Evertec Inc. reported $113.3 million in total revenue for the second quarter ended June 30, representing a 10 percent increase compared with $103.5 million in the prior year.
The revenue growth in the quarter reflected the impact of the acquisition of PayGroup as well as elevated sales volumes in Puerto Rico driven by post-hurricane recovery activity, federal relief and benefit programs and insurance proceeds.
The growth was “stronger-than-anticipated due to increased sales volumes and an improved net revenue mix,” Evertec President Mac Schuessler said. “We are pleased with our second quarter financial results and given our expectation for the remainder of the year, we have increased our 2018 guidance.”
For the quarter ended June 30, 2018, GAAP Net Income attributable to common shareholders was $20.1 million, or $0.27 per diluted share, flat as compared to the prior year. Adjusted EBITDA was $53.8 million, an increase of 7 percent compared to the prior year.
“We generated significant operating cash flow year-to-date of approximately $77 million, which is $6 million above last year,” Schuessler said. “Given the quarter results and our increased confidence with the remainder of the year, we are raising our guidance.”
In a call with analysts, Schuessler said Evertec experienced a 5 percent increase in transaction volumes and the average ticket continued to be significantly above the prior year, growing 12 percent, which accounted for the quarter’s revenue growth.
Aside from its acquisition of PayGo, the Evertec executive said the company “accomplished an important milestone with the implementation of our risk center solution with Banco Santander, the largest bank in Chile.”
“This was the first implementation of the software in an outsource model. The market response to this new risk management service capability has been positive, and we plan to invest more to incrementally build at our card and risk processing service, which we believe will be unique in the region,” he said.
On the other hand, the company spent about $2.6 million in due diligence for a potential transaction in Latin America that it eventually decided to pass upon.
“We remain committed to our strategy of expansion in Latin America, but every deal will be carefully evaluated based on the long-term benefits provided to Evertec and our shareholders,” he said.
Looking ahead, Evertec is increasing its financial outlook for 2018 as follows:
- Total consolidated revenue between $435 million and $445 million representing growth of 7 percent to 9 percent
- Adjusted earnings per common share guidance of $1.68 to $1.77 representing a range of 14 percent to 20 percent as compared to $1.47 in 2017
- Capital expenditures ranging between $35 and $40 million
- Non-GAAP effective tax rate ranging between 13 percent to 14 percent.