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Segment Information
 9 Months Ended
Sep. 30, 2023
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:

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$51,600 $46,155 $40,557 $56,522 $(21,636)$173,198 
Operating costs and expenses28,402 38,608 26,997 40,643 (1,014)133,636 
Depreciation and amortization6,203 4,898 1,078 4,478 5,262 21,919 
Non-operating income (expenses)110 (2,148)— 69 (28,712)(30,681)
EBITDA29,511 10,297 14,638 20,426 (44,072)30,800 
Compensation and benefits (2)
663 859 662 696 4,090 6,970 
Transaction, refinancing and other fees (3)
269 3,451 — — 34,363 38,083 
(Gain) loss on foreign currency remeasurement (4)
(87)2,885 — — 8 2,806 
Adjusted EBITDA$30,356 $17,492 $15,300 $21,122 $(5,611)$78,659 
(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.
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$44,592 $33,741 $36,911 $49,306 $(18,747)$145,803 
Operating costs and expenses26,960 28,513 25,261 38,522 2,729 121,985 
Depreciation and amortization5,116 4,104 1,045 3,745 5,702 19,712 
Non-operating income (expenses)385 (7,094)348 136,218 (932)128,925 
EBITDA23,133 2,238 13,043 150,747 (16,706)172,455 
Compensation and benefits (2)
1,557 972 498 503 2,141 5,671 
Transaction, refinancing and other fees (3)
330 — 325 (134,974)8,581 (125,738)
Loss on foreign currency remeasurement (4)
68 7,725 — — (14)7,779 
Adjusted EBITDA$25,088 $10,935 $13,866 $16,276 $(5,998)$60,167 
(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.

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$150,824 $120,548 $122,152 $169,188 $(62,624)$500,088 
Operating costs and expenses85,019 101,586 81,302 118,653 (897)385,663 
Depreciation and amortization18,178 13,002 3,357 13,436 15,707 63,680 
Non-operating income (expenses)590 (3,643)308 667 (27,902)(29,980)
EBITDA84,573 28,321 44,515 64,638 (73,922)148,125 
Compensation and benefits (2)
2,033 2,510 2,054 2,226 12,693 21,516 
Transaction, refinancing and other fees (3)
850 3,704 — — 38,741 43,295 
(Gain) loss on foreign currency remeasurement (4)
(41)7,372 — — 6 7,337 
Adjusted EBITDA$87,415 $41,907 $46,569 $66,864 $(22,482)$220,273 
(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.
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$130,678 $93,308 $111,079 $176,620 $(55,063)

$456,622 
Operating costs and expenses76,920 77,132 68,288 117,747 25 

340,112 
Depreciation and amortization15,062 9,628 3,104 12,787 17,851 58,432 
Non-operating income (expenses)928 (3,365)980 137,542 (3,560)132,525 
EBITDA69,748 22,439 46,875 209,202 (40,797)307,467 
Compensation and benefits (2)
2,569 2,758 1,284 1,503 7,241 15,355 
Transaction, refinancing and other fees (3)
330 — 325 (134,990)11,615 (122,720)
Loss on foreign currency remeasurement (4)
230 5,596 — — 1,032 6,858 
Adjusted EBITDA$72,877 $30,793 $48,484 $75,715 $(20,909)$206,960 
(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:
 Three months ended September 30,Nine months ended September 30,
(In thousands)2023202220232022
Net Income$9,956 $137,739 $68,069 $210,161 
Add:
Income tax (benefit) expense(4,858)9,048 4,546 22,911 
Interest expense, net3,783 5,956 11,830 15,963 
Depreciation and amortization21,919 19,712 63,680 58,432 
Total EBITDA$30,800 $172,455 $148,125 $307,467