EVERTEC Inc. announced results for its second quarter ended June 30, 2016 Thursday, reporting a 5 percent growth in revenue to $97.7 million, compared with $93.4 million in the prior year.
“We are pleased with our second quarter financial results that reflect the resiliency of our business model in challenging market conditions,” said EVERTEC President Mac Schuessler.
Merchant acquiring net revenue was $23.3 million, an increase of 10 percent compared with $21.2 million in the prior year. Revenue growth in the quarter was driven by the FirstBank merchant business, partially offset by the shift of a merchant acquiring customer contract to a payment processing contract as well as other revenue mix shifts, the company said.
Payment processing revenue was $28.2 million, an increase of 5 percent compared with $26.8 million in the prior year. Revenue growth in the quarter primarily reflected increases in transactions processed over the ATH debit network and card processing volume, revenue related to the acquisition of Processa, a Colombian payment processing company, and the reference revenue shift from merchant acquiring to payment processing.
“These increases were partially offset by a reduction related to the classification of FirstBank revenues in merchant acquiring in 2016 as well as revenue reductions related to government programs,” the company said.
Business Solutions revenue was $46.2 million, an increase of 2 percent compared to $45.5 million in the prior year, reflecting additional volumes in core banking and increased revenue from hardware sales, partially offset by a decrease in IT consulting and cash and item processing revenue.
For the quarter ended June 30, 2016, Adjusted EBITDA was $48.8 million, an increase of 4 percent compared with $47.0 million in the prior year. Margins decreased 30 basis points to 50 percent compared with 50.3 percent in the prior year, as a result of a change in revenue mix, increased business-to-business operating taxes, increased investment expense related to Latin America growth initiatives and corporate development, the company explained.
For the quarter ended June 30, 2016, GAAP net income was $20.2 million, or $0.27 per diluted share, compared with $19.6 million or $0.25 per diluted share in the prior year.
For the quarter ended June 30, 2016, adjusted net income was $32 million, an increase of 4 percent compared with $30.9 million in the prior year.
As a result of its second quarter numbers, EVERTEC increased its 2016 financial outlook to achieve total consolidated revenue of between $382 million and $388 million, representing growth of 2 to 4 percent. Capital expenditures continue to be expected in a range between $35 million and $40 million.