Earnings call transcript Q1 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon, everyone, and welcome to the EVERTEC's First Quarter 2023 Earnings 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 in 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 Reconciliation 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

Morgan Schuessler

everyone. testament business and transactions volume sales We strong both first benefited contributions the and a our to you, strength which good model. from delivered quarter from results, Thank acquisitions, increased as as well afternoon, of

will includes I on our highlights over well will for the for details further call, the we'll our from provide to to quarter guidance which Joaquin, rest today's results it update then and start year, as first as turn On raising expectations quarter our who the some an XXXX. of with

losses adjusted to will better our while with the and to re-measurement. EBITDA. the also from I business Before calculation peers revising unrealized begin of effect would highlight facilitate results, of agreement This foreign industry core adjusted of definition I our credit like and exclude financial with currency present overall performance our to comparison gains our EBITDA financial the summary of are that noncash we aligning

adjusted net to our adjusted EPS also changes will income translate change metrics. This in and

period comparability, and recast have calculation. revised clarity For numbers to prior conform we

compared decrease quarter with $XXX was when a approximately first $XX approximately Beginning recast year amount to first million, an the million. the X% for of was the Slide four. Total of XXXX. quarter, of Adjusted increase $XX revenue of million X% compared on prior EBITDA

expectations, and and margin approximately of SAdjusted EBITDA million quarter's million, and was share was share per operating X% XX%, repurchases. $XX and returned We recast to increase prior our adjusted $X.XX. earnings $X.XX, adjusted of flow the we cash year from $XX shareholders through with our line EPS of generated in an dividends

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

on POS to was XX% on and as impact update which continues due with initiatives. Slide from strong well was revenue down increases, XX% of and Acquiring acquisition year-over-year, contribution as five. Solutions by cards year-over-year year acquiring Merchant driven strength to up experienced year-over-year, expected that in payment for Moving both grew growth our Rico Puerto coming of the processing QX. pricing Payments and the ATH with the transaction. from to processing We sales small as and merchant volume will completed Business Rico XX% growth as the Popular Puerto last segment. Movil, up drive transactions anniversary mix

Popular the the segment of Solutions due as transaction. as expected, Our was Business year-over-year, sold revenue primarily XX% to business down part

for pleased network ATH we of seven key that with relationship are which on We with years, extended to institutions further strength the of Oriental an announce the issuing the our proof have provides island. additional

top to of three XXXX. this Puerto Rico partner network, long-term in we the through will With with cards ATH the in a Rico. top and of issuing extended over been the has issue three institutions medium have Oriental banks extension, Puerto now continue financial the ATH term branded relationships one now

a comments on Finally, the environment macro in few Puerto Rico.

many unchanged remained at begun fronts. quarter, in backdrop level largely the decades, to The unemployment moderate the the rate remains still in data lowest the economic but clearly While positive, X% overall at on has from first begun to an February has prior the when moderate, reduction compared increase less fourth points approximately X% January of quarter at in in basis with to of the than a XX economic index year. XXXX. activity and The

a of total sales up were passengers tourism But positive X% negative year-over-year in in the side, March. note, auto to continued airline the on a ago. March X.X% On recover travel with from year and month down

we own while remain So the significant our we optimistic are assuming economy. about not business, from overall tailwinds

up six. Latin LatAm now America Turning year-over-year in to on XX% Slide revenue quarter. the was

quarter continue of growth quarter, announced in also partial contribution from from contribution In acquisition this February. in the and to organic revenue the experience we had last that Paysmart strong We a BBR completed we year. the acquisition third

key another further to partner LatAm important announce region. in an strategy I'm in also business the win that with pleased our strengthens

our have in in their Mexico. with process Recall Mexico cards credit issuance Chile. Mercado and expanded recently cards to for currently we process Mali of We more that in relationship debit Libre

We expect contribution meaningful XXXX more this over next quarters new the in business beyond. to few a with ramp and

as Finally, diversify deployment, of Executive Vice driver of both our and in welcome key President Roberto company growth and hiring Gaffney objective aligned us on the joined Alberto Corporate to with his on of further to demonstrates our a to focus diversification. continuing as Development. commitment Lopez execute and March strategic I'm capital our pleased M&A

our With that, our increased will XXXX. look for turn Joaquin now first to provide quarter to results a over more outlook I it at in-depth and

Joaquín Castrillo

Mac, and good everyone. you, Thank afternoon,

$XXX.X offset to across revenue driven Total transaction. see year, revenue segments, of volumes the both for part by LatAm, Popular EVERTEC. Puerto will quarter the primarily acquisitions the the transaction as in consolidated strong of and approximately up million payment the by most and growth increasing contribution Rico you sold year. past small eight, over $XXX.X the X prior in Slide was partially completed the quarter first X% We results to experienced million, Turning for first compared

quarter $XX.X million, was the $XX.X decrease of Adjusted recast. EBITDA the prior from X% for in approximately year as a million

present definition peers, better while the with comparison aligning will of losses quarter, performance noncash this overall the related EBITDA currency beginning with financial credit remeasurement. gains our adjusted and industry to mentioned, EBITDA. unrealized ignition have business we also of our our Mac drive foreign facilitate agreement impact of adjusted As modified of This and to core

income adjusted EPS in and metrics. This change adjusted translate our will also to net changes

from We presentation, new those prior can periods details release. have results conform in to find to this and our you press recast

comments of growth my rates the periods. numbers based are prior recast on about from All

reflecting income net higher partially the to as a tax Adjusted of million, margin to have costs offset basis primarily quarter by a XXX related lower compared the adjusted approximately rate. compared point the decrease expenses EBITDA prior previous acquisitions. as decrease was EBITDA, year, Popular decrease lower-than-expected on the $XX.X XX%, as of was to reflects we impact the a Adjusted year. prior higher margin calls, the transaction X% The that in for well personnel discussed

in Our quarters. adjusted X.X%, likely in certain reflecting effective jurisdictions tax rate in the will given quarter back that be was future benefits

to to of quarter, continue to compared for approximately rate full X% for an expect to prior XX%. We $X.XX year. year from range tax was increase the Adjusted the the the XX% EPS

driven assets With the Popular share received as and a shares increase sold consideration part repurchase and of in share of lower count being the by XXXX. for throughout as retired result a the transaction activity our

driven strong we to will of the two growth, moderating exited by Merchant net Moving results, increased now XX% the Acquiring quarter was as approximately our year-over-year the million. quarter, of $XX.X on month In sales increase first X. segment months in cover volume mainly March. primarily revenue This and to Merchant Acquiring. the starting approximately with Slide I first

volume saw part organic categories. We new growth. in sales increased adds merchant across and to most attributed strong

of We improved benefited pricing which our also of the spread. that effect last year in overall most were from initiatives, place throughout

year. as we growth spread our in throughout moderation initiatives these of begin of expect the also rest We anniversary some to the

ticket the EBITDA share was compared implemented the approximately segment year, XX.X%, as Adjusted margin to Popular XXX see part segment down EBITDA year. the last per we impact processing higher of reflecting some X%. Puerto transaction as points as the from revenue declining Payment approximately million, the a Adjusted transaction when for compared costs to was as down $XX.X last as continue of well Rico basis average to

the the up by and for aligned segment. XX, $XX.X from driven from month approximately two of Payment Rico and of transaction the the quarter segment the Puerto was observed million, completed results of Services, very will the see where first months Slide strong up quarter exited contribution acquiring, strong acquisition and transactions in On XX%, first in tuck-in second Caribbean for trends growth Revenue the year the in the and the March. were merchant POS quarter XX% we last were the year. the to as starting prior moderate you to

sales business Services to in Movil, important volume growth app the ATH specifically to Latin and also This XX% for from the increases services segment. with continues provided segment approximately segment recognized of revenues to monitoring transaction year-over-year. the growth processing benefit for Payment America drive continues

EBITDA in Adjusted points for losses revenue to XX.X%, The was professional from partially margin the last up margin offset for approximately down strong growth. million, EBITDA to year. segment provisions XXX Adjusted as compared higher year. XX% to leverage $XX.X and fees, due the an by was compared an increase last decline operational basis was

segment. Slide million, compared see segment in as $XX.X Services year. up for On results LatAm quarter our XX% Revenue will for first Payment XX, was the you to the the approximately last

February. of the see PaySmart the and that region, to a last customers quarter third late the existing acquisition addition completed continue strong small growth in by acquisition we both We of the contribution with complemented in from across organic year, WVR announced

compared was and to of approximately in in both personnel the Adjusted year part higher via last function a adjusted XXX organic headcount, EBITDA also salaries and fluctuations increased due to is region. costs, higher XX.X%, to margin points for the currency segment and was basis as $XX.X million foreign acquisitions EBITDA down due primarily which

The a CPI. quarter with third you quarter transaction mainly mainly and of the revenue the XX, wasn't during approximately the will in for first effect for prior Slide the that result year by comparable Solutions expectations. and the find aligned Business that to On the down is million XX% of our $XX.X the tough the segment. revenue effects results the impacted Solutions quarter, was decline of sold closed a Business popular

adjusted $XX.X For for the have inflation. margin the revenues transaction, been costs sold, impacted was the higher which as margin approximately impacts EBITDA adjusted EBITDA driven basis and was which by down primarily business points by supplies the last was XXX operational decrease margin higher which as of year. by from printing to The XX.X%, adjusted quarter, our were EBITDA Popular million driven as compared include well effects

summary Moving a to will see Slide you of Other. Corporate and XX,

compared prior negative Our first year. decrease quarter approximately million, a a was of EBITDA $X.X adjusted XX% to

when Our of year. slightly prior X.X%, as revenue to the was percentage total EBITDA adjusted up a compared

operating accrued certain approximately to $XX liabilities. to $XX year, mainly expenditures approximately as cash on Slide provided full $XX of decrease in fluctuations anticipate income $XX the a $XX Net was to were million, year $XXX restricted result million. XXXX. nearly on of was compared our capital approximately Capital continue net beginning by down we Moving approximately million including cash and balance prior our million, the we XX, cas-flow activities lower cash overview of and as for working million, million CapEx a paid

decrease the $X common million approximately and We of in of shares credit debt an balance total revolving facility and $X cash paid a of withholding of resulted XXX,XXX price million, dividends paid taxes we $XX compensation, million. down on our $X million. of which for long-term approximately in average approximately of stock a We million $X $XX total at $XX.XX repurchased approximately share-based net payments million debt outstanding on

We future under the program. have for approximately company's $XX share use repurchase million available

$XX cash XX million Our of approximately included as million, was and cash. March balance ending of restricted $XXX this

dividend $X.XX another announced to record paid May of June shareholders X. recently we of be X to as on Additionally,

XX, Moving as a Slide of our of summary debt you XX. find to will March

net short-term quarter total million $XXX position $XXX debt $XXX was of million approximately approximately comprised borrowings Our unrestricted approximately of and and debt. long-term of cash million, ending

rate weighted was average Our interest X.X%.

was Our net XX-month EBITDA adjusted trailing approximately debt to X.Xx.

the XX, under liquidity capacity balance March excludes revolver. our $XXX includes cash available and million. approximately of was As This restricted borrowing total

Moving comments XX, with provide the as now well to outlook will year. XXXX as I update on Slide the to an you of some our remainder

million, $XXX X% and EBITDA we revenue now and guidance XX%. to to of adjusted to growth million to range be range Given visibility, expect in additional our raising to expect are our representing results $XXX continue a X.X% between and XX% margin of to QX

GAAP have Rico a between remainder observed over the the of moderation some of expected now year, the We are first share and considering even driven a by $X.XX. earnings anticipated performance growth this to seen is month earnings to few adjusted quarter, per we March, of Puerto drivers throughout we We of per our segment are from strong of April. during had better-than-expected On expect given share we quarters Payment what the through next though $X.XX and the some to have the $X.XX trends $X.XX. basis,

our is to tax anticipate share, we effective come quarters effective adjusted In remaining non-GAAP also more we back rate continue over are normalized earnings and tax between full per non-GAAP range the to terms anticipating levels of rate XX%. that XX% to to year our and expected

share any We additional outlook. considered repurchases as have of not part our

of the segments, our the now to grow digits. mid-single acquiring terms In revenue expect merchant we in

Rico and down year-over-year processing last starting high expect acquisition segment second expect anniversary to as we to in single We tuck-in payments the slow digits Puerto in our completed growth the quarter the year. grow

BBR down acquisition LatAm segment mid- but with year. grow third to strong second for the to We we growth a last see the continue to the quarter in high anticipate full as in our completed payments quarter year-over-year the we'll slowed teens anniversary year

low year, for to Popular the the growth second reset quarter. the expecting resembling the our transaction to In of mid-single-digit in with and the positive a Business we second turning in quarter year we as third first full Solutions, the anniversary half are quarter

In conferences trends summary, in hopefully in we upcoming coming we seeing at the our see forward in are and months. in results business. look pleased you the We to the the first with person quarter

please ahead open and questions. line go the for Operator,

Operator

come [Operator Instructions] from KBW. Govil question will Our first with Vasu

Vasundhara Govil

I magnitude bit Feb that quarterly you in March, just little for relative sense trends moderation. can first about to of April are change a guess talk Jan, where the like tracking question, the from cadence to saw us then a and give March to the you

Joaquín Castrillo

use sales volume. of I'll Joaquin. kind is this Vasu, Sure.

So January the range, range, to is we to in in single-digit high started exited X% close similar April sales and volume we the growth March trending March.

kind on the that's basis. we so decline sequential a saw of And level of that

Vasundhara Govil

impact we then the have got and And -- comment when you growth pricing those lap just sort may sort it. Got rate of disclosed growth. see initiative this the of on the Is helping I year? still

Joaquín Castrillo

would We price most implemented between year throughout QX this say the the that QX. but place and last I took of year, initiatives

and probably So will the throughout QX. we second start see in QX of lap those to half

Vasundhara Govil

that valuations where Got one priority were a quick as probability being I talked on think actually for it. you you. a completing Any deal the seeing know just you, whether larger And then you've of strategic about update to as more update indication Any on level Mac. you M&A one you size for the may the a could also be pipeline? sort and us the increasing? has like guess, I pipeline size increased give struggling fintechs complexion of And looks if then, what today. an of are on in whether of the deals

Morgan Schuessler

Sure.

So yes, thanks, Vasu.

hired earlier, investment because who I are What and I capitulation a the even a Latin onboard bounced experience, in back complete to markets we're Despegar, and March. up. is He move CFO lot run announced we basically As excited say bit, public which would starting little M&A new but them EVP say to Expedia have and there's we wouldn't to of has a America. of actually was the the is banking area, of

settle. see continue So during back to we'll the pricing half, hopefully,

the active that have through different the As going pretty pipeline we far pipeline, region. a across we're opportunities as

the at executed what We larger looking frankly, to well. could deals similarly as and that are we've past, deals that are sized potentially some be in

Vasundhara Govil

you Super helpful. can in banking industry And the didn't business? part in everything on any one. knock-on effects turmoil that's the or in I your any knock last on and if that that you Are gone from U.S. from one of squeeze hear

Morgan Schuessler

effect. great -- already and them in fact, seen have quarters. they we I a announced earnings the haven't We banks, couple local No. had mean, an And of

insulated from And of we've so that. been sort

Operator

Bank. question with next Deutsche Our [indiscernible] from comes

Unidentified Analyst

Rico. ask macro situation follow-up the few to on questions wanted more Just Puerto in a

ticket at I about mentioned your talked know in your update, remarks. Puerto sizes being inflation last prepared X% in you had lower Rico. you So

So inflation just the leisure expect continue the also wondering March. travel to your of decreasing? through sizes you for thoughts in then And Do remainder up being on the you X% ticket trends year? mentioned and

your you expectations? in that your guidance? into what you is -- then wondering, that you your of have travel do assumption sort current with Just XXXX line share And can baked

Joaquín Castrillo

a one, that and I we few of if I'll try would come terms say miss I that leisure, yes, travel visas and to break up in into back. I'll So don't will only expectation tourism general, I contribution. GDP is Puerto through flowing the all reason have XX% necessarily in right, for total is for that about say of specific Rico that X%,

it's So in just huge macroeconomic not a environment. factor the general

something to of it's not that a our and in from Obviously, we important it's driver it's track, specific verticals business. sense but the huge volume

ticket know average the over couple tickets really got is effect stimulus of this consumption the stimulus average level the to that something were out We that for than quarters. of we've terms that given on years, few In we a been that higher usual. sizes, a past saw, going

of continue slowly we longer little get Inflation has put expectation time. average . period of higher bit than modernization to part the forth. a back I'm will what that it an come kept guidance we've What other kind sorry? expected and them for of or a that ticket average the that the is we was But have question,

Unidentified Analyst

No, thing. that were last That that it. versus I I 'XX? Rico the you know also had expected flat on the still case? you 'XX makes touched undoing in Puerto think Is to quarter, highlighted

Joaquín Castrillo

the We . to at case, continue expect to that correct? be

Unidentified Analyst

more it. you color then follow-up, just for beyond debit. moving exciting Got very can give just sounds my wondering like the Obviously, it And the Mercado on relation with it. a Got if expanded little Libre.

what think how the So partnership the is be significant can material forward? relationship entails kind your with you the and new LatAm new maybe going talk about business business you current Mel how can of

Morgan Schuessler

Yes.

e-commerce particularly is brand the is look, this Mac. the I brand, in mean, Libre region. So probably best Mercado

then doing in that card And debit up do So with now they're started business. Mexico card good with us credit their a reputationally the Chile. to testament we on business from don't picked they if but being Mexico, in it's are know debit credit They you perspective, is in anything as materiality. conduct that to And business. financial both well. consumers The the great I issued add merchants and to business cards want

Joaquín Castrillo

reality. Magali have now No, we really the issuance. said relationship we credit have What these, bus is haven't month in say, and though debit ground started up let's broken the from with out of relationship of the our the both terms who in

that the are need businesses ramp up these build time out actually little So of bit to portfolio. a and

to the they So meaningful in said seeing America the it more business. to that we're organically growth Latin been becomes contributors overall have that, Having segment.

Morgan Schuessler

our And exceeded of our both those. exceeded forecast, They forecast, right?

So we're optimistic. .

Operator

Our next William question comes from Blair. with Napoli Bob

Robert Napoli

that Mac, are Joaquin, how completed active are the you feeling future I So and become the now as more you with is far? the that well. going? that the you've working integration the on that Banco are of you deals done deal look have integrations confident are you the M&A -- so front, completed machine mean M&A kind deals How Popular at

Morgan Schuessler

Yes.

you would Bob, over at time, that announced discussed and say, we've deals if are generally, new So I the on the brands platforms. done biggest look those marquee we've

So it processing they're Chile, Santander model that both up -- We a changing Derry running they're to model. we we intellectual integrated from acquired, Libre, able a well. Santa in licensing customers, if property to at and you new were Mercado look bring that on running

we look you largest running Grupo purchase. Colombia, e-commerce If the on gateway bank that the Aval, in at second they're

is make right? because and we from able different, different right type learn were job So at sure expand a on things be improve we to a different to things those revenue synergies of to postmortem and we good may that continue It business. valuation each buying We every each our always technology. a acquisition country, done we we of where think the had do and we've

getting from pivoting to we're very model time, good in from mistakes I think the been pleased think do make that we've right aggregate, buying we But sometimes way. processing. correct price done But time that we and the stuff agile so very there -- and the are to at far, Again, licensing try that we're to job integrating a I in an we've and it synergies. then we

look As do more hope to we we forward, M&A.

have over shorter we It's has So that's to a that of team a why it now -- more time. just leader. mean past do I did a period in the the fantastic job. we new done we're want

of stacked focus. So put because in my be to also that's -- when that team, time in I've my leader emphasis going we direct more but big out a and how building an team both bringing report additional

Robert Napoli

the And inorganic Great. then Puerto some also Latin America. on portion give Rico, the growth good what Can that? of How color the Services added? Payment have was acquisitions you in much

Morgan Schuessler

terms segment you... specifically mean You of or in every

Robert Napoli

you that you the if inorganic revenue know, want to broad something Are it, the to you don't I be want in give or helpful. like growth I give however quarter a guess, like would

Morgan Schuessler

Yes, we out. don't break that

we've the we break in have to in rate organic in do We say that your the would healthy, we LatAm. Rico So don't of that numbers playing and growth but some is point got Puerto separately. out

Joaquín Castrillo

Correct. additional Bob, cadence. What highlights say, try or in give of the stocking did QX. completed the least kind help prepared the right, at with of acquire we part In to as some Rico, remarks I would Puerto to we

are the that. the expecting the you second see right, growth growth that single-digit we're for still can year. year-over-year And anniversarying slowdown, we we're expecting a because high So just in in

last to or M&A. And -- to I we one do Chile bit more will on meaningful But acquisitions be them. is in a acquired can flowing going you most because it's through a year, know in back little third Latin kind we the have the anniversary in what that's less we basis two of more without the one, in America, which So quarter. go-forward

and QX what would expecting of or more somewhat of back the you're right, to a impact are also for the today you which teens can what growth still perspective we seeing year, full a growth, show from that slowdown we be. So year-over-year as less never into high expecting in kind

Robert Napoli

just one in. sneak And lastly,

and Citibanamex the partnerships, sum other the up. On the

how being there. growth Can I adding as color think they're or some partner those on if successful? at to great give an a well. any are partner, really partnerships you interesting

Joaquín Castrillo

Yes.

the Bob sum similar regional we the one I'll in they announced to to aspects last which unit, their of one, But about can excited get same quickly. start some was existing mere acquiring to up we and similar have pay migrate or terms an very transactions in ramped going similar very a portfolio let's with a presence. we're profitability that quarter. of, manner, where business portfolio or, are cards So is brand-new in this not up, mere say, we of

This is series meaningful that continue certainly but countries a of to has in the the grow something the with to needs more trying into that. that part In it multiple be a to across we business, product region work case to and Citi of get Citibanamex, sold.

but we've in our said this selling. back leading past, getting are of of in technology kind using As the the front of they in at clients they are terms end, and

Morgan Schuessler

the you up to you to have get get have and the on vendors steady their customer Citibanamex, because up. Yes, then

sort it's of a... So

Joaquín Castrillo

process mean product nature the also that's I a sold. slightly longer being because of sales of the

Operator

Susquehanna. Jamie Our next from with Friedman comes question

James Friedman

I'm far picture a on kind I of you a at any so that we're four level, bigger in, what months Mac, the surprised just good to wondering start you've has expect? only but year. Congrats seen so didn't far? know about what takeaways high you

Morgan Schuessler

I said, has beat our vis-a-vis look, at entire been From the has of consumer, you the has QX at of I I peers Other general, very well. the the surprised the consumer I some that's like so that, we're surprised executing been industry. I -- strength if the you in of everybody. strength strength focused just surprising, very we're on than of mean consumer think the And but surprise. M&A, not only I think the season, the think, look think but biggest through business, earnings but look

James Friedman

enumerate just we as then And the -- you comparison period of modeling the akin, so quarters that the of sometimes right. get Okay. follow-up, my can

your the So remind us think second year, you could were, can would if be kind model. can when half? the us that know there's and of as just of up remind we top a anything of the you just of it those things in there helpful about last I But lot. think some clean I try off head, QX or was you the if

Joaquín Castrillo

out in in quarter. through segment, Rico some the acquisition that I that third we of second I I'll the the Chile would called just will we in payment Puerto Rico anniversary That's kind we in anniversary Sure. say we the quarter. acquisition go as key that ones America mentioned, in tuck-in did the Bob, the in Puerto will the segment. Latin BBR of

that's an And in the that we we Solutions, plus we the segment. Popular So mostly quarter had important the sale item where for have right, also impacting CPI third assets, of Business had the transaction then credit.

QX, for the good the And in through what do most fourth of that expected much you XXXX. say that small the cleaner said Solutions, of of what is a flows piece we quarter for, although QX that we would assimulate to a we we Business what I impacts Puerto what at as kind have for reported we baseline related quarter. year, to will through flow one that to end Rico. look at And a just the if payments is as said last

Operator

from comes question Raymond John next with James. Our Davis

John Davis

of a said at better first look the just you you has than the start guide, up to but little in if held Mac, consumer the I the kind beat quarter. -- bit guys year raised less

commentary macro kind -- of curious, be more year? and do helpful. Just versus kind ago, sort of the just would is about back macro half based on you months of conservatism So the your any think of three there how

Joaquín Castrillo

the was strong. really I can months two surprised as and and quarter chime is, John, of just certainly look, consumer, really we're What the off first reflected, I mostly say started maybe I'll mentioned, by in. start, So in Mac of would it the where the it strength

out into seen more have year coming March started of we taper what April. expected kind that the down we kind -- getting We of when of to

Mac for and So our into as rates that looking said, monitor look the is to very operate us that year. if of first quarter. we still full guidance the those rest still during still we're And that to to at strength that are high, backdrop have right, we for the taking because level. a at the year, season saw model considers inflation is we What closely high, trends the declining we trend positive at consumer continue that it perform continue you the the able to as to something say well. certainly just economic would and be of I we this need

Morgan Schuessler

Feds the is the Feds believe and back wanted mean, from the I exhaust to than excess rates that be take, do going weaker half take the first consumers high, Yes. effect as cash as the the stay half. to we

John Davis

nice turn of that what a on or a And Okay. deal How appetite on would the do Head far leverage. willing capital EVERTEC. like you new now year from almost a lot a BPOP frees But we're in a of deal of big do? take you to leverage you just willing this to obviously, are to hired and you are M&A, allocation bigger at up, we're Where which throughout just of so where given under if your curious will. That's tuck-ins take transaction, kind Dev. talked Corp helpful. call then, is You've we've of you Mac, bunch the kind leverage? -- done time But about a

Morgan Schuessler

for of But Look, the questions conviction the make deal, very back we're a deal. larger the the to we look and the be and Xx risk, the of to think sure do I very aware more would that. deal. bigger We we do to to X I at higher previous mean, would one the the execution cautious, want right

can't I looking are we that about looking the more we larger past. sizable things deal than that are have at are in but one, mean, in we at are the we than have We some talk look, past. the

John Davis

me. And then for one Great. last Okay.

Just net any few We market a years on ago. Obviously, made you update that COVID. had Chile. in a

Just curious kind of going how that partnership Any there? color SP-X is

Morgan Schuessler

we They've Yes. I group, Chile that company The business turned and of in major deal a we most the because at processing Chile. mean, into then exceeded expectations. and up bank look, bought lot Santander successful incredibly brought first was is significantly had the created going or pay well. Petro partnership it the their excitement

they that because Chile It's because at look performed of you expanded well. love, a our . that Puerto X and We sizable of this Rico, is with largest markets business of outside into the legacy and well so we company know us you whole as is our Uruguay market market And it's we business for purchased of a -- right? there. us. when

Operator

Our next Stanley. with question comes from Morgan James Walker

Jeffrey Goldstein

This is Jeff Goldstein on James. for

trends you Just on call would on markets maybe Can notable around is if some there Is be just where most vertical, are pronounced? helpful. anything trends the particular to out you out. expand that the called slowing those more color by volume there

Joaquín Castrillo

the you visibility Sure. segment. I'll right? Puerto is mostly This give we have Rico do, to in what

exit specific So it's the that's kind say any in March port the to moderating where we're the wouldn't and then of vertical. and kind of of good half And of very seeing first April. I

see also The We truth is did strength verticals. down come all average we did the verticals. much across ticket in see all pretty

let's main say, that's or fact isn't any that I there it. the So a is starting is main, moderate. out to general seeing the say say, this and would that's that vertical comment we're how one at point, thing call could I

Jeffrey Goldstein

to And continues Got a resilience then it. popular recession be topic. Okay.

well, So a how Just maybe recession, that? you And can as cost us in side revenue? should pull margins? the you about potential we protect you have do to to how then on view what remind leverage protected think

Morgan Schuessler

typically thing is you get federal unique a of one is Puerto of XX% One if the a look, recession. mean, go bit market. Rico don't against subsidies. And population the away a I those

increase. could those fact, In

coming the the funding had opportunity and Feds hurricane from continued from you the in then pandemic. So for the the

size that that's billion, well. And that's about sub-people as said right? have some And of they another the $XX what at anticipate banks some still

because create federal are recession impacted. insulation be be would some of to type that less likely . against a those does funds that So

our labor From a not focused only continue arbitrage look cost opportunities in margins, perspective, with you on our America, different vendors. to Latin we've look, to in done we have Rico, we between -- Puerto if to what we'll for we're but over time, managing our look ability margins locations, look at still and the and continue our very with at

Operator

[Operator with Bob William is from question follow-up Instructions] a Our Blair. next Napoli

Robert Napoli

Brazil and Appreciate market. lot And getting follow lot players if just obviously make there, your it. Brazil mean, you PaySmart/Brazil, PayeSmart in a down don't of a up X I massive acquisition early There's strategy? how broader but a thoughts you on I you just I a bigger would. guess, Do is looking just wanted potentially Brazil. around broadly to have Brazil. is in days,

Morgan Schuessler

Great question, Bob.

So is opportunities. in the America as an believe, market us an you portion market. if in we're It's with can know, significant right we that when gives we've largest small business interested we Brazil, is business there a Latin some great far in by market. It Brazil had actually a we find a PayGroup. of customers. bought issuing It's the general. PaySmart important

like So market. we the

asset, do a you've to to and you've got team, the you've able We right differentiate got be to have good think yourself. to local got buy

And by bigger a to we manage the do do that continue like look create feel in it market. find where absolutely that we differentiated been advantage at And acquisitions, if we'll it, so better and synergies -- some and we combining far, able small it we have can do can Brazil. would we've something with to or we

Robert Napoli

you'd then -- of Are like or the of we types areas if more what or other on expect the M&A could technologies businesses looking technology on just from Just see you're there -- anything any perspective, to other same? at should we And acquire? thoughts the an acquisitions?

Morgan Schuessler

Yes.

from more the run strategic could broadly. products franchise to in we that them. and have customer Bob could We're set sell what the we region at existing we leverage have we infrastructure that our So have thinking cost and are additional we products very other effectively. what advantages how infrastructure looking The we that and both

commercially and that at that us. both So sense think perspective would adjacent sense operating from we're make an looking businesses. for we make

geographies at target want we will well. as are So part But create in sure better adjacencies in wide looking being to into make we'll we a look as But value. EVERTEC look to expand like makes of and products, that a we mentioned, the potentially company you way, Brazil. larger

Operator

This concludes our Schuessler question-and-answer remarks. for session. I would like to turn the conference Mac back over closing any to

Morgan Schuessler

night. forward want at joining call conferences. everyone months coming for to the today, just over Good we the thank I you. seeing and you Thank different to look

Operator

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

You may now disconnect.

EVERTEC (EVTC) 26 Apr 232023 Q1 Earnings call transcript