Evertec, Inc.

Good afternoon, and welcome to the Evertech third quarter 2021 earnings conference call. All participants will be in listen-only mode. Should you need 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 Kevin Hunt of Investor Relations. Please go ahead.

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.evertechinc.com. I will now hand over the call to Mac.

Thank you and good afternoon, everyone. Thank you for joining us on our third quarter 2021 earnings call. We are pleased to announce another strong quarter of financial results as we continue to benefit from strong sales volumes across our markets. In Puerto Rico, the continued effect from federal funds, increased digital usage, and a return to some pre-COVID seasonality drove strong transaction volumes. In Latin America, we're seeing strong growth driven by both recent implementations as well as organic growth from existing clients. Beginning on slide four, our total revenue for the third quarter was $146 million, an increase of approximately 7% compared to the third quarter of 2020. Adjusted EBITDA was $70 million, roughly the same as the prior year, and our adjusted earnings per share was 62 cents, a decrease of 5% year over year. in line with our expectations, despite a higher-than-expected adjusted effective tax rate. We generated significant year-to-date operating cash flow of $176 million, and we returned approximately $35 million to our shareholders through dividends and share repurchases. Our liquidity remains strong at $363 million as of September 30th. Moving on to our update for Puerto Rico on slide five. We saw continued strong volume and revenue growth in the third quarter. The ongoing effect from the inflow of federal stimulus and EBITDA funds earlier in the year was a major driver of growth, as was a pickup and back to school spending in August, a sign that we are returning to pre-COVID spending patterns. Merchant acquiring sales volume growth was approximately 23% year over year. An average ticket is coming down on a year over year basis, but remained above pre-pandemic levels. We remain pleased with the growth of ATH mobile, which was up 24% for the quarter, as we continue to see a shift in preference to digital payment methods. Turning to the operating environment in Puerto Rico, vaccination rates continue to increase with over 70% of the population now fully vaccinated, the highest level of any U.S. state or territory as reported by the CDC. Hospitalization rates are down over 80% from Delta variant peaks back in August, and this is moving us closer to a more normal environment, with the government continuing to loosen restrictions. The third quarter also had the highest hotel occupancy rates since the beginning of the pandemic, and we saw the first cruise ship dock in Puerto Rico since March of 2020. Now turning to Latin America on slide six. We continue to see strong double-digit growth in Latin America, as we are still benefiting from recent implementations as well as organic growth from existing clients in several countries. We are pleased to announce our recent contract with Caja Popular Mexicana for issuing a deal that we've been working on for some time and that just recently received regulatory approval. CPM is the largest savings and loan cooperative in Mexico with 479 branches and over 3 million members representing about 35% market share. They have been focused on increasing non-traditional payment methods in Mexico, including ATM, point-of-sale terminals, and digital payments. And to that end, recently launched several credit card products, which they will be rolling out to their members using our issuing platform, PayStudio. Our Santander relationship in Chile continues to progress ahead of our expectations. When the bank launched its POS business back in March, they had set a goal of bringing 20,000 customers on board by the end of 2021. They are already above 37,000 customers and have set a new goal of reaching 50,000 by year end. We have also successfully localized our gateway, place to pay, in Chile. These are good examples of the kind of growth opportunities that exist when previously closed markets open up for competition. While vaccination rates and reopenings continue to vary country to country, we have seen encouraging progress in Chile and Uruguay. and expect to continue to see a decrease in cases across the region as vaccines become widely available. Turning to our people, over 95% of Evertech employees at our Puerto Rico headquarters have been now vaccinated and we reopened our Puerto Rico offices on a hybrid model on October the 12th. We expect offices in other regions will follow in the coming months based on the conditions in each country. We remain committed to our scholarship program in Puerto Rico and across Latin America. Now in its seventh year, we awarded 177 scholarships to students across Puerto Rico and Latin America, an increase of 10% from the prior year. We were once again able to maintain a 50-50 gender ratio, providing equal opportunities for both men and women. We are proud to have awarded over $870,000 in scholarships over the past seven years and look forward to continuing the support of education for STEM careers in both Puerto Rico and Latin America. In summary, we delivered strong third quarter results. We are once again raising our 2021 outlook with a higher expected revenue range and an EPS range that is narrowed to the upper end of our prior expectations. While we will certainly monitor the impacts of the different COVID-19 variants across our markets and remain cautious in certain countries, at this point, we have a positive view towards the future. I will now hand the call over to Joaquin to review our results and guidance in more detail.