Earnings call transcript: Evertec Inc. Q1 2025 earnings beat forecasts, stock surges

Evertec Inc. reported strong financial results for Q1 2025, surpassing earnings and revenue forecasts. The company posted an adjusted earnings per share (EPS) of $0.87, beating the forecast of $0.79. Revenue reached $228.8 million, exceeding expectations of $217.97 million. Following the earnings release, Evertec’s stock surged 8.34% in after-hours trading, reflecting investor confidence in the company’s robust performance. According to InvestingPro data, the company maintains impressive profitability metrics with a 51.9% gross margin and a healthy PEG ratio of 0.46, suggesting attractive valuation relative to its growth rate.

Key Takeaways

• Evertec’s Q1 2025 EPS of $0.87 surpassed the forecast of $0.79.
• Revenue increased by 11.4% year-over-year to $228.8 million.
• The stock rose 8.34% in after-hours trading.
• Strong performance driven by growth in Latin America and technological advancements.
• The company maintained a solid liquidity position with $460 million.

Company Performance

Evertec demonstrated a strong start to the year with significant growth across its business segments. The company’s revenue increased by 11.4% year-over-year, driven by double-digit organic growth in Latin America and successful technological modernization efforts in Brazil. Evertec’s adjusted EBITDA rose by 14%, reflecting improved operational efficiency and cost management.

Financial Highlights

• Revenue: $228.8 million, up 11.4% year-over-year
• Adjusted EPS: $0.87, up 21% year-over-year
• Adjusted EBITDA: $89.4 million, up 14% year-over-year
• Operating Cash Flow: $37.6 million
• Adjusted EBITDA Margin: 39.1%, up 100 basis points

Earnings vs. Forecast

Evertec’s Q1 2025 earnings exceeded expectations, with an EPS of $0.87 compared to the forecast of $0.79, representing a surprise of approximately 10.1%. This beat is notable as it continues a trend of strong performances in recent quarters, showcasing Evertec’s ability to navigate market challenges effectively.

Market Reaction

Following the earnings announcement, Evertec’s stock price increased by 8.34% in after-hours trading, reaching $37.49. This surge reflects positive investor sentiment and confidence in the company’s future prospects. The stock’s performance is notable against its 52-week range, with a high of $38.32 and a low of $28.76, indicating strong recovery and growth potential. Based on InvestingPro’s Fair Value analysis, Evertec appears undervalued, presenting a potential opportunity for investors. The company’s strong financial health score of 2.72 (rated as "GOOD") further supports its investment case.

Outlook & Guidance

Evertec has provided a positive outlook for 2025, with constant currency revenue guidance of $903-$911 million, representing growth of 6.8-7.7%. The company anticipates adjusted EPS growth of 4.9-7.6% and an adjusted EBITDA margin between 39.5% and 40.5%. Evertec remains focused on mergers and acquisitions as part of its growth strategy. The company has demonstrated strong historical growth with a 5-year revenue CAGR of 12%, according to InvestingPro data. Discover detailed growth projections and 1,400+ comprehensive Pro Research Reports by subscribing to InvestingPro.

Executive Commentary

CFO Joaquin Castrillo stated, "We had a strong start to the year and believe Evertec remains well positioned to deliver strong top line growth in 2025." CEO Max Schuessler emphasized the importance of mergers and acquisitions, noting, "The M&A pipeline continues to be robust and full and we’re very excited about some of the assets that we’re looking at."

Risks and Challenges

• Potential macroeconomic impacts could affect future performance.
• Foreign currency headwinds are expected to impact revenue growth.
• The loss of the MercadoLibre transaction may partially affect Q2 results.
• Competitive pressures in the payment processing industry.
• Economic conditions in key markets such as Brazil and Chile.

Q&A

During the Q&A session, analysts focused on the reacceleration of the Brazil business following leadership changes and the full rollout of the GetNet Chile partnership with 200,000 active merchants. Executives were questioned about potential macroeconomic impacts, with a focus on monitoring economic conditions in various countries.

Full transcript - Evertec Inc (EVTC) Q1 2025:

Conference Operator: Good day, everybody, and welcome to the EVERTEC First Quarter twenty twenty five Earnings Call. All participants will be in a listen only mode. After today’s presentation, there will be an opportunity to ask questions. Please note that today’s event is being recorded. I would now like to turn the conference over to Beatrice Brown from Investor Relations.

Please go ahead.

Beatrice Brown, Investor Relations, EVERTEC: Thank you, and good afternoon. With me today are Max 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 report. 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.

Max Schuessler, President and Chief Executive Officer, EVERTEC: Thanks Beatrice and thanks to everyone for joining us today. I’m pleased to announce a strong start to 2025 for Evotec against what has become a backdrop of increased macro uncertainty. All of our business segments delivered strong growth over prior year and exceeded our internal expectations as we continue to execute at a very high level across all regions. On today’s call, I will provide a brief summary of our first quarter financial results, a discussion of the Puerto Rico environment and a LatAm update. I will then turn the call over to Joaquin who will provide some additional details on our Q1 results and our improved outlook for 2025.

Starting on slide four, I’ll cover some highlights from our first quarter results. Revenue for the quarter was $228,800,000 an 11.4% increase over the prior year as we saw growth across all of our segments. Currency represented a headwind in the quarter of approximately 3.3%. Adjusted EBITDA was $89,400,000 up approximately 14% year over year and adjusted EBITDA margin was 39.1 for the quarter, up approximately 100 basis points from a year ago. The margin increase reflects the strong revenue performance and our continued focus on efficiency and expense management across the company, partially offset by the revenue mix in the quarter that includes more hardware and software sales coming in at lower margins.

Adjusted EPS of $0.87 was up 21% year over year driven by the strong adjusted EBITDA growth, lower interest expense and a lower share count. In the quarter, we generated approximately $37,600,000 in operating cash flows and returned $3,200,000 to shareholders through dividends. Our liquidity remained strong at approximately $460,000,000 as of March 31. Let me now provide an update on Puerto Rico beginning on slide five. Merchant Acquiring grew 11% as we continue to benefit from an improved spread and increased sales volumes.

Payments Puerto Rico grew 4% driven by continued strong performance from ATH Mobile and higher POS transaction volumes. Business Solutions revenue grew 13% as we recognized revenue from key consultant projects completed during the second and third quarters of the prior year and also benefited from one time hardware and software sales. In terms of the overall condition of the Puerto Rico economy, it remains stable. Total employment continues to increase while the unemployment rate remains near multi decade lows of around 5.5%. Tourism was a bit mixed in the first quarter with passenger traffic in the San Juan Airport remaining strong, up approximately 9% year over year through February.

The cruise line passengers were down approximately 7% in January after being up low double digits in 2024. Turning to LATAM on slide six. In LATAM revenue grew 13% year over year or 22% measured in constant currency. Organic growth across the region was double digits driven by the GETNA Chile relationship and the reacceleration of our Brazil business, which benefited from initiatives put in place throughout last year such as repricing efforts and product monetization. Before I turn things over to Joaquin, I’ll make a quick comment on the tariff discussions and the potential impact to Evotec.

At this point, we’ve only identified a few areas where tariffs could have a direct impact on our business. However, we remain cautious given the overall impact to customer confidence, employment and other factors that it could have an indirect impact on our business. A number of the countries we serve do rely heavily on exports. So there is potential for disruption to their economies as 2025 progresses and this could impact the payment volumes that drive our business. For example, Brazil exports steel, oil and agricultural projects, while Chile relies heavily on exporting metals.

At this point, we have not seen any material disruptions to any of our business segments or countries, but I assure you that we will be monitoring events closely and that we will be proactive in managing our businesses if conditions change. With that, I will now turn the call over to Joaquin.

Joaquin Castrillo, Chief Financial Officer, EVERTEC: Thank you, Mac, and good afternoon, everyone. Turning to Slide eight, I’ll review the first quarter results for EVERTEC. Total revenue for the quarter was $228,800,000 up approximately 11% compared to the prior year, reflecting strong organic growth across all of the company segments and a small contribution from the two tuck in acquisitions completed in the fourth quarter. Constant currency revenue growth was 15% in the quarter, with most of the headwind coming from the Brazilian real. Adjusted EBITDA for the quarter rose to $89,400,000 up approximately 14% from last year with a margin of 39.1%, an increase of 100 basis points.

This growth resulted from strong revenue and a continued focus on expense management, partially offset by a mix shift toward lower margin areas within Business Solutions, mainly hardware and software sales. Adjusted net income was $56,300,000 an increase of approximately 17 year over year, driven primarily by the growth in adjusted EBITDA and a lower cash interest expense, which is a function of the lower sulfur rates in comparison to the prior year and the effect of the Term Loan B repricing efforts executed last year. The adjusted effective tax rate for the quarter was 5.3% and aligned with expectations. Adjusted EPS was $0.87 an increase of approximately 21% from the prior year, driven by the higher adjusted net income and the benefit from a reduced share count resulting from the repurchases completed during 2024. Moving to Slide nine, I will now cover our first quarter results by segment, beginning with Merchant Acquiring.

Net revenue increased approximately 11% year over year to $47,600,000 as we benefited from a higher spread and sales volume growth. The positive spread continues to benefit from pricing initiatives implemented last year that were lapped in the latter part of the quarter, a slight shift in mix of cards and the repricing of key relationships last year that will anniversary by the end of Q2. We also benefited from mid single digit volume growth driven by high volume merchants signed last year. Adjusted EBITDA for the segment was $20,400,000 with an adjusted EBITDA margin of 42.7%, an increase of approximately five ten basis points from the previous year. The margin increase is attributed to the spread driven top line growth as well as cost optimization efforts.

On Slide 10 are the results for the Payment Services Puerto Rico and Caribbean segment. Revenue in the quarter was $55,200,000 an increase of approximately 4% from the prior year. The revenue increase was primarily driven by growth in ATH Mobile business as well as 4% POS transaction growth, partially offset by a decrease in services provided to the LATAM segment, mainly as a result of lower transactions being processed due to customer attrition discussed on previous calls. Adjusted EBITDA was $31,400,000 up approximately 4% from the prior year, and adjusted EBITDA margin was 57%, down approximately 20 basis points from the prior year. The slight decrease in margin is related to the loss of scale from the decrease in transactions processed for the LATAM segment.

On Slide 11 are the results for Latin America Payments and Solutions. Revenue in the quarter was $83,800,000 up approximately 13% year over year or 22% on a constant currency basis. We experienced double digit organic growth across the region due to the GetNet Chile relationship, the positive impact from one time revenues in the quarter and the reacceleration in Brazil driven by the initiatives put in place last year around repricing of contracts, technology modernization and getting closer to clients. This segment also benefited from a full quarter contribution of Grand Data and Nuviti, the two acquisitions completed in the fourth quarter last year, which are performing as expected or better. In terms of currency, this represented a 9% headwind in the quarter, mainly driven by the devaluation of the Brazilian currency.

Adjusted EBITDA was 24,900,000.0 an increase of approximately 53% from the prior year with an adjusted EBITDA margin of 29.7%, up approximately seven eighty basis points. The margin increase was due primarily to the higher revenues, the impact from the one timers mentioned, which were highly accretive and the reversal of a contingency accrual from last year. Moving to Slide 12. Business Solutions segment revenue increased approximately 13% to $65,600,000 The increase is due primarily to the tailwind from projects that went into production last year and that will lap in the second and third quarters and nonrecurring hardware and software sales completed in the quarter. Adjusted EBITDA was $22,200,000 down approximately 4% from a year ago.

And adjusted EBITDA margin was down approximately five eighty basis points from the prior year to 33.9%. The lower margin was due primarily to the mix shift in revenues with more hardware and software sales, which come in at lower margins and an increase in professional services related to key initiatives around our products and services. Moving to Slide 13, you will see a summary of our corporate and other expenses. Corporate and other was $9,500,000 in the quarter or 4.1% of total revenue, slightly below our expectations but higher than prior year, mainly due to personnel expenses. Moving on to our cash flow overview for the first quarter twenty twenty five on Slide 14.

Net cash from operating activities was $37,600,000 Capital expenditures were $22,300,000 in the quarter and in line with our plan for $85,000,000 in CapEx for the 2025 year. We paid down approximately $11,600,000 in debt, paid approximately $8,700,000 in withholding taxes on share based compensation and returned approximately $3,200,000 to shareholders through dividends. Also during the quarter, we exercised our option to acquire the remaining noncontrolling interest in a Cinque subsidiary that provides technological solutions primarily for managing digital signatures for approximately $5,200,000 We did not repurchase any shares during the first quarter. ’1 hundred and ’30 ’8 million dollars available for future use under the company’s share repurchase program through 12/31/2025. Our ending cash balance was approximately $290,100,000 a decrease of approximately $8,000,000 from year end 2024.

Moving to Slide 15. Our net debt position at quarter end was seven zero four million dollars comprised of $969,800,000 in total long and short term debt, offset by $265,900,000 of unrestricted cash. Our weighted average interest rate was approximately 6.5%, a decrease of approximately 70 basis points from the first quarter of twenty twenty four, driven by the lower sulfur rates and the successful repricing of our TLB throughout 2024, which collectively reduced the spread on our term loan by 75 basis points. Our net debt to trailing twelve month adjusted EBITDA was approximately 2.04 times, down from 2.5 times a year ago and at the lower end of our leverage target range of two to three times. As of March 31, our total liquidity, which excludes restricted cash and includes borrowing capacity, was 459,700,000.0 up approximately $52,000,000 from a year ago.

Now I’ll turn to Slide 16 for commentary on our 2025 outlook. We now expect constant currency revenue to be between $9.00 3,000,000 to $911,000,000 representing growth of 6.8% to 7.7% year over year and above our prior constant currency range of 5.5% to 6.7%. We are now assuming 160 basis points of foreign currency headwinds based on Q1 rates, which would result in growth of 5.2% to 6.1% on a GAAP basis. Constant currency adjusted EPS is now expected to grow between 4.97.6% from the $3.28 reported for 2024 and higher than our previous assumption of 2.6% to 6% growth. We continue to assume an adjusted EBITDA margin of 39.5% to 40.5% and an adjusted effective tax rate of 6% to 7%.

I will now walk you through some of the key underlying assumptions that we consider in arriving at the outlook, beginning with revenue expectations for our business segments. For Merchant Acquiring, we continue to expect mid single digit growth in 2025 as we are coming up against tougher comps over the next few quarters, a tailwind from some of the pricing initiatives lag. In Payments Puerto Rico and The Caribbean, we continue to expect low single digit growth and reiterate our assumption that continued growth contribution from ATH Mobile will be partially offset by lower processing services being offered to the LATAM segment, mainly due to the loss of MercadoLibre transactions, which will begin to take even more of an effect starting in Q2. For Payments Latin America, we continue to expect constant currency growth to be low double digits. As a reminder, we are expecting some client attrition in 2025, most notably MercadoLibre that will begin to have more of an impact starting in Q2.

Finally, in Business Solutions, we continue to expect revenue growth of low single digits for the full year with margins improving from the level reported in the first quarter. Now turning to overall margin. As a reminder, the 10% Popular discount that we have previously discussed will begin to impact our revenue and adjusted EBITDA in the fourth quarter of twenty twenty five by approximately $4,000,000 The cost initiatives put in place to offset this impact continue to progress as planned and we continue to expect a gradual improvement in the overall margin over the next two quarters and then a reset lower in the fourth quarter as the discount takes effect, netting out to the 39.5% to 40.5% margin expected for the full year. We continue to expect an adjusted tax rate of 6% to 7% and CapEx of approximately $85,000,000 for 2025. We expect to return cash to shareholders via dividends and with appropriate share buybacks.

In summary, we had a strong start to the year and believe Evertech remains well positioned to deliver strong top line growth in 2025. Our guidance range does account for some variability given the uncertainty in the macro environment and the potential impact to our business. However, we are confident in our ability to navigate effectively through complex environments and different types of economic cycles as we have done in the past. We will continue to closely monitor potential impacts to our business, either direct or indirect, and adjust accordingly. We look forward to updating you on our progress in the coming year and hope to see some of you at conferences over the next few months.

With that, operator, please open the line for questions.

Conference Operator: Thank you. We will now begin the question and answer session. Our first question today comes from Vasu Goldil from KBW. Please proceed with your question.

Vasu Goldil, Analyst, KBW: Hi, thank you for taking my question. I guess first just on the revenue, strong revenue performance in this quarter, 15% constant currency growth is sort of one of the strongest I ever recall at the company given that most of it was organic. So, again, caught that you said very small contribution from the two M and A deals. So just curious relative to what your internal expectation was where you saw the outperformance come through. And sorry if I missed that, but it sounded like you’re not incorporating anything from a macro standpoint at this point in time in the guide.

Is that correct?

Joaquin Castrillo, Chief Financial Officer, EVERTEC: So what I would say, Vasu, is we really outperformed in pretty much every segment to what was our original expectation. I think if we look at Merchant Acquiring, we continue to see strong consumer confidence and that came through in both volume and as we continue to see a tailwind in the spread. Latin America continues to perform very well. As we said in the prepared remarks, Brazil’s reacceleration is reflected now, right, in the performance that we’re seeing in that segment. And obviously as we move forward throughout the year, as we said, we do have some headwinds that we are expecting mainly as we have some attrition that we mentioned in the past.

And then in Business Solutions, had some one timers on hard ground software that really propped up that performance this past quarter. In terms of the second part of the question, what I would say is, look, the low side does include or have some space for a degradation in customer confidence as we move forward, but nothing drastic really. At this point in the month of April continues to look aligned to what were our expectations, but it’s something that we will continue to monitor and that we’ve considered slightly within our guidance.

Vasu Goldil, Analyst, KBW: Thank you very much. And then Mac, I have a more high level strategic question for you. A little tricky, but I’ll still ask. So it seems like M and A has really picked up in this space again. We’ve seen some big announcements in the last two to three weeks.

So just curious how you think about Everdex positioning both as an acquirer of more sizable assets, but perhaps also as a potential strategic target?

Max Schuessler, President and Chief Executive Officer, EVERTEC: Yes. So what I would say is, look, we continue to focus on M and A. I mean, just did Grand Data and Nubity. The M and A pipeline continues to be robust and full and we’re very excited about some of the assets that we’re looking at. So that will continue to be an important part of our strategy.

I mean, I really don’t opine on how other people view us from a strategic acquisition perspective. I do think what we’re focused on is running the best business we can for our current investors. But like I said, we’re pretty optimistic about our M and A pipeline.

Vasu Goldil, Analyst, KBW: Appreciate the color. Thank you.

Joaquin Castrillo, Chief Financial Officer, EVERTEC: Thank you, Vincent.

Conference Operator: Our next question will come from Chris Kennedy from William Blair. Please proceed with your question.

Chris Kennedy, Analyst, William Blair: Good afternoon. Thanks for taking the questions. It’s good to hear about Brazil Reaccelerating. Can you characterize kind of how the business is performing down there relative to prior when you acquired that asset?

Max Schuessler, President and Chief Executive Officer, EVERTEC: Yes. So Chris, this is Mac. As you know, we won’t break it out. I mean, it’s because we manage it as part of the LatAm segment. What I would tell you is, at the beginning of last year, were very focused on a leadership change, very focused on some very specific initiatives, getting close to the customer, making sure that we are modernizing the platform so that we could maintain their business, but also sort of change the contracts and reprice them so that we could get the benefit of their growth.

And we’re seeing the effect of all of that. So the growth is back within our expectations. We won’t compare it to previous numbers, but we’re very pleased with the performance of Brazil this quarter and are optimistic about the remainder of the year.

Chris Kennedy, Analyst, William Blair: Great. Thank you for that. And then just you gave a little bit of commentary on kind of the environment in Brazil and Chile. You gave great information on Puerto Rico. But when you think about your lapse in American exposure, any countries from an economy standpoint kind of stand out that we should be monitoring?

Max Schuessler, President and Chief Executive Officer, EVERTEC: I mean, nothing specific. Mean, Brazil specifically, given that it’s such a large piece of the business and given sort of the fluctuation we’ve seen in the currency under Lugal’s administration. So that’s the one that’s the most significant where we’ve seen the biggest headwind from a currency perspective. As it relates to tariffs or any type of economic contraction, as Joaquin said, we haven’t seen any type of meaningful impact today. And we’re hopeful that that will remain, but we’ll continue to monitor the situation around all the countries.

Chris Kennedy, Analyst, William Blair: Great. Thanks for taking the questions.

Conference Operator: Thanks, Chris. Our next question will come from Jamie Friedman with Susquehanna International. Please proceed with your question.

Jamie Friedman, Analyst, Susquehanna International: Hi. Nice results here. Mac, I wanted to ask you about the observations also about LatAm. You called out in your press release that you saw that the double digit growth was driven in part by the GetNet Chile relationship and the reacceleration in Brazil. I was hoping you can unpack those a little bit.

And at least in terms of GetNet Chile, where are you in the journey of delivering on that partnership?

Max Schuessler, President and Chief Executive Officer, EVERTEC: Yes. So like we said earlier, the segment grew double digit organically. So we’re very pleased with that. Grand Data and Nubity were great at as well. And we’re very pleased with the performance of both of those acquisitions.

They’re performing at, if not above, our original expectations. When you think about GETNet, it is fully rolled out. So we’ve rolled out the capability for Santander and they’re now using that to enroll their merchants throughout Chile. So that is why you’re seeing such a strong performance, because they have been the most successful bank using our technology to move away from Transbank and that continues.

Jamie Friedman, Analyst, Susquehanna International: So my recollection with getting it, I would be being confused, but Chile was if I’m telling the story wrong, tell me, but it was originally a national issuer scheme. And then it got privatized, GetNet took some of it away and you were participating in that. Do you have any data as to where that evolution is? How many cards are left? What the distribution in the market looks like?

Anything that we can kind of drill into to come up with a size and opportunity

Max Schuessler, President and Chief Executive Officer, EVERTEC: for EVERTEC? Sure. So originally, it’s a great question. So for particularly those that are newer in story. So Transbank used to be the primary acquirer across all of Chile.

So all of the banks owned an equity stake in Transbank and they referred all their leads to Transbank and Transbank was the acquirer and processor for all of the merchants in the country. Santander was one of the first banks that decided to leave Transbank and create their own business. In addition, BCI did it with EVO, which is now part of Global Payments. In the marketplace, Gettin now has over 200,000 merchants that are active using our technology. So we believe we’ve been the most successful at helping them grow, as they’ve chosen to lead Transbank.

Across the country, mean Transbank has been rumored to be for sale for many occasions. So I think it’s created a lot of disruption for the original incumbent. And other banks in the region continue to look at alternatives other banks in the country. So I mean we’re optimistic with our relationship with GETNet and the performance that we’ve seen, but we also believe that as there’s more disruption there may be more opportunities to process for other banks.

Jamie Friedman, Analyst, Susquehanna International: Got it. Thanks for the color, Mac.

Conference Operator: Our next question comes from John Davis with Raymond James. Please proceed with your question.

John Davis, Analyst, Raymond James: Hey, good afternoon, guys. Joaquin, just wanted to touch on merchant margins for a second. I think they were up about five ten basis points year over year. I see in the slide deck, you talk about just spread driven top line growth and cost optimization, but hoping to dig in a little bit there and also maybe get some color on how we should think about those margins trending throughout the rest of 2025?

Joaquin Castrillo, Chief Financial Officer, EVERTEC: Sure. So I mean, look, as we’ve said, we have some a couple of different moving pieces when it comes to the spread. Number one, we have some pricing actions that we’re starting to lap towards the actually, already lapped them, but for purposes of Q1, we did have a tailwind over the first couple of months. And we also have, let’s say, more card not present transactions, which are usually higher yielding transactions. So that is also kind of driving a little bit the spread.

And I would say third, one of the main banks in Puerto Rico last year became a regulated bank. So that also decreases the total cost per transaction or, let’s say, the amount of interchange that we need to pay on those transactions. So those three factors are again the main drivers of growth. And because it’s price driven, it’s very accretive and that’s what’s driven the margin up. The one thing I would say is given that we will lap most of these throughout the year, the average ticket does continue to decline slightly, but it does continue to decline.

So our expectation would be that if that is the case on a go forward basis, that will start to put pressure again on the margin. So we’re not expecting, let’s say, margin expansion from where we are today in the Merchant segment. Okay. And then as we

John Davis, Analyst, Raymond James: think about MercadoLibre and then rolling off, is I’m not expecting exact answers here or numbers, but is second quarter going to be kind of a full run rate quarter of them being off? Or is it kind of a partial quarter and we get a full quarter impact in 3Q, 4Q? Just trying to calibrate the models for their exit.

Joaquin Castrillo, Chief Financial Officer, EVERTEC: It won’t be a full quarter, but it will take on, I would say, let’s say, thirds of the quarter will be already impacted.

John Davis, Analyst, Raymond James: Okay. So not much of a drop off from 2Q to 3Q then, as we think about it. And then last one for me, I guess, Mac or Joaquin. Just as we circle back to the hurricane money, relief money from, I guess, seven or eight years ago now. Obviously, you highlighted pretty healthy just general economic stats in Puerto Rico.

Are you starting to see benefits from the relief funds? Is it something that you think should continue? Just curious kind of any update there would be helpful.

Joaquin Castrillo, Chief Financial Officer, EVERTEC: What I would say, Johnny, is yes, we continue to expect those funds to come through. And I think that they have been, in fact, flowing through. And if you listen at some of the banks in Puerto Rico, they also are seeing more movement. How much of that or what’s the amount that’s going to impact any given year, I think it’s still very hard to tell. But I think a lot of what’s already coming in is getting reflected.

Again, some of the resiliency that we’re seeing in some of our payment segments in Puerto Rico. Actually coming back to your previous question, John, clarify, we did also call out, we have a few one timers in the LatAm segment this quarter that in addition to, let’s say, the attrition starting to show up over the next few quarters will also right now recur a portion of the top line we have in Q1 because it’s one time. Okay. Very helpful. Thanks guys.

No problem. Thanks John.

Conference Operator: And that will conclude our question and answer session. I would now like to turn the conference back over to Max Schuessler for any closing remarks.

Max Schuessler, President and Chief Executive Officer, EVERTEC: Again, I want to thank everyone for joining the call. Thank my colleagues for a great quarter, and we hope you have a great rest of your night.

Conference Operator: Thank you very much. The conference is now concluded. Thank you everybody for attending today’s presentation. You may now disconnect.

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