EVERTEC, Inc. (NYSE:EVTC) Q1 2024 Earnings Call Transcript

Operator: The next question comes from James Faucette with Morgan Stanley.

Q – Unidentified Analyst: I’m asking a question on behalf of James Faucette. I was wondering how you’re looking at capital allocation for 2024, 2025 and specifically, how you might be looking at timing or appetite for M&A now that the Sinqia deal has closed and you’ve started seeing those contributions coming in and kind of what that pipeline might look like?

Joaquín Castrillo: Yes. So look, specifically now with Sinqia, one thing to remember Sinqia being a highly acquisitive company, also had a very good M&A team locally. They are very close to the entrepreneurs, to open coming companies that have technology that’s either adjacent or complementary to Sinqia. So we certainly want to continue to leverage that, that has been a key part of how Sinqia has grown to be what it is today. And so we certainly continue to have a pipeline. In terms of general priorities for capital allocation, we continue to look for growth. I’d say that the scale or the size of the deals that we’re probably looking at are now more like what we used to do before Sinqia. So relatively small size that we can attach to Sinqia or some of our other countries or entities across Latin America.

But we’re certainly continuing to focus on growth. And after that, as we announced on the call, we entered into an ASR, $70 million ASR to make offer some of the shares that we issued as part of the Sinqia deal, but also to buy back some of our shares, as we usually do every year to offset some of the dilution coming from some of our long-term incentive plans. So those are the priorities. And obviously, now with interest rates, we’re obviously always looking at where is our debt, where our rates and whether it makes sense for us to pay down some debt and save some interest expense cost.

Mac Schuessler: Yes, I would say that — I mean, the big thing is that’s more expensive So that’s now something you look at more than you would have looked at in the past, the potential to pay down. Like Joaquin said, we’re still focused on M&A, more tuck-in deals like we used to do in the past, and we now have a bigger operation within which we can tuck those in. So we have a very healthy pipeline within Brazil and outside of Brazil and that’s still a focus of the team.

Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Mac Schuessler for any closing remarks.

Mac Schuessler: I want to thank everybody for joining the call. Joaquin, I look forward to seeing you over the coming quarter at different conferences and events. And thanks, and have a good night.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.