Earnings call transcript Q4 2022

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Operator

Good afternoon, everyone, and welcome to EVERTEC's Fourth Quarter and Full Year 2022 Conference Call. Today's conference call is being recorded.

At this time, I would like to turn the call over to Kevin Hunt of Investor Relations. Please go ahead.

Kevin Hunt

Thank you, and good afternoon. Mac Castrillo, President our are Officer; Chief today Joaquin and Chief me Schuessler, and our Executive With Financial Officer.

I contain should Company's most begin, this in our with we would periodic and remind contained to Before the release everyone cautionary call statements may considered SEC forward-looking be and recent earnings statements in conjunction like that report.

website net earnings rules, certain slides, the Investor non-GAAP in financial During common www.evertecinc.com. constitute Relations such adjusted to today's and will as company call, GAAP adjusted in related available information certain are management that earnings income EBITDA, at share. of Reconciliations additional supplemental section adjusted will release and are per also under SEC and today's provide measures which measures included information our

to over hand call now the Mac. I'll

Mac Schuessler

everyone. and Kevin, good Thanks, afternoon,

are start call impacted strong to against funds business backdrop quarter of year of results financial full prior difficult the highlights summary announce year. that the for and and today's federal results, XXXX. comparisons with will because a especially more of our positively pleased We fourth I

outlook discussion for EVERTEC XXXX. will our Joaquin, our some our our call and additional as I QX to with businesses Latin a results of discussion current of then details by I Next, and America Puerto Rico and of areas over in some for conclude XXXX. who turn as environment, followed the move well on will to will provide focus full results a year

Beginning on X. Slide

year, transaction. expectations some the $XXX the our results. the million, Let's of of fourth of for year million in year-over-year quarter over strong X% with start finished We second a revenue record exceeding $XXX the despite completion the in year, delivered with revenue our some Popular year following headwinds X% a half a We prior increase. the growth XXXX highlights from increase

the of Our XX% LatAm XX% encouraging. particularly in the year fourth was and growth quarter revenue for

effect with compared year-over-year. adjusted X% as the of foreign driven million EPS losses. the of Popular noncash by was XXXX XX% the when for was down impact $XXX EBITDA remeasurement of as down prior currency Adjusted transaction approximately $X.XX the year, of well XXXX

For $XX in million was expectations. approximately with mostly EPS $X.XX, line EBITDA our the quarter, and adjusted was adjusted

will this XXXX, fourth In with we flow and I for to repurchases, cash cash at quarter. million cash including million significant record some dividends year, operating levels, million $XXX slide $XX conclude and flow, highlights. approximately to in $XX generate continued the shareholders the through through million $XX share returned

December liquidity Additionally, our of XX. $XXX as remained million strong at

Puerto to X. on now Rico Slide Turning

the benefits by driven up and was volume that growth, with strong revenue as fourth saw a season quarter, the sales Acquiring translated holiday $XX strong given into pleased especially we funds higher Merchant that diminishing approximately X% the million, are progressed. We from spread. year federal In year-over-year

or $X growth. Payments Móvil Puerto ATH to driven year-over-year, and segment XX% transactions increase of by be million increased business, continues big Rico driver an POS a overall revenue in which

assets quarter transaction. sold We part acquisition revenue the the Solutions also the primarily benefited approximately of was X% second XXXX. due midyear in Popular the from completed tuck-in down to year-over-year Business as of

than we through about Finally, push in businesses, in December the world, macro an remains an others, Merchant inflationary estimated at are has Rico to a Like like the able comments slightly in X% price worth increases. environment, inflation that while few Acquiring, rest natural Puerto of of experienced. is provide our It some noting offsets XXXX, the elevated lower the environment. in U.S. what

control costs headcount We towards continue the manage to Latin to and shift America impact inflation. also of

approximately to to federal fallen fairly are have in COVID-related XXXX, anticipated anniversary XX% stimulus. to compared estimated funds moderate Rico Rico indicates flat to funds note, XXXX. to less stimulus a positive XXXX the federal in indicators index $X.X overall Other activity Puerto $XX.X economic funds somewhat XXXX received in be XXXX to federal On result that the to compared macro we like analysis billion COVID-related begun Recent have as billion in a mainly with of compared Puerto as XXXX. XXXX

strong tailwind unemployment the side, On rate seen not to throughout employment the XXXX picture down in with remains the levels decades. trending

to passengers relates the it and As XXXX were tourism, of up accelerating in X.X% XXXX, November month during airline over December.

enter Rico are we certainly headwinds, backdrop supportive Puerto EVERTEC some macro as economic in growth remains While feel we overall the XXXX. for of there

Slide Turning was X. to revenue XX% up on Fourth quarter Latin America year-over-year. highlights

benefit organic across growth region customers. new existing to strong continue from We and the with both

risk services with to we in quarter, contribution Santander Alelo. a our monitoring and service, contributed Brazil, positive this saw incremental example, For new growth from

new the issuing secured in for contribute deal in we with that Chile production. XXXX, wins also quarter, a including in SumUp services will is business During already that

demonstrates which Additionally, clients, important able an Latin represents of important in as region. to on key relationship we de the Costa the renewal we focus America with our of retain to were and are ability Banco continue renew in Rica. This key to our longest-standing in Central relationships so America expanding one

the at also LatAm midyear. benefited completed in from BBR growth transaction Finally,

some up strengthened Finally, transaction, our aggressively. place beyond. M&A for largest in that have the mentioned XXXX would strong EVERTEC, EVERTEC with major to business on X, already which Slide us more the a I offering position a I pursue for relationship in Popular and like XXXX to highlight customer, growth accomplishments milestone

expanded moving and relationships key Uruguay also Chile Mexico Getnet. to We with with from from in into Chile customers Mercado with including Libre LatAm,

to acquisitions other deployment Puerto capital fuel tuck-in we to during and in in two the and XXXX, On Rico one one completed explore America, continue growth. Latin front, opportunities we

on announced expansion product issuer close international services in in under and provides this and PaySmart services we for existing important prepaid programs acquisition Brazil. PaySmart in accelerates customers, over today, complements domestic processing Brazil. signed With in bid Brazil our to of have PaySmart offering sponsorship fact, our schemes market. XXX the that and In we

EVERTEC XXXX. to I conclude in areas some focus would of like by highlighting for

for workforce, year, consecutive among we're values demonstrate placing to diversity. diverse whose and Gender to high-quality a proud the to to Equality fifth named been us global committed be leaders the to continue commitment have We many this Index Bloomberg's

we demonstrated XXXX repurchases. as via committed the returned We to share million in $XXX by approximately shareholders and dividends shareholders also our to remain

top growth M&A. as XXXX opportunities in be through of development opportunities organic with the product pursuit as well Our priorities funding will inorganic

EVERTEC also a We repurchasing and for we that stock good area when have XXXX return remain view in as to active our expect excess cash. shareholders, in we

Joaquin. turn now it over I'll to

Joaquin Castrillo

afternoon, Thank you, everyone. Mac, and good

year I'll X, results quarter the Slide and EVERTEC. to Turning for full review first fourth

than Total continued in strong to LatAm. payment strong the growth quarter Rico revenue we as approximately $XXX.X up slightly in for Puerto organic million, and from compared fourth year and was the better benefited expected X% prior volumes

points of for line million, XX% the decrease given including impact and margin EBITDA $XX.X year, the with was approximately $XXX,XXX of quarter adjusted down EBITDA Adjusted approximately an approximately noncash year, XXX was the prior currency transaction. expectations basis a from XX.X%, in remeasurement the foreign Margin prior from was Popular loss. the

income XX%. decrease tax Adjusted $XX.X effective quarter of rate an the a net was with of million, in XX% year-over-year adjusted

sale rate Rico the some rates, to grow adjusted Popular the low assets of in as tax tax in has have Puerto in as we preferential and continue changes of we due increased to don't the tax XXXX. we of to where earlier year-over-year benefit lost Our result mix LatAm, of revenue in a business our

in with EPS line our expectations. Adjusted $X.XX, was XX% approximately a and decrease of

an the prior revenue customers the increase of For continued and total Latin was Throughout America. volumes, year. from strong we strong ATH benefited in million, approximately $XXX.X year, growth new X% Móvil the organic existing growth year, of with business full from and

onetime two credit the million completed sale driven by acquisitions transaction. offset growth We the approximately also of saw $X.X the by the and year, assets from the Popular during of

remeasurement against Adjusted high from an the in XXX of XX% X% well an EBITDA a margin as from prior EBITDA point of primarily XX% result and was losses amounting $X.X net Popular foreign to million, decrease transaction, a impacts a a EPS of decrease COVID-related was the result ago of prior with the from year. $XXX.X margins from decrease The million, of basis was a adjusted comparison $XXX.X margin approximately XX.X%, the $X.XX, year. Adjusted year of approximate also approximately approximately that decreased income were decrease million prior year, funds. record as currency

by I now Moving beginning to will Slide quarter with segment, Acquiring. cover Merchant results fourth our XX.

strong income, We saw over the back. increased to higher year-over-year We million, earlier prior X% year Net spread. benefited approximately also come the POS well all was slightly $XX driven as in sales in higher which from combined by growth quarter a seasonality volume by seasonality. volume driven increased almost by implemented with revenue rental year saw holiday initiatives pricing we as as categories holiday in

was year XX the agreement primarily segment the was percentage Adjusted revenue margin operating prior the a as the The put from expenses when a against margin as well to margins federal year. higher into decrease million, approximately of points was as effect EBITDA from XX.X%, and $XX.X a we larger adjusted comparison ago for due stimulus sharing benefit EBITDA funds. down part experienced transaction, Popular high

acquisition Puerto are driven was year. to million, Caribbean we segment. Services On Slide deliver pleased increase ATH X% tuck-in to prior in Payment the year-over-year by earlier revenue results The are growth growth quarter, Rico from approximately approximately progressed. the seasonality. $XX.X for in that part of in acquisition transactions with business, and growth The holiday by driven the completed the increase has and was quarter XX small Revenue contributed the an and continues XX% also overall strong which how Móvil in processed, XXXX the in

XX.X%, year. approximately margin higher The off year, Adjusted EBITDA primarily EBITDA to was the leverage margin expense was due the of XXX approximately increase $XX.X over million, from revenue. prior points and basis the in prior XX% was up adjusted up

the was currency Revenue XX On an from XX% The approximate Latin Services the results the up fluctuation. $XX.X clients from for customers driven region, the X% Slide million, headwind again existing foreign in acquisition BBR Payment in Mac across quarter mentioned including growth Santander increase year-over-year, from America. was are strong the by that and once Alelo third contribution the quarter. completed and organic like

our continue low region. by evolution growth in organic be mid-teens the in strong We the encouraged to the and the to of products

to currency was X% been prior this was basis remeasurement, EBITDA versus would prior QX of XX.X% with a $XX.X down a effect adjusted approximately in expectations $XXX,XXX which XXX foreign our the remeasurement, margins. XX.X% points margin of the loss part Adjusted EBITDA the from year have Normalizing XX.X%, our currency year noncash in approximately approximately of down compared with year, quarter and gain prior margin prior in due the the from $X.X mid-XXs to aligned million for year. million,

XX. Slide Turning to

You slightly were banking Results prior indicated, the to primarily year. than assets the Revenue services have annually. strength was decrease some better of which we generating for in our results about at as from a in the X% to $XX million to and sales. was The core and sold due will approximately Solutions expected midyear, due million, reset onetime were $XX.X see Business hardware the segment. revenue network as for revenue quarter software Popular well

$XX.X from assets to the EBITDA points Adjusted down was a Popular, which down the from were primarily year of EBITDA for prior our higher year The aligned was approximately due XX% margin margin. to to approximately reduced the expectations ago, was and XX.X%, quarter. basis margin of adjusted XXX million, to sale

Moving XX. Slide to

and total will initiatives. You $XX.X year, from million due percentage and Other Corporate in or of part our to a $X.X million summary X.X% Other prior quarter as up in a the Corporate expense see the was specific of corporate revenue, expenses.

million. projects XX. services, Key Popular overview flow from in some a and $XX Net key $XXX refresh Capital the increase focused from product cash for development approximately decrease XXXX XXXX and prior development million investment our $X to cash from resulting year. Slide the on $X regulatory transaction of amounting from million was million, million, operating existing on including were enhancement investments. included expenditures a XXXX, areas on functionality $X software hardware activities Moving to

year-end, debt use dividends. XXX,XXX We million the share $XX paid million future and million at for approximately $XX the had approximately $XX shareholders and We program. shares and through $XXX under fourth $XX repurchases for available spent two quarter, acquisitions. to million approximately returned down we We repurchased repurchase on share in during million Company's

Our was XXXX ending $XXX year. of $XX prior cash balance a million, decrease million for the from

XX. Slide to Moving

points. term to Loan We loan A, B and now our December XX, review million to like a facility rate on full spread, revolver new on will current on our as spread in will million SOFR revolving of basis be XX prior I completed debt the have $XX compared capital repay be is greater an a December. At approximately applicable EVERTEC drawn from proceeds leverage revolver and I'd ratio, both new comment leverage and debt to we Term million the the and $XXX We our previous flexibility represents basis that $XXX us XXX previous provides revolving million both credit Before refinancing $XXX improvement the the in our in XXXX. plus terms which Term the SOFR versus used facility ratio. based debt due of plus A This points with term million loans. loan the over and an The the $XXX facility. Term

Turning $XXX and by unrestricted short-term our million $XXX now million at debt, was debt million $XXX position of to offset in loan year-end cash. total of comprised

approximately Our weighted was average interest X.X%. rate

EBITDA ago. to was a debt XX-month net X.XXx, year trailing adjusted Our X.XXx approximately from down

$XXX year down was total December XX, a excludes which ago. our million capacity, of restricted As and borrowing $XX roughly from cash liquidity million, includes

our commentary turn Now I'll for Slide outlook. to on XXXX XX

EBITDA we million to to Adjusted of EPS of a million a $X.XX, growth between be our which of XX% rate X.X% XXXX, in growth an X.X% be XX% for to For and to or X.X% to to an to range effective adjusted the margin to $XXX revenue range is range of $X.XX $XXX of XX%. compared XXXX. tax reported expect in to X.X% year-over-year. expected This $X.XX assumes XX% represents

that you expectations the walk underlying for we of key assumptions with now business in segments. will at through arriving I outlook, our the some beginning revenue considered

of stable new closed spread. tuck-in price in Merchant the CPI Popular the high-volume Puerto well in low Rico ATH expect as to growth driven a we we solid of by growth mid-single-digit from to initiatives expect effect a Payments transaction mid-single-digit full as For and April continued Caribbean, driven In XXXX, transaction Móvil, strong primarily merchants contribution Acquiring, and growth POS growth, services XXXX. and by from that year anticipated

the the first acquisition a anniversary from will given quarter that We expect stronger quarter. the impact second in

Payments acquisitions driven like the to XXXX, that a completed expectation mid to growth as in America, of of For customers to the will teens, Brazil, of in the Latin be organic begin to will contribution of contribution well strong but we the meaningful midyear impact and a continued have the expect by high full a which have in contribution minimal existing growth from effects PaySmart now have BBR as primarily QX, QX. year more in should

the to with July to decline we year entirely Business business the mid-single-digit Banco reset Popular expect in Finally, Solutions, to a the due XXXX. low for sold in revenue full in

to half Given the timing CPI of the with a that sale, we expect a driven larger new in reset of year in of return of the wins combination Popular. a half adjustments the business single-digit year, by growth and first low second and the

to turning margins. Now

the that effect are expected expenses operating and Popular slightly revenue we the Acquiring following margins. the increase for with From with of acquisitions Our we the from with lower consistent expectations a of in target cost single-digit at a adjusted low of to margin high outlined have Merchant EBITDA full mid-XXs range the completion share Popular year are transaction. planning perspective, effect completed for a are

limit will investments, can we we continue We not operating work to expenses the offset some and in a onetime charges experienced expect of do to order we of in recurrence XXXX. where to

Additionally, currency our or gains include foreign of remeasurement. any guidance not losses impact potential does from

compared when the discussed the relatively refinancing items, we of other terms interest for the flat debt with to be year from impact consider and expect expense In XXXX previously.

fixes X.XX% to applicable approximately million an swap of rate XX% spread. in also plus or the have place, our at We outstanding continue debt agreement interest which $XXX

adjusted Latin business and higher America shift compared tax Rico. the in preferential our to revenues the Popular of in that tax of transaction of due taxed mix recent as part in higher rate to XX% Puerto were We an countries sale to expect the XX% to years rates at

during of compared XXXX. a also further We our we assumption the XXXX share to $XX due an finally, million, expect for And repurchases XXXX. lower is to activity in similar CapEx year, repurchase share of have included higher XXXX level not target last to count but

we executed the and look months. positioning In are shareholders next growth credit and our at imperatives. holding summary, extensions two acquisitions. We coming a for year. bank largest levels, in full and and forward Popular, considered fourth progress we we returned cash conferences customer, Banco to on completed with tuck-in no in record strategic facilities, We some refinanced strong generated executed you company. continued quarter to the to your longer XXXX on over several and beyond. results our on hope I We EVERTEC XXXX updating of year few see in our

With that, please questions. line the for operator, open

Operator

Napoli question with will from first Blair. come Our William Bob Instructions] [Operator

Bob Napoli

I Solid bit for you of overlay And guidance the results way the included guess what give on of X/X a it. and 'XX? through kind of kind first Appreciate Can from macro macro quarter. a in what you're just of perspective? we're color guidance. seeing little is your

Joaquin Castrillo

Bob, the so a continue somewhat activity to good economic which of script. track very say inflation Puerto what is had kind going one mean the a higher would past, with Rico. seen I indicators the the commentary see been and that GMP we've it of Mac because the in of has in slightly correlation has moderation in there what index, than to I we that is we

employment disaster recovery the some at come that was where should we've participation are of for been to have projects funds of big That the that continue in and the same rate, moved those that from electricity. privatize to put Maria of generation some been supposed terms of some Rico Puerto are time. the a to starting waiting on electricity, pressure very see through funds some some has to of piece we time, government employment, good that especially very bigger But and see a announced, high of movement to around we

it's say some to macro indicators we some seeing general balanced that U.S. we're have higher offsets as levels said in through, the we in at terms in be should of some pretty similar the which would I coming that's of call, of still the than XXXX. funding just So the But from

Bob Napoli

for thoughts, just Latin And overall. around Latin what thoughts large how to EVERTEC? acquisition America growth -- large big is mean then Latin opportunity interesting. -- guess, how I accelerate really on helps are the is picture your But just America. rate on its I -- Brazil the your Mac, America some in

how moving into in market I strategy you on but more not just your And M&A a thoughts you've past, there? Latin are the Brazil getting guess, highlighted lot Brazil. that a is aggressive broadly, So America large guess, for then a And you it with the or little Brazil can the I thought opportunity What acquisition is further into Brazil, be? interesting. I was move EVERTEC? into

Mac Schuessler

Thanks, No. Bob. Yes.

M&A got us. them and have That's regulatory out of lot a balance did deal important the the we We hurdle. cash. off BPOP We're throwing look, of reasons a is stock. for that So increasingly We've we sheet. got said great of didn't one the

So LatAm acquisition BBR. just we're very a We we accelerate casting M&A. this wide announced with did Last to in PaySmart. net year,

we a just now are license a business small processing. set that it's us business but with I over This today mean in gives clients Brazil, a have of actually XXX customers.

So it's cards, well. as with have we employees a now prepaid and XX processing model

to good and acquisitive good for us continue go allows So a diversify region, Company. after be small and Latin to this but us, continue to with a being markets will market investment focus the in the the in this biggest valuation at one of America enter the a

Bob Napoli

America. revenue Services then just of over that Can -- the to in the your guess, it's, five next mean, about years? XX% guess, of I the I Latin M&A broadly, combination mix opportunity plus XX% Latin I -- America, organic Payment be next today a And over the

Mac Schuessler

give your And guidance. a Bob. it's point we look as is, it's don't mean growing you to point, I great to What question, mid-teens would I business if you that at Yes. long-term know, today, organically.

on be we've the and more now seven tripled we're going Over years, business, M&A. focused last six, that even to

LatAm. more entire the hope diversify is in expanding we that can rapidly more our quickly company So by

Operator

will question next Morgan James Stanley. Our from with Faucette come

Jeff Goldstein

Jeff on Goldstein is This for James.

were you when talk implementing the guidance? pricing in is of what contribution like product but we And your think taking about mentioned just specific quarter, You XXXX, then pricing can to any areas built those? initiatives type into you

Joaquin Castrillo

something perspective, calls. 'XX in Look, that we from I think this started second is something this discussed doing the and previous we that quarter, in is the probably

portfolio feel can implement very try and be look really by in We pricing industry have some remain and especially we are how power we by competitive. We strategic very pricing how go we we strategic segment. areas in in the initiatives, still to of at these where

We've maybe we where ancillary not also are looked that our gave them some services the cetera. necessarily assessments, we helped that of at with transactional PCI merchants et but

something is that this so doing. we're continuously And

were little the, given from funding of going the forward. let's a portfolio, saw think federal how we aggressive more say, some the as we'll evaluated move XXXX, something that's in continue I we in headwind and we bit to XXXX that to that do we

Jeff Goldstein

Got it. the to from opportunity PXP That's transactions transactions. helpful. And Móvil then ATH business you've mentioned converting in the past

like curious does at was in that. you runway I benefit the that And there? Like any around So fourth the quarter? look all a if put dynamic numbers could was what

Joaquin Castrillo

I you can been we've it's and we'll to, to internally is that fourth that, certain them conversations merchants that those to grew at from in the can portion, main developed you convert point, ATH an we have certainly business if than in person, business, continues your revenue numbers to identify it which specific free, what benefit. us. for utilization quarter. a in it but business generates Other somebody revenue which for know well initiative then tell to driver coming obviously, using of overall specific is, the least more with the a person Móvil give generation. be I yes, say terms the generally, don't runway, very would I has the of I ATH

Mac Schuessler

that's but revenue, we we But It's clear, created significantly more to a receiver. right? a perspective, for like a to a Móvil credit money revenue. significant make be transaction money, much and So a consumer to it's revenue from more looks convert the have make we bringing business. been Just in BXB, then and ATH have do on And card it we do year. the we lift if receiver

Operator

John Davis Raymond Our question James. with will come next from

Madison Suhr

This on a here. of then Where kind deal? do on overall to appetite to larger the I leverage also And strategic of M&A you kind was saw? you for touch you a for potentially if is valuations of Can trended Madison would your J.D. on stick there wanted a larger are pipeline. minute just where deal take kind more and

Mac Schuessler

kind I focus my do Yes. I'll with us regulatory financial of back for the answer have point -- to capacity, and mean to Bob. hurdles now we It significant different is a have we less M&A. that

We a the are net. entire across casting wider region. We're looking

important a adjacencies. As deal we demonstrated, which in region, and market market. looking It's just we at an is the in Brazil, we're largest the did

that with of commercial our well infrastructure. other are types fit and our also businesses with What platform

now we've that if We potentially look contingency we Puerto because to to have competitive we for at we're business, that at but have us it's processes deals focus a diversify have will be we past for on bidding even outside the than critical regulatory look approval because larger continue and in financial given -- will of Rico. a capability we get this more don't the the

Madison Suhr

business? Any this into Okay. revenue the be can then rates would profitable insights us specifically, any of a or give contribution? PaySmart And EBITDA insight Is into Great. kind for growth you the helpful.

Mac Schuessler

I'll you Joaquin then let mean tell start is profitable, the... I Yes. I'll it and with

Joaquin Castrillo

some what do able This now processing then business been doing this complement this something that say not Brazil region. something certainly we've revenue today we're we're our is which as platform will gives model, us said, Mac countries. would specifically And other for to good is I we feel Brazil. it breaking that model, gives now with mean a in And a execute and I in as out in specifically, recurring very well that in to a us a PaySmart. of do the well

Madison Suhr

I Okay. Great. And in real one if more quick. sneak can

equity seeing moving of lot into You're a LatAm. money private

a maybe standpoint out months, ago? call update tougher to entrants? year anything six curious, competitive a from a standpoint. Just from from pricing, Just any Anything new from competitive

Mac Schuessler

remark what not are, I active we've where when to willing like is, interest mean also move We're are let they bit. things private is down they go don't as want seeing little but we to multiples the I assets in private the given -- a equity seen bought. seeing Yes. that were say would rates they past, equity as not we with

So there to on hopefully, year rates goes the little bit we capitulate multiples, dislocation are be, more people of going movement seeing yet. to potentially But higher not and fully as a but stay is ready are longer. on

Joaquin Castrillo

a for So enough still money runway I there there think was here. to be

movement think that, starts for I more might So period little to a extent what above there long of high the shorter with a we're that seeing rates runway to bit be get time, today.

Operator

Our Nate next question will come from Stenson with Bank. Deutsche

Unidentified Analyst

on touch I XX% to the just to XX%. guidance, wanted kind of margin

the XXX the color once there. of then at the -- is sort going year-over-year midpoint. of impact we we contraction points longer-term give be Two margin sort about points can what lap you expand for questions give noting move two, should to any of that across So One, the Popular of contraction and deal basis expect suggests there move lap segments? And as as don't XXX on into margins -- to that you deal able forward of you XXXX? guidance, and we that sort we

Joaquin Castrillo

Sure.

we from of had Popular's that half obviously, higher margin. perspective, thing first all when mention assets first still year a it of I'll were is, at last the look the year-over-year So

business going merchant of have acquiring into EBITDA. impacting that going and going have as also not part that that's XXXX Popular share to transaction, specifically we're the so benefit And is of down now directly we the to our in revenue a

what QX clean you, quarter that at as look is a in good of one-timers to rate take margin. baseline what related actually say, you the gives business a the if think where I it's relatively did in Popular deal a terms run no we let's to now

margin And of faster in Puerto aspect We're same we grow in in in we're America growing have trying terms segment. of contribution Latin of the second that where some America. Rico look, the we have think don't Latin I to the question, also the

for diversification as is Rico said, Puerto a is priority away us. a priority So Mac from M&A us. for

region So be to extent is margin. that now few us that we scale to that in to time. and over on processing across years put economies we've the that fact that overall pressure doing built will of the our over that past the the that platform we're strategy successful the continue counter would the I say gives

long expand So we in through transactions to be this platform, we to we'll that as margin position more a term. put again feel medium the in

Unidentified Analyst

the helpful. BBR just very that in give you've quantified can impact is guess impact want think acquisition, How big going. a color some on And any but Peru performing? on I to how the of I I That's qualitative know BBR the And know asset how the don't there's BBR if would part been past, on I it. that's very is be from protests was any don't that. you helpful. to that more in maybe going? integration Got I check impact there. the

Mac Schuessler

so processes in products integration say this because of Yes. our get don't gives we that payments. have some merchants, I to additional around is going would far. excited We're the deeper well Well, us today

we some that geographies trying operate cross-sell But far, So we're the of proactively so today. into good. now those so in to other

Operator

James from will next question come Our Susquehanna. with Friedman

James Friedman

unpack on expansion Chile, you the great last possible for on least, regions? quarter. wanted the a Libre call. the to Would Mercado to example, double-click Congrats that you opened question had it of LatAm had At be about some year. I Bob's

some this got quarter. up You

strategically of landmark stay Is regions that it point? deal dimensionalize at the got which in there. possible are Santander Latin material You America most or these -- this to

Mac Schuessler

Yes.

would I from what is, several and say platform we benefited our we've that. countries, localized in So look,

the fact at like Chile, SumUp, in Mexico, are localized new spent our Chile, where roll that customers. able our out Rica, right? platform Costa look we've out we've platforms. customers to them. already now incremental you been CapEx if Uruguay, those So additional so we've roll to localized we've So localized we've

with is in we XXX a What's about have this clients already that exciting now platform acquisition Brazil it. on prepaid

now Brazil have to well. in products out ability we the So as those roll

what like Santander so tie entered we When Chile, it costs you're well, we So that's opportunistic. we those as contract. able to today, where we Uruguay we're in to focused we're specific doing localize in mean, but and I are Uruguay. a look, said,

James Friedman

great And more flat macro for Mac, two you repeat I about have M&A? assumption were And likely looking -- don't to the if versus you're what for because reason ones. quick No, ask just that's 'XX? 'XX the context. saying presumably repurchase could Okay. I'll then for could do share then the real you you

Joaquin Castrillo

incorporated share second I being either, the yes, mainly we've deployment our priority. kind been consistent amount. repurchasing part question, program think because Jamie, on capital past, of one been we strategy. opportunities pick So specific number repurchases in than the the establishing In we've have of the M&A a rather

funds of decline relatively coming when in the then what look at has incentive from much similar. buy the to the XXXX do We that amount are pandemic. expected the happened strive comment long-term a back received referring flattish was always on from received you versus think federal And XXXX coming XXXX funds dilution to because was plans. to at XXXX, in very least I XXXX. so that Mac's be in were Those But that were from significant to

Operator

to [Operator Instructions] the would questions. concludes It our over session. conference appears back there I to turn closing further remarks. any no This like Mac are for question-and-answer

Mac Schuessler

we've I to XXXX want grow look In for in investors all to capabilities conferences. many our you in and leveraging to our of forward thank conclusion, see the I coming XXXX, colleagues of in just what accomplished and

call. Operator, you. close can you the Thank

Operator

presentation. attending has concluded. conference for today's now The Thank you

now disconnect. You may

EVERTEC (EVTC) 22 Feb 232022 Q4 Earnings call transcript