EVERTEC Surges Ahead in Q1 2025: Strong Revenue Growth and Margin Expansion
EVERTEC, a leading provider of payment technology solutions, has reported a strong start to 2025 with impressive revenue growth and margin expansion in its first quarter financial results. According to Mac Schuessler, the company's President and Chief Executive Officer, all business segments delivered strong growth over prior year, exceeding internal expectations.
Revenue for the quarter reached $228.8 million, an 11.4% increase over the prior year, with currency representing a headwind of approximately 3.3%. Adjusted EBITDA was $89.4 million, 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 EVERTEC's 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 terms of business segment performance, Merchant Acquiring grew 11%, benefiting from an improved spread and increased sales volumes in Puerto Rico. Payment Puerto Rico grew 4%, driven by continued strong performance from ATH Movil and higher POS transaction volumes. Business Solutions revenue grew 13%, as the company recognized revenue from key consulting projects completed during the second and third quarters of the prior year, and also benefited from one-time hardware and software sales.
The overall condition of the Puerto Rico economy remains stable, with total employment continuing to increase while the unemployment rate remains in 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, though cruise line passengers were down approximately 7% in January.
LatAm revenue grew 13% year-over-year or 22% measured in constant currency, driven by organic growth across the region, particularly in Chile and Brazil. The company's relationship with Getnet Chile has reaccelerated its business, while initiatives put in place throughout last year, such as repricing efforts and product modernization, have benefited its Brazil operations.
Looking ahead to 2025, EVERTEC remains cautious regarding the potential impact of tariffs on APAC, citing a few areas where tariffs can have a direct impact on their business. However, they acknowledge that there is also potential for disruption to customer confidence, employment and other factors that could have an indirect impact on their business.
In conclusion, EVERTEC has reported a strong start to 2025 with impressive revenue growth and margin expansion. The company's focus on efficiency and expense management, combined with its continued investment in key markets such as Puerto Rico and LatAm, positions it well for future success.
