QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. employer identification number) | ||||||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
☒ | Accelerated filer | ☐ | ||||||||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||||||||
Emerging growth company |
Page | ||||||||
Part I. FINANCIAL INFORMATION | ||||||||
Item 1. | Financial Statements | |||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Item 5. | ||||||||
Item 6. | ||||||||
September 30, 2023 | December 31, 2022 | |||||||||||||
Assets | ||||||||||||||
Current Assets: | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Restricted cash | ||||||||||||||
Accounts receivable, net | ||||||||||||||
Settlement assets | ||||||||||||||
Prepaid expenses and other assets | ||||||||||||||
Total current assets | ||||||||||||||
Debt securities available-for-sale, at fair value | ||||||||||||||
Equity securities, at fair value | ||||||||||||||
Investment in equity investee | ||||||||||||||
Property and equipment, net | ||||||||||||||
Operating lease right-of-use asset | ||||||||||||||
Goodwill | ||||||||||||||
Other intangible assets, net | ||||||||||||||
Deferred tax asset | ||||||||||||||
Derivative asset | ||||||||||||||
Net investment in leases | ||||||||||||||
Other long-term assets | ||||||||||||||
Total assets | $ | $ | ||||||||||||
Liabilities and stockholders’ equity | ||||||||||||||
Current Liabilities: | ||||||||||||||
Accrued liabilities | $ | $ | ||||||||||||
Accounts payable | ||||||||||||||
Contract liability | ||||||||||||||
Income tax payable | ||||||||||||||
Current portion of long-term debt | ||||||||||||||
Short-term borrowings | ||||||||||||||
Current portion of operating lease liability | ||||||||||||||
Settlement liabilities | ||||||||||||||
Foreign currency swap liability | ||||||||||||||
Total current liabilities | ||||||||||||||
Long-term debt | ||||||||||||||
Deferred tax liability | ||||||||||||||
Contract liability - long term | ||||||||||||||
Operating lease liability - long-term | ||||||||||||||
Other long-term liabilities | ||||||||||||||
Total liabilities | ||||||||||||||
Commitments and contingencies (Note 15) | ||||||||||||||
Stockholders’ equity | ||||||||||||||
Preferred stock, par value $ | ||||||||||||||
Common stock, par value $ | ||||||||||||||
Additional paid-in capital | ||||||||||||||
Accumulated earnings | ||||||||||||||
Accumulated other comprehensive loss, net of tax | ( | ( | ||||||||||||
Total EVERTEC, Inc. stockholders’ equity | ||||||||||||||
Non-controlling interest | ||||||||||||||
Total equity | ||||||||||||||
Total liabilities and equity | $ | $ |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
Revenues (affiliates Note 16) | $ | $ | $ | $ | ||||||||||||||||||||||
Operating costs and expenses | ||||||||||||||||||||||||||
Cost of revenues, exclusive of depreciation and amortization | ||||||||||||||||||||||||||
Selling, general and administrative expenses | ||||||||||||||||||||||||||
Depreciation and amortization | ||||||||||||||||||||||||||
Total operating costs and expenses | ||||||||||||||||||||||||||
Income from operations | ||||||||||||||||||||||||||
Non-operating income (expenses) | ||||||||||||||||||||||||||
Interest income | ||||||||||||||||||||||||||
Interest expense | ( | ( | ( | ( | ||||||||||||||||||||||
Loss on foreign currency remeasurement | ( | ( | ( | ( | ||||||||||||||||||||||
Loss on foreign currency swap | ( | ( | ||||||||||||||||||||||||
Earnings of equity method investment | ||||||||||||||||||||||||||
Gain on sale of business | ||||||||||||||||||||||||||
Other income, net | ||||||||||||||||||||||||||
Total non-operating (expenses) income | ( | ( | ||||||||||||||||||||||||
Income before income taxes | ||||||||||||||||||||||||||
Income tax (benefit) expense | ( | |||||||||||||||||||||||||
Net income | ||||||||||||||||||||||||||
Less: Net loss attributable to non-controlling interest | ( | ( | ( | ( | ||||||||||||||||||||||
Net income attributable to EVERTEC, Inc.’s common stockholders | ||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax of $ | ||||||||||||||||||||||||||
Foreign currency translation adjustments | ( | ( | ||||||||||||||||||||||||
Gain on cash flow hedges | ||||||||||||||||||||||||||
Unrealized loss on change in fair value of debt securities available-for-sale | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||
Total comprehensive income attributable to EVERTEC, Inc.’s common stockholders | $ | $ | $ | $ | ||||||||||||||||||||||
Net income per common share - basic attributable to EVERTEC, Inc.’s common stockholders | $ | $ | $ | $ | ||||||||||||||||||||||
Net income per common share - diluted attributable to EVERTEC, Inc.’s common stockholders | $ | $ | $ | $ | ||||||||||||||||||||||
Number of Shares of Common Stock | Common Stock | Additional Paid-in Capital | Accumulated Earnings | Accumulated Other Comprehensive (Loss) Income | Non-Controlling Interest | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2022 | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||
Share-based compensation recognized | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | ( | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
Restricted stock units delivered | ( | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Cash dividends declared on common stock, $ | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2023 | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||
Share-based compensation recognized | — | — | — | — | — | $ | ||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | ( | ( | ( | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
Restricted stock units delivered | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Cash dividends declared on common stock, $ | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2023 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
Share-based compensation recognized | — | — | — | — | — | $ | ||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | ( | ( | ( | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
Restricted stock units delivered | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Cash dividends declared on common stock, $ | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
Other comprehensive (loss) income | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2023 | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||
Number of Shares of Common Stock | Common Stock | Additional Paid-in Capital | Accumulated Earnings | Accumulated Other Comprehensive Loss | Non-Controlling Interest | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||
Share-based compensation recognized | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | ( | ( | ( | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
Restricted stock units delivered | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Cash dividends declared on common stock, $ | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2022 | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||
Share-based compensation recognized | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | ( | ( | ( | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
Restricted stock units delivered | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Cash dividends declared on common stock, $ | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||
Balance at June 30, 2022 | ( | |||||||||||||||||||||||||||||||||||||||||||
Share-based compensation recognized | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | ( | ( | ( | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
Restricted stock units delivered | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Cash dividends declared on common stock, $ | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Common stock received in exchange of the sale of a Business | ( | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
Balance at September 30, 2022 | ( | |||||||||||||||||||||||||||||||||||||||||||
Nine months ended September 30, | ||||||||||||||
2023 | 2022 | |||||||||||||
Cash flows from operating activities | ||||||||||||||
Net income | $ | |||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
Depreciation and amortization | ||||||||||||||
Amortization of debt issue costs and accretion of discount | ||||||||||||||
Operating lease amortization | ||||||||||||||
Unrealized loss on foreign currency hedge | ||||||||||||||
Unrealized gain on change in fair value of equity securities | ( | |||||||||||||
(Release) provision for expected credit losses and sundry losses | ( | |||||||||||||
Deferred tax benefit | ( | ( | ||||||||||||
Share-based compensation | ||||||||||||||
Gain on sale of a business | ( | |||||||||||||
Loss on disposition of property and equipment | ||||||||||||||
Earnings of equity method investment | ( | ( | ||||||||||||
Dividend received from equity method investment | ||||||||||||||
Loss on foreign currency remeasurement | ||||||||||||||
Decrease (increase) in assets: | ||||||||||||||
Accounts receivable, net | ( | |||||||||||||
Prepaid expenses and other assets | ( | ( | ||||||||||||
Other long-term assets | ( | ( | ||||||||||||
(Decrease) increase in liabilities: | ||||||||||||||
Accrued liabilities and accounts payable | ||||||||||||||
Income tax payable | ( | |||||||||||||
Contract liability | ( | |||||||||||||
Operating lease liabilities | ( | ( | ||||||||||||
Other long-term liabilities | ( | ( | ||||||||||||
Total adjustments | ( | |||||||||||||
Net cash provided by operating activities | ||||||||||||||
Cash flows from investing activities | ||||||||||||||
Additions to software | ( | ( | ||||||||||||
Acquisition of customer relationship | ( | |||||||||||||
Property and equipment acquired | ( | ( | ||||||||||||
Proceeds from sales of property and equipment | ||||||||||||||
Acquisition of available-for-sale debt securities | ( | ( | ||||||||||||
Purchase of equity securities | ( | |||||||||||||
Investment in equity investee | ( | |||||||||||||
Purchase of certificates of deposit | ( | |||||||||||||
Proceeds from maturities of available-for-sale debt securities | ||||||||||||||
Acquisitions, net of cash acquired | ( | ( | ||||||||||||
Net cash used in investing activities | ( | ( | ||||||||||||
Cash flows from financing activities | ||||||||||||||
Withholding taxes paid on share-based compensation | ( | ( | ||||||||||||
Net decrease in short-term borrowings | ( | |||||||||||||
Repayment of short-term borrowings for purchase of equipment and software | ( | |||||||||||||
Dividends paid | ( | ( | ||||||||||||
Repurchase of common stock | ( | ( | ||||||||||||
Repayment of long-term debt | ( | ( | ||||||||||||
Net cash used in financing activities | ( | ( | ||||||||||||
Effect of foreign exchange rate on cash, cash equivalents and restricted cash | ||||||||||||||
Net decrease in cash, cash equivalents and restricted cash | ( | ( | ||||||||||||
Cash, cash equivalents, restricted cash and cash included in settlement assets at beginning of the period | ||||||||||||||
Cash, cash equivalents, restricted cash, and cash included in settlement assets at end of the period | $ | $ | ||||||||||||
Reconciliation of cash, cash equivalents, restricted cash and cash included in settlement assets | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Restricted cash | ||||||||||||||
Cash and cash equivalents included in settlement assets | ||||||||||||||
Cash, cash equivalents, restricted cash and cash included in settlement assets | $ | $ | ||||||||||||
Supplemental disclosure of cash flow information: | ||||||||||||||
Cash paid for interest | $ | $ | ||||||||||||
Cash paid for income taxes | $ | $ | ||||||||||||
Supplemental disclosure of non-cash activities: | ||||||||||||||
Payable due to vendor related to equipment and software acquired | $ | $ | ||||||||||||
Non-cash investing activities | ||||||||||||||
Software exchanged for common stock | ||||||||||||||
Goodwill exchanged for common stock | ||||||||||||||
CDs transferred in the acquisition of a business | ||||||||||||||
Non-cash financing activities | ||||||||||||||
Payable due to vendor related to licenses acquired | ||||||||||||||
Non-cash financing and investing activities | ||||||||||||||
Common stock received and retired for sale of a business | ||||||||||||||
Preliminary Assets/Liabilities (at fair value) | |||||
( In thousands) | |||||
Cash and cash equivalents | $ | ||||
Accounts receivable, net | |||||
Prepaid expenses and other assets | |||||
Property and equipment, net | |||||
Operating lease right-of-use asset | |||||
Goodwill | |||||
Settlement assets | |||||
Other intangible assets, net | |||||
Total assets acquired | |||||
Accounts payable | |||||
Settlement liabilities | |||||
Operating lease liability | |||||
Income tax payable | |||||
Deferred tax liability | |||||
Total liabilities assumed | $ |
Amount | Weighted-average life | |||||||
(Dollar amounts in thousands) | ||||||||
Customer relationships | $ | |||||||
Trademark | ||||||||
Software packages | ||||||||
Total | $ |
September 30, 2023 | ||||||||||||||||||||||||||
(In thousands) | Gross unrealized | |||||||||||||||||||||||||
Amortized cost | Gains | Losses | Fair Value | |||||||||||||||||||||||
Costa Rica Government Obligations | ||||||||||||||||||||||||||
After 1 to 5 years | $ | $ | $ | ( | $ |
December 31, 2022 | ||||||||||||||||||||||||||
(In thousands) | Gross unrealized | |||||||||||||||||||||||||
Amortized cost | Gains | Losses | Fair Value | |||||||||||||||||||||||
Costa Rica Government Obligations | ||||||||||||||||||||||||||
After 1 to 5 years | $ | $ | $ | $ |
(Dollar amounts in thousands) | Useful life in years | September 30, 2023 | December 31, 2022 | |||||||||||||||||
Buildings | $ | $ | ||||||||||||||||||
Data processing equipment | ||||||||||||||||||||
Furniture and equipment | ||||||||||||||||||||
Leasehold improvements | ||||||||||||||||||||
Less - accumulated depreciation and amortization | ( | ( | ||||||||||||||||||
Depreciable assets, net | ||||||||||||||||||||
Land | ||||||||||||||||||||
Property and equipment, net | $ | $ |
(In thousands) | Payment Services - Puerto Rico & Caribbean | Payment Services - Latin America | Merchant Acquiring, net | Business Solutions | Total | |||||||||||||||||||||||||||
Balance at December 31, 2022 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Goodwill attributable to acquisition | ||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | ||||||||||||||||||||||||||||||||
Balance at September 30, 2023 | $ | $ | $ | $ | $ |
September 30, 2023 | ||||||||||||||||||||||||||
(Dollar amounts in thousands) | Useful life in years | Gross amount | Accumulated amortization | Net carrying amount | ||||||||||||||||||||||
Customer relationships | $ | $ | ( | $ | ||||||||||||||||||||||
Trademarks | ( | $ | ||||||||||||||||||||||||
Software packages | ( | $ | ||||||||||||||||||||||||
Other intangible assets, net | $ | $ | ( | $ |
December 31, 2022 | ||||||||||||||||||||||||||
(Dollar amounts in thousands) | Useful life in years | Gross amount | Accumulated amortization | Net carrying amount | ||||||||||||||||||||||
Customer relationships | $ | $ | ( | $ | ||||||||||||||||||||||
Trademarks | ( | |||||||||||||||||||||||||
Software packages | ( | |||||||||||||||||||||||||
Other intangible assets, net | $ | $ | ( | $ |
(In thousands) | ||||||||
Remaining 2023 | $ | |||||||
2024 | ||||||||
2025 | ||||||||
2026 | ||||||||
2027 | ||||||||
(In thousands) | September 30, 2023 | December 31, 2022 | ||||||||||||
2027 Term A Loan bearing interest at a variable interest rate (SOFR plus applicable margin(1)(2)) | $ | $ | ||||||||||||
Revolving credit facility(2) | ||||||||||||||
Note payable due on September 1, 2030(1) | $ | |||||||||||||
Swap Agreement | Effective date | Maturity Date | Notional Amount | Variable Rate | Fixed Rate | |||||||||||||||||||||||||||
2018 Swap | April 2020 | November 2024 | $ | 1-month SOFR | ||||||||||||||||||||||||||||
2023 Swap | November 2024 | December 2027 | $ | 1-month SOFR |
September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||
(In thousands) | Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||||||||||||
Financial assets: | ||||||||||||||||||||||||||
Costa Rica government obligations | $ | $ | $ | $ | ||||||||||||||||||||||
Equity securities | $ | $ | $ | $ | ||||||||||||||||||||||
Interest rate swaps | ||||||||||||||||||||||||||
Financial liabilities: | ||||||||||||||||||||||||||
Term Loan Facility | ||||||||||||||||||||||||||
Foreign currency hedge liability |
(In thousands) | Foreign Currency Translation Adjustments | Cash Flow Hedges | Unrealized Gains (losses) on Debt Securities AFS | Total | ||||||||||||||||||||||
Balance - December 31, 2022, net of tax | $ | ( | $ | ( | ||||||||||||||||||||||
Other comprehensive income (loss) before reclassifications | ( | |||||||||||||||||||||||||
Effective portion reclassified to net income | $ | $ | ( | ( | ||||||||||||||||||||||
Balance - September 30, 2023, net of tax | $ | ( | $ | $ | $ | ( |
Nonvested RSUs | Shares | Weighted-average grant date fair value | ||||||||||||
Nonvested at December 31, 2022 | $ | |||||||||||||
Granted | ||||||||||||||
Vested | ( | |||||||||||||
Forfeited | ( | |||||||||||||
Nonvested at September 30, 2023 | $ |
Three Months Ended September 30, 2023 | |||||||||||||||||||||||||||||
(In thousands) | Payment Services - Puerto Rico & Caribbean | Payment Services - Latin America | Merchant Acquiring, net | Business Solutions | Total | ||||||||||||||||||||||||
Timing of revenue recognition | |||||||||||||||||||||||||||||
Products and services transferred at a point in time | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Products and services transferred over time | $ | ||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | |||||||||||||||||||||||||
Three Months Ended September 30, 2022 | |||||||||||||||||||||||||||||
(In thousands) | Payment Services - Puerto Rico & Caribbean | Payment Services - Latin America | Merchant Acquiring, net | Business Solutions | Total | ||||||||||||||||||||||||
Timing of revenue recognition | |||||||||||||||||||||||||||||
Products and services transferred at a point in time | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Products and services transferred over time | $ | ||||||||||||||||||||||||||||
$ | $ | $ | $ | $ |
Nine months ended September 30, 2023 | |||||||||||||||||||||||||||||
(In thousands) | Payment Services - Puerto Rico & Caribbean | Payment Services - Latin America | Merchant Acquiring, net | Business Solutions | Total | ||||||||||||||||||||||||
Timing of revenue recognition | |||||||||||||||||||||||||||||
Products and services transferred at a point in time | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Products and services transferred over time | $ | ||||||||||||||||||||||||||||
$ | $ | $ | $ | $ |
Nine months ended September 30, 2022 | |||||||||||||||||||||||||||||
(In thousands) | Payment Services - Puerto Rico & Caribbean | Payment Services - Latin America | Merchant Acquiring, net | Business Solutions | Total | ||||||||||||||||||||||||
Timing of revenue recognition | |||||||||||||||||||||||||||||
Products and services transferred at a point in time | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Products and services transferred over time | $ | ||||||||||||||||||||||||||||
$ | $ | $ | $ | $ |
(In thousands) | September 30, 2023 | December 31, 2022 | |||||||||
Balance at beginning of period | $ | $ | |||||||||
Services transferred to customers | |||||||||||
Transfers to accounts receivable | ( | ( | |||||||||
Balance at end of period | $ | $ | |||||||||
(In thousands) | September 30, 2023 | December 31, 2022 | ||||||||||||
Balance at beginning of period | $ | $ | ||||||||||||
Current period provision for expected credit losses | ||||||||||||||
Write-offs | ( | ( | ||||||||||||
Recoveries of amounts previously written-off | ||||||||||||||
Balance at end of period | $ | $ | ||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||
(In thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Current tax provision | $ | $ | $ | $ | ||||||||||||||||||||||
Deferred tax benefit | ( | ( | ( | ( | ||||||||||||||||||||||
Income tax (benefit) expense | $ | ( | $ | $ | $ |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||
(In thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Current tax provision | ||||||||||||||||||||||||||
Puerto Rico | $ | $ | $ | $ | ||||||||||||||||||||||
United States | ||||||||||||||||||||||||||
Foreign countries | ||||||||||||||||||||||||||
Total current tax provision | $ | $ | $ | $ | ||||||||||||||||||||||
Deferred tax benefit | ||||||||||||||||||||||||||
Puerto Rico | $ | ( | $ | $ | ( | $ | ( | |||||||||||||||||||
United States | ||||||||||||||||||||||||||
Foreign countries | ( | ( | ( | ( | ||||||||||||||||||||||
Total deferred tax benefit | $ | ( | $ | ( | $ | ( | $ | ( |
Nine months ended September 30, | ||||||||||||||
(In thousands) | 2023 | 2022 | ||||||||||||
Computed income tax at statutory rates | $ | $ | ||||||||||||
Differences in tax rates due to multiple jurisdictions | ||||||||||||||
Effect of income subject to tax-exemption grant | ( | ( | ||||||||||||
Effect of the gain on sale of a business | ( | |||||||||||||
Unrecognized tax expense | ( | |||||||||||||
Excess tax benefits on share-based compensation | ||||||||||||||
Tax credits for research and development activities | ( | |||||||||||||
Other, net | ( | |||||||||||||
Income tax expense | $ | $ |
Three Months Ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||
(In thousands, except per share information) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Net income available to EVERTEC, Inc.’s common shareholders | $ | $ | $ | $ | ||||||||||||||||||||||
Weighted average common shares outstanding | ||||||||||||||||||||||||||
Weighted average potential dilutive common shares (1) | ||||||||||||||||||||||||||
Weighted average common shares outstanding - assuming dilution | ||||||||||||||||||||||||||
Net income per common share - basic | $ | $ | $ | $ | ||||||||||||||||||||||
Net income per common share - diluted | $ | $ | $ | $ |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||
(In thousands) | 2022 (1) | 2022 (1) | ||||||||||||
Total revenues | $ | $ | ||||||||||||
Cost of revenues | $ | $ | ||||||||||||
Operating lease cost and other fees | $ | $ | ||||||||||||
Interest earned from affiliate | ||||||||||||||
Interest income | $ | $ |
Three Months Ended September 30, 2023 | |||||||||||||||||||||||||||||||||||
(In thousands) | Payment Services - Puerto Rico & Caribbean | Payment Services - Latin America | Merchant Acquiring, net | Business Solutions | Corporate and Other (1) | Total | |||||||||||||||||||||||||||||
Revenues | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
Operating costs and expenses | ( | ||||||||||||||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||||||||||||||
Non-operating income (expenses) | ( | ( | ( | ||||||||||||||||||||||||||||||||
EBITDA | ( | ||||||||||||||||||||||||||||||||||
Compensation and benefits (2) | |||||||||||||||||||||||||||||||||||
Transaction, refinancing and other fees (3) | |||||||||||||||||||||||||||||||||||
(Gain) loss on foreign currency remeasurement (4) | ( | ||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | $ | $ | $ | $ | ( | $ |
Three Months Ended September 30, 2022 | |||||||||||||||||||||||||||||||||||
(In thousands) | Payment Services - Puerto Rico & Caribbean | Payment Services - Latin America | Merchant Acquiring, net | Business Solutions | Corporate and Other (1) | Total | |||||||||||||||||||||||||||||
Revenues | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
Operating costs and expenses | |||||||||||||||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||||||||||||||
Non-operating income (expenses) | ( | ( | |||||||||||||||||||||||||||||||||
EBITDA | ( | ||||||||||||||||||||||||||||||||||
Compensation and benefits (2) | |||||||||||||||||||||||||||||||||||
Transaction, refinancing and other fees (3) | ( | ( | |||||||||||||||||||||||||||||||||
Loss on foreign currency remeasurement (4) | ( | ||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | $ | $ | $ | $ | ( | $ |
Nine months ended September 30, 2023 | |||||||||||||||||||||||||||||||||||
(In thousands) | Payment Services - Puerto Rico & Caribbean | Payment Services - Latin America | Merchant Acquiring, net | Business Solutions | Corporate and Other (1) | Total | |||||||||||||||||||||||||||||
Revenues | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
Operating costs and expenses | ( | ||||||||||||||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||||||||||||||
Non-operating income (expenses) | ( | ( | ( | ||||||||||||||||||||||||||||||||
EBITDA | ( | ||||||||||||||||||||||||||||||||||
Compensation and benefits (2) | |||||||||||||||||||||||||||||||||||
Transaction, refinancing and other fees (3) | |||||||||||||||||||||||||||||||||||
(Gain) loss on foreign currency remeasurement (4) | ( | ||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | $ | $ | $ | $ | ( | $ |
Nine months ended September 30, 2022 | |||||||||||||||||||||||||||||||||||
(In thousands) | Payment Services - Puerto Rico & Caribbean | Payment Services - Latin America | Merchant Acquiring, net | Business Solutions | Corporate and Other (1) | Total | |||||||||||||||||||||||||||||
Revenues | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
Operating costs and expenses | |||||||||||||||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||||||||||||||
Non-operating income (expenses) | ( | ( | |||||||||||||||||||||||||||||||||
EBITDA | ( | ||||||||||||||||||||||||||||||||||
Compensation and benefits (2) | |||||||||||||||||||||||||||||||||||
Transaction, refinancing and other fees (3) | ( | ( | |||||||||||||||||||||||||||||||||
Loss on foreign currency remeasurement (4) | |||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | $ | $ | $ | $ | ( | $ |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
(In thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Net Income | $ | $ | $ | $ | |||||||||||||||||||
Add: | |||||||||||||||||||||||
Income tax (benefit) expense | ( | ||||||||||||||||||||||
Interest expense, net | |||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||
Total EBITDA | $ | $ | $ | $ |
Three months ended September 30, | |||||||||||||||||||||||
In thousands | 2023 | 2022 | Variance | ||||||||||||||||||||
Revenues | $ | 173,198 | $ | 145,803 | $ | 27,395 | 19 | % | |||||||||||||||
Operating costs and expenses | |||||||||||||||||||||||
Cost of revenues, exclusive of depreciation and amortization | 81,280 | 76,272 | 5,008 | 7 | % | ||||||||||||||||||
Selling, general and administrative expenses | 30,437 | 26,001 | 4,436 | 17 | % | ||||||||||||||||||
Depreciation and amortization | 21,919 | 19,712 | 2,207 | 11 | % | ||||||||||||||||||
Total operating costs and expenses | 133,636 | 121,985 | 11,651 | 10 | % | ||||||||||||||||||
Income from operations | $ | 39,562 | $ | 23,818 | $ | 15,744 | 66 | % |
Three months ended September 30, | |||||||||||||||||||||||
In thousands | 2023 | 2022 | Variance | ||||||||||||||||||||
Interest income | $ | 1,926 | $ | 807 | $ | 1,119 | 139 | % | |||||||||||||||
Interest expense | (5,709) | (6,763) | 1,054 | 16 | % | ||||||||||||||||||
Loss on foreign currency remeasurement | (2,806) | (7,779) | 4,973 | 64 | % | ||||||||||||||||||
Loss on foreign currency swap | (29,225) | — | (29,225) | — | % | ||||||||||||||||||
Earnings of equity method investment | 1,197 | 688 | 509 | 74 | % | ||||||||||||||||||
Gain on sale of business | — | 135,642 | (135,642) | (100) | % | ||||||||||||||||||
Other income | 153 | 374 | (221) | (59) | % | ||||||||||||||||||
Total non-operating (expenses) income | $ | (34,464) | $ | 122,969 | $ | (157,433) | 128 | % |
Three months ended September 30, | |||||||||||||||||||||||
In thousands | 2023 | 2022 | Variance | ||||||||||||||||||||
Income tax (benefit) expense | $ | (4,858) | $ | 9,048 | $ | (13,906) | (154) | % |
Nine months ended September 30, | |||||||||||||||||||||||
In thousands | 2023 | 2022 | Variance | ||||||||||||||||||||
Revenues | $ | 500,088 | $ | 456,622 | $ | 43,466 | 10 | % | |||||||||||||||
Operating costs and expenses | |||||||||||||||||||||||
Cost of revenues, exclusive of depreciation and amortization | 238,149 | 215,244 | 22,905 | 11 | % | ||||||||||||||||||
Selling, general and administrative expenses | 83,834 | 66,436 | 17,398 | 26 | % | ||||||||||||||||||
Depreciation and amortization | 63,680 | 58,432 | 5,248 | 9 | % | ||||||||||||||||||
Total operating costs and expenses | 385,663 | 340,112 | 45,551 | 13 | % | ||||||||||||||||||
Income from operations | $ | 114,425 | $ | 116,510 | $ | (2,085) | (2) | % |
Nine months ended September 30, | |||||||||||||||||||||||
In thousands | 2023 | 2022 | Variance | ||||||||||||||||||||
Interest income | $ | 5,162 | $ | 2,279 | $ | 2,883 | 127 | % | |||||||||||||||
Interest expense | (16,992) | (18,242) | 1,250 | 7 | % | ||||||||||||||||||
Loss on foreign currency remeasurement | (7,337) | (6,858) | (479) | 7 | % | ||||||||||||||||||
Loss on foreign currency swap | (29,225) | — | (29,225) | — | % | ||||||||||||||||||
Earnings of equity method investment | 3,828 | 2,120 | 1,708 | 81 | % | ||||||||||||||||||
Gain on sale of business | — | 135,642 | (135,642) | (100) | % | ||||||||||||||||||
Other income | 2,754 | 1,621 | 1,133 | 70 | % | ||||||||||||||||||
Total non-operating (expenses) income | $ | (41,810) | $ | 116,562 | $ | (158,372) | 136 | % |
Nine months ended September 30, | |||||||||||||||||||||||
In thousands | 2023 | 2022 | Variance | ||||||||||||||||||||
Income tax expense | $ | 4,546 | $ | 22,911 | $ | (18,365) | (80) | % |
Three months ended September 30, | |||||||||||
In thousands | 2023 | 2022 | |||||||||
Revenues | $51,600 | $44,592 | |||||||||
Adjusted EBITDA | 30,356 | 25,088 | |||||||||
Adjusted EBITDA Margin | 58.8 | % | 56.3 | % |
Three months ended September 30, | |||||||||||
In thousands | 2023 | 2022 | |||||||||
Revenues | $46,155 | $33,741 | |||||||||
Adjusted EBITDA | 17,492 | 10,935 | |||||||||
Adjusted EBITDA Margin | 37.9 | % | 32.4 | % |
Three months ended September 30, | |||||||||||
In thousands | 2023 | 2022 | |||||||||
Revenues | $40,557 | $36,911 | |||||||||
Adjusted EBITDA | 15,300 | 13,866 | |||||||||
Adjusted EBITDA Margin | 37.7 | % | 37.6 | % |
Three months ended September 30, | |||||||||||
In thousands | 2023 | 2022 | |||||||||
Revenues | $56,522 | $49,306 | |||||||||
Adjusted EBITDA | 21,122 | 16,276 | |||||||||
Adjusted EBITDA Margin | 37.4 | % | 33.0 | % |
Nine months ended September 30, | |||||||||||
In thousands | 2023 | 2022 | |||||||||
Revenues | $150,824 | $130,678 | |||||||||
Adjusted EBITDA | 87,415 | 72,877 | |||||||||
Adjusted EBITDA Margin | 58.0 | % | 55.8 | % |
Nine months ended September 30, | |||||||||||
In thousands | 2023 | 2022 | |||||||||
Revenues | $120,548 | $93,308 | |||||||||
Adjusted EBITDA | 41,907 | 30,793 | |||||||||
Adjusted EBITDA Margin | 34.8 | % | 33.0 | % |
Nine months ended September 30, | |||||||||||
In thousands | 2023 | 2022 | |||||||||
Revenues | $122,152 | $111,079 | |||||||||
Adjusted EBITDA | 46,569 | 48,484 | |||||||||
Adjusted EBITDA Margin | 38.1 | % | 43.6 | % |
Nine months ended September 30, | |||||||||||
In thousands | 2023 | 2022 | |||||||||
Revenues | $169,188 | $176,620 | |||||||||
Adjusted EBITDA | 66,864 | 75,715 | |||||||||
Adjusted EBITDA Margin | 39.5 | % | 42.9 | % |
Nine months ended September 30, | ||||||||||||||
(In thousands) | 2023 | 2022 | ||||||||||||
Cash provided by operating activities | $ | 163,458 | $ | 159,009 | ||||||||||
Cash used in investing activities | (105,433) | (106,002) | ||||||||||||
Cash used in financing activities | (68,852) | (99,508) | ||||||||||||
Effect of foreign exchange rate on cash, cash equivalents and restricted cash | 10,716 | 4,260 | ||||||||||||
Increase in cash, cash equivalents and restricted cash | $ | (111) | $ | (42,241) |
Swap Agreement | Effective date | Maturity Date | Notional Amount | Variable Rate | Fixed Rate | |||||||||||||||||||||||||||
2018 Swap | April 2020 | November 2024 | $250 million | 1-month SOFR | 2.929% | |||||||||||||||||||||||||||
2023 Swap | November 2024 | December 2027 | $250 million | 1-month SOFR | 3.375% |
Three months ended September 30, | Nine months ended September 30, | Twelve months ended | ||||||||||||||||||||||||||||||
(In thousands, except per share information) | 2023 | 2022 | 2023 | 2022 | September 30, 2023 | |||||||||||||||||||||||||||
Net income | $ | 9,956 | $ | 137,739 | $ | 68,069 | $ | 210,161 | $ | 96,777 | ||||||||||||||||||||||
Income tax (benefit) expense | (4,858) | 9,048 | 4,546 | 22,911 | 10,618 | |||||||||||||||||||||||||||
Interest expense, net | 3,783 | 5,956 | 11,830 | 15,963 | 17,518 | |||||||||||||||||||||||||||
Depreciation and amortization | 21,919 | 19,712 | 63,680 | 58,432 | 83,866 | |||||||||||||||||||||||||||
EBITDA | 30,800 | 172,455 | 148,125 | 307,467 | 208,779 | |||||||||||||||||||||||||||
Equity income (1) | 1,834 | 1,159 | (797) | (273) | (1,645) | |||||||||||||||||||||||||||
Compensation and benefits (2) | 6,970 | 5,671 | 21,516 | 15,355 | 26,496 | |||||||||||||||||||||||||||
Transaction, refinancing and other fees (3) | 36,249 | (126,897) | 44,092 | (122,447) | 47,665 | |||||||||||||||||||||||||||
Loss on foreign currency remeasurement (4) | 2,806 | 7,779 | 7,337 | 6,858 | 8,124 | |||||||||||||||||||||||||||
Adjusted EBITDA | 78,659 | 60,167 | 220,273 | 206,960 | 289,419 | |||||||||||||||||||||||||||
Operating depreciation and amortization (5) | (13,061) | (10,748) | (38,265) | (33,156) | (49,527) | |||||||||||||||||||||||||||
Cash interest expense, net (6) | (3,755) | (5,645) | (11,575) | (15,132) | (17,451) | |||||||||||||||||||||||||||
Income tax expense (7) | (9,447) | (8,184) | (25,855) | (27,067) | (34,416) | |||||||||||||||||||||||||||
Non-controlling interest (8) | 50 | 47 | 96 | 58 | 72 | |||||||||||||||||||||||||||
Adjusted net income | $ | 52,446 | $ | 35,637 | $ | 144,674 | $ | 131,663 | $ | 188,097 | ||||||||||||||||||||||
Net income per common share (GAAP): | ||||||||||||||||||||||||||||||||
Diluted | $ | 0.15 | $ | 2.06 | $ | 1.04 | $ | 2.98 | ||||||||||||||||||||||||
Adjusted Earnings per common share (Non-GAAP): | ||||||||||||||||||||||||||||||||
Diluted | $ | 0.80 | $ | 0.53 | $ | 2.20 | $ | 1.87 | ||||||||||||||||||||||||
Shares used in computing adjusted earnings per common share: | ||||||||||||||||||||||||||||||||
Diluted | 65,779,259 | 67,045,809 | 65,705,596 | 70,588,915 |
Period | Total number of shares purchased | Average price paid per share | Total number of shares purchased as part of a publicly announced program (1) | Approximate dollar value of shares that may yet be purchased under the program | ||||||||||||||||||||||
7/1/2023-7/31/2023 | 208,498 | 37.44 | 208,498 | |||||||||||||||||||||||
8/1/2023-8/31/2023 | 66 | 38.99 | 66 | |||||||||||||||||||||||
208,564 | 37.44 | 208,564 | 149,997,425 |
2.1# | ||||||||
10.1 | ||||||||
31.1* | ||||||||
31.2* | ||||||||
32.1** | ||||||||
32.2** | ||||||||
101.INS XBRL** | Inline Instance document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
101.SCH XBRL** | Inline Taxonomy Extension Schema | |||||||
101.CAL XBRL** | Inline Taxonomy Extension Calculation Linkbase | |||||||
101.DEF XBRL** | Inline Taxonomy Extension Definition Linkbase | |||||||
101.LAB XBRL** | Inline Taxonomy Extension Label Linkbase | |||||||
101.PRE XBRL** | Inline Taxonomy Extension Presentation Linkbase | |||||||
104** | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
EVERTEC, Inc. (Registrant) | ||||||||
Date: October 27, 2023 | By: | /s/ Morgan Schuessler | ||||||
Morgan Schuessler Chief Executive Officer (Principal Executive Officer) | ||||||||
Date: October 27, 2023 | By: | /s/ Joaquin A. Castrillo-Salgado | ||||||
Joaquin A. Castrillo-Salgado Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |
Date: October 27, 2023 | /s/ Morgan Schuessler | |||||||
Morgan Schuessler | ||||||||
Chief Executive Officer |
Date: October 27, 2023 | /s/ Joaquin A. Castrillo-Salgado | |||||||
Joaquin A. Castrillo-Salgado | ||||||||
Chief Financial Officer |
Date: October 27, 2023 | /s/ Morgan Schuessler | |||||||
Morgan Schuessler | ||||||||
Chief Executive Officer |
Date: October 27, 2023 | /s/ Joaquin A. Castrillo-Salgado | |||||||
Joaquin A. Castrillo-Salgado | ||||||||
Chief Financial Officer |
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock authorized (in shares) | 2,000,000 | 2,000,000 |
Preferred stock issued (in shares) | 0 | 0 |
Common stock par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock authorized (in shares) | 206,000,000 | 206,000,000 |
Common stock issued (in shares) | 64,630,922 | 64,847,233 |
Common stock outstanding (in shares) | 64,630,922 | 64,847,233 |
Unaudited Condensed Consolidated Statements of Income and Comprehensive Income (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Income Statement [Abstract] | ||||
Other comprehensive income (loss), tax | $ 329 | $ 716 | $ 18 | $ 1,442 |
Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity (Parenthetical) - $ / shares |
3 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Jul. 20, 2023 |
Apr. 20, 2023 |
Feb. 16, 2023 |
Sep. 30, 2023 |
Jun. 30, 2023 |
Mar. 31, 2023 |
Sep. 30, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
|
Statement of Stockholders' Equity [Abstract] | |||||||||
Cash dividends declared (in usd per share) | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 |
The Company and Basis of Presentation |
9 Months Ended |
---|---|
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
The Company and Basis of Presentation | The Company and Basis of Presentation The Company EVERTEC, Inc. and its subsidiaries (collectively the “Company” or “EVERTEC”) is a leading full-service transaction processing business in Latin America and the Caribbean. The Company is based in Puerto Rico and provides a broad range of merchant acquiring, payment processing and business process management services. The Company provides services across 26 countries in the region. EVERTEC owns and operates the ATH network, which we believe is one of the leading personal identification number (“PIN”) debit networks in Latin America. In addition, EVERTEC provides a comprehensive suite of services for core banking, cash processing and fulfillment in Puerto Rico and technology outsourcing and payment transactions fraud monitoring in all the regions the Company serves. EVERTEC serves a broad and diversified customer base of leading financial institutions, merchants, corporations, and government agencies with solutions that are essential to their operations, enabling them to issue, process and accept transactions securely. Basis of Presentation The unaudited condensed consolidated financial statements of EVERTEC have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of the accompanying unaudited condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the unaudited condensed consolidated financial statements. Actual results could differ from these estimates. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted from these statements pursuant to the rules and regulations of the Securities and Exchange Commission and, accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the Audited Consolidated Financial Statements of the Company for the year ended December 31, 2022, included in the Company’s 2022 Annual Report on Form 10-K. In the opinion of management, the accompanying unaudited condensed consolidated financial statements, prepared in accordance with GAAP, contain all adjustments necessary for a fair presentation. Intercompany accounts and transactions are eliminated in consolidation. Certain amounts from prior periods have been reclassified to conform to the current period presentation. Settlement Assets and Liabilities Settlement assets and liabilities result from timing differences in the Company’s settlement processes with merchants, financial institutions, and credit card associations related to merchant and card transaction processing. The amounts are generally collected or paid the following business day. Settlement assets represent cash received or amounts receivable from agents, payment networks, bank partners, merchants or direct consumers. Settlement liabilities represent amounts payable to merchants and payees. Settlement assets were historically presented within cash and accounts receivable, while Settlement liabilities were presented within accrued liabilities and accounts payable.
|
Business Acquisition |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination and Asset Acquisition [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition | Business Acquisition Acquisition of a Business On February 16, 2023, the Company closed on the acquisition of 100% of Paysmart Pagamentos Eletronicos Ltda (“paySmart”). Headquartered in Porto Alegre, Brazil, paySmart provides issuer processing services and BIN Sponsorship services for prepaid programs under domestic and international schemes in Brazil. The aggregate purchase price was $130 million Brazilian reais, approximately USD$25 million. The acquisition expands the Company's footprint in Brazil and compliments the current product offering in the country. The Company accounted for this transaction as a business combination. The following table details the preliminary fair value of assets acquired and liabilities assumed from the paySmart acquisition:
The following table details the major groups of intangible assets acquired and the weighted average amortization period for these assets:
Refer to Note 6- Goodwill and Other Intangible Assets for detail of goodwill allocated by reportable segments. The goodwill is primarily attributed to anticipated synergies. Currently, none of the goodwill is deductible for income tax purposes.
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Debt Securities |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Securities | Debt Securities The amortized cost, gross unrealized gains and losses recorded in OCI and estimated fair value of debt securities available-for-sale by contractual maturity as of September 30, 2023 and December 31, 2022 were as follows:
Costa Rica Government Obligations are held by a trust in the Costa Rica National Bank as a collateral requirement for settlement activities. The Company may substitute securities as needed but must maintain certain levels of collateral based on transaction volumes. For the nine months period ended September 30, 2023, the Company purchased $1.0 million in debt securities that were classified as available-for-sale and $0.3 million for the corresponding period in 2022. Debt securities amounting to $1.0 million and $1.0 million matured during the nine months period ended September 30, 2023 and 2022, respectively, while no debt securities were sold during the same periods. A provision for credit losses was not required for the periods presented above. Refer to Note 8 for disclosure requirements related to the fair value hierarchy.
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Investment in Equity Investee |
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Sep. 30, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investment in Equity Investee | Investment in Equity InvesteeIn the third quarter of 2023, the Company, through its wholly owned subsidiary EVERTEC Costa Rica, S.A. (“EVERTEC CR”), entered into an agreement with a corporate partner to jointly develop and provide payment services in the Latin America region. The services will be provided through a newly formed entity which both entities will contribute capital to form. The Company has concluded that the newly formed entity is a joint venture not controlled by the Company and will therefore account for the entity as an equity investee. The Company has committed capital contributions in the amount of $13.5 million, consisting of cash payments amounting to $7.5 million, nonfinancial assets consisting of $3.5 million in development of intellectual property, and $2.5 million in processing cost credits. At September 30, 2023, the Company had contributed $5.5 million in cash from the committed amounts, which represented 9.91% ownership in the joint venture. |
Property and Equipment, net |
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Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment, net | Property and Equipment, net Property and equipment, net consists of the following:
Depreciation and amortization expense related to property and equipment for the three and nine months ended September 30, 2023 amounted to $5.4 million and $15.9 million, respectively, compared to $4.6 million and $13.9 million for the corresponding periods in 2022.
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Goodwill and Other Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The changes in the carrying amount of goodwill, allocated by operating segments, were as follows (see Note 17):
Goodwill is tested for impairment on an annual basis as of August 31, or more often if events or changes in circumstances indicate there may be impairment. The Company may test for goodwill impairment using a qualitative or a quantitative analysis. In a qualitative analysis, the Company assesses whether it is "more likely than not" that the fair value of a reporting unit is less than its carrying amount. In the quantitative analysis, the Company compares the estimated fair value of the reporting units to their carrying values, including goodwill. No impairment losses were recognized based on the quantitative assessment performed as of August 31, 2023. For the corresponding period in 2022 the qualitative analysis was followed and no impairment losses were recognized. Refer to Note 2 - Business Acquisition, for further details of goodwill acquired in the first quarter of 2023. The carrying amount of other intangible assets at September 30, 2023 and December 31, 2022 was as follows:
Amortization expense related to other intangibles for the three and nine months ended September 30, 2023 amounted to $16.6 million and $47.8 million, respectively, compared to $15.2 million and $44.5 million for the corresponding periods in 2022. During the nine months ended September 30, 2022, the Company recorded an impairment loss through cost of revenues of $4.1 million for a multi-year software development for which a reduction in future cash flows was projected. The impairment charge affected the Company's Payment Services - Puerto Rico & Caribbean segment. The estimated amortization expense of the other intangible balances outstanding at September 30, 2023, for the next five years is as follows:
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Debt and Short-Term Borrowings |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt and Short-Term Borrowings | Debt and Short-Term Borrowings Debt at September 30, 2023 and December 31, 2022 was as follows:
(1)Net of unaccreted discount and unamortized debt issue costs, as applicable. (2)Subject to a minimum rate ("SOFR floor") of 0% plus applicable margin of 1.50% at September 30, 2023 and December 31, 2022. Secured Credit Facilities On December 1, 2022, EVERTEC and EVERTEC Group, entered into a credit agreement with a syndicate of lenders and Truist Bank, as administrative agent and collateral agent, providing for (i) a $415.0 million term loan A facility (the “Term Loan Facility”) and (ii) a $200.0 million revolving credit facility (the “Revolving Facility”, and together with the Term Loan Facility, the “2022 Credit Facilities”). The 2022 Credit Facilities mature on December 1, 2027. At September 30, 2023, the unpaid principal balance of the Term Loan Facility was $399.4 million. At September 30, 2023, there was $6.0 million outstanding on the Revolving Facility and the additional borrowing capacity was $188.0 million, considering letters of credit issued. The Company issues letters of credit against the Revolving Facility which reduce the additional borrowing capacity of the Revolving Facility. Notes Payable In September 2023, EVERTEC Group entered into a non-interest bearing financing agreement amounting to $10.1 million to purchase software and maintenance which the Company recorded on a discounted basis using an implied interest of 6.9%. As of September 30, 2023, the outstanding principal balance of the note payable on a discounted basis was $7.9 million. The current portion of the note is included in accounts payable and the long-term portion is included in other long-term liabilities on the Company's unaudited condensed consolidated balance sheet. Interest Rate Swaps As of September 30, 2023, the Company has two interest rate swap agreements, entered into in December 2018 and May 2023, which convert a portion of the interest rate payments on the Company's Term Loan Facility from variable to fixed:
As of September 30, 2023 and December 31, 2022, the carrying amount of the derivatives included on the Company's unaudited condensed consolidated balance sheets was $11.5 million and $7.4 million, respectively. The fair value of these derivatives are estimated using Level 2 inputs in the fair value hierarchy on a recurring basis. Refer to Note 9 for disclosure of gains recorded on cash flow hedging activities. During the three and nine months ended September 30, 2023, the Company reclassified gains of $1.6 million and $4.0 million, respectively, from accumulated other comprehensive income into interest expense compared to losses of $0.4 million and $3.5 million, respectively, for the corresponding periods in 2022. Based on current SOFR rates, the Company expects to reclassify gains of $6.2 million from accumulated other comprehensive income into interest expense over the next 12 months. The cash flow hedge is considered highly effective.
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Financial Instruments and Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments and Fair Value Measurements | Financial Instruments and Fair Value Measurements Recurring Fair Value Measurements Debt Securities Available for Sale The fair value of debt securities is estimated based on observable inputs, therefore classified as a Level 2 asset within the fair value hierarchy. The fair value of the Costa Rica Government Obligations was $2.1 million and $2.2 million as of September 30, 2023 and December 31, 2022. Derivative Instruments The fair value of the Company's interest rate swaps are estimated using Level 2 inputs under the fair value hierarchy. These derivatives were in an asset position with a balance of $11.5 million and $7.4 million as of September 30, 2023 and December 31, 2022, respectively. The fair value of the foreign currency swap entered into during the third quarter of 2023 to fix the acquisition price of the Sinqia transaction described in Note 18, Subsequent events, is estimated using Level 2 inputs under the fair value hierarchy. This derivative was in a liability position of $29.2 million as of September 30, 2023. Equity Securities During the third quarter of 2023, the Company purchased 4.8 million shares of Sinqia, S.A., a public company traded in B3, the Brazilian stock exchange. The shares were purchased in the open market for $26.5 million and at September 30, 2023 the fair value of the equity securities, classified as a Level 1 input, amounted to $26.0 million. For both the three and nine month periods ended September 30, 2023, the Company recognized unrealized gains of $0.1 million in the unaudited condensed consolidated statement of income and translation losses of $0.6 million through other comprehensive income (loss). The following table presents the carrying value, as applicable, and estimated fair value for financial instruments at September 30, 2023 and December 31, 2022:
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity | Equity Accumulated Other Comprehensive Income (Loss) The following table provides a summary of the changes in the balances of accumulated other comprehensive income (loss) for the nine months ended September 30, 2023:
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Share-based Compensation |
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Share-Based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation | Share-based Compensation Long-term Incentive Plan ("LTIP") During the three months ended March 31, 2021, 2022 and 2023, the Compensation Committee (the "Compensation Committee") of the Company's Board of Directors ("Board") approved grants of restricted stock units (“RSUs”) to executives and certain employees pursuant to the 2021 LTIP, 2022 LTIP and 2023 LTIP, respectively, all under the terms of the Company's 2022 Equity Incentive Plan. Under the LTIPs, the Company granted RSUs to eligible participants as time-based awards and/or performance-based awards. The vesting of the RSUs is dependent upon service and/or performance conditions as defined in the award agreements. Employees that received time-based awards with service conditions are entitled to receive a specific number of shares of the Company’s common stock on the vesting date if the employee provides services to the Company through the vesting date. Time-based awards vest over a period of three years in substantially equal installments commencing on the grant date and ending on March 2 of each year for the 2021 LTIP, February 25 of each year for the 2022 LTIP and February 24 of each year for the 2023 LTIP. In 2022 and 2023, the Company also granted time-based awards with a three year service vesting period which will cliff vest on February 25, 2025 and February 24, 2026, respectively. For the performance-based awards under the 2021 LTIP, 2022 LTIP, and 2023 LTIP, the Compensation Committee established adjusted earnings before income taxes, depreciation and amortization ("Adjusted EBITDA") as the primary performance measure while maintaining focus on total shareholder return through the use of a market-based total shareholder return ("TSR") performance modifier. The Adjusted EBITDA measure is based on annual targets and can result in a payout between 0% and 200%, depending on the performance level. The TSR modifier adjusts the shares earned based on the Adjusted EBITDA performance upwards or downwards (+/- 25%) based on the Company’s relative TSR at the end of the three-year performance period as compared to the companies in the Russell 2000 Index. The Adjusted EBITDA performance measure will be calculated for the one-year period commencing on January 1 of the year of the grant and ending on December 31 of the same year, relative to the goals set by the Compensation Committee for this same period. The shares earned will be subject to an additional two-year service vesting period and will vest on March 2, 2024 for the 2021 LTIP, February 25, 2025 for the 2022 LTIP, and February 24, 2026 for the 2023 LTIP. Unless otherwise specified in the award agreement, or in an employment agreement, awards are forfeited if the employee voluntarily ceases to be employed by the Company prior to vesting. The following table summarizes nonvested RSUs activity for the nine months ended September 30, 2023:
For the three and nine months ended September 30, 2023, the Company recognized $6.7 million and $18.8 million of share-based compensation expense, compared with $5.3 million and $14.7 million for the corresponding period in 2022. As of September 30, 2023, the maximum unrecognized cost for RSUs was $36.7 million. The cost is expected to be recognized over a weighted average period of 1.8 years.
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Revenues |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues | Revenues Disaggregation of Revenue The Company disaggregates revenue from contracts with customers into primary geographical markets, nature of the products and services, and timing of transfer of goods and services. The Company's operating segments are determined by the nature of the products and services the Company provides and the primary geographical markets in which the Company operates. Revenue disaggregated by segment is discussed in Note 17, Segment Information. In the following tables, revenue for each segment, excluding intersegment revenues, is disaggregated by timing of revenue recognition for the periods indicated.
Revenue concentration with a single customer, Popular, as a percentage of total revenues for the quarters ended September 30, 2023 and 2022 was approximately 34% and 35%, respectively. For the nine months ended September 30, 2023 and September 30, 2022 this percentage was approximately 36% and 40%, respectively. Contract Balances The following table provides information about contract assets from contracts with customers.
The current portion of contract assets is recorded as part of prepaid expenses and other assets, and the long-term portion is included in other long-term assets in the unaudited condensed consolidated balance sheets. Accounts receivable, net at September 30, 2023 amounted to $115.8 million. Contract liability and contract liability - long term at September 30, 2023 amounted to $14.4 million and $34.1 million, respectively, and may arise when consideration is received or due in advance from customers prior to performance. The contract liability is mainly comprised of upfront fees for implementation or set up activities, including fees charged in pre-production periods in connection with hosting services. The Company regularly reviews its estimates for variable consideration on the transaction price and recognizes changes in estimates on a cumulative catch-up basis as if the most current estimate of the transaction price adjusted for variable consideration had been known as of the inception of the contract. During the three and nine months ended September 30, 2023, the Company recognized revenue of $4.2 million and $12.9 million, respectively, that was included in the contract liability at December 31, 2022. During the three and nine months ended September 30, 2022, the Company recognized revenue of $17.0 million and $29.0 million, respectively, that was included in the contract liability at December 31, 2021. Transaction price allocated to the remaining performance obligations The estimated aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially satisfied at September 30, 2023 is $907.6 million, which is expected to be recognized over the next 1 to 6 years. This amount consists of minimums on certain master services agreements, professional service fees for implementation or set up activities related to managed services and maintenance services typically recognized over the life of the contract, and professional service fees for customizations or development of on-premise licensing agreements, which are recognized over time based on inputs relative to the total expected inputs to satisfy a performance obligation.
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Current Expected Credit Losses |
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Receivables [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current Expected Credit Losses | Current Expected Credit Losses Allowance for Current Expected Credit Losses Trade receivables from contracts with customers are financial assets analyzed by the Company under the expected credit loss model. To measure expected credit losses, trade receivables are grouped based on shared risk characteristics (i.e., the relevant industry sector and customer's geographical location) and days past due (i.e., delinquency status), while considering the following: •Customers in the same geographical location share similar risk characteristics associated with the macroeconomic environment of their country. •The Company has two main industry sectors: private and governmental. The private pool is comprised mainly of leading financial institutions, merchants and corporations, while the governmental pool is comprised of government agencies. The governmental customers possess different risk characteristics than private customers because although all invoices are due 30 days after issuance, governmental customers usually pay within 60 to 90 days after issuance (i.e., approximately 30 to 60 more days than private customers). •The expected credit loss rate is likely to increase as receivables move to older aging buckets. The Company used the following aging categories to estimate the risk of delinquency status: (i) 0 days past due; (ii) 1-30 days past due; (iii) 31-60 days past due; (iv) 61-90 days past due; and (v) over 90 days past due. The credit losses of the Company’s trade receivables have been low historically and most balances are collected within one year. Therefore, the Company determined that the expected loss rates should be calculated using the historical loss rates adjusted by macroeconomic factors. The historical rates are calculated for each of the aging categories used for pooling trade receivables. To determine the collected portion of each bucket, the collection time of each trade receivable is identified, to estimate the proportion of outstanding balances per aging bucket that ultimately will not be collected. This is used to determine the expectation of losses based on the history of uncollected trade receivables once the specific past due period is surpassed. The historical rates are adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of customers to settle the receivables by applying a country risk premium as the forward-looking macroeconomic factor. Specific reserves are established for certain customers for which collection is doubtful. Rollforward of the Allowance for Expected Current Credit Losses The following table provides information about the allowance for expected current credit losses on trade receivables.
The Company does not have a delinquency threshold for writing-off trade receivables. The Company has a formal process for the review and approval of write-offs. Impairment losses on trade receivables are presented as net impairment losses within cost of revenue, exclusive of depreciation and amortization in the unaudited condensed consolidated statements of income and comprehensive income. Subsequent recoveries of amounts previously written-off, when applicable, are credited against the allowance for expected current credit losses within accounts receivable, net on the unaudited condensed consolidated balance sheets.
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Income Tax |
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax | Income Tax The components of income tax expense for the three and nine months ended September 30, 2023 and 2022, respectively, consisted of the following:
The Company conducts operations in Puerto Rico, the United States, and certain countries in Latin America. As a result, the income tax expense includes the effect of taxes paid to the government of Puerto Rico as well as foreign jurisdictions. The following table presents the components of income tax expense for the three and nine months ended September 30, 2023 and 2022, and its segregation based on location of operations:
Taxes payable to foreign countries by EVERTEC’s subsidiaries will be paid by such subsidiary and the corresponding liability and expense will be presented in EVERTEC’s consolidated financial statements. As of September 30, 2023, the Company had $130.6 million of unremitted earnings from foreign subsidiaries, compared to $115.5 million as of December 31, 2022. The Company has not recognized a deferred tax liability on undistributed earnings for the Company’s foreign subsidiaries because these earnings are intended to be indefinitely reinvested. As of September 30, 2023, the gross deferred tax asset amounted to $29.9 million and the gross deferred tax liability amounted to $20.0 million, compared to $17.9 million and $20.7 million, respectively, as of December 31, 2022. As of September 30, 2023, and December 31, 2022, there is a valuation allowance against the gross deferred tax asset of approximately $2.4 million and $1.6 million, respectively. Income tax expense differs from the amount computed by applying the Puerto Rico statutory income tax rate to the income before income taxes as a result of the following:
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Net Income Per Common Share |
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Net Income Per Common Share | Net Income Per Common ShareThe reconciliation of the numerator and denominator of the income per common share is as follows:
(1)Potential common shares consist of common stock issuable under RSUs awards using the treasury stock method. On February 16, 2023, April 20, 2023 and July 20, 2023, respectively the Company's Board declared quarterly cash dividends of $0.05 per share of common stock, which was paid on March 17, 2023, June 2, 2023 and September 1, 2023, respectively to stockholders' of record on February 28, 2023, May 1, 2023 and July 31, 2023, respectively.
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Commitments and Contingencies |
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Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and ContingenciesEVERTEC is a defendant in a number of legal proceedings arising in the ordinary course of business. Based on the opinion of legal counsel and other factors, management believes that the final disposition of these matters will not have a material adverse effect on the business, results of operations, financial condition, or cash flows of the Company. The Company has identified certain claims in which a loss may be incurred, but in the aggregate the loss would be insignificant. For other claims regarding proceedings that are in an initial phase, the Company is unable to estimate the range of possible loss, if any, but at this time believes that any loss related to such claims will not be material. |
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Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions | Related Party Transactions In connection with closing of the Popular Transaction on July 1, 2022, the Company terminated the existing stockholder agreement with Popular, which granted Popular certain benefits as a shareholder of the Company. In addition, on August 15, 2022, through a secondary offering, Popular sold its remaining shares of common stock of Evertec and as of that date no longer holds any shares of EVERTEC common stock. EVERTEC is no longer considered a subsidiary of Popular under the Bank Holding Company Act of 1956, as amended (the “Bank Holding Company Act”). Given both the termination of the stockholder agreement and that Popular is no longer a shareholder of EVERTEC, management concluded that Popular is no longer a related party as of August 15, 2022. The following table presents the Company’s transactions with Popular for the three and nine months ended September 30, 2022 while they were deemed a related party:
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Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment InformationThe Company operates in four business segments: Payment Services - Puerto Rico & Caribbean, Payment Services - Latin America (collectively "Payment Services segments"), Merchant Acquiring, and Business Solutions. The Payment Services - Puerto Rico & Caribbean segment revenues are comprised of revenues related to providing access to the ATH debit network and other card networks to financial institutions, including related services such as authorization, processing, management and recording of ATM and point of sale ("POS") transactions, and ATM management and monitoring. The segment revenues also include revenues from card processing services (such as credit and debit card processing, authorization and settlement and fraud monitoring and control to debit or credit issuers), payment processing services (such as payment and billing products for merchants, businesses and financial institutions), ATH Movil (person-to-person) and ATH Business (person-to-merchant) digital transactions and EBT (which principally consist of services to the government of Puerto Rico for the delivery of benefits to participants). For ATH debit network and processing services, revenues are primarily driven by the number of transactions processed. Revenues are derived primarily from network fees, transaction switching and processing fees, and the leasing of POS devices. For card issuer processing, revenues are primarily dependent upon the number of cardholder accounts on file, transactions and authorizations processed, the number of cards embossed and other processing services. For EBT services, revenues are primarily derived from the number of beneficiaries on file. The Payment Services - Latin America segment revenues consist of revenues related to providing access to the ATH network of ATMs and other card networks to financial institutions, including related services such as authorization, processing, management and recording of ATM and POS transactions, and ATM management and monitoring. The segment revenues also include revenues from card processing services (such as credit and debit card processing, authorization and settlement and fraud monitoring and control to debit or credit issuers), payment processing services (such as payment and billing products for merchants, businesses and financial institutions), as well as licensed software solutions for risk and fraud management and card payment processing. For network and processing services, revenues are primarily driven by the number of transactions processed. Revenues are derived primarily from transaction switching, processing fees, and the leasing of POS devices. For card issuer processing, revenues are primarily dependent upon the number of cardholder accounts on file, transactions and authorizations processed, the number of cards embossed, and other processing services. The Merchant Acquiring segment consists of revenues from services that allow merchants to accept electronic methods of payment. In the Merchant Acquiring segment, revenues include a discount fee and membership fees charged to merchants, debit network fees and rental fees from POS devices and other equipment, net of credit card interchange and assessment fees charged by credit cards associations (such as VISA or MasterCard) or payment networks. The discount fee is generally a percentage of the transaction value. EVERTEC also charges merchants for other services that are unrelated to the number of transactions or the transaction value. The Business Solutions segment consists of revenues from a full suite of business process management solutions in various product areas such as core bank processing, network hosting and management, IT professional services, business process outsourcing, item processing, cash processing, and fulfillment. Core bank processing and network services revenues are derived in part from a recurrent fixed fee and from fees based on the number of accounts on file (i.e., savings or checking accounts, loans, etc.), server capacity usage or computer resources utilized. Revenues from other processing services within the Business Solutions segment are generally volume-based and depend on factors such as the number of accounts processed. In addition, EVERTEC is a reseller of hardware and software products and these resale transactions are generally non-recurring. In addition to the four operating segments described above, management identified certain functional cost areas that operate independently and do not constitute businesses in themselves. These areas could neither be concluded as operating segments nor could they be combined with any other operating segments. Therefore, these areas are aggregated and presented within the “Corporate and Other” category in the financial statements alongside the operating segments. The Corporate and Other category consists of corporate overhead expenses, intersegment eliminations, certain leveraged activities and other non-operating and miscellaneous expenses that are not included in the operating segments. The overhead and leveraged costs relate to activities such as: •marketing, •corporate finance and accounting, •human resources, •legal, •risk management functions, •internal audit, •corporate debt related costs, •non-operating depreciation and amortization expenses generated as a result of merger and acquisition activity, •intersegment revenues and expenses, and •other non-recurring fees and expenses that are not considered when management evaluates financial performance at a segment level The Chief Operating Decision Maker ("CODM") reviews the operating segments separate financial information to assess performance and to allocate resources. Management evaluates the operating results of each of its operating segments based upon revenues and Adjusted EBITDA. Effective for the quarter ended March 31, 2023, the Company modified the manner in which it calculates and reports Adjusted EBITDA presented to the CODM for assessing segment performance to exclude the impact of non-cash unrealized gains and losses from foreign currency remeasurement. Adjusted EBITDA is defined as EBITDA further adjusted to exclude certain non-cash unrealized items and unusual expenses such as: share-based compensation, restructuring related expenses, fees and expenses from corporate transactions such as M&A activity and financing, equity investment income net of dividends received, and the impact from unrealized gains and losses on foreign currency remeasurement for assets and liabilities in non-functional currency. Adjusted EBITDA, as it relates to operating segments, is presented in conformity with ASC Topic 280, Segment Reporting, given that it is reported to the CODM for purposes of allocating resources. The Company has recast prior periods to conform with the modified definition of Adjusted EBITDA. Segment asset disclosure is not used by the CODM as a measure of segment performance since the segment evaluation is driven by revenues and Adjusted EBITDA. As such, segment assets are not disclosed in the notes to the unaudited condensed consolidated financial statements. The following tables set forth information about the Company’s operations by its four business segments for the periods indicated:
(1)Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations. Intersegment revenue eliminations predominantly reflect the $13.5 million processing fee from Payments Services - Puerto Rico & Caribbean to Merchant Acquiring, intercompany software developments and transaction processing of $4.4 million from Payment Services- Latin America to both Payment Services- Puerto Rico & Caribbean and Business Solutions, and transaction processing and monitoring fees of $3.7 million from Payment Services - Puerto Rico & Caribbean to Payment Services - Latin America. (2)Primarily represents share-based compensation and severance payments. (3)Primarily represents fees and expenses associated with corporate transactions as defined in the Credit Agreement, the foreign currency swap loss and the elimination of unrealized equity earnings from our 19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A., net of dividends received. (4)Represents non-cash unrealized gains (losses) on foreign currency remeasurement for assets and liabilities denominated in non-functional currencies.
(1)Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations. Intersegment revenue eliminations predominantly reflect the $12.3 million processing fee from Payments Services - Puerto Rico & Caribbean to Merchant Acquiring, intercompany software developments and transaction processing of $3.7 million from Payment Services - Latin America to both Payment Services - Puerto Rico & Caribbean and Business Solutions, and transaction processing and monitoring fees of $2.8 million from Payment Services - Puerto Rico & Caribbean to Payment Services - Latin America. (2)Primarily represents share-based compensation and severance payments. (3)Primarily represents fees and expenses associated with corporate transactions as defined in the 2018 Credit Agreement, the gain from the Popular transaction and the elimination of unrealized equity earnings from our 19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A., net of dividends received. (4)Represents non-cash unrealized gains (losses) on foreign currency remeasurement for assets and liabilities denominated in non-functional currencies.
(1)Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations. Intersegment revenue eliminations predominantly reflect the $39.9 million processing fee from Payments Services - Puerto Rico & Caribbean to Merchant Acquiring, intercompany software developments and transaction processing of $12.8 million from Payment Services- Latin America to both Payment Services- Puerto Rico & Caribbean and Business Solutions, and transaction processing and monitoring fees of $9.9 million from Payment Services - Puerto Rico & Caribbean to Payment Services - Latin America. (2)Primarily represents share-based compensation and severance payments. (3)Primarily represents fees and expenses associated with corporate transactions as defined in the Credit Agreement, the foreign currency swap loss and the elimination of unrealized equity earnings from our 19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A, net of dividends received. (4)Represents non-cash unrealized gains (losses) on foreign currency remeasurement for assets and liabilities denominated in non-functional currencies.
(1)Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations. Intersegment revenue eliminations predominantly reflect the $36.5 million processing fee from Payments Services - Puerto Rico & Caribbean to Merchant Acquiring, intercompany software developments and transaction processing of $10.7 million from Payment Services- Latin America to both Payment Services- Puerto Rico & Caribbean and Business Solutions, and transaction processing and monitoring fees of $7.9 million from Payment Services - Puerto Rico & Caribbean to Payment Services - Latin America. (2)Primarily represents share-based compensation and severance payments. (3)Primarily represents fees and expenses associated with corporate transactions as defined in the 2018 Credit Agreement, the gain from the Popular transaction and the elimination of unrealized equity earnings from our 19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A., net of dividends received. (4)Represents non-cash unrealized gains (losses) on foreign currency remeasurement for assets and liabilities denominated in non-functional currencies. The reconciliation of consolidated net income to EBITDA is as follows:
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Subsequent Events |
9 Months Ended |
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Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On October 19, 2023, the Board declared a regular quarterly cash dividend of $0.05 per share on the Company’s outstanding shares of common stock. The dividend will be paid on December 1, 2023 to stockholders of record as of the close of business on October 30, 2023. The Board anticipates declaring this dividend in future quarters on a regular basis; however future declarations of dividends are subject to the Board’s approval and may be adjusted as business needs or market conditions change. On July 20, 2023, the Company entered into a Merger Agreement and Other Covenants (the “Merger Agreement”), by and among Evertec Brasil Informática S.A, a wholly-owned subsidiary of Evertec (“Evertec BR”), Sinqia S.A., a publicly held company incorporated and existing in accordance with the laws of the Federative Republic of Brazil (“Sinqia”), and certain other Key Shareholders (as defined therein), as shareholders of Sinqia. The Board and the board of directors of Sinqia (the “Sinqia Board”) have unanimously approved the Merger Agreement. Pursuant to and on the terms and subject to the conditions set forth in the Merger Agreement, a business combination of Evertec BR and Sinqia (the "Sinqia Transaction") will be carried out through a merger of all shares issued by Sinqia into Evertec BR pursuant to provisions of the Brazilian Corporations Law and other applicable Brazilian laws and regulations (the “Merger of Shares”), and as a result of such Merger of Shares, Sinqia will become a wholly-owned subsidiary of Evertec BR. On September 14, 2023, the Merger Transaction received Sinqia shareholder approval, a closing condition in the Merger Agreement. The Sinqia Transaction is expected to close in the fourth quarter of 2023 and is subject to the satisfaction or waiver of customary closing conditions. Evertec intends to finance the Sinqia Transaction with cash on hand and committed financing of $600 million. On September 12, 2023, the Company formally registered a Brazilian Depositary Receipts ("BDR") program with the Brazilian securities and exchange commission ("BDR Program"), in order to have securities backed by Evertec shares trading in the B3, the Brazilian stock exchange. The BDR Program has not been funded, no Evertec common stock underlying such BDRs has been issued, and no BDRs are actively trading on the B3. On October 24, 2023, the Company submitted to the NYSE a supplemental application review form requesting to reserve 1,168,555 shares of common stock, with a par value of $0.01 underlying 1,168,555 BDRs which will be issued as consideration pursuant to the Merger Agreement. October 27, 2023, the reserve was approved by the NYSE.
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Pay vs Performance Disclosure - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
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Pay vs Performance Disclosure | ||||
Net income | $ 10,036 | $ 137,814 | $ 68,243 | $ 210,301 |
Insider Trading Arrangements |
3 Months Ended | 9 Months Ended |
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Sep. 30, 2023
shares
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Sep. 30, 2023
shares
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Trading Arrangements, by Individual | ||
Non-Rule 10b5-1 Arrangement Adopted | false | |
Rule 10b5-1 Arrangement Terminated | false | |
Non-Rule 10b5-1 Arrangement Terminated | false | |
Morgan M. Schuessler [Member] | ||
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | “Rule 10b5-1 trading arrangement” (as defined in Item 408(a) of Regulation S-K) that provides for the sale of up to 84,467 shares of the Company's common stock and which has a plan end date of October 4, 2024. | |
Name | Morgan M. Schuessler | |
Title | President and Chief Executive Officer | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | August 30, 2023 | |
Arrangement Duration | 401 days | |
Aggregate Available | 84,467 | 84,467 |
The Company and Basis of Presentation (Policies) |
9 Months Ended |
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Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
The Company | The Company EVERTEC, Inc. and its subsidiaries (collectively the “Company” or “EVERTEC”) is a leading full-service transaction processing business in Latin America and the Caribbean. The Company is based in Puerto Rico and provides a broad range of merchant acquiring, payment processing and business process management services. The Company provides services across 26 countries in the region. EVERTEC owns and operates the ATH network, which we believe is one of the leading personal identification number (“PIN”) debit networks in Latin America. In addition, EVERTEC provides a comprehensive suite of services for core banking, cash processing and fulfillment in Puerto Rico and technology outsourcing and payment transactions fraud monitoring in all the regions the Company serves. EVERTEC serves a broad and diversified customer base of leading financial institutions, merchants, corporations, and government agencies with solutions that are essential to their operations, enabling them to issue, process and accept transactions securely.
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Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements of EVERTEC have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of the accompanying unaudited condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the unaudited condensed consolidated financial statements. Actual results could differ from these estimates. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted from these statements pursuant to the rules and regulations of the Securities and Exchange Commission and, accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the Audited Consolidated Financial Statements of the Company for the year ended December 31, 2022, included in the Company’s 2022 Annual Report on Form 10-K. In the opinion of management, the accompanying unaudited condensed consolidated financial statements, prepared in accordance with GAAP, contain all adjustments necessary for a fair presentation. Intercompany accounts and transactions are eliminated in consolidation. Certain amounts from prior periods have been reclassified to conform to the current period presentation.
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Business Acquisition (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of fair value of assets acquired and liabilities assumed | The following table details the preliminary fair value of assets acquired and liabilities assumed from the paySmart acquisition:
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Schedule of intangible assets acquired and weighted average amortization period | The following table details the major groups of intangible assets acquired and the weighted average amortization period for these assets:
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Debt Securities (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt securities available-for-sale by contractual maturity | The amortized cost, gross unrealized gains and losses recorded in OCI and estimated fair value of debt securities available-for-sale by contractual maturity as of September 30, 2023 and December 31, 2022 were as follows:
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Property and Equipment, net (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of property and equipment, net | Property and equipment, net consists of the following:
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Goodwill and Other Intangible Assets (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of changes in carrying amount of goodwill allocated by reportable segments | The changes in the carrying amount of goodwill, allocated by operating segments, were as follows (see Note 17):
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Summary of carrying amount of other intangible assets | The carrying amount of other intangible assets at September 30, 2023 and December 31, 2022 was as follows:
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Summary of estimated amortization expenses | The estimated amortization expense of the other intangible balances outstanding at September 30, 2023, for the next five years is as follows:
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Debt and Short-Term Borrowings (Tables) |
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of total debt | Debt at September 30, 2023 and December 31, 2022 was as follows:
(1)Net of unaccreted discount and unamortized debt issue costs, as applicable. (2)Subject to a minimum rate ("SOFR floor") of 0% plus applicable margin of 1.50% at September 30, 2023 and December 31, 2022.
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Summary of interest rate swap transaction | As of September 30, 2023, the Company has two interest rate swap agreements, entered into in December 2018 and May 2023, which convert a portion of the interest rate payments on the Company's Term Loan Facility from variable to fixed:
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Financial Instruments and Fair Value Measurements (Tables) |
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of carrying value and estimated fair values for financial instruments | The following table presents the carrying value, as applicable, and estimated fair value for financial instruments at September 30, 2023 and December 31, 2022:
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Equity (Tables) |
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of changes in balances of accumulated other comprehensive income (loss) | The following table provides a summary of the changes in the balances of accumulated other comprehensive income (loss) for the nine months ended September 30, 2023:
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Share-based Compensation (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of nonvested RSUs activity | The following table summarizes nonvested RSUs activity for the nine months ended September 30, 2023:
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Revenues (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of disaggregation of revenue | In the following tables, revenue for each segment, excluding intersegment revenues, is disaggregated by timing of revenue recognition for the periods indicated.
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Summary of contract balances | The following table provides information about contract assets from contracts with customers.
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Current Expected Credit Losses (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of allowance for credit losses on trade receivables | The following table provides information about the allowance for expected current credit losses on trade receivables.
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Income Tax (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of income tax expense | The components of income tax expense for the three and nine months ended September 30, 2023 and 2022, respectively, consisted of the following:
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Segregation of income tax expense based on location of operations | The following table presents the components of income tax expense for the three and nine months ended September 30, 2023 and 2022, and its segregation based on location of operations:
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Schedule of income tax expense differs from computed income tax at statutory rates | Income tax expense differs from the amount computed by applying the Puerto Rico statutory income tax rate to the income before income taxes as a result of the following:
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Net Income Per Common Share (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of reconciliation of numerator and denominator of income per common share | The reconciliation of the numerator and denominator of the income per common share is as follows:
(1)Potential common shares consist of common stock issuable under RSUs awards using the treasury stock method.
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Related Party Transactions (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary transactions with related parties | The following table presents the Company’s transactions with Popular for the three and nine months ended September 30, 2022 while they were deemed a related party:
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Segment Information (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of information about operations by business segments | The following tables set forth information about the Company’s operations by its four business segments for the periods indicated:
(1)Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations. Intersegment revenue eliminations predominantly reflect the $13.5 million processing fee from Payments Services - Puerto Rico & Caribbean to Merchant Acquiring, intercompany software developments and transaction processing of $4.4 million from Payment Services- Latin America to both Payment Services- Puerto Rico & Caribbean and Business Solutions, and transaction processing and monitoring fees of $3.7 million from Payment Services - Puerto Rico & Caribbean to Payment Services - Latin America. (2)Primarily represents share-based compensation and severance payments. (3)Primarily represents fees and expenses associated with corporate transactions as defined in the Credit Agreement, the foreign currency swap loss and the elimination of unrealized equity earnings from our 19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A., net of dividends received. (4)Represents non-cash unrealized gains (losses) on foreign currency remeasurement for assets and liabilities denominated in non-functional currencies.
(1)Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations. Intersegment revenue eliminations predominantly reflect the $12.3 million processing fee from Payments Services - Puerto Rico & Caribbean to Merchant Acquiring, intercompany software developments and transaction processing of $3.7 million from Payment Services - Latin America to both Payment Services - Puerto Rico & Caribbean and Business Solutions, and transaction processing and monitoring fees of $2.8 million from Payment Services - Puerto Rico & Caribbean to Payment Services - Latin America. (2)Primarily represents share-based compensation and severance payments. (3)Primarily represents fees and expenses associated with corporate transactions as defined in the 2018 Credit Agreement, the gain from the Popular transaction and the elimination of unrealized equity earnings from our 19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A., net of dividends received. (4)Represents non-cash unrealized gains (losses) on foreign currency remeasurement for assets and liabilities denominated in non-functional currencies.
(1)Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations. Intersegment revenue eliminations predominantly reflect the $39.9 million processing fee from Payments Services - Puerto Rico & Caribbean to Merchant Acquiring, intercompany software developments and transaction processing of $12.8 million from Payment Services- Latin America to both Payment Services- Puerto Rico & Caribbean and Business Solutions, and transaction processing and monitoring fees of $9.9 million from Payment Services - Puerto Rico & Caribbean to Payment Services - Latin America. (2)Primarily represents share-based compensation and severance payments. (3)Primarily represents fees and expenses associated with corporate transactions as defined in the Credit Agreement, the foreign currency swap loss and the elimination of unrealized equity earnings from our 19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A, net of dividends received. (4)Represents non-cash unrealized gains (losses) on foreign currency remeasurement for assets and liabilities denominated in non-functional currencies.
(1)Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations. Intersegment revenue eliminations predominantly reflect the $36.5 million processing fee from Payments Services - Puerto Rico & Caribbean to Merchant Acquiring, intercompany software developments and transaction processing of $10.7 million from Payment Services- Latin America to both Payment Services- Puerto Rico & Caribbean and Business Solutions, and transaction processing and monitoring fees of $7.9 million from Payment Services - Puerto Rico & Caribbean to Payment Services - Latin America. (2)Primarily represents share-based compensation and severance payments. (3)Primarily represents fees and expenses associated with corporate transactions as defined in the 2018 Credit Agreement, the gain from the Popular transaction and the elimination of unrealized equity earnings from our 19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A., net of dividends received. (4)Represents non-cash unrealized gains (losses) on foreign currency remeasurement for assets and liabilities denominated in non-functional currencies.
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Reconciliation of EBITDA to consolidated net income | The reconciliation of consolidated net income to EBITDA is as follows:
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The Company and Basis of Presentation (Details) |
Sep. 30, 2023
country
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Accounting Policies [Abstract] | |
Number of countries where services are provided | 26 |
Business Acquisition - Additional Information (Details) - Paysmart Pagamentos Eletronicos Ltda R$ in Millions, $ in Millions |
Feb. 16, 2023
BRL (R$)
|
Feb. 16, 2023
USD ($)
|
---|---|---|
Business Acquisition [Line Items] | ||
Percentage of shares acquired | 100.00% | 100.00% |
Aggregate purchase price | R$ 130 | $ 25 |
Business Acquisition - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Feb. 16, 2023 |
Dec. 31, 2022 |
---|---|---|---|
Business Acquisition [Line Items] | |||
Goodwill | $ 434,496 | $ 423,392 | |
Paysmart Pagamentos Eletronicos Ltda | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 2,037 | ||
Accounts receivable, net | 451 | ||
Prepaid expenses and other assets | 58 | ||
Property and equipment, net | 107 | ||
Operating lease right-of-use asset | 182 | ||
Goodwill | 9,735 | ||
Settlement assets | 52,593 | ||
Other intangible assets, net | 15,174 | ||
Total assets acquired | 80,337 | ||
Accounts payable | 278 | ||
Settlement liabilities | 50,368 | ||
Operating lease liability | 185 | ||
Income tax payable | 298 | ||
Deferred tax liability | 4,253 | ||
Total liabilities assumed | $ 55,382 |
Business Acquisition - Intangible Assets Acquired (Details) - Paysmart Pagamentos Eletronicos Ltda $ in Thousands |
Feb. 16, 2023
USD ($)
|
---|---|
Business Acquisition [Line Items] | |
Total | $ 15,174 |
Weighted-average life | 15 years |
Customer relationships | |
Business Acquisition [Line Items] | |
Amount | $ 10,239 |
Weighted-average life | 20 years |
Trademark | |
Business Acquisition [Line Items] | |
Amount | $ 1,299 |
Weighted-average life | 5 years |
Software packages | |
Business Acquisition [Line Items] | |
Amount | $ 3,636 |
Weighted-average life | 5 years |
Debt Securities - Amortized Cost, Gross Unrealized Gains and Losses (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Costa Rica Government Obligations | ||
Amortized cost, after 1 to 5 years | $ 2,090 | $ 2,194 |
Gross unrealized gains, after 1 to 5 years | 0 | 9 |
Gross unrealized losses, after 1 to 5 years | (11) | 0 |
Debt securities available-for-sale, at fair value | $ 2,079 | $ 2,203 |
Debt Securities - Additional Information (Details) - USD ($) |
9 Months Ended | |
---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
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Investments, Debt and Equity Securities [Abstract] | ||
Purchase of available-for sale debt securities | $ 962,000 | $ 254,000 |
Proceeds from maturities of available-for-sale debt securities | 1,048,000 | 1,015,000 |
Proceeds from sale of available-for-sale debt securities | $ 0 | $ 0 |
Investment in Equity Investee (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2023 |
Sep. 30, 2022 |
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Joint Venture Disclosure [Line Items] | |||
Equity investee, cash payments paid | $ 5,500 | $ 0 | |
Joint Venture with Corporate Partner | |||
Joint Venture Disclosure [Line Items] | |||
Equity investee, committed capital contribution | $ 13,500 | 13,500 | |
Equity investee, committed capital contribution, cash | 7,500 | 7,500 | |
Equity investee, committed capital contribution, nonfinancial assets, development of intellectual property | 3,500 | 3,500 | |
Equity investee, committed capital contribution, nonfinancial assets, processing cost credits | 2,500 | $ 2,500 | |
Equity investee, cash payments paid | $ 5,500 | ||
Joint Venture with Corporate Partner | Joint Venture with Corporate Partner | |||
Joint Venture Disclosure [Line Items] | |||
Equity investee, ownership percentage | 9.91% | 9.91% |
Property and Equipment, net - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Property, Plant and Equipment [Abstract] | ||||
Depreciation and amortization expense related to property and equipment | $ 5.4 | $ 4.6 | $ 15.9 | $ 13.9 |
Goodwill and Other Intangible Assets - Additional Information (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Aug. 31, 2023 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Goodwill | |||||
Impairment of goodwill | $ 0 | $ 0 | |||
Amortization expense for intangible assets | $ 16,600,000 | $ 15,200,000 | $ 47,800,000 | 44,500,000 | |
Software packages | |||||
Goodwill | |||||
Impairment charge | $ 4,100,000 |
Goodwill and Other Intangible Assets - Estimated Amortization Expenses (Details) - Finite-Lived Intangible Assets, Excluding Assets Acquired in paySmart Acquisition $ in Thousands |
Sep. 30, 2023
USD ($)
|
---|---|
Acquired Finite-Lived Intangible Assets [Line Items] | |
Remaining 2023 | $ 16,411 |
2024 | 55,249 |
2025 | 28,644 |
2026 | 19,267 |
2027 | $ 14,522 |
Debt and Short-Term Borrowings - Total Debt (Details) - USD ($) $ in Thousands |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2023 |
Dec. 31, 2022 |
|
Note Payable | ||
Debt Instrument [Line Items] | ||
Note payable due on September 1, 2030 | $ 7,911 | $ 0 |
Term A due on December 1, 2027 | Credit Facility | ||
Debt Instrument [Line Items] | ||
2027 Term A Loan bearing interest at a variable interest rate (SOFR plus applicable margin) | $ 395,406 | $ 410,248 |
Term A due on December 1, 2027 | Credit Facility | SOFR | ||
Debt Instrument [Line Items] | ||
Minimum variable rate floor | 0.00% | 0.00% |
Applicable margin interest rate | 1.50% | 1.50% |
Term A due on December 1, 2027 | Credit Facility | Credit Agreement 2022 | ||
Debt Instrument [Line Items] | ||
Revolving credit facility | $ 399,400 | |
Revolving Credit Facility | Credit Facility | Credit Agreement 2022 | ||
Debt Instrument [Line Items] | ||
Revolving credit facility | $ 6,000 | $ 20,000 |
Debt and Short-Term Borrowings - Summary of Interest Rate Swap Transaction (Details) |
9 Months Ended |
---|---|
Sep. 30, 2023
USD ($)
| |
2018 Swap | |
Derivative [Line Items] | |
Notional Amount | $ 250,000,000 |
2018 Swap | 1-month SOFR | |
Derivative [Line Items] | |
Fixed Rate | 2.929% |
2023 Swap | |
Derivative [Line Items] | |
Notional Amount | $ 250,000,000 |
2023 Swap | 1-month SOFR | |
Derivative [Line Items] | |
Fixed Rate | 3.375% |
Share-based Compensation - Nonvested Restricted Shares and RSUs Activity (Details) - Restricted Stock Units (RSUs) |
9 Months Ended |
---|---|
Sep. 30, 2023
$ / shares
shares
| |
Shares | |
Beginning balance (in shares) | shares | 1,363,780 |
Granted (in shares) | shares | 778,656 |
Vested (in shares) | shares | (608,800) |
Forfeited (in shares) | shares | (15,080) |
Ending balance (in shares) | shares | 1,518,556 |
Weighted-average grant date fair value | |
Beginning balance (in usd per share) | $ / shares | $ 38.96 |
Granted (in usd per share) | $ / shares | 37.51 |
Vested (in usd per share) | $ / shares | 36.92 |
Forfeited (in usd per share) | $ / shares | 40.52 |
Ending balance (in usd per share) | $ / shares | $ 40.13 |
Revenues - Additional Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Dec. 31, 2022 |
|
Product Information [Line Items] | |||||
Accounts receivable, net | $ 115,779 | $ 115,779 | $ 111,493 | ||
Contract liability | 14,428 | 14,428 | 15,226 | ||
Contract liability - long term | 34,062 | 34,062 | $ 34,068 | ||
Revenue recognized that was included in unearned income | $ 4,200 | $ 17,000 | $ 12,900 | $ 29,000 | |
Total Revenue | Customer Concentration Risk | Popular | |||||
Product Information [Line Items] | |||||
Total percentage of revenues from Popular | 34.00% | 35.00% | 36.00% | 40.00% |
Revenues - Contract Balances (Details) - USD ($) $ in Thousands |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2023 |
Dec. 31, 2022 |
|
Revenue, Contract Balances [Roll Forward] | ||
Balance at beginning of period | $ 4,749 | $ 1,715 |
Services transferred to customers | 17,827 | 9,313 |
Transfers to accounts receivable | (12,244) | (6,279) |
Balance at end of period | $ 10,332 | $ 4,749 |
Current Expected Credit Losses (Details) - USD ($) $ in Thousands |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2023 |
Dec. 31, 2022 |
|
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Balance at beginning of period | $ 2,159 | $ 2,523 |
Current period provision for expected credit losses | 956 | 754 |
Write-offs | (197) | (1,268) |
Recoveries of amounts previously written-off | 17 | 150 |
Balance at end of period | $ 2,935 | $ 2,159 |
Income Tax - Components of Income Tax Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Income Tax Disclosure [Abstract] | ||||
Current tax provision | $ 8,166 | $ 9,537 | $ 21,037 | $ 24,610 |
Deferred tax benefit | (13,024) | (489) | (16,491) | (1,699) |
Income tax (benefit) expense | $ (4,858) | $ 9,048 | $ 4,546 | $ 22,911 |
Income Tax - Tax Expense Based on Location (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Current tax provision | ||||
Puerto Rico | $ 1,851 | $ 6,318 | $ 5,626 | $ 11,809 |
United States | 80 | 44 | 138 | 107 |
Foreign countries | 6,235 | 3,175 | 15,273 | 12,694 |
Total current tax provision | 8,166 | 9,537 | 21,037 | 24,610 |
Deferred tax benefit | ||||
Puerto Rico | (11,169) | 719 | (11,593) | (321) |
United States | 34 | 54 | 38 | 9 |
Foreign countries | (1,889) | (1,262) | (4,936) | (1,387) |
Total deferred tax benefit | $ (13,024) | $ (489) | $ (16,491) | $ (1,699) |
Income Tax - Additional Information (Details) - USD ($) $ in Millions |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Income Tax Disclosure [Abstract] | ||
Unremitted earnings from foreign subsidiaries | $ 130.6 | $ 115.5 |
Gross deferred tax asset | 29.9 | 17.9 |
Gross deferred tax liability | 20.0 | 20.7 |
Gross deferred tax asset, valuation allowance | $ 2.4 | $ 1.6 |
Income Tax - Income Tax Expense Differs from Computed Income Tax at Statutory Rates (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Income Tax Disclosure [Abstract] | ||||
Computed income tax at statutory rates | $ 27,231 | $ 87,402 | ||
Differences in tax rates due to multiple jurisdictions | 3,034 | 2,612 | ||
Effect of income subject to tax-exemption grant | (24,697) | (26,262) | ||
Effect of the gain on sale of a business | 0 | (39,645) | ||
Unrecognized tax expense | 103 | (3,472) | ||
Excess tax benefits on share-based compensation | 11 | 169 | ||
Tax credits for research and development activities | (884) | 0 | ||
Other, net | (252) | 2,107 | ||
Income tax (benefit) expense | $ (4,858) | $ 9,048 | $ 4,546 | $ 22,911 |
Net Income Per Common Share - Reconciliation of Income Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Earnings Per Share [Abstract] | ||||
Net income available to EVERTEC, Inc.’s common shareholders | $ 10,036 | $ 137,814 | $ 68,243 | $ 210,301 |
Weighted average common shares outstanding (in shares) | 64,648,542 | 66,398,547 | 64,886,551 | 69,906,483 |
Weighted average potential dilutive common shares (in shares) | 1,130,717 | 647,262 | 819,045 | 682,432 |
Weighted average common shares outstanding - assuming dilution (in shares) | 65,779,259 | 67,045,809 | 65,705,596 | 70,588,915 |
Net income per common share - basic (in usd per share) | $ 0.16 | $ 2.08 | $ 1.05 | $ 3.01 |
Net income per common share - diluted (in usd per share) | $ 0.15 | $ 2.06 | $ 1.04 | $ 2.98 |
Net Income Per Common Share - Additional Information (Details) - $ / shares |
3 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Jul. 20, 2023 |
Apr. 20, 2023 |
Feb. 16, 2023 |
Sep. 30, 2023 |
Jun. 30, 2023 |
Mar. 31, 2023 |
Sep. 30, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
|
Earnings Per Share [Abstract] | |||||||||
Cash dividends declared (in usd per share) | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 |
Related Party Transactions - Transactions with Related Parties (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Transactions with Third Party | ||||
Total revenues | $ 173,198 | $ 145,803 | $ 500,088 | $ 456,622 |
Cost of revenues | 81,280 | 76,272 | 238,149 | 215,244 |
Interest earned from affiliate | ||||
Interest income | $ 1,926 | 807 | $ 5,162 | 2,279 |
Related Party | ||||
Transactions with Third Party | ||||
Total revenues | 22,782 | 153,335 | ||
Cost of revenues | 653 | 2,386 | ||
Operating lease cost and other fees | 807 | 4,433 | ||
Interest earned from affiliate | ||||
Interest income | $ 231 | $ 1,011 |
Segment Information - Income from Segments to Consolidated Net Income (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 |
Jun. 30, 2023 |
Mar. 31, 2023 |
Sep. 30, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Segment Reporting [Abstract] | ||||||||
Net income | $ 9,956 | $ 28,050 | $ 30,063 | $ 137,739 | $ 33,556 | $ 38,866 | $ 68,069 | $ 210,161 |
Add: | ||||||||
Income tax (benefit) expense | (4,858) | 9,048 | 4,546 | 22,911 | ||||
Interest expense, net | 3,783 | 5,956 | 11,830 | 15,963 | ||||
Depreciation and amortization | 21,919 | 19,712 | 63,680 | 58,432 | ||||
Total EBITDA | $ 30,800 | $ 172,455 | $ 148,125 | $ 307,467 |
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 19, 2023 |
Jul. 20, 2023 |
Apr. 20, 2023 |
Feb. 16, 2023 |
Dec. 31, 2023 |
Sep. 30, 2023 |
Jun. 30, 2023 |
Mar. 31, 2023 |
Sep. 30, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
Oct. 27, 2023 |
Dec. 31, 2022 |
|
Subsequent Event [Line Items] | |||||||||||||
Cash dividends declared (in usd per share) | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | ||||
Common stock par value (in usd per share) | $ 0.01 | $ 0.01 | |||||||||||
Sinqia S.A. Merger | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Expected price of acquisition | $ 600 | ||||||||||||
Subsequent Event | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Cash dividends declared (in usd per share) | $ 0.05 | ||||||||||||
Subsequent Event | Sinqia S.A. Merger | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Common stock, reserved shares (in shares) | 1,168,555 | ||||||||||||
Common stock par value (in usd per share) | $ 0.01 | ||||||||||||
Subsequent Event | Sinqia S.A. Merger | Brazilian Depositary Receipts | Forecast | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Underlying shares to be issued as consideration (in shares) | 1,168,555 |
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