Evertec, Inc.

Hello, and welcome to the Evertech third quarter 2023 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 touch-tone phone. To withdraw your question, please press star then two. Please note, today's event is being recorded. We're now going to turn the conference over to Beatrice Bronsigns of Investor Relations. Please go ahead, ma'am.

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

Thanks, Beatrice. I'm pleased to report very strong third quarter results that were above our expectations as we continue to execute on our initiatives across all our markets. Strength was broad-based with every one of our segments growing both revenue and EBITDA over the prior period. We also continue to make progress on the Syncia acquisition and hope to announce the closing of that transformational deal in the near future. On today's call, I will start with some highlights from the quarter, and then we'll turn it over to Joaquin, who will provide further details on our third quarter results, as well as an update to our expectations for the remainder of the year. Beginning on slide four, total revenue was approximately $173 million for the third quarter, an increase of approximately 19% compared to the third quarter of 2022. Adjusted EBITDA was approximately $79 million, an increase of approximately 31% when compared with the prior year quarter. Adjusted EBITDA margin was 45.4%, approximately 410 basis points above last year's level and above our expectations and guidance. Adjusted earnings per share was 80 cents, an increase of 51% from the prior year quarters, adjusted EPS of 53 cents. As a reminder, we changed our calculation of adjusted EBITDA, adjusted net income, and adjusted earnings per share metrics earlier this year to exclude the impact of non-cash, unrealized gains, and losses from foreign currency remeasurement, and all variances against prior year had been compared against recast figures. We generated operating cash flow of $163 million, and we returned approximately $33 million to our shareholders through dividends and share repurchases. Additionally, our liquidity remained strong at approximately $366 million as of September 30th. Moving on to our business update on slide five. In Puerto Rico, we experienced growth across all our segments. Merchant acquiring revenue was up approximately 10% year-over-year, driven by strong sales volume and an increase in our overall spread. Famous Puerto Rico was up approximately 16%, reflecting strong POS transaction volumes and continued strength in ATH mobile business. Our business solution segment revenue was up approximately 15%, primarily due to the impact in the prior year of the one-time credit granted popular upon closing of the popular transaction. Excluding this impact, business solutions revenue grew approximately 2%. As a reminder, this is the first quarter where we are not facing a year-over-year growth headwind due to the impact of the assets sold to Popular. Business solutions growth also benefited from certain one-time hardware and software sales completed in the quarter. Turning to the macro environment in Puerto Rico, the overall backdrop remains stable with a few signs of optimism this past quarter. The overall level of unemployment has remained fairly stable through 2023, though the unemployment rate did tick up to 6.2% in July. This is still near the lowest level in decades. Inflation seems to be coming down more rapidly on the island, with a reading of just 2.2% in July, and the Economic Activity Index was up 3.5% year-over-year. Travel and tourism trends continue to be positive, with total airline passengers recording year-over-year growth in the mid-20s. and year-to-date growth is now 20% year-over-year through September. Auto sales have also rebounded in recent months, up 40% year-over-year in September and 9% in August, after being flat to down for most of the year. In sum, we continue to view the macroeconomic environment as supportive for Evertech's growth. Moving to Latin America on slide six, revenue was up an impressive 37% year-over-year. As we have indicated previously, our relationship with GetNet Chile has been an important driver of growth over the past few years, and this quarter is no different, as we now expect to exceed contract minimums, which led to the recognition of a $6.3 million revenue catch-up adjustment, which Joaquin will explain further. The segment also benefited from the Paysmart acquisition completed in the first quarter of this year and organic growth aligned to our expectations. Our customers in the region delivered strong contributions to growth in the quarter, and the broad-based strength we are seeing provides confidence in our LATAM growth strategy. As a reminder, we lapped the benefit of the BBR acquisition completed in the third quarter last year. In regards to the Syncia acquisition, we previously announced that we received Syncia shareholder approval, an important milestone towards closing, and expect to complete the transaction before year-end. We are currently working with the Syncia team on integration and growth plans, and are excited with the opportunity ahead in Brazil. We expect to be able to provide a more detailed update of our plans and expectations for Syncia on our fourth quarter earnings call. In sum, this is another strong quarter that reflects our ability to deliver organic growth while also working to complete the biggest acquisition in the company's history. I want to thank the teams that worked so hard this past quarter to deliver these outstanding results. With that, I'll now turn it over to Joaquin to provide a more in-depth look at our third quarter results and our increased outlook for 2023.