Evertec's Q1 2025: Unraveling Key Contradictions in Growth, Economic Impact, and Margin Expectations

Sinqia's growth and performance, economic impact of hurricane relief funds in Puerto Rico, economic performance and consumer confidence, and pricing initiatives and their impact on future margins in Merchant Acquiring are the key contradictions discussed in EVERTEC's latest 2025Q1 earnings call.



Revenue and Earnings Performance:
- EVERTEC reported revenue of $228.8 million for Q1 2025, an 11.4% increase over the prior year, with an adjusted EBITDA of $89.4 million, up approximately 14% year-over-year.
- This growth was driven by strong performance across all business segments, efficiency improvements, and a focus on expense management, partially offset by the revenue mix including lower-margin hardware and software sales.

Segment Growth and Performance:
- Merchant Acquiring grew 11%, with a margin increase to 42.7%, attributed to pricing initiatives and increased sales volumes.
- Latin America Payments & Solutions reported a 13% increase in revenue, driven by the Getnet Chile relationship and the reacceleration in Brazil, with an adjusted EBITDA margin improvement to 29.7%.

Puerto Rico and LatAm Economic Context:
- Puerto Rico's economy remains stable, with employment growth and unemployment rates at multi-decade lows, positively impacting EVERTEC's local operations.
- The company's strong performance in Latin America was supported by the improved Brazil business and the Getnet Chile relationship, despite currency headwinds.

Financial Outlook and Strategy:
- EVERTEC raised its constant currency revenue growth outlook for 2025 to 6.8% to 7.7%, reflecting confidence in continued organic growth and the positive impact of recent acquisitions.
- The company maintains a focus on strategic M&A opportunities, with a robust pipeline and expectations for further revenue and margin enhancements from recent acquisitions.