Evertec, Inc.

Good afternoon, everyone, and welcome to Evertech's first quarter 2024 earnings conference call. Today's conference call is being recorded. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. I would now like to turn the conference over to Beatrice Brown-Signs 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 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.erotechinc.com. I will now hand the call over to Max.

Thanks, Beatrice, and good afternoon, everyone. We are pleased to announce a good start to the fiscal year with strong revenue growth driven by a full quarter contribution from CINCIA and organic growth across all our segments. I will begin today's call with a summary of our first quarter 2024 financial results, followed by a discussion of the Puerto Rico environment and an update on Latin America. I will then turn the call over to Joaquin, who will provide some additional details on our Q1 results and an update on our 2024 outlook. Beginning on slide four, Let's start with some financial highlights from our first quarter. We reported $205 million in revenue, a 28% increase over the prior year quarter, and adjusted EBITDA was $78.2 million, up approximately 16% when compared with the prior year, driven by the revenue increase. Adjusted EBITDA margin was 38.1%, down from a year ago and aligned with our expectations, driven by a full quarter of CINCIA contribution at lower margins. Adjusted EPS for the quarter was $0.72, up 4% year over year. Operating cash flow for the quarter was $36 million. On the capital allocation front, we returned approximately $3 million to shareholders through dividends and entered into a $70 million ASR as anticipated on our last call, which we expect to complete by the third quarter. Our liquidity remains strong at approximately $408 million as of March 31st. Turning to our Puerto Rico update on slide five. All our Puerto Rico segments performed well during the quarter, reflecting solid organic growth over prior year. Payments Puerto Rico revenue grew approximately 10% year-over-year, driven by higher POS transactions and continued strength in ATH mobile business. Merchant acquiring grew approximately 7% on a year-over-year basis, benefiting from sales volume growth and a higher spread. The business solutions segment returned to growth up approximately 4% year over year, reflecting growth across various lines of business. The Puerto Rico macro environment continues to be supportive for Evertech as we move through 2024. The unemployment rate remained low at 5.7% in the first quarter, and the level of employment remained steady at 1.1 million, the highest number since 2009. Travel also remains robust, with airport arrivals up over 10% year over year in the first quarter. Turning to Latin America on slide six. LATAM revenue was up significantly year over year in the quarter, reflecting the contribution from the CINCIA acquisition that closed in the fourth quarter, as well as continued organic growth from our legacy business. On our last call, we discussed our area of focus with CINCIA for 2024, and we continue to make strides on all fronts. From a technology modernization perspective, we have laid out detailed roadmaps and have identified the key projects that we will prioritize throughout 2024 with a focus on those investments that will have the largest impact for our clients. We believe these enhancements will open the door for pricing initiatives with existing customers and better offerings to capture market share. As for our customer-centric initiatives, we have implemented regular visits to our top clients, and we are making a point of acting on the feedback they have given us. Our next step will be to leverage these relationships to cross-sell our products. The integration process continues to be a priority for the executive team, and to that end, we have promoted Claudio Prado, to Group Head of Brazil, replacing Bernardo Gomez, who, for personal reasons, has decided to take a step back and shift to a consultant role. Bernardo did a fantastic job building Syncia over the past years, and we thank him for his contributions during the integration process. Claudio has over 30 years of experience in the technology industry, including as CIO of Santander and Deutsche Bank, and over seven years contributing to Syncia. Claudio's entrepreneurship background provides a good perspective of the client-focused approach, best suiting him to handle the day-to-day leadership responsibilities at SyncU. We look forward to providing further updates on the integration process as we progress. With that, I will now turn the call over to Joaquin.