Evertec Q3 2026 Earnings: Revenue Rises 24% as Outlook Is Raised
Evertec reported Q3 2026 revenue of $283.0 million, up 24% year-over-year, driven by acquisitions and organic growth in Latin America. However, GAAP diluted EPS declined to $0.49 due to higher interest expenses, increased taxes, and the absence of prior-year tax credits, whereas adjusted EPS rose 16% to $1.07. Supported by strong performance, the company raised its full-year revenue outlook and narrowed its adjusted EPS guidance to $4.00–$4.08. Key investor risks include acquisition-related leverage, margin compression from regional expansion, contract headwinds in Business Solutions, and currency fluctuations.
Evertec (NYSE: EVTC) reported Q3 2026 revenue of $283.0 million, up 24% from $228.6 million, while GAAP diluted EPS slipped to $0.49 from $0.51. Acquisitions, organic growth, and favorable currency movements supported revenue, but higher interest and tax expense and the absence of a prior-year tax credit weighed on GAAP profit. Adjusted EPS still increased 16% to $1.07.
Core Earnings Data
Revenue for the quarter ended September 30 increased by $54.4 million. On a constant-currency basis, revenue was $277.0 million and grew 21%, indicating that foreign exchange contributed part—but not most—of the reported increase.
Adjusted EBITDA grew with revenue, although the margin fell by 150 basis points as Latin America represented a larger share of the business. GAAP net income attributable to common shareholders declined despite higher operating income.
| Metric | Q3 2026 | Q3 2025 | Year-Over-Year Change |
|---|---|---|---|
| Revenue | $283.0 million | $228.6 million | +24% |
| Operating income | $50.6 million | $37.7 million | Approximately +34% |
| GAAP net income attributable to common shareholders | $29.9 million | $32.9 million | Approximately -9% |
| GAAP diluted EPS | $0.49 | $0.51 | Approximately -4% |
| Adjusted EBITDA | $110.5 million | Approximately $92.6 million | +19% |
| Adjusted EBITDA margin | 39.0% | 40.5% | -150 basis points |
| Adjusted net income | $64.8 million | $59.8 million | Approximately +8% |
| Adjusted EPS | $1.07 | $0.92 | +16% |
Adjusted EBITDA, adjusted net income, and adjusted EPS are non-GAAP measures.
Business and Segment Performance
Latin America revenue increased through contributions from recent acquisitions, organic regional growth, and a $6 million benefit from favorable currency movements. The difference between reported revenue growth of 24% and constant-currency growth of 21% shows that underlying business expansion remained the primary driver.
Payment Services benefited from higher point-of-sale transaction volumes and growth in ATH Móvil, particularly ATH Business. Merchant acquiring revenue also increased, supported by higher sales volume and additional non-transactional revenue.
Business Solutions moved in the opposite direction. Revenue contracted primarily because a 10% discount to Popular took effect in the fourth quarter of 2025, creating a continuing headwind for the segment.
Evertec also completed its acquisition of BBChain during the period, adding blockchain, tokenization, and digital asset technology infrastructure capabilities. The company did not separately quantify BBChain’s quarterly contribution.
Revenue Growth Did Not Fully Reach GAAP Earnings
Operating income increased approximately 34%, but GAAP net income attributable to common shareholders declined about 9%. The difference was mainly below the operating-income line and in taxes.
Interest expense rose to $21.5 million from $16.5 million, reflecting higher interest rates and additional acquisition-related debt. Income tax expense was $3.6 million, compared with a slight tax benefit a year earlier. The prior-year quarter also included a $6 million net gain from research and development tax credits that did not recur in Q3 2026.
Adjusted results presented a different picture. Higher adjusted EBITDA lifted adjusted net income, while the diluted weighted-average share count declined to 60.4 million from 64.8 million following share repurchases. Together, those factors helped adjusted EPS grow faster than adjusted net income.
Cash Flow, Debt, and Capital Allocation
For the first nine months of 2026—not the third quarter alone—operating cash flow increased to $176.3 million from $157.0 million. Over the same period, Evertec used $186.6 million for acquisitions, $57.3 million for software and other intangible assets, and $17.6 million for property and equipment.
Cash and cash equivalents stood at $284.1 million on September 30, down from $306.0 million at the end of 2025. Long-term debt increased to $1.214 billion from $1.053 billion, consistent with management’s explanation that acquisition financing contributed to higher interest expense.
During the quarter, Evertec repurchased 500,946 shares at an average price of $30.78, spending $15.4 million. Including dividends, it returned $18.4 million to shareholders. Approximately $135 million remained under the company’s expanded $150 million repurchase authorization at quarter-end.
2026 Guidance
Evertec raised its full-year revenue outlook and characterized its adjusted EPS outlook as higher. The disclosed EPS growth range became narrower, with its lower end increasing and its upper end decreasing. The company also expects reported margins to remain below constant-currency margins.
| Metric | Latest 2026 Guidance | Previous Guidance | Change |
|---|---|---|---|
| Revenue | $1.088 billion–$1.096 billion; growth of 16.7%–17.6% | Growth of 16.4%–17.5% | Both growth endpoints raised |
| Constant-currency revenue growth | 14.5%–15.4% | — | Current range disclosed |
| Adjusted EPS | $4.00–$4.08; growth of 10.5%–12.7% | Growth of 8.8%–13.8% | Range narrowed; lower end raised and upper end reduced |
| Constant-currency adjusted EPS growth | 9.4%–11.6% | — | Current range disclosed |
| Adjusted EBITDA margin | Approximately 39.5%; 40% at constant currency | — | Current outlook disclosed |
| Capital expenditures | Approximately $95 million | — | Current outlook disclosed |
| Adjusted effective tax rate | Approximately 10%–11% | — | Current outlook disclosed |
Risks Investors Need to Watch
- Latin America’s margin profile: Regional growth is adding scale, but the increasing weight of Latin America reduced the consolidated adjusted EBITDA margin in Q3.
- Acquisition-related leverage: Higher debt and interest rates raised quarterly interest expense, limiting how much operating growth reached GAAP net income.
- Popular contract economics: The 10% discount to Popular continues to pressure Business Solutions revenue and could remain a drag on consolidated growth.
- Currency exposure: Favorable foreign exchange added $6 million to Latin America revenue this quarter. A reversal would reduce the gap between reported and constant-currency results.
- Tax mix: A larger contribution from Latin American jurisdictions with higher statutory tax rates increased the effective tax rate and weighed on earnings.
Conclusion
Evertec’s Q3 2026 revenue growth reflected acquisitions, organic expansion across Latin America, and higher payment activity, leading the company to raise its full-year outlook. The main limitation was earnings conversion: regional mix compressed the adjusted EBITDA margin, while acquisition-related interest costs and higher taxes held back GAAP profit. Execution against the updated guidance, Latin America’s margin contribution, debt costs, and the continuing Popular discount are the main items to monitor.
This article may include AI-generated content that is human-reviewed, which is for reference and general information purposes only and does not constitute investment advice.
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