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EVERTEC (EVTC) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Industrials· Aug 4, 2026

Source: earnings call transcript

Executive summary

EVERTEC, Inc. Q2 FY26 — Strong Organic Growth and Strategic Acquisitions Drive Raised Outlook

EVERTEC delivered a strong second quarter, driven by robust organic growth across its acquiring and payment businesses, particularly in Latin America, and the strategic integration of recent acquisitions. The company raised its full-year revenue and EPS outlook, reflecting confidence in its diversified business model and continued execution of strategic priorities, while managing the impact of a cybersecurity incident and a contractual discount in its Business Solutions segment.

Highlights

5

  • Total revenue increased 20% year-over-year to $275 million, with constant currency growth of 16%.

  • Adjusted EBITDA grew 18% year-over-year to $109 million, reflecting strong operating leverage.

  • Adjusted EPS increased 18% to $1.05, benefiting from higher earnings and share repurchases.

  • Latin America Payments and Solutions revenue surged 52% year-over-year (42% constant currency) to $131 million.

  • Full-year 2026 revenue outlook raised to $1.085 billion - $1.095 billion, representing 16.4% to 17.5% growth.

Concerns

4

  • Adjusted EBITDA margin slightly contracted to 39.8% from 40.3% due to increasing contribution from lower-margin Latin America businesses.

  • Business Solutions segment revenue decreased 9% year-over-year to $59 million, impacted by the Popular contract discount and delays in new business wins.

  • Net debt to trailing 12 months adjusted EBITDA increased to 2.55 times from 1.95 times a year ago, following the Demensa acquisition.

  • Higher adjusted effective tax rate due to a greater proportion of taxable income in higher-tax foreign jurisdictions.

Guidance & targets

CategoryTargetConfidence
Full-year 2026 Reported Revenue
$1.085 billion to $1.095 billion
high materiality
High
Full-year 2026 Reported Revenue Growth
16.4% to 17.5%
high materiality
High
Full-year 2026 Constant Currency Revenue Growth
14.5% to 15.6%
high materiality
High
Full-year 2026 Merchant Acquiring Revenue Growth
high single-digit growth
medium materiality
High
Full-year 2026 Payments Puerto Rico and Caribbean Revenue Growth
mid-single-digit growth
medium materiality
High
Full-year 2026 Latin America Payments and Solutions Reported Revenue Growth
low 40s
medium materiality
High
Full-year 2026 Latin America Payments and Solutions Constant Currency Revenue Growth
mid to high 30s
medium materiality
High
Full-year 2026 Business Solutions Revenue Growth
decline in the mid-single digits
medium materiality
High
Full-year 2026 Adjusted EBITDA Margin
39% to 40%
high materiality
High
Full-year 2026 Adjusted EPS Growth
8.8% and 11.7%
high materiality
High
Full-year 2026 Adjusted EPS Growth (Constant Currency)
7.2% and 10%
high materiality
High
Full-year 2026 Effective Tax Rate
11% to 12%
medium materiality
High
Full-year 2026 Capital Expenditures
$90 million
medium materiality
High
Demensa EPS Impact
EPS neutral to slightly accretive
medium materiality
High
TransBank Agreement Revenue Contribution
start impacting second half of 2027, fully ramp in 2028
high materiality
High
AI Initiatives Financial Impact
incorporate benefits into financial outlook starting in 2027
low materiality
Medium

Segment performance

SegmentRevenueYoYQoQMargin
Merchant Acquiring
Strong organic growth driven by higher sales volume, non-transactional revenues, and improved spread. Benefited from onboarding new high-volume merchants and healthy consumer spending in Puerto Rico, including tax relief initiatives. Adjusted EBITDA margin declined 60 bps due to higher processing costs.
Sales volume growth: 7%Transactions growth: 6%
$53 million11%—41.7% Adjusted EBITDA margin
Payment Services
Growth driven by continued momentum in ATH Mobile (especially ATH Mobile Business) and higher POS transaction volumes. Benefited from a non-recurrent volume-based benefit. Adjusted EBITDA margin expanded 210 bps due to the accretive non-recurrent benefit and platform scalability.
ATH Mobile growth: double-digitPOS transactions growth: 12%
$61 million8%—60.6% Adjusted EBITDA margin
Latin America Payments and Solutions
Largest contributor to revenue and EBITDA growth. Benefited from Demensa and Technobank acquisitions, including Technobank's expansion in Brazil. Underlying organic performance supported by business outsourcing, licensing, platform revenues, and higher transaction volumes. Adjusted EBITDA increased 70% YoY. Margin expanded 320 bps, driven by Technobank's higher margin profile, partially offset by Demensa's lower current margins.
Constant currency revenue growth: 42%Foreign currency tailwind: $9 million
$131 million52%—30.3% Adjusted EBITDA margin
Business Solutions
Decline primarily attributable to the 10% contractual discount to Popular effective October last year. Adjusted EBITDA decreased 13%. Margin contracted 200 bps due to the discount, partially offset by non-recurrence of prior-year project expenses. Performance was in line with expectations, reflecting underlying stability despite the anticipated impact.
$59 million-9%—38.3% Adjusted EBITDA margin
Corporate and Other
Represents corporate overhead and other unallocated expenses.
Adjusted EBITDA as % of total revenue: 4.2%
———Negative $12 million Adjusted EBITDA

Deals & partnerships

TransBank Multi-year agreement to operate transactional processing environment and selected technology platforms and services. at least five years

Chile's leading payment solutions provider and one of the largest acquirers in Latin America. Represents one of the most significant commercial wins in EVERTEC's history, deepening strategic relevance in Chile.

CLIP Agreement to provide acquiring switching technology for CLIP's e-wallet (MeClip).

One of Mexico's leading financial ecosystem providers, serving nearly 1 million merchants. Serves as a strong proof point of EVERTEC's ability to compete and win in Mexico.

Metro Pistas Agreements to support card-present and card-not-present transactions.

A toll road operator and subsidiary of Albertus Infrastructura in Puerto Rico. Highlights EVERTEC's ability to integrate solutions, including those acquired through prior investments like Place to Pay.

Demensa Acquisition of a software capabilities provider for financial institutions. approximately $199 million

Strengthens EVERTEC's software capabilities, expands addressable market, and increases relevance within the Brazilian financial services ecosystem. Integration is in early stages but exceeding expectations.

BBChain Acquisition of a provider of blockchain infrastructure, tokenization, digital custody, and digital asset solutions.

Strategically expands EVERTEC's platform beyond traditional payments and banking technology into next-generation digital financial infrastructure, particularly in Brazil. Creates opportunities to extend capabilities across Latin America.

Technobank Acquisition completed in Q4 2025, contributing to Latin America growth.

Expansion into two additional states in Brazil. Non-controlling interest associated with this acquisition impacts adjusted net income.

Syncia Prior strategic acquisition mentioned as part of building a diversified financial technology platform.

Part of a series of acquisitions (Syncia, Technobank, Demensa, BBChain) aimed at expanding portfolio and broadening solutions.

Risks & headwinds

Cybersecurity Incident Q2 FY26 and ongoing

Incurred costs related to response and remediation reflected in GAAP results.

Mitigation:Activated incident response protocols, engaged external cybersecurity experts, working with affected clients and authorities. Incident did not disrupt operations.

Popular Contractual Discount Ongoing until Q4 FY26

10% discount to Popular, effective October last year, resulted in a 9% YoY revenue decrease for Business Solutions segment.

Mitigation:Anticipated impact reflected in revised outlook for Business Solutions. Headwind will no longer impact YoY comparison after Q4 FY26 anniversary.

Lower Margin Profile of Latin America Acquisitions Near-term, Q2 FY26 and beyond

Demensa currently operates at lower margins than existing Latin America business, partially offsetting margin expansion from Technobank.

Mitigation:Expect to realize synergy opportunities over time, becoming more meaningful in 2027, to bring margins to a more stable level. Full-year EBITDA margin guidance maintained at 39-40% through favorable business mix and cost management.

Higher Adjusted Effective Tax Rate Q2 FY26 and full-year 2026

Higher tax rate primarily reflects greater proportion of taxable income generated in higher tax foreign jurisdictions.

Mitigation:Full-year effective tax rate expected to remain within 11% to 12% range.

Delays in Business Solutions New Business Wins FY26

Contributed to the mid-single digit decline expected for Business Solutions revenue in FY26.

Mitigation:Reflected in the revised outlook for the segment.

Increased Interest Expense FY26

Higher interest expense is expected to limit full translation of stronger operating performance into earnings growth.

Mitigation:Benefit from debt repricing actions executed in prior year and lower interest rates, but overall expense remains a factor.

Increased Depreciation and Amortization Expense FY26

Higher D&A expense is expected to limit full translation of stronger operating performance into earnings growth.

Mitigation:Partially offset by strong adjusted EBITDA performance.

Higher Non-Controlling Interest FY26

Higher non-controlling interest related to Technobank acquisition is expected to limit full translation of stronger operating performance into earnings growth.

Mitigation:Partially offset by strong adjusted EBITDA performance.

What to watch in Q3 FY26

TransBank Agreement Implementation

Next quarter
Current Implementation in process
Target Continued progress on migration, on track for H2 2027 revenue impact

Why it matters

This is a significant commercial win, and its successful implementation is key to future revenue growth and market expansion in Chile.

We're already in the process, you know, going through the implementation and it'll be a migration of their existing merchant base. So once it is implemented, it'll ramp very quickly because it is a migration.

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Q&A highlights

Seeking details on the economic significance of the TransBank win, timing of revenue contribution, and how it compares to previous Santander and Banco de Chile deals.

Max Schuessler highlighted TransBank as a major commercial contract, validating their technology. He stated implementation is underway, with revenue impact expected in H2 2027 and full ramp in 2028, driven by a migration of the existing merchant base. He also mentioned the Clip deal in Mexico as a significant reputational win.

“We expect it to start impacting second half of 2027, but really fully ramp in 2028.”

asked by Vasu Govil · answered by Max Schuessler

2 min read 6 chapters

Detailed narrative

Strategic Organic Growth Initiatives

EVERTEC secured significant organic growth opportunities, including a multi-year agreement with TransBank, Chile's largest acquirer, to operate its transactional processing environment and technology platforms. This deal, with an initial term of at least five years, is expected to start impacting revenue in H2 2027 and fully ramp in 2028. Additionally, the company signed a contract with CLIP in Mexico, a leading financial ecosystem provider, marking an early milestone in its acquiring services business in the country. New agreements with Metro Pistas in Puerto Rico further highlight the ability to leverage existing capabilities for new customer segments.

Disciplined M&A Strategy and Integration

The company completed two strategic acquisitions in the quarter: Demensa and BBChain. Demensa strengthens software capabilities for financial institutions in Brazil, with integration in early stages but exceeding initial expectations. BBChain expands the platform into next-generation digital financial infrastructure, including blockchain, tokenization, and digital asset solutions, particularly in Brazil. These acquisitions, along with Syncia and Technobank, are part of a strategy to build a larger, more diversified financial technology platform, enhancing product portfolios and client reach across Latin America.

AI Adoption and Future Impact

EVERTEC is advancing its AI initiatives with a focus on efficiency, innovation, and service enhancement. Current applications include accelerating software development, improving incident management, enhancing fraud detection, and developing new client-facing solutions. While current efforts are focused on operational efficiency, the company anticipates longer-term opportunities to enhance revenue growth and profitability, expecting to incorporate these benefits into its financial outlook starting in 2027.

Puerto Rico Market Resilience

The Puerto Rico business continues to provide a resilient foundation, with Merchant Acquiring revenue growing 11% year-over-year and Payment Services revenue increasing 8%. This growth was driven by higher sales volumes, POS transaction volumes, and the momentum in ATH Mobile. Favorable economic conditions, including positive employment trends, consumer spending, and tourism activity, along with a $554 million tax relief program, support Puerto Rico's role as a stable source of recurring cash flow.

Cybersecurity Incident Management

The company addressed a cybersecurity incident disclosed in June, activating incident response protocols and engaging external experts. Management stated the incident did not disrupt operations or ability to serve clients, and remediation measures are ongoing. Costs related to the response and remediation were incurred and reflected in GAAP results, but underlying operating performance remained strong.

Capital Allocation and Financial Flexibility

EVERTEC continues to execute a balanced capital allocation strategy, investing in organic growth, completing acquisitions, and returning capital to shareholders. During the quarter, $47 million was used to repurchase approximately 2 million shares, and $3 million was paid in dividends. The board replenished the share repurchase authorization to $150 million, and liquidity remained strong at $420 million, providing financial flexibility for future growth and capital return.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.