Good afternoon, everyone and welcome to EVERTEC's Fourth Quarter 2024 Earnings Conference Call. Today's conference call is being recorded. [Operator Instructions]. I would now like to turn the conference over to Beatriz Brown-Saenz 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. 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 reports. 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 per common share. Reconciliations to GAAP 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 website at www.evertecinc.com. I will now hand the call over to Mac.

Thanks, Beatriz, and thanks to everyone for joining us today. I'm pleased to announce a strong finish to 2024, a very significant year for EVERTEC on multiple fronts. We delivered another year of record revenue with great execution across all our core markets. We successfully integrated Sinqia, the largest acquisition in EVERTEC's history and have started to see growth reaccelerate an important area of focus for us in 2024. We continue to execute our acquisition strategy with two tuck-in deals closed in the fourth quarter, Grandata, which we discussed on our third quarter call and Nubity announced today. Additionally, we developed a robust business pipeline in Latin America, the strongest in years, and I'm pleased to report that we have begun converting these opportunities into important business wins. Moreover, we initiated cost efficiency measures that resulted in margins exceeding our expectations for 2024. These achievements set the stage for 2025, where our focus will remain on organic revenue growth, margin optimization and capital allocation. On today's call, I will provide a brief summary of our 2024 financial results, a discussion on the Puerto Rico environment and an update on LATAM. I will then turn the call over to Joaquin, who will provide some additional details on our Q4 and full year results as well as our outlook for 2025. Starting on Slide 4 are some highlights from our 2024 results. Revenue for the year was $845.5 million, a 22% increase over prior year. We achieved strong growth across all our segments. Merchant Acquiring grew by 11% due to pricing initiatives and increased sales volume. Payments Puerto Rico grew 6%, driven by higher transaction volumes and continued strong performance from ATH Movil. And Business Solutions revenue grew by 7% as we recognized revenue from key projects that went into production throughout…

Thank you, Mac, and good afternoon everyone. Turning to Slide 9. I will first review the fourth quarter and full year results for EVERTEC. Total revenue for the quarter was $216.4 million, up approximately 11% compared to the prior year, reflecting organic growth across all of the company segments, a full quarter contribution from Sinqia as the deal closed in November of the previous year and the effect of the two tuck-in acquisitions completed in the fourth quarter. In Puerto Rico, we benefited from higher transaction volumes, continued growth from ATH Movil business and higher spreads in MAB. On a constant currency basis, revenue growth would have been approximately 14.5%. Adjusted EBITDA for the quarter rose to $88.6 million, up 24% from last year with a margin of 40.9%, an increase of 410 basis points. This growth resulted from strong revenue and the positive impact on operating expenses from efficiency initiatives aimed at offsetting the 10% discount on Popular services starting in October 2025. Adjusted net income was $56 million, an increase of approximately 37% year-over-year, driven primarily by the growth in adjusted EBITDA and a lower adjusted effective tax rate. The adjusted effective tax rate for the quarter was 5.1%. Adjusted EPS was $0.87, an increase of approximately 40% from the prior year, driven by the higher adjusted net income and the benefit from a reduced share count from repurchases completed throughout the year. For the full year, total revenue was $845.5 million, an increase of approximately 22% from the previous year. This growth reflects strong performance across all segments, driven by higher transaction volumes, improved spreads and the contribution from projects that have gone into production. Additionally, our Latin America segment benefited from a full year contribution of Sinqia. On a constant currency basis, revenue growth was approximately…

We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Nate Svensson with Deutsche Bank. Please go ahead.

Hi guys. Nice results. Thanks for the question. So Joaquin, I appreciate you walking through the 2025 guide by segment. Super helpful, preempted some of my questions there. I think maybe the related question is, as we seek to better understand the normalized growth profiles of each of your segments, have you given any thought to giving some sort of midterm guide to help investors better understand the business? I'm just asking because I think it might be helpful to put a line in the sand to help underwrite future growth, particularly you've gone through so many changes incorporating Sinqia and other two additional acquisitions. We have the MSA later in the year. So just any thoughts on that and how we can help sort of underwrite future growth beyond '25?

Hi, Nate, this is Joaquin. So right now, I think we're focused on giving really guidance for 2025. And to your point, I think we're -- we have some moving pieces here, and we're trying to be very clear on kind of what are the areas of focus as we move into 2025. So that will be the kind of the guidance that we're focused on for the time being.

Okay. Understood. Yes. No, I agree that it was definitely clear on the outlook for '25. So I appreciate that. The follow-up is on Sinqia. So I haven't had the chance to try to do the math on the implied growth in 4Q. But I think at the time of the acquisition, Sinqia is growing low-double digits. You had obviously decelerated through 2024, but it sounded like from Mac's comments that it started to reaccelerate in 4Q. And I know you've talked about some of the initiatives you've done to sort of work on reaccelerating even further in 2025. So maybe just some more color and more granular updates on how you expect the Sinqia business to perform, particularly given everything that's going on with the Brazilian economy and sort of how confident you are in your ability to get Sinqia back to that kind of normalized low-double digit growth maybe later this year or in '26?

Hey, Nate, this is Mac. Yes. So look, we just had our Board meeting last week, Sinqia, so the Board could get close to the management team and better understand the market there, and we're all pretty excited. As you noted, it sort of decelerated as we started to close the acquisition and then it decelerated last year. We were very focused at the beginning of the year, making sure we have the right leaders in place and then focusing on -- again, they had acquired 24 companies over a 10-year period. And we knew going in, there were going to be some things that we could do to optimize the business. So we were very focused early on the year. Number one is upgrading their technology so that we could upsell to new platforms, and we've had success this year doing that with some of our key clients, renegotiating some of our contracts. Some of these contracts were not volume-based. So now we've renegotiated up pricing and now we have volume-based contracts in place, and then also focusing on margin optimization. So making sure that we kind of move the margins north by making some efficiencies. We've said, look, we've been very focused on getting closer to customers. They had sort of lost sight of getting close to the customers performing well so that they could cross-sell and upsell, and we feel like they have a good cadence now. So as we said in our prepared remarks, it is definitely -- the growth is accelerating off of last year. We're very optimistic, and it's one of the reasons that we have double-digit growth expectations for the entire LATAM segment this year.

Thanks, Mac. Appreciate it.

Yep.

The next question comes from Cris Kennedy with William Blair. Please go ahead.

Good afternoon. Thanks for taking the question. Just a follow-up on Sinqia. Can you provide an update on bringing some of EVERTEC's processing business into Brazil? How is that going?

Yes. What I would say, Chris, thanks for the question. We really, really focused at the beginning of last year on taking their existing businesses and trying to make them better perform on the existing six verticals that they have, the four verticals and the service from the digital business. And we're seeing reacceleration there. We have had some small successes on the payment side, and we're optimistic that going into this year and going into the next year, that will be sort of a renewed area of focus as well. But we've really focused on the businesses they have and have the management team sort of head down on that. But we are seeing interest in the payments products as well.

Got it. Understood. And it sounds like you're very confident in your ability to navigate the 10% discount slated for October given all of your efficiencies and cost initiatives?

Absolutely. I mean one of the things that the team early last year, even as last year started, we put this initiative in place to take a look at how do we cut costs to accommodate that. I mean we hadn't -- I've run the company for over a decade, and we really haven't taken a hard look at our cost to the extent that we have. We were really focused on stabilizing our business, renewing with Popular, making these acquisitions. So we had a very, very big effort with Joaquin and Alberto, who now run strategy for us and looking across the organization to find those efficiencies. So they've already kicked in, and that's why you saw great margins at the end of '24, and we've got a good start to this year on our margins as well. So we're incredibly well prepared for the discount that we'll provide at the end of '25 for the bank.

Great. Thanks for taking the questions.

Yep.

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

Hi, congratulations on a strong finish to '24. I had two questions. I'll just ask them upfront. So Mac, now that you got like a third or more of the revenue coming from LATAM growing 60%. I'm just curious what sort of -- what -- how transferable is the skill set and technical competence that you have taken from Puerto Rico into LATAM? What do you know now that you didn't know before you started? That's the first one, high level. And then, Joaquin, with regard to the -- I think it was Chile GetNet payments, the $600,000 one that sounded like was high margin. Could you just remind us what that's about, like how that works? And is it thresholds or it is quite lucrative when it does happen? Thank you both.

Hey, yes, great question. This is Mac. So what I would say is our knowledge and expertise has made a big difference in what you've seen over the last 10 years. I mean you've seen our team, Mike Vizcarrondo has managed ATH for a very long time. You've seen the knowledge he's had allow us to even actually grow our market share in Puerto Rico with ATH with new innovation, and we continue to do more business with the major banks there. And then you look outside of Puerto Rico. I mean, we bought new platforms. So we just announced someone's called Grupo Aval, which is one of the largest banks in Colombia, $75 billion in assets. They've been a customer in the past, but this is a significant deal for us in Colombia. In fact, our largest deal in Colombia since I've been CEO. So a lot of that payments knowledge has been transferable. And then throughout the region, as we've acquired platforms, we've been able to deploy those. So GetNet and Chile uses the same platform they use in Uruguay. We're using our issuing platform. And we're using that platform as well now in Costa Rica. Our issuing platform, we are now using in Mexico. We also or will now use that in other countries as well. So we have been able to use the expertise from Puerto Rico throughout this journey. We've also been able to leverage these platforms and these technologies across the region. And we hope to do that with some of these Brazilian technologies that we have. So -- and the other thing that we talked about on this call a little bit as well, we talked about Grandata on the last call. Now we also have Nubity. So Nubity is a great company out of Mexico. The majority of their business is in this country, which, again, Mexico, we want to continue to invest here. But Nubity now has new skills to help sort of modernize our infrastructure and the infrastructure of our clients by helping them migrate to the cloud and manage their applications in a more modern way. So we've been able to leverage the existing skills and the acquired skills throughout this journey.

And then I guess I'll take the second part of the question, Jamie. The deal that we have with GetNet had some [indiscernible]. Actually, that deal ended now in December. So we're entering into a new phase of that relationship where we will no longer have these sorts of, I'll call it catch-ups or one-time events. We will now move to a price per transaction. So as transactionality flows in, we'll charge that in that same cadence. So we won't see these, let's say, blips every once in a while.

Okay. Thank you both.

[Operator Instructions]. The next question comes from John Davis with Raymond James. Please go ahead.

Hey, good afternoon guys. Obviously, really strong results in Merchant this year, up 11% and 16% in the fourth quarter. Joaquin, hoping you could help us a little bit on what the contribution from pricing was just so we calibrate our models as we look at '25. I know you gave us some color, but I would really like to understand how much pricing was in there? And then also just double checking, there's nothing from an inorganic perspective that's in the Merchant segment.

So number one, no, there's no inorganic effect within the growth rates. I would say that in the fourth quarter, if we look at kind of what we've done throughout the year, it's been pretty split, kind of a third pricing, a third volume and probably a third in non-transactional type fees. I think that when we look at Q4, it is more skewed towards pricing than volume because as I said, we had some offsetting effects from kind of lower price of gas, which is an important part of the portfolio. As we move into 2025, as I said in kind of the outlook, we'll still have some tailwind in the beginning of the year from some of those pricing initiatives as we continue to anniversary them and then as we start to kind of get out of Q1, we're expecting kind of that mix to kind of come back to half and half or a third, a third, a third in terms of the contribution to growth going into 2025.

Okay. And then, Mac, just on capital allocation. Balance sheet is in great shape, back down towards the lower end of your kind of midterm leverage range. It feels like the deal pace has picked up a little bit. So I would just love your comments on the state of the M&A market in Latin America, what you're seeing? Have prices rationalized? You're seeing more opportunities? Should we expect this kind of quicker pace of M&A versus historically over the last, call it, decade since you've been there?

Yes. So I mean, look, the Sinqia deal was the biggest deal on our history. So as a team, we are very focused on that and myself personally, I spent a lot of time in Brazil. And that's -- so once we sort of started working on that deal, closing that deal, integrating that deal, that was a significant amount of focus, and we want to get that right. As we saw and we gain more confidence in that deal, we got closed on Grandata and Nubity. What I would say is we have a pretty good M&A pipeline. We're still very focused on diversifying the company, growing through good, smart deals. And so we will continue to engage in M&A, probably more of the size of the ones we've recently announced or the ones we've done historically, but we're very focused on M&A. And we have a good pipeline.

All right. Appreciate the color. Thanks guys.

Yep.

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

Thank you. Again, I want to thank my colleagues for a successful year in 2024 and for putting great plans in place for 2025. I want to thank each of you for joining our call, and we look forward to seeing you in the coming weeks at various conferences. Thank you.

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