Good day and welcome to the EverTech Third Quarter 2025 Earnings Conference Call. All participants will be in a listen-only mode. Should you need any assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Lloyda Montez-Santiago, Finance, Property, and Investor Relations Senior Manager. Please go ahead.

Thank you, and good afternoon. With me today are Matt Schussler, our President and Chief Executive Officer, Joaquin Castillo, our Chief Operating Officer, and Carla Cruz-Ulcino, Chief Financial Officer. Before we begin, I would like to remind everyone that this call may contain forward-looking statements and should be considered in conjunction with cautionary statements contained in our earnings release and the company's most recent periodic SEC report. During today's call, management will provide certain information that will constitute non-GAAP financial measures under SEC rules, such as constant currency revenue, adjusted EBITDA, adjusted net income, and adjusted earnings per common share. Reconciliations to gap measures and certain additional information are also included in today's earnings release and related supplemental slides, which are available in the Investor Relations section of our company's website at www.EverTechInc.com. I will now hand over the call to Mac.

Thanks, Loida, and good afternoon, everyone. Before we dive in, I'd like to have a moment to recognize Loida as our new internal point of contact for Investor Relations. In the third quarter, Evertech delivered another strong quarter of organic revenue growth and further advanced our presence and capabilities in Brazil by closing on the previously announced Technobank acquisition. On today's call, I'll provide an update of the cybersecurity incident we identified in August, give a brief summary of our third quarter results, including an update on our Puerto Rico and Latin businesses, followed by our updated outlook for 2025. Before we dive in, I'd like to address an important leadership transition that took effect on November 1st. I'm pleased to announce that Joaquin Castillo has been promoted to Chief Operating Officer. In this extended capacity, he will be responsible for the revenue and management across all Evertech's commercial areas. During his tenure as CFO, Joaquin was instrumental in establishing strong relationships with the investment community, and his strategic vision has been invaluable to the company's growth trajectory. As he transitions to the role of Chief Operating Officer, Joaquin brings with him a proven track record of financial stewardship and a deep understanding of Evertech's business. ensuring continued momentum and seamless continuity in the company's leadership team. Succeeding Joaquin as CFO is Carla Cruz-Husina, who has been promoted from Chief Accounting Officer. Carla has been a keystone to our finance and accounting organization for six years, and I'm confident that her track record, strategic vision, and dedication to Evertech's mission position her to guide the company's financial strategy through its next phase of growth. Overall, these interim promotions reflect the strength and depth of our finance organization and ensure seamless continuity in our leadership. With the transition noted, let me give a brief update on the cybersecurity incident we identified in August. As stated previously, we detected unauthorized activity in Synchia's PICS environment in the Brazilian Central Bank, or BCB. For context, PICS is a real-time payment system in Brazil governed by the central bank, and Synchia has services that enable financial institutions to access this payment system. Once the unauthorized activity was detected, our teams reacted promptly and in accordance with our cyber incident protocols were able to contain the situation. The team worked closely with both our clients and the BCB, reviewed and implemented key security enhancements to our systems, and obtained approval from the BCB that allowed our systems to be now up and running for several weeks. Additionally, our financial institution clients have now confirmed that the vast majority of the funds have been recovered, significantly limiting the original exposure. Now that our investigation has nearly concluded, we can confirm that this incident was isolated to the PICS real-time payment system in Brazil and did not impact any other Evertech products or services or geographies. Our Q3 results for GAAP purposes reflect the impact from cost incurred throughout the incident, as well as an estimate of potential claims related to client losses from funds yet to be recovered, as we continue to work with our clients and our cybersecurity insurance provider. Moving now to our third quarter results, I'm pleased to announce solid revenue performance. We delivered healthy growth over the prior year and exceeded our internal expectations as we continue to execute at a high level across all regions and business segments. Beginning on slide five, I'll start by covering a few highlights from our third quarter results. Revenue for the third quarter was $228.6 million, an 8% increase over the prior year, while constant currency revenue was approximately $227.9 million, representing growth of 8%, as we again saw growth across all of our segments. Adjusted EBITDA increased to $92.6 million, up approximately 6% year-over-year, and adjusted EBITDA margin was 40.5% for the quarter. Adjusted EPS of $0.92 was up 7% year-over-year, driven by the strong adjusted EBITDA growth and lower interest expense, partially offset by higher tax expense. Through the first nine months of the year, we have generated operating cash flow of approximately $157 million in return cash to shareholders through $9.6 million in dividends and $3.7 million in share repurchases. Our liquidity remains strong at approximately $518.6 million as of September 30th. Let me now provide an update on Puerto Rico, beginning on slide six. Merchant acquiring revenue grew 3% year-over-year, driven by a higher sales volume. Payment services Puerto Rico grew 5% year-over-year, driven by strong performance in ATH mobile, primarily ATH business, as well as POS transaction growth. Business solutions revenue grew 1%, primarily driven by projects completed during the quarter. Economic conditions in Puerto Rico remained favorable through the end of the third quarter, with positive trends in total employment, strong tourism performance, and other key economic indicators. The unemployment rate held steady at 5.6% near historic lows, while consumer spending continued to demonstrate strength and stability. Moving to Latin America on slide 7, revenue increased 19% year-over-year, or 18% on a constant currency basis, as we continue to see strong organic growth across the region, fueled by the re-acceleration in Brazil and a contribution from the Grandada and Nubiti acquisitions. Our pipeline in LATAM remains robust and, as anticipated, is now beginning to drive key wins. I'm excited to announce that we have signed a deal to provide acquiring, processing, and risk monitoring services to Banco de Chile, one of the largest financial institutions in Chile, known for its retail and corporate banking services and extensive national presence. With this win, we now have two of the largest banks in Chile on our acquiring platform, validating our strategy of investing in dynamic markets and positioning Evertech as one of the top processors in the country. I'm also excited to announce that we have signed a deal with Financiaria O, a leading financial services company in Peru, known for its innovative credit solutions and strong retail presence. We will provide issuing, processing of debit, credit, and fraud monitoring solutions. This is a key win that also positions Evertech with a marquee name in the very attractive Peruvian market. On the M&A front, I would like to acknowledge the closing of a patrolling stake in Technobank in October. This acquisition strengthens our financial technology capabilities in Brazil and opens new avenues for growth and scale. And I would like to personally extend a warm welcome to the entire Technobank team. In summary, we delivered another quarter of strong results across Puerto Rico and Latin America. More importantly, the key wins announced in the previously mentioned win of Grupo Aval in Colombia demonstrate our ability to win in key markets where the opportunity for Evertech continues to be immense. The combination of strong organic growth in LATAM and the contribution from M&A will continue to drive our diversification into growth markets that will lead to a faster-growing Evertech over time. These are exciting times for our company. With that, I'll turn the call over to Joaquin to provide deeper commentary around our third quarter results, followed by Carlo, who will discuss our improved outlook for the remainder of 2025.

Thank you, Mac, and good afternoon, everyone. Turning to slide nine, I'll start with a review of our third quarter results. Total revenue for the quarter was $228.6 million, up approximately 8% compared to the prior year quarter, reflecting strong organic growth across all of the company segments, continued momentum in LATAM, and the contribution from acquisitions completed in the fourth quarter of 2024. Revenue also grew 8% in the quarter on a constant currency basis, with a minor tailwind primarily attributable to the Brazilian REI. Adjusted EBITDA for the quarter was $92.6 million, up approximately 6% from last year, representing a margin of 40.5%, a decrease of 80 basis points from a year ago, but in line with our expectations. Adjusted EBITDA benefited from strong revenue, the M&A contribution, and Brazilian market reacceleration in LATAM, as well as benefits from previously announced cost initiatives. Adjusted net income was $59.8 million, an increase of approximately 8% year-over-year, driven by growth in adjusted EBITDA and lower cash interest expense, reflecting the positive impact of repricing our debt. These were partially offset by higher tax expense. As expected, our effective tax rate has been increasing slightly as we find ways to lower our interest expense, which drives certain tax efficiencies, as well as the growing contribution from our LATAM operations, which are subject to higher statutory tax rates. Adjusted EPS was 92 cents, an increase of approximately 7% from the prior year, driven by the higher adjusted net income. Moving to slide 10, I will now cover our third quarter results by segment, beginning with merchant acquiring. Net revenue increased approximately 3% year-over-year to $46.8 million as we benefited from strong sales volume and transaction growth throughout the quarter. Both were positively impacted by new merchant relationships and the impact from the Bad Bunny residency, which resulted in key verticals within the portfolio seeing increased volumes. We also benefited from tax return payments during the third quarter as we got closer to extension deadlines. The positive impact from volumes was partially offset by a slight decrease in spread as we saw a shift towards more card present transactions. Adjusted EBITDA for the segment was $18.6 million with an adjusted EBITDA margin of 39.8%, a decrease of approximately 30 basis points as we experienced a lower average ticket that drove higher processing costs. On Slide 11 are the results for the Payment Services Puerto Rico and Caribbean segment. Revenue in the quarter was $55.2 million, an increase of approximately 5% from the prior The revenue increase was primarily driven by another quarter of strong performance in ATH Mobile with mid-teens growth, driven specifically by ATH Business, where we continue to sign up new merchants driving higher sales volume and transactions. COS transaction growth was 7%, aligned with the same factors that drove sales volume growth in our merchant segment, such as the Bad Bunny Residency. Adjusted EBITDA was $29.9 million, up approximately 5% from the prior year, and adjusted EBITDA margin was 54.1%, an increase of approximately 40 basis points from the prior year. The increase in margin is driven mainly by revenue growth and operational efficiencies related to POS repairs. On slide 12 are the results for Latin America payments and solutions. Revenue in the quarter was $90.4 million, up approximately 19% year-over-year, or approximately 18% on a constant currency basis. We delivered double-digit organic growth across the region, in part driven by the reacceleration in Brazil, where we continue to execute on our modernization initiatives the favorable impact of contract repricing tailwinds and a strong pipeline. Chile continues to deliver strong growth, including the contribution from the GetNet Chile contract. The segment also benefited from grand data annuity, the two acquisitions we completed in the fourth quarter of last year, both of which continue to perform as expected or better. These positive impacts were partially offset by the melee attrition and a $1.8 million one-time GATnet impact recognized prior year. Adjusted EBITDA was $24.4 million, an increase of approximately 18% from the prior year, with an adjusted EBITDA margin of 27%, a modest decrease of approximately 30 basis points. The margin decrease is mainly related to the recognition in prior year of the one-time get net revenue that was highly accretive to margin. Moving to slide 13, our business solution segment revenue increased approximately 1% to $61.7 million. The increase is due primarily to projects completed during the quarter and higher hardware sales, partially offset by a one-time credit related to a managed services contract. Adjusted EBITDA was $25.1 million, a decrease of approximately 2% from a year ago, and adjusted EBITDA margin was down approximately 100 basis points from the prior year to 40.7%. Margin is down year-over-year primarily due to the one-time credit and the lower margin from hardware sales. Moving to slide 14, you will see a summary of our corporate and other expenses. Adjusted EBITDA was a negative $5.4 million in the quarter, or 2.4% of total revenue, which is slightly lower than expected and lower than prior year as we continue to realize more of the benefits from expense management initiatives that we have been executing throughout the year. Moving on to our cash flow overview for the first nine months of 2025 on slide 15, Net cash from operating activities year to date was $157 million. Capital expenditures were $67.9 million through the third quarter, tracking in line with our plan of $85 million for the whole year. We paid down approximately $22.4 million in debt, paid approximately $8.9 million in withholding taxes on shared-based compensation, and returned approximately $13.3 million to shareholders through share repurchases and dividends. Our ending cash balance, excluding cash in settlement assets, was approximately $499.7 million, an increase of $201.5 million from the year ended 2024. This cash balance includes approximately $150 million of cash from our revolver that was used on October 1st of 2025 to close on the acquisition of the controlling stake in Tecnobank. Moving to slide 16, our net debt position at quarter end was $631.8 million, which includes $1.1 billion in total long and short-term debt offset by $474.7 million of unrestricted cash. Our weighted average interest rate was approximately 6.24%, a decrease of approximately 47 basis points from the third quarter of 2024. Our net debt to trailing 12-month adjusted EBITDA was approximately 1.8 times, down from 2.2 times a year ago, and slightly below the lower end of our leverage target range of two to three times. As of September 30th, our total liquidity, which includes restricted cash and includes borrowing capacity, was $518.6 million, approximately $50 million from a year ago. Now, I'd like to turn the call over to Carla, who will offer updated 2025 guidance, discuss key modeling points to consider, and provide some preliminary thoughts on our outlook for 2026.

Thanks, 14, and good afternoon, everyone. Turning to slide 18, I'll start with commentary on our updated 2025 outlook. We now expect revenues to be between $921 and $927 million, representing growth of 8.9 to 9.6%. The updated outlook includes a Q3 overperformance and improved foreign currency expectation in Q4 and the acquisition of Technobank. On a constant currency basis, we now expect growth of 10% to 11% year-over-year, above our prior constant currency range of 7.8% to 8.7%. Adjusted EBS is now expected to grow between 8.5% and 10.4% from the $3.28 reported for 2024 and higher than our previous assumption of 4.8% to 7% growth. We now expect our adjusted EBITDA margin to be approximately 40% and we continue to expect the adjusted effective tax rate to range from 6% to 7%. I will now walk you through the key underlying assumptions considered in our outlook started with revenue expectations across our business segments. We continue to anticipate mid-single-digit growth in merchant acquiring for 2025 as we expect a Q4 outlook in line with Q3 performance. In payments Puerto Rico and Caribbean, we now expect mid-single-digit growth as we benefit from the continued momentum in ATH Mobile, partially offset by lower processing services to the Ladan segment and the impact from the popular discount that began in October. For Latin America payments and solutions, we now expect high-teens growth driven by strong organic momentum across the region and the contribution from the Tecnobank acquisition completed at the beginning of the fourth quarter, partially offset by the headwind of foreign currency mainly in Brazil. On a constant currency basis, growth is now expected to be in the low 20s. As a reminder, we will anniversary both the grand data and new bid acquisitions in Q4. Finally, in business solutions, we continue to expect low single-digit revenue growth, primarily reflecting the 10% discount to popular that became effective in October, impacting approximately $18 million annually, estimated to be $4 million in Q4. Turning to overall margin, we anticipate approximately 40% for the full year. As we start to shift focus to 2020 SIP, while we are now providing guidance, I would like to share key items intended to help you frame your modeling assumptions and provide clarity on the strategic priorities driving our outlooks for next year. Beginning with Puerto Rico, the 10% discount on selected MSA services with Banco Popular became effective in October 2025. As we head into 2026, this discount represents an estimated headwind of approximately $14 million, impacting mostly our business solution segment, with a more modest impact on our payments Puerto Rico segment. Additionally, the CPI for September was announced at 3%, and as a reminder, This is capped at 1.5% per MSA agreement and 2.5% per ATH processing agreement with Popular. Beginning on October 2026, the CPI escalator will now allow increases above 2%, capped at a maximum of 2%. Specifically, as we look at our segments, while the merchant acquiring segment benefited from pricing initiatives through the first half of 2025, these tailwinds are expected to normalize in 2026.

Additionally, the boost in transaction volumes linked to the Bad Bunny Residency will create a modest headwind.

Despite these factors, we remain optimistic about the segment's trajectory and are anticipating implementing key merchants that should continue to drive positive growth in 2026. For payments Puerto Rico, we expect a slight impact from the 10% discount to popular, to be offset by the continued strength in ATH Mobile and anticipated growth in POS transactions. In Latin America, we expect continued momentum in 2026, supported by a mix of organic growth and strategic M&A, including Technobank. Additionally, while we are very excited about the key wins and on-spite Mac, these are not expected to have a meaningful contribution to 2026, as these will be either ramping up or under-implementation for most of the year. Finally, in business solutions, we expect a top-line reset driven by the incremental $14 million impact as a result of the 10% discount to popular debt began in October, partially offset by the CPI impact already mentioned. Moving to margins, to offset the impact of the 10% popular discount and the lower margin contribution from Latin American organic growth, we remain focused on executing targeted cost efficiencies initiatives across our business segments. Interest expense is projected to decline year-over-year, supported by successful debt reprising and lower SOFR rates. However, this benefit will be partially offset by incremental debt related to the Technobank acquisition. Lastly, regarding taxes, we expect a higher adjusted tax rate reflected increased EBITDA contributions from LADAM and a reduction in interest expense, a key driver of tax efficiency in 2025. In summary, we delivered a strong third quarter and are well positioned to deliver strong top line growth in 2026. We remain focused on executing our strategic priorities and cost initiatives to support long-term value creation. We look forward to sharing more updates on our progress in early 2026. On behalf of Max, Joaquin, and myself, we appreciate your continued support, and I hope to connect with many of you at upcoming conferences over the next few months. Operator, please go ahead and open the line for questions.

Thank you. We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. Your first question comes from Jamie Friedman from Susquehanna. Please go ahead.

Congratulations, Joaquin and Carla, on your respective promotions. And I hope we continue to work together in the future, Joaquin. I learned a lot from you over the years. So, Mac, maybe I'll ask, first of all, in terms of LATAM, you know, up 19% year over year, you know this this this growth seems quite durable you're signing incremental deals Banco Chile etc so any perspective that you could share now as to what you're finding relative to when you began the expansion in LATAM is it you know are you resonating are you gaining the mind share that you had anticipated and what's so far surprised you down there yeah so what I mean If I look at long-term over the course of the company, I think what we've been able to do is, you know, build products through acquisitions so that they're now some of the best products in the region.

So if you look at the deals we just announced, Banco de Chile is using our acquiring platform, which is now, you know, our second big deal in Chile. If you look in Peru, we now have this deal where they're using our issuing platform. So I think what we've done is we've built these products now that we're scaling across the region, and as you'll see, we're getting good margins. The other piece I think that's pretty important was the Synchia deal. We got that deal. It's now growing at a rate that we're very happy with now that we've integrated, and it also gives us the ability to make other acquisitions like Technobank. So those are the two big things that I think we've seen is our products are now scalable across the region. We're winning business to demonstrate that. And now we have sort of a cornerstone of our strategy to continue to invest in Brazil through the Synchia acquisition and the infrastructure we have there. We're super excited about the future, as Carla talked about, 2026. and, you know, the continued growth that we think we'll see in my town.

And also about that, Carly, you were talking about the COLA, the return of COLAs. I remember that was a theme earlier in the company's history. It sounds like that's coming back. So, you know, what typically can be the contribution from those sorts of cost of living adjustments in a typical year?

Hey, Jamie, I don't think that we could hear you clearly. I'm talking about the cost of living adjustments. You're talking about the CPI adjustments on the resolution contract?

CPI, that's what I'm trying to say, CPI, yeah.

Yeah, no, I got it. So, yeah, yeah, so do you want to talk about the CPI adjustments?

Yes, we did call out that the CPI in this first September was announced at 3%, and it's now currently capped at 1.5% for our MSA agreement with Popular and at 2.5% for ATH processing agreement. Now, beginning in 2026, we have mentioned in the past that that escalator will permit an increase in the CBI above 2%, but now capped at 2%.

Okay. Okay. I get the idea. All right, I'll drop back in the queue. Congratulations, everyone. Thank you. Thanks, Simon.

Thank you. Once again, if you wish to ask a question, please press star 1. Your next question comes from Mark Feldman from William Blair. Please go ahead.

Hi, guys. Thanks for taking the questions. And I'll echo my congratulations to both you, Joaquin and Carla. I guess, first off, can you talk about, you know, potential cross-sell opportunities between Technobank and Synchia, just given Synchia's presence in the consortium model in Brazil?

Yeah, so look, as we tuck in assets to the, you know, the SYNCIA acquisition, it's exciting to have an organization and management team that can manage these investments. Technobank has cross-sell opportunities because we do business with a lot of the financial institutions, and the financial institutions are primarily, and the consortiums are primarily the customers of Technobank. So there's tremendous cross-sell opportunities where Technobank customers can use other products that we already have and vice versa. So there's some CINCIA customers that don't use Technobank today. It's a great business on a standalone basis, but the cross-sell opportunities we think are relevant.

Great. Thank you. Appreciate that. And then I guess just one more, you know, I know the situation is dynamic, but with the government shutdown and, you know, your benefits business and then also the Puerto Rican economy in general, can you talk about any trends that you've seen thus far and what we should be considering for the fourth quarter?

Sure. So, Joaquin, look, so far, no direct impact. Obviously, we're monitoring it closely, just like everybody is, because the Puerto Rico economy does rely on certain federal funds. One of the biggest impacts could potentially be around the NAP and SNAP programs. A big portion of the Puerto Rico population does rely on welfare. Having said that, we know that at least through November, that has been funded.

So, we do have a little bit of a runway here to continue to monitor before it starts to have any impact great thanks for taking the questions and congratulations again thank you thanks mark thank you your next question comes from john davis from raymond james please go ahead hey good afternoon guys and i'll add my congrats lucky and carla uh mac just big picture here um the security incident uh within the team I'm just curious, you know, understand it's kind of been ring fence at this point, but have you seen any adverse impact on business momentum, pipeline, anything like that? Just be curious kind of on the state of the momentum at Sinkia more broadly as well.

You know, at this point we haven't seen an impact to the commercial business. It was primarily just two banks that were impacted, and those two banks, you know, we've been able to work through all the issues with those guys. We also think that we can now demonstrate – I also want to say just – I don't know that everyone has perspective. This happened to multiple technology companies. So there were criminals trying to take advantage of the PIC system through multiple companies in Brazil. So if you pull the press, this didn't happen to just us. It was several. What I would say is that we believe now that we've really been able to harden our systems, that we've been able to demonstrate we have better systems, and we're going to work to make this an advantage versus a disadvantage. But we haven't seen any negative commercial impact at this point.

Okay, great. And then, plus Huma Carla, just margins more broadly, you know, I think they're down about 80 basis points year over year in the third quarter. I think that's before the changes, the contract changes, the DPOP. But, you know, just curious, you know, I heard, like, average ticket was called out. But more broadly, were those, you know, I know you guys don't got margins by quarter, But was that largely in line with your expectations or anything that surprised you on the margin front in the third quarter specifically?

I mean, look, when we look at it on a year-over-year basis, John, remember that we called it out. We had a big one-timer last year in LATAM that was highly margin accretive. But if you look at the sequential growth of our margin, it is aligned to our expectations, right? We had said we were going to start at kind of 39s, grow to like mid-40s, and then come back down, right? And that's the trajectory that's been reflected. In the case specifically of merchant acquiring, yes, we did have a slight declining margin, which is coming because, yes, the average ticket is coming down. We have a lot more transactionality than necessarily sales volume, although we did have very good sales volume as well. So I think it's just the nature of how that business moved this past quarter. We need to continue to monitor both trends as it relates to merchant occurring, specifically going into the next quarter.

Okay. And then last one, Mac, just on capital allocation, balance sheet's in good shape. You know, I know the Technobank deal just closed. But just curious, you know, Appetite, you're thinking kind of more tuck-in deals, thoughts on essentially buying back stock with the pullback, frankly, across the whole space. Just curious, I'll say your thoughts with where the stock is trading and also kind of appetite on the M&A side.

So, I mean, what I would say is, look, after, you know, into the next quarter we'll be above, a little bit above two. Right, Carla? So, I mean, you know, we'll be between two and three, but on the lower end of sort of what's tolerable. We do recognize where our stock price is, and we are sort of evaluating the pipeline. We still have a good pipeline. And every quarter we'll take a look at capital allocation and try and make the right decision. But as you know, it's something we're very, very focused on, and we'll balance where the stock price is, but also the M&A opportunities that we have.

Mark, I would add there that we do have $150 million available still under our share repurchase program, and that ends in 2020. So this is another data point.

Okay, appreciate your call.

Thank you. Once again, if you wish to ask a question, please press star one. We'll pause again for any further questions to register. Thank you. There are no further questions at this time. I'll now hand the conference back to management for any closing remarks.

Again, I want to thank everybody for joining the call. Again, I want to congratulate all of my colleagues on the call with me, and we look forward to seeing you in the future at investor events. Have a good night.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.