Good afternoon, and welcome to the EVERTEC, Incorporated, Second Quarter 2019 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Kay Sharpton, Vice President of Investor Relations. Please go ahead.

Thank you, and good afternoon. With me today are Mac Schuessler, our President and Chief Executive Officer; and Joaquin Castrillo, our Chief Financial Officer. A replay of this call will be available until Wednesday, August 7. Access information for the replay is listed in today's financial release, which is available on our website under Investor Relations section of evertecinc.com. For those listening to the replay, this call was held July 31. Please note there's a presentation that accompanies this conference call, and it is accessible in the Investor Relations section of our website. Before we begin, I'd like to remind everyone that this call may contain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements about our expectations for future performance are subject to known and unknown risks and uncertainty. EVERTEC cautions that these statements are not guarantees of future performance. All forward-looking statements made today reflect our current expectations only, and we undertake no obligation to update any statements in -- to reflect the events that occur after this call. Please refer to the company's most recent annual report on Form 10-K filed with the SEC for factors that could cause our actual results to differ materially from any forward-looking statement. During today's call, management will provide certain information that will constitute non-GAAP financial measures under SEC rules, such as adjusted EBITDA, adjusted net income and adjusted earnings. Reconciliations to GAAP measures and certain additional information are also included in today's earnings release and related supplemental slides. I'll now hand the call over to Mac.

Thanks, Kay, and good afternoon, everyone. We are pleased with our results for the second quarter of 2019, which exceeded our expectations, and we are therefore increasing our guidance for the full year. We are executing well, and we continue to benefit from Puerto Rico's economic recovery, our innovation strategies and our Latin America focus. Beginning on slide 4, I'll cover some of the quarter's financial highlights and provide you with an update on recent developments. Total revenue was $123 million, an increase of 8% compared to 2018. We are seeing growth across all segments. We're benefiting from some pricing actions, our deployment of value-added solutions, new managed services, hardware and software sales and the completion of some longer-term projects this quarter. Adjusted EBITDA was $58 million or 7% growth over the prior year, and adjusted earnings per share was $0.51, an increase of 11% compared to last year. We generated significant operating cash flow and returned approximately $35 million year-to-date to our shareholders through dividends and share repurchases. Moving on to our exciting progress in Latin America, beginning on slide 5, first, we are pleased to announce an agreement to acquire PlacetoPay, a Colombian-based gateway and payment service provider. Their services are focused on enabling customers with a digital presence accept different forms of payment and include customers in different industries. We believe PlacetoPay is the second-largest local player and competes with other regional companies. We anticipate this gateway to become our primary digital offering for the region as well as strengthen our presence in Colombia. We anticipate this transaction to close by the end of the year, but we are waiting for regulatory approval. Next, we are also pleased with the recent expansion of our regional agreement with Citibank, for our collection payment platform to include Mexico and…

Thank you, Mac, and good afternoon, everyone. I'll now provide a review of our second quarter 2019 results. Turning to slide 8, you will see the consolidated second quarter results for EVERTEC. Total revenue for the second quarter was $122.5 million, up 8% to $113.3 million for the prior year. Our sales volume for the quarter was down slightly versus prior year primarily due to prior year's volume benefiting from EBT relief funding that ended last quarter. Additionally, we had a lower average ticket this quarter, offset by higher net spread driven by pricing actions. We've also benefited from new fees on ATH Movil and ATH Movil Business, increased core banking transactions and increase in network services related to new managed services. And lastly, revenue increased due to hardware and software sales and completed projects of approximately $2.5 million. Total revenue for the 6 months year-to-date was $241.4 million and up 8% year-over-year. Adjusted EBITDA for the quarter was $57.8 million, an increase of 7% from $53.8 million in the prior year. Adjusted EBITDA margin was 47.2%, and this represents a 30 basis point decrease in our adjusted EBITDA margin compared to the prior year. The year-over-year decrease in margin primarily reflects the impact of the elevated average ticket last year that drove a higher-than-normal margin as well as the mix of revenues this year that was skewed to Business Solutions segment this quarter, which has a lower margin contribution. Additionally, we continue to have higher costs related to our investments in technology platforms, and FX negatively impacted us approximately $1 million this quarter. Year-to-date, our adjusted EBITDA was $115.4 million, an increase of 7% from $107.7 million in the prior year. Adjusted net income in the quarter was $37.2 million, an increase of 8% as compared to the prior…

[Operator Instructions] The first question comes from Bob Napoli with William Blair. Please go ahead.

Thank you. I was hoping to get -- I think in your presentation – and good afternoon Mac, Joaquin and Kay. The Santander Chile, I think it says you expect to be profitable with that in 2020. I just was hoping to get maybe just some TAM, what you think the opportunity is for that business? And then I have a follow-up question.

Sure. So let me just give a little bit of color on the market, Bob, so that people understand what's going on in Chile and sort of the deal that we struck. So right now in Chile, Transbank owns all of the merchant contracts. So when you look at a lot of people entering different countries, like when Global Payments or EVO or Elavon entered Spain, they actually bought a book of merchant contracts, immediately had revenue because they own the contracts, and they immediately had earnings. Chile is a bit different because all the merchant contracts are owned by Transbank. So there are 2 types of deals you can do in Chile. You could do -- try do a JV with a bank. And what's going to happen with that type of JV is there's a significant investment involved, but you're going to have to add revenue $1 at a time as you board new merchants. So you're not actually buying a portfolio. You're investing in a JV, and it's going to be a slow ramp as that bank picks up their share and takes the merchants away from Transbank. Our deal is a bit different. It's a processing deal. So our deal is that we are actually providing Transbank with switching and authorization services -- or I'm sorry, Santander. Santander switching and authorization services, fraud management, merchant management. So we are actually the processor, and we actually have minimums in the contract because we know that it's going to take time for some of these banks to pick up market share and there may be, in some cases, a price force. So our strategy in Chile is very much similar to what we have in Puerto Rico in that we have a good processing business. I mean we have a nice processing segment here. That's the same thing. So our intent in Chile is we have minimums on the contract with Santander, and we plan over time to offer multiple products to these banks, like we do with Santander today and other clients. And we also hope to have other processing arrangements with other banks and other merchant acquirers in the market.

Can you -- I mean can you give any feel for like what kind of revenue? Would that ramp up and the size of the revenue potential from Santander and...

I can when we give guidance for 2020. We're not prepared -- so right now just -- not to be coy, but we're very focused on getting this implemented. We've been working on this for some time. We started negotiations well before you actually saw this contract signed. So we are focused on piloting before the end of the year and actually being in the market early next year. So our focus right now is getting Santander up and running, to making sure we hit the banks, making sure we have the features so that they can grow their portfolio. And then I think as we get more confident on that time line and we have those milestones, then as we give you 2020 guidance, we'll have more clarity on that, the impact because we just don't want to get ahead of ourselves. But as we're incredibly excited. It's a -- if you look at the GDP of Chile, it's 3x what Puerto Rico is. We already have a good business there. We have over 200 employees. Santander has been a customer for a while, and now we are partnering with the biggest bank in the market to actually open up the market. So I think it's a great milestone reputationally, but it's also going to add revenue and EBITDA to that segment that will be helpful next year.

And just what can you tell us about PlacetoPay and the Colombia market, the gateway that you're acquiring? And what do you think the opportunity is or the TAM is for that business over time?

Yes. So Colombia has been -- I mean we've been in the Colombia market longer than we have Chile. And we're very pleased with our team there and what they have been working on, but the market has not opened as quickly as we had hoped, and we've talked about that a little bit I think in the past. What this acquisition does for us is twofold: One is it gives us an even stronger presence and role in that -- in country. So as we do believe over time that market will open, we'll be even more considered a partner of choice given our in-country presence. The second thing it does is it's very similar to PayGroup. 4 years ago, when we were trying to cross-sell and win business in the region, we didn't have the product set that would really win the businesses of big banks. The PayGroup acquisition, as you've seen, has helped us win Santander Chile processing business, helped us expand our relationship with Citibank. The PlacetoPay acquisition now will give us a gateway product and an e-commerce product that will strengthen our portfolio of offerings throughout the region as well. So it's complementary on both fronts, the in-country presence in Colombia and also the suite of products that we can now offer to all of our customers.

Great. Thank you I appreciate it.

Thank you, Bob.

The next question comes from Vasu Govil with KBW. Please go ahead.

Hi thanks for taking my question and congratulations to you all. This was a good quarter, making a lot of progress in Latin America.

Thank you.

So I guess the question I had for you, Mac, was as you think about the pipeline of clients across Latin America, it doesn't seem like there is an increase in pace of decision-making there following this deal in Chile. And could we expect more deals to be coming in the relative near term? Or was this sort of more of a one-off situation based on what was happening in Chile, and so we'll just have to wait and see as to how the region develops.

So I mean we talked about it a little bit on the call, the year-end call where we set guidance for the year. I'm more optimistic on some of the opportunities in these markets more than I have been the previous 3 to 4 years that I served at this company. I mean we saw early on the movement with Prisma. And now Prisma is owned by Advent. We knew that Santander was leaving. It was public information, and we know that other banks in Chile are looking for opportunities. So I would say we think the trend will continue to accelerate. It's country by country. Chile people are, again, continuing to look for alternatives now that the market is moving, but I'm hopeful over the coming years that this will be a trend throughout the region. And again, it's not just one country that we see this trend, it's multiple countries where I would say for the past couple of years, there's been a lot of noise and desire and intent and speculation. But I would say within the last year, if you look at the Prisma trade and now this transaction, you're actually seeing the movement and the opportunities taking place. So I can't predict it, I can't give you a time line of when opportunities will open in each market. But the markets where we have investments, we're engaged in trying to uncover those opportunities.

That's great. And I guess just 2 very quick ones. One, I think Oriental Bank made an acquisition with Scotiabank in Puerto Rico, and I know Oriental was a client of yours or partner of yours. So does that have any implications for you guys? And the second quick one I had was that we've seen a lot of press articles that there was a pullback in economic activity following all the protests that have been happening related to the political situation. Was that reflected in your July sales volumes in any way? Or was it just a second quarter trend?

So what I'd say on Scotia and Oriental, they're both actually customers. So I don't see in the immediate future any significant change, but both of those are customers of ours. They're both members of the ATH network, and we do business with both. So I don't see any immediate impact in that -- and that change. On the -- I mean you saw the headlines in the news that there definitely was some economic impact because in Old San Juan, the cruise ships didn't come in. So there was some economic impact. I'll let Joaquin, if he'll speak a little bit more to that.

Yes. I mean directionally, Vasu, as we said on the call, we were down year-over-year on sales volume. That trend we're seeing in July as well. Obviously, what Mac said is right. There is some economic impact in the July numbers. We're still monitoring as to how much of impact that really is, but nothing that we would expect to continue forward as the government stabilizes.

Great thank you very much.

Thank you.

The next question comes from George Mihalos with Cowen. Please go ahead.

Hey good afternoon guys. Just wanted to -- the Merchant Acquiring business, where I think you said it was pricing that drove the positive growth, can you just square for us again why the EBITDA margin declined given the pricing benefit? What are kind of the puts and takes that impacted the quarter there?

Sure. So I would say if you look at it different -- and take from a volume perspective, we're down year-over-year, and that's mainly EBT, so we had some EBT funding last year that we don't have this year. We've also been seeing the -- a declining average ticket. That's something that impacts spread, and that's something that we've been expecting. Even in the prior year, we saw a very elevated average ticket, and we've now said a couple of quarters that we were seeing that come back to normal. So that has a direct impact to our spread. Our pricing initiatives are offsetting some of that effect from a negative volume and a declining average ticket, and the net is negative to overall margin, but our overall spread is positive.

Okay. And I would assume that you would expect some improvement throughout the course of the year.

In terms of our margin.

Yes.

Well, we're still expecting our average ticket in June to come down slightly. It is still above pre-hurricane levels, and we are expecting similar EBITDA margins to what we saw in Q2 for the remainder of the year.

Okay, that's helpful. And then the attrition on the LatAm side, which again, continues to kind of be pushed out. Mac, again do you feel that there are increased opportunities to maybe hold on to some of that business?

Yes. So I mean the longer it goes, the less likely. We were able a couple of quarters ago to announce that we were able to retain a little bit of business. We will continue to try. We're not hopeful about it, we're more hopeful on the new business. But I mean we will continue to do the best job we can to continue to improve our services, see if we can sell them other services and keep them but right now, it's -- we still believe that it's more likely that they will leave than not.

Okay great, thank you.

Thanks, George.

The next question comes from James Friedman with Susquehanna. Please go ahead.

Hi and thank you, Tim, Mac and Kay. It's Jamie at Susquehanna. Mac, I just want to revisit a couple of the comments you made in your prepared remarks. Let me start with the managed services. What's that about? If you could give us some use cases about how that works and how significant that is to the company's opportunity?

Jamie, so it's Joaquin. So those managed services specifically relate in this case to some government contracts that we had announced in the previous year that we have won with the Puerto Rico government. In some cases, they relate to either disaster recovery services, a management of infrastructure and applications, air communications, et cetera. And some of those contracts -- actually most of those contracts usually take some time from signing to implementation. And it takes some time for us to begin to actually see revenue reflected, and we're beginning to see that now. So this is related to some contracts that we announced a couple of quarters ago.

Hi. Jamie, this is Mac. Thanks. I do want to thank you for picking up the stock. What I would say is what -- after the hurricane, we did have several examples of how we were able to recover very, very quickly. And the government and some other customers took notice of these types of managed services contracts. Really, our ability to sell those and close those picked up after we demonstrated our resiliency after the hurricane.

And Mac or Joaquin, you also said in your prepared remarks, you talked about long-term project completions. Is that something that's like finite and over? Or will that be continuing through the second half and into next year?

So it's somewhere in the middle, is how I can say, Jamie. These are projects that have 2 pieces to it. They have an implementation phase, and they have a more recurring phase. What you're seeing and what we're calling out in this case are projects that we've been working on for in some cases, a year or more. And we've ended implementation phase, and we recognized a portion of revenue related to that implementation which will not recur. But now we will be able to see some smaller recurring fees over time.

Okay. And then maybe my last question is about the Citibank regional agreement for collections. I'm just wondering how does that work? Is that consumer credit collections or business collections or all of the above? If you can give us any idea about how that process is?

Yes. So it's managed out of their cash management group and their treasury group. And they've got a product called One Receivable, and we are sort of the engine of that. And it allows some of their large customers to post their bills online to get those bills paid from their different vendors or partners and then for them to be able to concentrate that cash into accounts and effectively manage their capital. So we're pretty excited about it, and we originally rolled it out in Colombia. Now we've got these 2 countries, and we hope to roll it out throughout the region. So -- and it's really core to Citibank's payment strategy and treasury management strategy in Latin America.

Okay great good number here guys. Thank you.

Thank you. Thanks James.

The next question is from John Davis with Raymond James. Please go ahead.

Hey good afternoon guys. Mac, I wanted to maybe touch on the Chile opportunity beyond Santander. So I think you mentioned potential opportunity to get some other processing relationships. Is there an opportunity for some of the smaller banks for you to actually do the front-end acquiring, thinking maybe some of these smaller banks don't have the resources to build out their funding capabilities. So you could do similar what you do in Puerto Rico, where you process for some banks but you also do the front-end acquiring for other banks. Is that an option longer term in Chile?

Yes. I mean it's really interesting because I think the investment community has really historically followed merchant acquiring businesses and fallen love with them because you do own the pricing. You do get the organic growth, and that's sort of where I had a lot of background myself in Global Payments. If you look at EVERTEC as a company, we have two segments in Puerto Rico around payments: One is the processing business, and one is the Merchant Acquiring. And the processing business in Puerto Rico for us, Puerto Rico actually has higher margins. So it can be a very good margin business, and our view in each of these markets is they're relatively small. I mean if you look at Chile compared to Spain, it's a much smaller market. So the way that we think we build a profitable business is by being multi-client, multi-product. And that's what we've done in Puerto Rico, and that's what we plan to do in Chile. And in Chile, we already have many of these financial institutions and retailers as customers on the collection product that we just discussed that we're rolling out with Citibank in Latin America. We've also rolled out our risk management product to some of these and in a cloud-based format. So this is just an evolution of extending that relationship with Santander Chile, so that we're now doing their acquiring process, which is even a bigger piece of their technology spend. And we plan to do that with other partners. The contract, like I said, has minimums. It does -- I mean we're very, very focused on getting Santander up and getting it right, but it does allow us, over the course of the contract, to go after other banks or financial institutions or new entrants who want to get into the processing or merchant acquiring business. So that's our strategy. Again, we think that, that makes more sense in a country like Chile. Instead of just having an exclusive merchant acquiring joint venture, which a, is going to take time to actually make money; b, you're betting on one financial institution, so you better be right because you're not buying a book; and c, again this may be -- the way that many win business is a pricing war, which we won't be subject to. So that's the way we chose to enter the market, and that's what we plan to replicate in the other markets. Again, if there's another market different, where there's a big merchant acquiring portfolio for sale, then maybe that would be our entry strategy. But this is our strategy for Chile, and we're pretty excited about it.

Okay, and then maybe just touch on the Colombian market for a second. I think obviously you guys did the acquisition a couple of years back. It's kind of been very quiet. I think everyone -- you mentioned earlier, it's frustrating and slow for that market to open. Is there anything behind the timing of this deal? Was this just opportunistic? Or do you think we're actually getting closer to the Colombian market opening. Just kind of any commentary there.

No. I don't see -- so we talked about again -- when we launched the year that we saw -- we knew Chile was open. I mean -- and we knew Prisma was trading. There's not an indicative signal where someone has publicly stated there's going to be a change in the market. There's still a lot of speculation in the market. There's still a lot of interest by banks to see what alternatives there are. So again, there's nothing imminent. What I would tell you is we're positioning ourselves in Colombia much as we were positioned in Chile, and that's to have a good, solid business that has stable revenue. We're already making money. We have an executive team that can interact with the banks, and we can roll out products through that business. We did say earlier that we are looking at localizing our products there, but the -- any big movements like Santander is a little bit TBD. And I do want to remind you on the PlacetoPay, we say this every time. But on PlacetoPay, we're not closed. We got to get the regulatory approval, as always.

And Joaquin, I'm not going to let you off the hook here. So any change in the aid expectations and guide? Or -- I know you're not going to give me a -- quantify the impact from the protest. But have the protest have an impact on the way you think about the pace of aid coming in? And I think being able to raise guidance this much pretty much signals that there was very little aid expectations in your numbers. But just maybe talk high level or qualitatively about how you think about the protest, the impact on aid, not just this year but kind of as we go forward into 2020.

Sure. So as you look at the -- our guidance that we just put out and what that reflects for the second half, we reflected a modest improvement in our original expectations. But of course, everything that's happened and the fact that FEMA said that now we have to go through an additional hurdle for aid is something that we need to consider. In terms of the total aid coming to Puerto Rico, I don't think we have -- we don't have a change in our expectation at this point. We -- what we're seeing and what's being reflected in our actuals is what we're expecting through the end of the year. But obviously, we continue to be cautious. We continue to monitor the disbursements, which continue to be slow and continue to be delayed. But we're comfortable with the guidance that we have for the full year. In terms of the protests, as Mac mentioned, really there's some cruise ships that have been coming to the island. Obviously, Old San Juan was impacted because people were protesting there, and they couldn't spend and some of the larger strip mall were closed for a couple of days. And so it's very specific. Nothing that we think is a trend, and nothing that we would call out as something that's going to have a long-term impact in our numbers.

Okay all right thanks guys.

Thank you.

The next question is from Jim Schneider with Goldman Sachs. Please go ahead.

Good afternoon. Thanks for taking my question. Mac, now that we're a little bit closer to getting some clarity on the relief funds and their timing, can we maybe just kind of walk through any more details around what your assumptions were as you enter the year? And what they are now? And kind of any quantification would be helpful and kind of directionally, whether they moved up or down.

Yes. I'll hand that to Joaquin.

Sorry, can you repeat that? I didn't catch that.

In terms of relief funding and the timing of it and the magnitude of it, now that there's more clarity on that front, can you maybe clarify what your assumption was with respect to your guidance heading into the year? What it is now? And directionally whether it's kind of better or worse?

I think as I just said in the previous question, we had always guided to a modest level of aid since the beginning, given that we knew the complexity around the funding and the controls and the delays that we're seeing here in the island. I don't think -- that hasn't changed in reality except for an additional funding for EBT that was approved a couple of months ago. There's an additional $600 million related to EBT that will get dispersed starting in August. If you compare that to the EBT funding, relief funding from the previous year, which was $1.2 billion, this is half of the amount and it's going to impact half of the year. So the impact to our Merchant Acquiring segment is not very significant, but it's something positive that will definitely flow through our numbers. And that should offset any other potential delay that we might see in aid. And all that is considered in the guidance as it stands.

That's helpful. Thanks. And then maybe just as a follow-up, you referenced several pricing actions kind of benefiting the segment, and you talked about them before. But can you maybe comment further on whether there's an additional pricing action and room for that kind of on a go-forward basis that would either kind of potentially benefit you as we head into 2020?

I mean we're always looking for different ways in which to continue growing both our top end and our margin. In this case, given the impact to volume from having EBT in the previous year, we thought it was a -- and we hadn't done pricing action in some time, it was a good moment for us to take advantage of that lever. I don't think it's something that I would tell you right now we're going to do for 2020. We will discuss that as we get closer to giving guidance on 2020, but we're always looking at different aspects of the business, both from a pricing perspective, new transaction fees or new services to complement the current services.

Right. What I would just say, I would compliment Joaquin. I think he's done a very good job of making sure we're analyzing the profitability in certain segments, making sure that we take a look at are we making the return we want based on the risk profile, repricing them as they're appropriate, taking a look at some of the value-added services, like our PCICs, are they within market, raising them where there's an opportunity. So again, I would give him a lot of credit for being much more disciplined about that, which has benefited the year.

Great thank you very much.

[Operator Instructions] The next question comes from James Faucette with Morgan Stanley. Please go ahead.

Hi, This is Priscilla on for James. Just two quick questions. How do you think about developing your e-commerce offerings overall? It's still growing radically in Latin America, but it's still quite small. So how do you think about it when you're prioritizing point of sale versus online?

Yes. I mean that's a great question. So what I would tell you is we're seeing not only a shift to online but even to mobile, which is even a quick transition. In Puerto Rico, we've done very good job capturing the mobile market with our ATH Movil product and making sure that we have the ability to use your mobile phone, and we'll continue to focus on that segment. But I think one of the openings or one of the opportunities we had to make is to have a better gateway, so that we could provide better services to merchants and give them a better alternative for processing their online payments. And that was part of the rationale for PlacetoPay. We do see the shift. It hasn't occurred to the same rate that it has as you see in the U.S., but we do think with ATH in our network, we have captured a significant amount of growth by using that as a digital product. And the PlacetoPay acquisition is an investment in trying to improve our gateway offering.

Got it. And then can you give us an update on pvot and any feedback that you've received from merchants about the product so far? And where do you think you are in terms of development, especially as you try to expand it to other markets?

Sure. So we don't have an update for this call specifically on pvot. What I'll tell you is we do, as we've said before, we have a road map. We have a restaurant application that we'll be piloting in a couple of months, and that will be rolling out by the end of the year. So we're very focused on what is the development pipeline, so that we continue to add new features, new segments, and we continue to be pleased with the acceptance that we're seeing in the market.

Great thank you.

Thank you.

The next question is a follow-up from Bob Napoli with William Blair. Please go ahead.

Thank you. Just want to get a little more color on the trends in ATH Movil and the mobile business as well. The -- and I think -- you said it adds 1% to revenue growth for this year and just trying to get a feel for the trends and what you think that could add to revenue over the next few years.

Sure. So I'll take it, and then I'll hand it to Joaquin. As you know, Bob, as we spent time together, we have really focused on making sure that we are innovating, we're investing in new products, new services, testing new technologies. And we are pretty excited to be able to show now how that's impacted the business, and that's why we want to show you that ATH Movil plus ATH Movil Business. So ATH Movil, both products is now contributing 1% of our growth this year. So we expect it to continue to provide growth opportunities in 2020, and some of the other products we're investing too as well. I don't know, Joaquin, if you want to add anything else.

Well, the only thing I would just comment on, Bob, just to remind everyone is some of the monetization of these fees began second half of last year. So we're seeing that grow over in the first half of the current year, right, get really reflected in terms of growth. That laps in July. Having said that, we do continue to also look in terms of innovation for different uses of both ATH Movil and ATH Movil Business and different features that we continue to add to eventually either continue to generate a high number of transactions, which we continue to see today and new fees as well. But that's something that will happen over time.

And then just last question, the -- you raised your CapEx forecast for this year and just wondered what the addition was for.

So it's mainly -- we did some big hardware refresh that were due, and we took advantage of good pricing to make those and some of these contracts that we just mentioned, like Santander, Citibank, required development, required infrastructure. And obviously as we push to get this into production as soon as possible, we're having to invest in ourselves for that type of growth, which is actually part of our capital allocation strategy in terms of investing for growth, both through M&A and through CapEx.

Great, thank you. I appreciate it.

Thanks Bob.

This concludes our question-and-answer session. I would like to turn the conference back over Mac Schuessler for any closing remarks.

So everyone, I'd like to thank you for joining the call. Thank you for listening us today. I look forward to seeing you over the coming months, at different conferences and different visits. Thank you, and good night.

The conference is now concluded. Thank you for attending today’s presentation, you may now disconnect.