10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549 

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022 or 

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                  to                 

COMMISSION FILE NUMBER 001-35872

 EVERTEC, Inc.

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) 

Puerto Rico		66-0783622
(State or other jurisdiction of incorporation or organization)		(I.R.S. employer identification number)
Cupey Center Building,	Road 176, Kilometer 1.3,
San Juan,	Puerto Rico	00926
(Address of principal executive offices)		(Zip Code)

(787) 759-9999

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	EVTC	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company", and "emerging growth company" in Rule 12b-2 of the Exchange Act. 

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐  No  ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

At October 27, 2022, there were 65,202,196 outstanding shares of common stock of EVERTEC, Inc.

TABLE OF CONTENTS

		Page
Part I. FINANCIAL INFORMATION
Item 1.	Financial Statements
	Unaudited Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021	1
	Unaudited Condensed Consolidated Statements of Income and Comprehensive Income for the three and nine months ended September 30, 2022 and 2021	2
	Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2022 and 2021	3
	Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and 2021	5
	Notes to Unaudited Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	40
Item 4.	Controls and Procedures	41
Part II. OTHER INFORMATION		42
Item 1.	Legal Proceedings	42
Item 1A.	Risk Factors	42
Item 2.	Unregistered Sales of Equity in Securities and Use of Proceeds	42
Item 3.	Defaults Upon Senior Securities	42
Item 4.	Mine Safety Disclosures	43
Item 5.	Other Information	43
Item 6.	Exhibits	44
SIGNATURES		45

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Report”) contains “forward-looking statements” within the meaning of, and subject to the protection of, the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such statements can be identified by the use of forward-looking terminology such as “believes,” “expects,” “may,” “estimates,” “will,” “should,” “plans” or “anticipates” or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and may involve significant risks and uncertainties, and that actual results may differ materially from those in the forward-looking statements as a result of various factors. Among the factors that significantly impact our business and could impact our business in the future are:

•our reliance on our relationship with Popular, Inc. (“Popular”) for a significant portion of our revenues pursuant to our second amended and restated Master Services Agreement (“MSA”) with them, and as it may impact our ability to grow our merchant acquiring business;

•our ability to renew our client contracts on terms favorable to us, including but not limited to the current term and any extension of the MSA with Popular;

•our dependence on our processing systems, technology infrastructure, security systems and fraudulent payment detection systems, as well as on our personnel and certain third parties with whom we do business, and the risks to our business if our systems are hacked or otherwise compromised;

•our ability to develop, install and adopt new software, technology and computing systems;

•a decreased client base due to consolidations and failures in the financial services industry;

•the credit risk of our merchant clients, for which we may also be liable;

•the continuing market position of the ATH network;

•a reduction in consumer confidence, whether as a result of a global economic downturn or otherwise, which leads to a decrease in consumer spending;

•our dependence on credit card associations, including any adverse changes in credit card association or network rules or fees;

•changes in the regulatory environment and changes in macroeconomic, market, international, legal, tax, political, or administrative conditions, including inflation or the risk of recession;

•the geographical concentration of our business in Puerto Rico, including our business with the government of Puerto Rico and its instrumentalities, which are facing severe political and fiscal challenges;

•additional adverse changes in the general economic conditions in Puerto Rico, whether as a result of the government’s debt crisis or otherwise, including the continued migration of Puerto Ricans to the U.S. mainland, which could negatively affect our customer base, general consumer spending, our cost of operations and our ability to hire and retain qualified employees;

•operating an international business in Latin America and the Caribbean, in jurisdictions with potential political and economic instability;

•the impact of foreign exchange rates on operations;

•our ability to protect our intellectual property rights against infringement and to defend ourselves against claims of infringement brought by third parties;

•our ability to comply with U.S. federal, state, local and foreign regulatory requirements;

•evolving industry standards and adverse changes in global economic, political and other conditions;

•our level of indebtedness and the impact of rising interest rates, restrictions contained in our debt agreements, including the secured credit facilities, as well as debt that could be incurred in the future;

•our ability to prevent a cybersecurity attack or breach to our information security;

•the possibility that we could lose our preferential tax rate in Puerto Rico;

•the possibility of future catastrophic hurricanes, earthquakes and other potential natural disasters affecting our main markets in Latin America and the Caribbean;

•uncertainty related to the effect of the discontinuation of the London Interbank Offered Rate;

•the elimination of Popular's ownership of our common stock; and

•the other factors set forth under "Part 1, Item 1A. Risk Factors," in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 filed with the Securities and Exchange Commission (the "SEC") on February 25, 2022, as updated by Part II, Item 1A. “Risk Factors” in this Report.

These forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Forward-looking statements should, therefore, be considered in light of various factors, including those set forth under “Part 1, Item 1A. Risk Factors,” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 filed with the SEC on February 25, 2022, as updated by Part II, Item 1A. “Risk Factors” in this Report, and as updated in our subsequent filings with the SEC, and in “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Report. These forward-looking statements speak only as of the date of this Report, and we do not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this Report or to reflect the occurrence of unanticipated events.

WHERE YOU CAN FIND MORE INFORMATION

All reports we file with the SEC are available free of charge via the Electronic Data Gathering Analysis and Retrieval (EDGAR) System on the SEC’s website at www.sec.gov. We also provide copies of our SEC filings at no charge upon request and make electronic copies of our reports available for download through our website at www.evertecinc.com as soon as reasonably practicable after filing such material with the SEC.

EVERTEC, Inc. Unaudited Condensed Consolidated Balance Sheets

(In thousands, except for share information)

	September 30, 2022		December 31, 2021
Assets
Current Assets:
Cash and cash equivalents	$	224,971	$	266,351
Restricted cash	18,705		19,566
Accounts receivable, net	112,293		113,285
Prepaid expenses and other assets	40,992		37,148
Total current assets	396,961		436,350
Debt securities available-for-sale, at fair value	2,198		3,041
Investment in equity investee	14,071		12,054
Property and equipment, net	49,928		48,533
Operating lease right-of-use asset	17,799		21,229
Goodwill	417,819		393,318
Other intangible assets, net	196,316		213,288
Deferred tax asset	5,414		6,910
Net investment in leases	14		107
Derivative asset	7,070		—
Other long-term assets	13,378		9,926
Total assets	$	1,120,968	$	1,144,756
Liabilities and stockholders’ equity
Current Liabilities:
Accrued liabilities	$	82,798	$	74,540
Accounts payable	33,489		28,484
Contract liability	17,051		17,398
Income tax payable	10,757		7,132
Current portion of long-term debt	28,813		19,750
Current portion of operating lease liability	6,007		5,580
Total current liabilities	178,915		152,884
Long-term debt	426,691		444,785
Deferred tax liability	7,998		2,369
Contract liability - long term	34,726		36,258
Operating lease liability - long-term	13,320		16,456
Derivative liability	—		13,392
Other long-term liabilities	4,063		8,344
Total liabilities	665,713		674,488
Commitments and contingencies (Note 14)
Stockholders’ equity
Preferred stock, par value $0.01; 2,000,000 shares authorized; none issued	—		—
Common stock, par value $0.01; 206,000,000 shares authorized; 65,588,270 shares issued and outstanding as of September 30, 2022 (December 31, 2021 - 71,969,856)	655		719
Additional paid-in capital	—		7,565
Accumulated earnings	480,740		506,051
Accumulated other comprehensive loss, net of tax	(29,586)		(48,123)
Total EVERTEC, Inc. stockholders’ equity	451,809		466,212
Non-controlling interest	3,446		4,056
Total equity	455,255		470,268
Total liabilities and equity	$	1,120,968	$	1,144,756

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

1

EVERTEC, Inc. Unaudited Condensed Consolidated Statements of Income and Comprehensive Income

(In thousands, except per share information)

 

	Three months ended September 30,				Nine months ended September 30,
	2022		2021		2022		2021
Revenues (affiliates Note 16)	$	145,803	$	145,883	$	456,622	$	434,559
Operating costs and expenses
Cost of revenues, exclusive of depreciation and amortization	76,272		62,995		215,244		182,180
Selling, general and administrative expenses	26,001		17,126		66,436		49,980
Depreciation and amortization	19,712		18,745		58,432		56,091
Total operating costs and expenses	121,985		98,866		340,112		288,251
Income from operations	23,818		47,017		116,510		146,308
Non-operating income (expenses)
Interest income	807		504		2,279		1,343
Interest expense	(6,763)		(5,684)		(18,242)		(17,248)
Earnings of equity method investment	688		411		2,120		1,307
(Loss) gain on foreign currency remeasurement	(7,779)		(304)		(6,858)		652
Gain on sale of a business	135,642		—		135,642		—
Other income (expenses)	374		450		1,621		2,067
Total non-operating income (expenses)	122,969		(4,623)		116,562		(11,879)
Income before income taxes	146,787		42,394		233,072		134,429
Income tax expense	9,048		7,134		22,911		14,474
Net income	137,739		35,260		210,161		119,955
Less: Net loss attributable to non-controlling interest	(75)		(54)		(140)		(59)
Net income attributable to EVERTEC, Inc.’s common stockholders	137,814		35,314		210,301		120,014
Other comprehensive income (loss), net of tax of $716, $382, $1,442 and $817
Foreign currency translation adjustments	4,125		(6,942)		(210)		(7,823)
Gain on cash flow hedges	5,762		1,537		18,824		6,814
Unrealized (loss) gain on change in fair value of debt securities available-for-sale	$	(21)	$	8	$	(77)	$	97
Total comprehensive income attributable to EVERTEC, Inc.’s common stockholders	$	147,680	$	29,917	$	228,838	$	119,102
Net income per common share - basic attributable to EVERTEC, Inc.’s common stockholders	$	2.08	$	0.49	$	3.01	$	1.66
Net income per common share - diluted attributable to EVERTEC, Inc.’s common stockholders	$	2.06	$	0.48	$	2.98	$	1.65

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2

EVERTEC, Inc. Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity

(In thousands, except share information)

	Number of Shares of Common Stock	Common Stock		Additional Paid-in Capital		Accumulated Earnings		Accumulated  Other Comprehensive Loss		Non-Controlling Interest		Total Stockholders’ Equity
Balance at December 31, 2021	71,969,856	$	719	$	7,565	$	506,051	$	(48,123)	$	4,056	$	470,268
Share-based compensation recognized	—	—		4,279		—		—		—		4,279
Repurchase of common stock	(521,643)	(5)		(6,193)		(14,981)		—		—		(21,179)
Restricted stock units delivered	251,085	3		(5,651)		—		—		—		(5,648)
Net income (loss)	—	—		—		38,898		—		(32)		38,866
Cash dividends declared on common stock, $0.05 per share	—	—		—		(3,598)		—		—		(3,598)
Other comprehensive income	—	—		—		—		11,912		248		12,160
Balance at March 31, 2022	71,699,298	$	717	$	—	$	526,370	$	(36,211)	$	4,272	$	495,148
Share-based compensation recognized	—	—		5,165		—		—		—		5,165
Repurchase of common stock	(357,114)	(4)		(3,466)		(10,566)		—		—		(14,036)
Restricted stock units delivered	25,149	—		(28)		—		—		—		(28)
Net income (loss)	—	—		—		33,589		—		(33)		33,556
Cash dividends declared on common stock, $0.05 per share	—	—		—		(3,579)		—		—		(3,579)
Other comprehensive income (loss)	—	—		—		—		(3,241)		(384)		(3,625)
Balance at June 30, 2022	71,367,333	$	713	$	1,671	$	545,814	$	(39,452)	$	3,855	$	512,601
Share-based compensation recognized	—	—		5,296		—		—		—		5,296
Repurchase of common stock	(1,190,388)	(12)		(6,958)		(30,347)		—		—		(37,317)
Restricted stock units delivered	485	—		(9)		—		—		—		(9)
Net income (loss)	—	—		—		137,814		—		(75)		137,739
Cash dividends declared on common stock, $0.05 per share	—	—		—		(3,338)		—		—		(3,338)
Other comprehensive income (loss)	—	—		—		—		9,866		(334)		9,532
Common stock received in exchange of the sale of a Business	(4,589,160)	(46)		—		(169,203)		—		—		(169,249)
Balance at September 30, 2022	65,588,270	$	655	$	—	$	480,740	$	(29,586)	$	3,446	$	455,255

3

	Number of Shares of Common Stock	Common Stock		Additional Paid-in Capital		Accumulated Earnings		Accumulated  Other Comprehensive Loss		Non-Controlling Interest		Total Stockholders’ Equity
Balance at December 31, 2020	72,137,678	$	721	$	5,340	$	379,934	$	(48,254)	$	4,688	$	342,429
Share-based compensation recognized	—	—		3,380		—		—		—		3,380
Repurchase of common stock	(382,974)	(4)		(1,290)		(12,974)		—		—		(14,268)
Restricted stock units delivered	411,739	4		(7,430)		(1,302)		—		—		(8,728)
Net income	—	—		—		35,503		—		101		35,604
Cash dividends declared on common stock, $0.05 per share	—	—		—		(3,605)		—		—		(3,605)
Other comprehensive income (loss)	—	—		—		—		1,576		(381)		1,195
Balance at March 31, 2021	72,166,443	$	721	$	—	$	397,556	$	(46,678)	$	4,408	$	356,007
Share-based compensation recognized	—	—		3,855		—		—		—		3,855
Repurchase of common stock	(231,314)	(2)		(3,790)		(6,328)		—		—		(10,120)
Restricted stock units delivered	34,727	—		(65)		—		—		—		(65)
Net income (loss)	—	—		—		49,197		—		(106)		49,091
Cash dividends declared on common stock, $0.05 per share	—	—		—		(3,608)		—		—		(3,608)
Other comprehensive income (loss)	—	—		—		—		2,909		(25)		2,884
Balance at June 30, 2021	71,969,856	$	719	$	—	$	436,817	$	(43,769)	$	4,277	$	398,044
Share-based compensation recognized	—	—		3,708		—		—		—		3,708
Net income (loss)	—	—		—		35,314		—		(54)		35,260
Cash dividends declared on common stock, $0.05 per share	—	—		—		(3,598)		—		—		(3,598)
Other comprehensive loss	—	—		—		—		(5,397)		(87)		(5,484)
Balance at September 30, 2021	71,969,856	719		3,708		468,533		(49,166)		4,136		427,930

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4

EVERTEC, Inc. Unaudited Condensed Consolidated Statements of Cash Flows

(In thousands) 

5

	Nine months ended September 30,
	2022		2021
Cash flows from operating activities
Net income	$	210,161	$	119,955
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	58,432		56,091
Amortization of debt issue costs and accretion of discount	1,187		1,423
Operating lease amortization	4,576		4,443
Provision for expected credit losses and sundry losses	3,363		1,428
Deferred tax benefit	(1,699)		(1,119)
Share-based compensation	14,740		10,943
Gain on sale of a business	(135,642)		—
Gain from sale of assets	—		(778)
Loss on disposition of property and equipment and impairment of software	4,691		1,168
Earnings of equity method investment	(2,120)		(1,307)
Dividend received from equity method investment	2,053		1,183
Loss (gain) on valuation of foreign currency	6,858		(652)
(Increase) decrease in assets:
Accounts receivable, net	3,503		(593)
Prepaid expenses and other assets	(3,417)		(3,070)
Other long-term assets	(4,389)		(339)
Increase (decrease) in liabilities:
Accrued liabilities and accounts payable	468		(773)
Income tax payable	2,921		(2,685)
Contract liability	1,344		(2,654)
Operating lease liabilities	(4,450)		(4,107)
Other long-term liabilities	(3,571)		(2,702)
Total adjustments	(51,152)		55,900
Net cash provided by operating activities	159,009		175,855
Cash flows from investing activities
Additions to software	(28,287)		(31,004)
Acquisition of customer relationships	(10,607)		(14,750)
Acquisitions, net of cash acquired	(44,369)		—
Property and equipment acquired	(16,313)		(12,388)
Proceeds from sales of property and equipment	77		805
Purchase of certificates of deposit	(7,264)		—
Proceeds from maturities of available-for-sale debt securities	1,015		—
Acquisition of available-for-sale debt securities	(254)		(2,968)
Net cash used in investing activities	(106,002)		(60,305)
Cash flows from financing activities
Statutory withholding taxes paid on share-based compensation	(5,685)		(8,793)
Repayment of short-term borrowings for purchase of equipment and software	(901)		(1,603)
Dividends paid	(10,515)		(10,811)
Repurchase of common stock	(72,532)		(24,388)
Repayment of long-term debt	(9,875)		(28,482)
Net cash used in financing activities	(99,508)		(74,077)
Effect of foreign exchange rate on cash, cash equivalents and restricted cash	4,260		215
Net (decrease) increase in cash, cash equivalents and restricted cash	(42,241)		41,688
Cash, cash equivalents and restricted cash at beginning of the period	285,917		221,105
Cash, cash equivalents and restricted cash at end of the period	$	243,676	$	262,793
Reconciliation of cash, cash equivalents and restricted cash
Cash and cash equivalents	$	224,971	$	244,129
Restricted cash	18,705		18,664
Cash, cash equivalents and restricted cash	$	243,676	$	262,793
Supplemental disclosure of cash flow information:
Cash paid for interest	$	18,523	$	16,289
Cash paid for income taxes	24,386		19,468

6

Supplemental disclosure of non-cash activities:
Payable due to vendor related to equipment and software acquired	—	739
Non-cash investing activities
Software exchanged for common stock	18,761	—
Goodwill exchanged for common stock	5,813	—
CDs transferred in the acquisition of a business	7,169	—
Non-cash financing and investing activities
Common stock received and retired for sale of a business	169,249	—

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

7

Notes to Unaudited Condensed Consolidated Financial Statements

Note 1 - The Company and Basis of Presentation	8
Note 2 - Recent Accounting Pronouncements	9
Note 3 - Business Acquisitions and Dispositions	9
Note 4 - Debt Securities	12
Note 5 - Property and Equipment, net	12
Note 6 - Goodwill and Other Intangible Assets	12
Note 7 - Debt and Short-Term Borrowings	14
Note 8 - Financial Instruments and Fair Value Measurements	15
Note 9 - Equity	16
Note 10 - Share-based Compensation	16
Note 11 - Revenues	17
Note 12 - Current Expected Credit Losses	19
Note 13 - Income Tax	20
Note 14 - Net Income per Common Share	21
Note 15 - Commitments and Contingencies	21
Note 16 - Related Party Transactions	21
Note 17 - Segment Information	22
Note 18 - Subsequent Events	26

8

Note 1 – The Company and Basis of Presentation

The Company

EVERTEC, Inc. and its subsidiaries (collectively the “Company” or “EVERTEC”) is a leading full-service transaction processing business in Latin America and the Caribbean. The Company is based in Puerto Rico and provides a broad range of merchant acquiring, payment processing and business process management services. The Company provides services across 26 countries in the region. EVERTEC owns and operates the ATH network, one of the leading personal identification number ("PIN") debit and automated teller machine ("ATM") networks in the Caribbean and Latin America. In addition, EVERTEC provides a comprehensive suite of services for core bank processing and cash processing in Puerto Rico and technology outsourcing in the regions the Company serves. EVERTEC serves a broad and diversified customer base of leading financial institutions, merchants, corporations, and government agencies with solutions that are essential to their operations.

Basis of Presentation

The unaudited condensed consolidated financial statements of EVERTEC have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of the accompanying unaudited condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the unaudited condensed consolidated financial statements. Actual results could differ from these estimates.

Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted from these statements pursuant to the rules and regulations of the Securities and Exchange Commission and, accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the Audited Consolidated Financial Statements of the Company for the year ended December 31, 2021, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. In the opinion of management, the accompanying unaudited condensed consolidated financial statements, prepared in accordance with GAAP, contain all adjustments necessary for a fair presentation. Intercompany accounts and transactions are eliminated in consolidation. Certain amounts from prior periods have been reclassified to conform to the current period presentation.

Note 2 – Recent Accounting Pronouncements

Recently adopted accounting pronouncements

In October 2021, the FASB issued ASU 2021-08 to update ASC 805, Business Combinations, to require that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts. The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company selected to early adopt this guidance for its most recent business combination.

Note 3 – Business Acquisitions and Dispositions

Acquisition of a Business

On July 1, 2022, EVERTEC's main operating subsidiary, EVERTEC Group closed on the acquisition of 100% of the share capital of BBR SpA ("BBR"), a payment solutions and business technology company with operations in Chile and Peru, by entering into a share purchase agreement (Contrato de Compraventa de Acciones), between EVERTEC Group and IG Capital, Cuatro R, Rivers and Brela ( collectively, the "Sellers"). As consideration for the purchase, the Company transferred to the sellers upon closing cash that amounted to $45.9 million and certificates of deposits that amounted to $7.3 million. The BBR acquisition increases the Company's payment solution offerings, provides access to larger merchants in Chile and expands the Company's physical presence into Peru.

The Company accounted for this transaction as a business combination. The following table details the preliminary fair value of assets acquired and liabilities assumed from the BBR acquisition:

9

	Assets/Liabilities (at fair value)
( In thousands)
Cash and cash equivalents	$	1,551
Accounts receivable, net	2,969
Property and equipment, net	3
Operating lease right-of-use asset	76
Goodwill	33,247
Other intangible assets, net	24,850
Deferred tax asset	267
Total assets acquired	62,963
Accounts payable	1,039
Contract liability	1,136
Operating lease liability	85
Deferred tax liability	7,614
Total liabilities assumed	$	9,874

10

The following table details the major groups of intangible assets acquired and the weighted average amortization period for these assets:

	Amount		Weighted-average life
(Dollar amounts in thousands)
Customer relationships	$	22,500	15
Trademark	1,250		5
Software packages	1,100		5
Total	$	24,850	14

Refer to Note 6 Goodwill and Other Intangible Assets for detail of goodwill allocated by reportable segments. The goodwill is primarily attributed to synergies. None of the goodwill is deductible for income tax purposes.

Revenues and earnings from the BBR acquisition were not material for either the three or nine months ended September 30, 2022. Pro forma results of operations have not been presented because the effect of this business combination is not material to the consolidated financial condition and results of operations.

Sale of a Business

On July 1, 2022, the Company closed on a definitive agreement with Banco Popular de Puerto Rico and its parent, Popular, to sell software and prepaid assets and transfer certain employees in connection with those assets (the "Business"). As consideration for the sale of the Business, Popular delivered 4.6 million shares of Evertec common stock held by Popular with a value of $169.2 million at close (the "Popular Transaction"). Additionally, management concluded that $15.4 million included in the Company's contract liability should be treated as consideration for the sale therefore, total consideration for the sale of the Business amounted to $184.7 million. The Company also modified and extended the main commercial agreements with Popular, including a 10-year extension of the Merchant Acquiring Independent Sales Organization Agreement, a 5-year extension of the ATH Network Participation Agreement and a 3-year extension of the MSA. The MSA modifications, among other things, includes the elimination of the exclusivity requirement which was the basis for a non-compete intangible asset recorded in 2010 as part of the original MSA that was amortized over a 15 year period. The Company also entered into new contracts and transition services agreements concurrently with the close of the Popular Transaction with terms between 3 months and 36 months.

Given the elimination of the exclusivity clause discussed above, the Company determined that the balance of the non-compete intangible asset on July 1, 2022 of $12.3 million, should be written off as a component of the gain on sale of a business. The Company also concluded that certain provisions in the new contracts and transition services agreements with Popular were not at fair value, therefore requiring that a portion of the gain be allocated to these contracts. The Company recorded a contract liability based on relative fair value of $11.7 million in connection with this conclusion.

The following table details the consideration for the sale of the business, major classes of assets and liabilities included in the business sale and the gain on sale of a business:

	July 1, 2022
(In thousands)
Common stock received in exchange for the sale of a business	$	169,249
Contract liability representing consideration for the sale of a business	15,426
Total consideration for the sale of a business	184,675
Goodwill	(5,813)
Other intangible assets, net	(31,011)
Prepaid expenses and other assets	(497)
Contract liability	(11,712)
Gain on sale of a business	$	135,642

11

Note 4 – Debt Securities

The amortized cost, gross unrealized gains and losses recorded in OCI and estimated fair value of debt securities available-for-sale by contractual maturity as of September 30, 2022 and December 31, 2021 were as follows:

	September 30, 2022
(In thousands)			Gross unrealized
	Amortized cost		Gains	Losses	Fair Value
Costa Rica Government Obligations
After 1 to 5 years	$	2,219	—	(21)	$	2,198

	December 31, 2021
(In thousands)			Gross unrealized
	Amortized cost		Gains		Losses		Fair Value
Costa Rica Government Obligations
After 1 to 5 years	$	2,963	$	78	$	—	$	3,041

Debt securities are held by a trust in the Costa Rica National Bank as a collateral requirement for settlement activities. The Company may substitute securities as needed but must maintain certain levels of collateral based on transaction volumes.

For both the three and nine months period ended September 30, 2022, the Company purchased $0.3 million in debt securities that were classified as available-for-sale. No debt securities were sold during the nine months ended September 30, 2022, while $1.0 million matured during the same period. A provision for credit losses was not required for the periods presented above. Refer to Note 8 for disclosure requirements related to the fair value hierarchy.

Note 5 – Property and Equipment, net

Property and equipment, net consists of the following:

(In thousands)	Useful life in years	September 30, 2022		December 31, 2021
Buildings	30	$	1,387	$	1,359
Data processing equipment	3 - 5	151,545		141,359
Furniture and equipment	3 - 20	8,742		7,718
Leasehold improvements	5 -10	3,572		3,277
		165,246		153,713
Less - accumulated depreciation and amortization		(116,531)		(106,365)
Depreciable assets, net		48,715		47,348
Land		1,213		1,185
Property and equipment, net		$	49,928	$	48,533

Depreciation and amortization expense related to property and equipment for three and nine months ended September 30, 2022 amounted to $4.6 million and $13.9 million, respectively, compared to $4.2 million and $13.0 million for the corresponding periods in 2021.

During the nine months ended September 30, 2021, the Company recorded a loss on the disposition of damaged POS devices amounting to $0.5 million through cost of revenues.

12

Note 6 – Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill, allocated by operating segments, were as follows (see Note 17):

(In thousands)	Payment Services - Puerto Rico & Caribbean		Payment Services - Latin America		Merchant Acquiring, net		Business Solutions		Total
Balance at December 31, 2021	$	160,972	$	48,402	$	138,121	$	45,823	$	393,318
Goodwill attributable to acquisition	—		33,247		—		—		33,247
Goodwill attributable to the sale of a business	—		—		—		(5,813)		(5,813)
Foreign currency translation adjustments	—		(2,933)		—		—		(2,933)
Balance at September 30, 2022	$	160,972	$	78,716	$	138,121	$	40,010	$	417,819

Goodwill is tested for impairment on an annual basis as of August 31, or more often if events or changes in circumstances indicate there may be impairment. The Company may test for goodwill impairment using a qualitative or a quantitative analysis. In a qualitative analysis, the Company assesses whether it is "more likely than not" that the fair value of a reporting unit is less than its carrying amount. In the quantitative analysis, the Company compares the estimated fair value of the reporting units to their carrying values, including goodwill. No impairment losses were recognized for the periods ended September 30, 2022 or 2021.

The carrying amount of other intangible assets at September 30, 2022 and December 31, 2021 was as follows:

		September 30, 2022
(In thousands)	Useful life in years	Gross amount		Accumulated amortization		Net carrying amount
Customer relationships	8 - 15	$	390,221	$	(295,170)	$	95,051
Trademarks	1 - 15	43,025		(37,638)		$	5,387
Software packages	3 - 10	332,767		(236,889)		$	95,878
Other intangible assets, net		$	766,013	$	(569,697)	$	196,316

		December 31, 2021
(Dollar amounts in thousands)	Useful life in years	Gross amount		Accumulated amortization		Net carrying amount
Customer relationships	8 - 14	$	357,991	$	(272,732)	$	85,259
Trademarks	2 - 15	41,901		(36,684)		5,217
Software packages	3 - 10	326,320		(217,643)		108,677
Non-compete agreement	15	56,539		(42,404)		14,135
Other intangible assets, net		$	782,751	$	(569,463)	$	213,288

In the second quarter of 2022, the Company acquired a customer relationship in Puerto Rico for $10.6 million that is being amortized over five years. Revenues and expenses in connection with this customer relationship are included as part of the Payment Services - Puerto Rico & Caribbean segment. As part of the BBR acquisition, the Company added a customer relationship amounting to $22.5 million, a trademark of $1.3 million, and software of $1.1 million, refer to Note 3- Business Acquisitions and Dispositions for further details. On July 1, 2022, in connection with the closing of the Popular Transaction, the remaining balance of the Non-compete agreement of $12.3 million was written off against the transaction gain. The Company no longer has non-compete intangibles on its Balance Sheets as of September 30, 2022. Refer to Note 3- Business Acquisitions and Dispositions for further details.

Amortization expense related to other intangibles for the three and nine months ended September 30, 2022 amounted to $15.2 million and $44.5 million, respectively, compared to $14.5 million and $43.0 million for the corresponding periods in 2021, respectively. During the nine months ended September 30, 2022, the Company recorded an impairment loss through cost of revenues of $4.1 million for a multi-year software development for which a reduction in future cash flows was projected. During the nine months ended September 30, 2021, the Company recorded an impairment charge through cost of revenues

13

amounting to $0.6 million for a software solution that will no longer be used. Both impairment charges affected the Company’s Payment Services – Puerto Rico & Caribbean segment.

The estimated amortization expense of the other intangible balances outstanding at September 30, 2022 for the next five years is as follows:

(Dollar amounts in thousands)
Remaining 2022	$	14,156
2023	53,108
2024	41,611
2025	16,218
2026	11,300

Note 7 – Debt and Short-Term Borrowings

Total debt at September 30, 2022 and December 31, 2021 was as follows:

(In thousands)	September 30, 2022		December 31, 2021
2023 Term A Loan bearing interest at a variable interest rate (LIBOR plus applicable margin(1)(2))	$	162,930	$	170,875
2024 Term B Loan bearing interest at a variable interest rate (LIBOR plus applicable margin(1)(3))	292,574		293,660
Note payable due January 1, 2022(1)	—		758
Total debt	$	455,504	$	465,293

(1)Net of unaccreted discount and unamortized debt issue costs, as applicable.

(2)Applicable margin of 1.75% at September 30, 2022 and December 31, 2021.

(3)Subject to a minimum rate ("LIBOR floor") of 0% plus applicable margin of 3.50% at September 30, 2022 and December 31, 2021.

Secured Credit Facilities

On November 27, 2018, EVERTEC and EVERTEC Group, LLC ("EVERTEC Group") (collectively, the “Borrower”) entered into a credit agreement providing for the secured credit facilities, consisting of a $220.0 million term loan A facility that matures on November 27, 2023 (the “2023 Term A Loan"), a $325.0 million term loan B facility that matures on November 27, 2024 (the “2024 Term B Loan”), and a $125.0 million revolving credit facility (the “Revolving Facility”) that matures on November 27, 2023, with a syndicate of lenders and Bank of America, N.A. (“Bank of America”), as administrative agent, collateral agent, swingline lender and line of credit issuer (collectively the “2018 Credit Agreement”).

The 2018 Credit Agreement requires mandatory repayment of outstanding principal balances based on a percentage of excess cash flow, provided that no such payment shall be due if the leverage ratio is below 1.75x or the resulting amount of the excess cash flow multiplied by the applicable percentage is less than $10 million. On March 8, 2021, in connection with this mandatory repayment clause, the Company repaid $17.8 million, as a result of excess cash flow calculation performed for the year ended December 31, 2020. No mandatory repayment was required in 2022 in connection with the excess cash flow calculation performed for the year ended December 31, 2021 as the leverage ratio was below 1.75x.

The unpaid principal balance at September 30, 2022 of the 2023 Term A Loan and the 2024 Term B Loan was $163.4 million and $294.2 million, respectively. The additional borrowing capacity under our Revolving Facility at September 30, 2022 was $119.1 million. The Company issues letters of credit against the Revolving Facility which reduce the additional borrowing capacity of the Revolving Facility.

Notes Payable

In December 2019, EVERTEC Group entered into two non-interest bearing financing agreements amounting to $2.4 million to purchase software and maintenance, which were fully repaid in January 2022. As of December 31, 2021, the outstanding principal balance of the notes payable was $0.8 million. These notes were included in accounts payable in the Company's unaudited condensed consolidated balance sheets.

14

Interest Rate Swap

As of September 30, 2022, the Company has an interest rate swap agreement, entered into in December 2018, which converts a portion of the interest rate payments on the Company's 2024 Term B Loan from variable to fixed: 

Swap Agreement	Effective date	Maturity Date	Notional Amount	Variable Rate	Fixed Rate
2018 Swap	April 2020	November 2024	$250 million	1-month LIBOR	2.89%

The Company has accounted for this agreement as a cash flow hedge.

As of September 30, 2022 and December 31, 2021, the carrying amount of the derivative included on the Company's unaudited condensed consolidated balance sheets was an asset of $7.1 million and a liability $13.4 million, respectively. The fair value of this derivative is estimated using Level 2 inputs in the fair value hierarchy on a recurring basis. Refer to Note 8 for disclosure of losses recorded on cash flow hedging activities.

During the three and nine months ended September 30, 2022, the Company reclassified losses of $0.4 million and $3.5 million, respectively, from accumulated other comprehensive loss into interest expense compared to $1.8 million and $5.3 million for the corresponding periods in 2021. Based on current LIBOR rates, the Company expects to reclassify gains of $3.4 million from accumulated other comprehensive loss into interest expense over the next 12 months.

The cash flow hedge is considered highly effective.

Note 8 – Financial Instruments and Fair Value Measurements

Recurring Fair Value Measurements

Debt Securities Available for Sale

The fair value of debt securities is estimated based on observable inputs, therefore classified as a Level 2 asset within the fair value hierarchy. The fair value of debt securities was $2.2 million and $3.0 million as of September 30, 2022 and December 31, 2021 respectively.

Derivative Instruments

The fair value of the Company's interest rate swap is estimated using Level 2 inputs under the fair value hierarchy. This derivative was in an asset position with a balance of $7.1 million as of September 30, 2022 and in a liability position with a balance of $13.4 million as of December 31, 2021.

Debt and Short-Term Borrowings

The fair values of the term loans at September 30, 2022 and December 31, 2021 were obtained using prices provided by third party service providers. Their pricing is based on various inputs such as market quotes, recent trading activity in a non-active market or imputed prices. These inputs are considered Level 3 inputs under the fair value hierarchy. Also, the pricing may include the use of an algorithm that could take into account movements in the general high yield market, among other variants. The secured term loans are not accounted for at fair value in the balance sheets.

15

The following table presents the carrying value, as applicable, and estimated fair value for financial instruments at September 30, 2022 and December 31, 2021:

	September 30, 2022		December 31, 2021
(In thousands)	Carrying Amount	Fair Value	Carrying Amount	Fair Value
Financial assets:
Costa Rica government obligations	2,198	2,198	3,041	3,041
Interest rate swap	7,070	7,070	—	—
Financial liabilities:
2023 Term A Loan	162,930	161,730	170,875	168,610
2024 Term B Loan	292,574	291,400	293,660	294,735
Interest rate swap	—	—	13,392	13,392

Note 9 – Equity

Accumulated Other Comprehensive Loss

The following table provides a summary of the changes in the balances of accumulated other comprehensive loss for the nine months ended September 30, 2022: 

(In thousands)	Foreign Currency Translation Adjustments		Cash Flow Hedges		Unrealized Gains (losses) on Debt Securities AFS		Total
Balance - December 31, 2021, net of tax	$	(35,971)	$	(12,261)	109		(48,123)
Other comprehensive (loss) income before reclassifications	(210)		15,320		(77)		15,033
Effective portion reclassified to net income	—		3,504		—		3,504
Balance - September 30, 2022, net of tax	$	(36,181)	$	6,563	$	32	$	(29,586)

Note 10 – Share-based Compensation

Long-term Incentive Plan ("LTIP")

During the three months ended March 31, 2020, 2021 and 2022, the Compensation Committee (the "Compensation Committee") of the Company's Board of Directors ("Board") approved grants of restricted stock units (“RSUs”) to executives and certain employees pursuant to the 2020 LTIP, 2021 LTIP and 2022 LTIP, respectively, all under the terms of the Company's 2013 Equity Incentive Plan.

On May 20, 2022 (the “Effective Date”), the Company's shareholders approved the Company's 2022 Equity Incentive Plan (the "2022 Plan") which replaced the Company's 2013 Equity Incentive Plan. All shares remaining available for grant under the 2013 Plan as of the Effective Date plus any shares of common stock of the Company covered by outstanding awards under the 2013 Plan as of the Effective Date that again become available for grant pursuant to the terms of the 2022 Plan as of the Effective Date, to the extent the shares underlying such awards are not issued because they are forfeited or settled or terminate without distribution of shares of common stock of the Company became available for issuance under the 2022 Plan on the Effective Date pursuant to the terms of the 2022 Plan.

The vesting of the RSUs is dependent upon service and/or performance conditions as defined in the award agreements. Employees that received time-based awards with service conditions are entitled to receive a specific number of shares of the Company’s common stock on the vesting date if the employee provides services to the Company through the vesting date. Time-based awards vest over a period of three years in substantially equal installments commencing on the grant date and ending on February 27 of each year for the 2020 LTIP, March 2 of each year for the 2021 LTIP, and February 25 of each year for the 2022 LTIP. In 2022, the Company also granted time-based awards with a three year service vesting period which will cliff vest on February 25, 2025.

For the performance-based awards under the 2020 LTIP, 2021 LTIP, and 2022 LTIP, the Compensation Committee established adjusted earnings before income taxes, depreciation and amortization ("Adjusted EBITDA") as the primary performance

16

measure while maintaining focus on total shareholder return through the use of a market-based total shareholder return ("TSR") performance modifier. The Adjusted EBITDA measure is based on annual targets and can produce a payout between 0% and 200%. The TSR modifier adjusts the shares earned based on the core Adjusted EBITDA performance upwards or downwards (+/- 25%) based on the Company’s relative TSR at the end of the three-year performance period as compared to the companies in the Russell 2000 Index. The Adjusted EBITDA performance measure will be calculated for the one-year period commencing on January 1 of the year of the grant and ending on December 31 of the same year, relative to the goals set by the Compensation Committee for this same period. The shares earned will be subject to an additional two-year service vesting period and will vest on February 27, 2023 for the 2020 LTIP, March 2, 2024 for the 2021 LTIP, and February 25, 2025 for the 2022 LTIP. Unless otherwise specified in the award agreement, or in an employment agreement, awards are forfeited if the employee voluntarily ceases to be employed by the Company prior to vesting.

The following table summarizes nonvested RSUs activity for the nine months ended September 30, 2022:

Nonvested RSUs	Shares	Weighted-average grant date fair value
Nonvested at December 31, 2021	1,086,329	$	34.73
Granted	709,302	41.90
Vested	(421,764)	33.02
Forfeited	(8,546)	37.10
Nonvested at September 30, 2022	1,365,321	$	38.97

For the three and nine months ended September 30, 2022, the Company recognized $5.3 million and $14.7 million of share-based compensation expense, respectively, compared with $3.7 million and $10.9 million for the corresponding periods in 2021.

As of September 30, 2022, the maximum unrecognized expense for RSUs was $32.0 million. The cost is expected to be recognized over a weighted average period of 2.0 years.

Note 11 – Revenues

Disaggregation of Revenue

The Company disaggregates revenue from contracts with customers into primary geographical markets, nature of the products and services, and timing of transfer of goods and services. The Company's operating segments are determined by the nature of the products and services the Company provides and the primary geographical markets in which the Company operates. Revenue disaggregated by segment is discussed in Note 17, Segment Information.

In the following tables, revenue for each segment, excluding intersegment revenues, is disaggregated by timing of revenue recognition for the periods indicated.

	Three months ended September 30, 2022
(In thousands)	Payment Services - Puerto Rico & Caribbean		Payment Services - Latin America		Merchant Acquiring, net		Business Solutions		Total
Timing of revenue recognition
Products and services transferred at a point in time	$	89	$	973	$	—	$	3,790	$	4,852
Products and services transferred over time	29,456		29,068		36,911		45,516		140,951
	$	29,545	$	30,041	$	36,911	$	49,306	$	145,803

17

	Three months ended September 30, 2021
(In thousands)	Payment Services - Puerto Rico & Caribbean		Payment Services - Latin America		Merchant Acquiring, net		Business Solutions		Total
Timing of revenue recognition
Products and services transferred at a point in time	$	30	$	449	$	—	$	446	$	925
Products and services transferred over time	25,712		23,807		37,606		57,833		144,958
	$	25,742	$	24,256	$	37,606	$	58,279	$	145,883

	Nine months ended September 30, 2022
(In thousands)	Payment Services - Puerto Rico & Caribbean		Payment Services - Latin America		Merchant Acquiring, net		Business Solutions		Total
Timing of revenue recognition
Products and services transferred at a point in time	$	244	$	1,405	$	—	$	7,956	$	9,605
Products and services transferred over time	86,045		81,229		111,079		168,664		447,017
	$	86,289	$	82,634	$	111,079	$	176,620	$	456,622

	Nine months ended September 30, 2021
(In thousands)	Payment Services - Puerto Rico & Caribbean		Payment Services - Latin America		Merchant Acquiring, net		Business Solutions		Total
Timing of revenue recognition
Products and services transferred at a point in time	$	119	$	1,633	$	—	$	4,048	$	5,800
Products and services transferred over time	76,642		69,919		106,808		175,390		428,759
	$	76,761	$	71,552	$	106,808	$	179,438	$	434,559

Contract Balances

The following table provides information about contract assets from contracts with customers.

(In thousands)	September 30, 2022		December 31, 2021
Balance at beginning of period	$	1,715	$	2,796
Services transferred to customers	7,246		5,374
Transfers to accounts receivable	(3,861)		(6,455)
Balance at end of period	$	5,100	$	1,715

The current portion of contract assets is recorded as part of prepaid expenses and other assets, and the long-term portion is included in other long-term assets in the unaudited condensed consolidated balance sheets.

Accounts receivable, net as of September 30, 2022 amounted to $112.3 million. Contract liability and contract liability - long term at September 30, 2022 amounted to $17.1 million and $34.7 million, respectively, and may arise when consideration is received or due in advance from customers prior to performance. The contract liability is mainly comprised of upfront fees for implementation or set up activities, including fees charged in pre-production periods in connection with hosting services, as

18

well as amounts related to contracts entered into concurrently with the close of the Popular Transaction as described in Note 3- Business Acquisitions and Dispositions. Contract liabilities may also arise when consideration is received or due in advance from customers prior to performance. During the three and nine months ended September 30, 2022, the Company recognized revenue of $17.0 million and $29.0 million respectively that was included in the contract liability at December 31, 2021. During the three and nine months ended September 30, 2021, the Company recognized revenue of $5.3 million and $20.7 million that was included in the contract liability at December 31, 2020.

Transaction price allocated to the remaining performance obligations

The estimated aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially satisfied at September 30, 2022 is $1,061.8 million, which is expected to be recognized over the next 1 to 6 years. This amount consists of minimums on certain master services agreements, professional service fees for implementation or set up activities related to managed services and maintenance services typically recognized over the life of the contract, and professional service fees for customizations or development of on-premise licensing agreements, which are recognized over time based on inputs relative to the total expected inputs to satisfy a performance obligation.

Note 12 – Current Expected Credit Losses

Allowance for Current Expected Credit Losses

Trade receivables from contracts with customers are financial assets analyzed by the Company under the expected credit loss model. To measure expected credit losses, trade receivables are grouped based on shared risk characteristics (i.e., the relevant industry sector and customer's geographical location) and days past due (i.e., delinquency status), while considering the following:

•Customers in the same geographical location share similar risk characteristics associated with the macroeconomic environment of their country.

•The Company has two main industry sectors: private and governmental. The private pool is comprised mainly of leading financial institutions, merchants and corporations, while the governmental pool is comprised of government agencies. The governmental customers possess different risk characteristics than private customers because although all invoices are due 30 days after issuance, governmental customers usually pay within 60 to 90 days after issuance (i.e., approximately 30 to 60 more days than private customers).

•The expected credit loss rate is likely to increase as receivables move to older aging buckets. The Company used the following aging categories to estimate the risk of delinquency status: (i) 0 days past due; (ii) 1-30 days past due; (iii) 31-60 days past due; (iv) 61-90 days past due; and (v) over 90 days past due.

The credit losses of the Company’s trade receivables have been low historically and most balances are collected within one year. Therefore, the Company determined that the expected loss rates should be calculated using the historical loss rates adjusted by macroeconomic factors. The historical rates are calculated for each of the aging categories used for pooling trade receivables. To determine the collected portion of each bucket, the collection time of each trade receivable is identified, to estimate the proportion of outstanding balances per aging bucket that ultimately will not be collected. This is used to determine the expectation of losses based on the history of uncollected trade receivables once the specific past due period is surpassed. The historical rates are adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of customers to settle the receivables by applying a country risk premium as the forward-looking macroeconomic factor. Specific reserves are established for certain customers for which collection is doubtful.

Rollforward of the Allowance for Expected Current Credit Losses

The following table provides information about the allowance for expected current credit losses on trade receivables.

(In thousands)	September 30, 2022		December 31, 2021
Balance at beginning of period	$	2,523	$	2,401
Current period provision for expected credit losses	649		819
Write-offs	(135)		(698)
Recoveries of amounts previously written-off	150		1
Balance at end of period	$	3,187	$	2,523

19

The Company does not have a delinquency threshold for writing-off trade receivables. The Company has a formal process for the review and approval of write-offs.

Impairment losses on trade receivables are presented as net impairment losses within cost of revenue, exclusive of depreciation and amortization in the unaudited condensed consolidated statements of income and comprehensive income. Subsequent recoveries of amounts previously written-off, when applicable are credited against the allowance for expected current credit losses within accounts receivable, net on the unaudited condensed consolidated balance sheets.

Note 13 – Income Tax

The components of income tax expense for the three and nine months ended September 30, 2022 and 2021, respectively, consisted of the following:

	Three months ended September,				Nine months ended September 30,
(In thousands)	2022		2021		2022		2021
Current tax provision	$	9,537	$	7,306	$	24,610	$	15,593
Deferred tax benefit	(489)		(172)		(1,699)		(1,119)
Income tax expense	$	9,048	$	7,134	$	22,911	$	14,474

The Company conducts operations in Puerto Rico, the United States, and certain countries in Latin America. As a result, the income tax expense includes the effect of taxes paid to the government of Puerto Rico as well as foreign jurisdictions. The following table presents the components of income tax expense for the three and nine months ended September 30, 2022 and 2021, and its segregation based on location of operations:

	Three months ended September 30,				Nine months ended September 30,
(In thousands)	2022		2021		2022		2021
Current tax provision (benefit)
Puerto Rico	$	6,318	$	2,328	$	11,809	$	3,363
United States	44		57		107		132
Foreign countries	3,175		4,921		12,694		12,098
Total current tax provision	$	9,537	$	7,306	$	24,610	$	15,593
Deferred tax (benefit) provision
Puerto Rico	$	719	$	(258)	$	(321)	$	(778)
United States	54		116		9		(71)
Foreign countries	(1,262)		(30)		(1,387)		(270)
Total deferred tax benefit	$	(489)	$	(172)	$	(1,699)	$	(1,119)

Taxes payable to foreign countries by EVERTEC’s subsidiaries will be paid by such subsidiary and the corresponding liability and expense will be presented in EVERTEC’s consolidated financial statements.

As of September 30, 2022, the Company has $113.3 million of unremitted earnings from foreign subsidiaries, compared to $99.1 million as of December 31, 2021. The Company has not recognized a deferred tax liability on undistributed earnings for the Company’s foreign subsidiaries because these earnings are intended to be indefinitely reinvested.

As of September 30, 2022, the gross deferred tax asset amounted to $18.6 million and the gross deferred tax liability amounted to $19.4 million, compared to $22.3 million and $16.3 million, respectively, as of December 31, 2021. As of September 30, 2022, and December 31, 2021, there is a valuation allowance against the gross deferred tax asset of approximately $1.8 million and $1.4 million, respectively.

During the quarter ended September 30, 2022, the Company released $3.6 million of the previously recorded Puerto Rico liability for uncertain tax positions related to the net operating loss created by transaction costs from mergers and acquisitions as a result of the expiration of the statute of limitations.

Income tax expense differs from the amount computed by applying the Puerto Rico statutory income tax rate to the income before income taxes as a result of the following:

20

	Nine months ended September 30,
(In thousands)	2022		2021
Computed income tax at statutory rates	$	87,402	$	50,411
Differences in tax rates due to multiple jurisdictions	2,612		1,789
Effect of income subject to tax-exemption grant	(26,262)		(35,121)
Effect of the gain on sale of a business	(39,645)		—
Unrecognized tax (benefit) expense	(3,472)		(3,475)
Excess tax benefits on share-based compensation	169		(1,027)
Other, net	2,107		1,897
Income tax expense	$	22,911	$	14,474

Note 14 – Net Income Per Common Share

The reconciliation of the numerator and denominator of the income per common share is as follows:

	Three months ended September 30,				Nine months ended September 30,
(In thousands, except per share information)	2022		2021		2022		2021
Net income available to EVERTEC, Inc.’s common shareholders	$	137,814	$	35,314	$	210,301	$	120,014
Weighted average common shares outstanding	66,398,547		71,969,856		69,906,483		72,082,082
Weighted average potential dilutive common shares (1)	647,262		906,397		682,432		735,625
Weighted average common shares outstanding - assuming dilution	67,045,809		72,876,253		70,588,915		72,817,707
Net income per common share - basic	$	2.08	$	0.49	$	3.01	$	1.66
Net income per common share - diluted	$	2.06	$	0.48	$	2.98	$	1.65

(1)Potential common shares consist of common stock issuable under RSUs awards using the treasury stock method.

On February 15, 2022, April 21, 2022 and July 28, 2022, respectively the Company's Board declared quarterly cash dividends of $0.05 per share of common stock, which was paid on March 25, 2022, June 3, 2022 and September 2, 2022, respectively to stockholders' of record on February 25, 2022, May 2, 2022 and August 8, 2022, respectively.

Note 15 – Commitments and Contingencies

EVERTEC is a defendant in a number of legal proceedings arising in the ordinary course of business. Based on the opinion of legal counsel and other factors, management believes that the final disposition of these matters will not have a material adverse effect on the business, results of operations, financial condition, or cash flows of the Company. The Company has identified certain claims as a result of which a loss may be incurred, but in the aggregate the loss would be insignificant. For other claims regarding proceedings that are in an initial phase, the Company is unable to estimate the range of possible loss, if any, but at this time believes that any loss related to such claims will not be material.

Note 16 – Related Party Transactions

In connection with closing of the Popular Transaction on July 1, 2022, the Company terminated the existing stockholder agreement with Popular, which granted Popular certain benefits as a shareholder of the Company. In addition, on August 15, 2022, through a secondary offering, Popular sold its remaining shares of common stock of Evertec and as of that date no longer holds any shares of Evertec common stock. Evertec is no longer considered a subsidiary of Popular under the Bank Holding Company Act of 1956, as amended (the "Bank Holding Company Act"). Given both the termination of the stockholder agreement and that Popular is no longer a shareholder of EVERTEC, management concluded that Popular is no longer a related party as of August 15, 2022.

The following table presents the Company’s transactions with Popular while they were deemed a related party during 2022 and for the three and nine months ended September 30, 2021:

21

	Three months ended September 30,				Nine months ended September 30,
(In thousands)	2022 (1)		2021		2022 (1)		2021
Total revenues	$	22,782	$	60,091	$	153,335	$	182,344
Cost of revenues	$	653	$	624	$	2,386	$	2,242
Operating lease cost and other fees	$	807	$	1,958	$	4,433	$	5,482
Interest earned from affiliate
Interest income	$	231	$	184	$	1,011	$	422

(1)Amounts presented through August 15, 2022.

The Company continues to have revenue concentration with Popular, revenues as a percentage of total revenues were 35% and 40% for the three and nine months ended September 30, 2022, respectively and 41% and 42%, for the comparable periods in 2021, respectively. Accounts receivable from Popular as of September 30, 2022 amounted to $36.4 million.

As of the December 31, 2021, EVERTEC had the following balances arising from transactions with related parties:

(In thousands)	December 31, 2021
Cash and restricted cash deposits in affiliated bank	$	187,602
Other due to/from affiliate
Accounts receivable	$	38,120
Prepaid expenses and other assets	$	1,763
Operating lease right-of-use assets	$	13,533
Other long-term assets	$	2,853
Accounts payable	$	5,601
Contract liabilities	$	40,982
Operating lease liabilities	$	14,019

Note 17 – Segment Information

The Company operates in four business segments: Payment Services - Puerto Rico & Caribbean, Payment Services - Latin America, Merchant Acquiring, and Business Solutions.

The Payment Services - Puerto Rico & Caribbean segment revenues are comprised of revenues related to providing access to the ATH debit network and other card networks to financial institutions, including related services such as authorization, processing, management and recording of ATM and point of sale ("POS") transactions, and ATM management and monitoring. The segment revenues also include revenues from card processing services (such as credit and debit card processing, authorization and settlement and fraud monitoring and control to debit or credit issuers), payment processing services (such as payment and billing products for merchants, businesses and financial institutions and digital payment services to the government of Puerto Rico), ATH Movil (person-to-person) and ATH Business (person-to-merchant) digital transactions and EBT (which principally consist of services to the government of Puerto Rico for the delivery of benefits to participants). For ATH debit network and processing services, revenues are primarily driven by the number of transactions processed. Revenues are derived primarily from network fees, transaction switching and processing fees, and the leasing of POS devices. For card issuer processing, revenues are primarily dependent upon the number of cardholder accounts on file, transactions and authorizations processed, the number of cards embossed and other processing services. For EBT services, revenues are primarily derived from the number of beneficiaries on file.

22

The Payment Services - Latin America segment revenues consist of revenues related to providing access to the ATH network of ATMs and other card networks to financial institutions, including related services such as authorization, processing, management and recording of ATM and POS transactions, and ATM management and monitoring. The segment revenues also include revenues from card processing services (such as credit and debit card processing, authorization and settlement and fraud monitoring and control to debit or credit issuers), payment processing services (such as payment and billing products for merchants, businesses and financial institutions), as well as licensed software solutions for risk and fraud management and card payment processing. For network and processing services, revenues are primarily driven by the number of transactions processed. Revenues are derived primarily from transaction switching and processing fees, and the leasing of POS devices and network fees. For card issuer processing, revenues are primarily dependent upon the number of cardholder accounts on file, transactions and authorizations processed, the number of cards embossed, and other processing services.

The Merchant Acquiring segment consists of revenues from services that allow merchants to accept electronic methods of payment. In the Merchant Acquiring segment, revenues include a discount fee and membership fees charged to merchants, debit network fees and rental fees from POS devices and other equipment, net of credit card interchange and assessment fees charged by credit cards associations (such as VISA or MasterCard) or payment networks. The discount fee is generally a percentage of the transaction value. EVERTEC also charges merchants for other services that are unrelated to the number of transactions or the transaction value.

The Business Solutions segment consists of revenues from a full suite of business process management solutions in various product areas such as core bank processing, network hosting and management, IT professional services, business process outsourcing, item processing, cash processing, and fulfillment. Core bank processing and network services revenues are derived in part from a recurrent fixed fee and from fees based on the number of accounts on file (i.e. savings or checking accounts, loans, etc.), server capacity usage or computer resources utilized. Revenues from other processing services within the Business Solutions segment are generally volume-based and depend on factors such as the number of accounts processed. In addition, EVERTEC is a reseller of hardware and software products and these resale transactions are generally non-recurring.

In addition to the four operating segments described above, management identified certain functional cost areas that operate independently and do not constitute businesses in themselves. These areas could neither be concluded as operating segments nor could they be combined with any other operating segments. Therefore, these areas are aggregated and presented within the “Corporate and Other” category in the financial statements alongside the operating segments. The Corporate and Other category consists of corporate overhead expenses, intersegment eliminations, certain leveraged activities and other non-operating and miscellaneous expenses that are not included in the operating segments. The overhead and leveraged costs relate to activities such as:

•marketing,

•corporate finance and accounting,

•human resources,

•legal,

•risk management functions,

•internal audit,

•corporate debt related costs,

•non-operating depreciation and amortization expenses generated as a result of merger and acquisition activity,

•intersegment revenues and expenses, and

•other non-recurring fees and expenses that are not considered when management evaluates financial performance at a segment level

The Chief Operating Decision Maker ("CODM") reviews the operating segments separate financial information to assess performance and to allocate resources. Management evaluates the operating results of each of its operating segments based upon revenues and Adjusted EBITDA. Adjusted EBITDA is defined as EBITDA further adjusted to exclude unusual items and other adjustments. Adjusted EBITDA, as it relates to operating segments, is presented in conformity with ASC Topic 280, Segment Reporting, given that it is reported to the CODM for purposes of allocating resources. Segment asset disclosure is not used by the CODM as a measure of segment performance since the segment evaluation is driven by revenues and Adjusted EBITDA. As such, segment assets are not disclosed in the notes to the accompanying unaudited condensed consolidated financial statements.

23

The following tables set forth information about the Company’s operations by its four business segments for the periods indicated:

	Three months ended September 30, 2022
(In thousands)	Payment Services - Puerto Rico & Caribbean		Payment Services - Latin America		Merchant Acquiring, net		Business Solutions		Corporate and Other (1)		Total
Revenues	$	44,592	$	33,741	$	36,911	$	49,306	$	(18,747)	$	145,803
Operating costs and expenses	$	26,960	$	28,513	$	25,261	$	38,522	$	2,729	$	121,985
Depreciation and amortization	$	5,116	$	4,104	$	1,045	$	3,745	$	5,702	$	19,712
Non-operating income (expenses)	$	385	$	(7,094)	$	348	$	136,218	$	(932)	$	128,925
EBITDA	23,133		2,238		13,043		150,747		(16,706)		172,455
Compensation and benefits (2)	1,557		972		498		503		2,141		$	5,671
Transaction, refinancing and other fees (3)	330		—		325		(134,974)		8,567		$	(125,752)
Adjusted EBITDA	$	25,020	$	3,210	$	13,866	$	16,276	$	(5,998)	$	52,374

(1)Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations.  Intersegment revenue eliminations predominantly reflect the $12.3 million processing fee from Payments Services - Puerto Rico & Caribbean to Merchant Acquiring, intercompany software developments and transaction processing of $3.7 million from Payment Services- Latin America to both Payment Services- Puerto Rico & Caribbean and Business Solutions, and transaction processing and monitoring fees of $2.8 million from Payment Services - Puerto Rico & Caribbean to Payment Services - Latin America.

(2)Primarily represents share-based compensation and severance payments.

(3)Primarily represents fees and expenses associated with corporate transactions as defined in the 2018 Credit Agreement, the gain from the Popular transaction and the elimination of non-cash equity earnings from our 19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A., net of dividends received.

	Three months ended September 30, 2021
(In thousands)	Payment Services - Puerto Rico & Caribbean		Payment Services - Latin America		Merchant Acquiring, net		Business Solutions		Corporate and Other (1)		Total
Revenues	$	38,773	$	26,792	$	37,606	$	58,134	$	(15,422)	$	145,883
Operating costs and expenses	21,420		22,209		19,922		37,412		(2,097)		98,866
Depreciation and amortization	3,989		2,809		1,010		4,691		6,246		18,745
Non-operating income (expenses)	203		1,844		281		551		(2,322)		557
EBITDA	21,545		9,236		18,975		25,964		(9,401)		66,319
Compensation and benefits (2)	260		755		255		70		2,153		3,493
Transaction, refinancing and other fees (3)	—		—		—		—		(42)		(42)
Adjusted EBITDA	$	21,805	$	9,991	$	19,230	$	26,034	$	(7,290)	$	69,770

(1)Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations.  Intersegment revenue eliminations predominantly reflect the $10.8 million processing fee from Payments Services - Puerto Rico & Caribbean to Merchant Acquiring and intercompany software developments and transaction processing of $2.4 million from Payment Services- Latin America to both Payment Services- Puerto Rico & Caribbean and Business Solutions, and transaction processing and monitoring fees of $2.2 million from Payment Services - Puerto Rico & Caribbean to Payment Services - Latin America.

(2)Primarily represents share-based compensation.

(3)Primarily represents fees and expenses associated with corporate transactions as defined in the 2018 Credit Agreement and the elimination of non-cash equity earnings from our 19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A, net dividends received.

24

	Nine months ended September 30, 2022
(In thousands)	Payment Services - Puerto Rico & Caribbean		Payment Services - Latin America		Merchant Acquiring, net		Business Solutions		Corporate and Other (1)		Total
Revenues	$	130,678	$	93,308	$	111,079	$	176,620	$	(55,063)	$	456,622
Operating costs and expenses	76,920		77,132		68,288		117,747		25		340,112
Depreciation and amortization	15,062		9,628		3,104		12,787		17,851		58,432
Non-operating income (expenses)	928		(3,365)		980		137,542		(3,560)		132,525
EBITDA	69,748		22,439		46,875		209,202		(40,797)		307,467
Compensation and benefits (2)	2,569		2,758		1,284		1,503		7,241		15,355
Transaction, refinancing and other fees (3)	330		—		325		(134,990)		12,647		(121,688)
Adjusted EBITDA	$	72,647	$	25,197	$	48,484	$	75,715	$	(20,909)	$	201,134

(1)Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations.  Intersegment revenue eliminations predominantly reflect the $36.5 million processing fee from Payments Services - Puerto Rico & Caribbean to Merchant Acquiring and intercompany software developments and transaction processing of $10.7 million from Payment Services - Latin America to both Payment Services - Puerto Rico & Caribbean and Business Solutions, and transaction processing and monitoring fees of $7.9 million from Payment Services - Puerto Rico & Caribbean to Payment Services - Latin America.

(2)Primarily represents share-based compensation and severance payments.

(3)Primarily represents fees and expenses associated with corporate transactions as defined in the 2018 Credit Agreement, the gain from the Popular transaction and the elimination of non-cash equity earnings from our 19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A., net of dividends received.

	Nine months ended September 30, 2021
(In thousands)	Payment Services - Puerto Rico & Caribbean		Payment Services - Latin America		Merchant Acquiring, net		Business Solutions		Corporate and Other (1)		Total
Revenues	$	113,626	$	77,641	$	106,808	$	179,438	$	(42,954)	$	434,559
Operating costs and expenses	61,270		63,020		55,762		110,276		(2,077)		$	288,251
Depreciation and amortization	11,813		8,695		2,631		14,085		18,867		$	56,091
Non-operating income (expenses)	618		5,348		835		2,494		(5,269)		$	4,026
EBITDA	64,787		28,664		54,512		85,741		(27,279)		206,425
Compensation and benefits (2)	781		2,321		781		1,193		6,204		$	11,280
Transaction, refinancing and other fees (3)	660		—		—		(647)		1,202		$	1,215
Adjusted EBITDA	$	66,228	$	30,985	$	55,293	$	86,287	$	(19,873)	$	218,920

(1)Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations.  Intersegment revenue eliminations predominantly reflect the $31.2 million processing fee from Payments Services - Puerto Rico & Caribbean to Merchant Acquiring and intercompany software developments and transaction processing of $6.6 million from Payment Services - Latin America to both Payment Services - Puerto Rico & Caribbean and Business Solutions, and transaction processing and monitoring fees of $5.1 million from Payment Services - Puerto Rico & Caribbean to Payment Services - Latin America.

(2)Primarily represents share-based compensation and severance payments.

(3)Primarily represents fees and expenses associated with corporate transactions as defined in the 2018 Credit Agreement and the elimination of non-cash equity earnings from our 19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A. net dividends received, a software impairment charge and a gain from the sale of the asset.

25

The reconciliation of EBITDA to consolidated net income is as follows:

	Three months ended September 30,				Nine months ended September 30,
(In thousands)	2022		2021		2022		2021
Total EBITDA	$	172,455	$	66,319	$	307,467	$	206,425
Less:
Income tax expense	9,048		7,134		22,911		14,474
Interest expense, net	5,956		5,180		15,963		15,905
Depreciation and amortization	19,712		18,745		58,432		56,091
Net income	$	137,739	$	35,260	$	210,161	$	119,955

Note 18 – Subsequent Events

On October 20, 2022, the Board declared a regular quarterly cash dividend of $0.05 per share on the Company’s outstanding shares of common stock. The dividend will be paid on December 2, 2022 to stockholders of record as of the close of business on November 1, 2022. The Board anticipates declaring this dividend in future quarters on a regular basis; however, future declarations of dividends are subject to the Board’s approval and may be adjusted as business needs or market conditions change.

26

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) covers: (i) the results of operations for the three and nine months ended months ended September 30, 2022 and 2021 and (ii) the financial condition as of September 30, 2022. You should read the following discussion and analysis in conjunction with the audited consolidated financial statements (the “Audited Consolidated Financial Statements”) and related notes for the fiscal year ended December 31, 2021, included in the Company’s Annual Report on Form 10-K ("2021 Form 10-K") as filed with the SEC on February 25, 2022 and with the unaudited condensed consolidated financial statements (the “Unaudited Condensed Consolidated Financial Statements”) and related notes appearing elsewhere herein. This MD&A contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ from those indicated in the forward-looking statements as a result of various factors, including those set forth in the section titled "Risk Factors" in our 2021 Form 10-K, as may be updated from time to time in our other filings with the SEC. See “Forward-Looking Statements” for a discussion of the risks, uncertainties and assumptions associated with these statements.

Except as otherwise indicated or unless the context otherwise requires, (a) the terms “EVERTEC,” “we,” “us,” “our,” “our Company” and “the Company” refer to EVERTEC, Inc. and its subsidiaries on a consolidated basis, (b) the term “Holdings” refers to EVERTEC Intermediate Holdings, LLC, but not any of its subsidiaries and (c) the term “EVERTEC Group” refers to EVERTEC Group, LLC and its predecessor entities and their subsidiaries on a consolidated basis. EVERTEC Inc.’s subsidiaries include Holdings, EVERTEC Group, EVERTEC Dominicana, SAS, Evertec Chile Holdings SpA (formerly known as Tecnopago SpA), Evertec Chile SpA (formerly known as EFT Group SpA), Evertec Chile Global SpA (formerly known as EFT Global Services SpA), Evertec Chile Servicios Profesionales SpA (formerly known as EFT Servicios Profesionales SpA), EFT Group S.A., Tecnopago España SL, Paytrue S.A., Caleidon, S.A., Evertec Brasil Informática Ltda. (formerly known as Paytrue Solutions Informática Ltda.), EVERTEC Panamá, S.A., EVERTEC Costa Rica, S.A. (“EVERTEC CR”), EVERTEC Guatemala, S.A., Evertec Colombia, SAS (formerly known as Processa, SAS), EVERTEC USA, LLC, Evertec Placetopay, SAS (formerly known as EGM Ingeniería sin Fronteras, S.A.S. ("PlacetoPay")), BBR, SpA, BBR Perú, S.A.C. and EVERTEC México Servicios de Procesamiento, S.A. de C.V. Neither EVERTEC nor Holdings conducts any operations other than with respect to its indirect or direct ownership of EVERTEC Group.

Executive Summary

EVERTEC is a leading full-service transaction-processing business in Puerto Rico, the Caribbean and Latin America, providing a broad range of merchant acquiring, payment services and business process management services. We believe that we are one of the largest merchant acquirers in Latin America based on total number of transactions and the largest merchant acquirer in the Caribbean. We serve 26 countries out of 12 offices, including our headquarters in Puerto Rico. We own and operate the ATH network, one of the leading personal identification number ("PIN") debit and automated teller machine ("ATM") networks in the Caribbean and Latin America. We manage a system of electronic payment networks and offer a comprehensive suite of services for core banking, cash processing, and fulfillment in Puerto Rico, that process over three billion transactions annually. Additionally, we offer technology outsourcing in all the regions we serve. We serve a diversified customer base of leading financial institutions, merchants, corporations, and government agencies with “mission-critical” technology solutions that enable them to issue, process and accept transactions securely. We believe our business is well-positioned to continue to expand across the fast-growing Latin American region.

We are differentiated, in part, by our diversified business model, which enables us to provide our varied customer base with a broad range of transaction-processing services from a single source across numerous channels and geographic markets. We believe this capability provides several competitive advantages that will enable us to continue to penetrate our existing customer base with complementary new services, win new customers, develop new sales channels, and enter new markets. We believe these competitive advantages include:

•Our ability to provide competitive products;

•Our ability to provide in one package a range of services that traditionally had to be sourced from different vendors;

•Our ability to leverage proprietary IP that enables us to be nimble and flexible when it comes to client and country requirements;

•Our ability to put forth Spanish speaking developers in front of our Spanish speaking customers making communication much more effective and integrations more efficient;

•Our ability to serve customers with disparate operations across several geographies with technology solutions that enable them to manage their business as one enterprise; and

•Our ability to capture and analyze data across the transaction-processing value chain and use that data to provide value-added services that are differentiated from those offered by pure-play vendors that serve only one portion of the transaction-processing value chain (such as only merchant acquiring or payment services).

27

Our broad suite of services spans the entire transaction-processing value chain and includes a range of front-end customer-facing solutions such as the electronic capture and authorization of transactions at the point-of-sale, as well as back-end support services such as the clearing and settlement of transactions and account reconciliation for card issuers. These include: (i) merchant acquiring services, which enable point of sales (“POS”) and e-commerce merchants to accept and process electronic methods of payment such as debit, credit, prepaid and electronic benefit transfer (“EBT”) cards; (ii) payment processing services, which enable financial institutions and other issuers to manage, support and facilitate the processing for credit, debit, prepaid, automated teller machines (“ATM”) and EBT card programs; and (iii) business process management solutions, which provide “mission-critical” technology solutions such as core bank processing, as well as IT outsourcing and cash management services to financial institutions, corporations and governments. We provide these services through scalable, end-to-end technology platforms that we manage and operate in-house and that generate significant operating efficiencies that enable us to maximize profitability.

We sell and distribute our services primarily through a proprietary direct sales force with established customer relationships. We continue to pursue both organic and inorganic opportunities such as acquisitions, joint ventures and alliances. We benefit from an attractive business model, the hallmarks of which are recurring revenue, scalability, significant operating margins, and moderate capital expenditure requirements. Our revenue is predominantly recurring in nature because of the mission-critical and embedded nature of the services we provide. In addition, we generally negotiate multi-year contracts with our customers. We believe our business model should enable us to continue to grow our business organically in the primary markets we serve without significant incremental capital expenditures.

Relationship with Popular

On September 30, 2010, EVERTEC Group entered into a 15-year MSA, and several related agreements with Popular. Under the terms of the MSA, Popular agreed to use Evertec services on an ongoing exclusive basis for the duration of the agreement. On July 1, 2022, we modified and extended the main commercial agreements with Popular, which had initial terms ending in 2025, including a 10-year extension of the Merchant Acquiring Independent Sales Organization Agreement (as amended, the “A&R ISO Agreement”), a 5-year extension of the ATH Network Participation Agreement and a 3-year extension of the MSA (the "A&R MSA Agreement"). The A&R ISO Agreement, which sets our merchant acquiring relationship with Popular, now includes revenue sharing provisions with Popular. The MSA modifications include the elimination of the exclusivity requirement, the inclusion of annual MSA minimums through September 30, 2028, a 10% fee discount on certain MSA services beginning in October of 2025 and adjustments to the existing CPI pricing escalator clause. On the same date, we also sold to Popular certain assets in exchange for 4.6 million shares of Evertec common stock owned by Popular. As part of this transaction, Popular agreed to take certain actions after closing to ensure that Evertec was no longer deemed a “subsidiary” of Popular for purposes of the Bank Holding Company Act by 90 days following the closing, including selling its shares of Evertec common stock in the open market and, if necessary, converting certain Evertec common stock into non-voting stock to reduce its voting interest to 4.5%. On August 15, 2022, through a secondary offering, Popular sold its remaining shares of Evertec common stock and as of this date no longer holds any shares of Evertec common stock. Evertec is no longer considered a subsidiary of Popular under the Bank Holding Company Act.

Results of Operations

Comparison of the three months ended September 30, 2022 and 2021

	Three months ended September 30,
In thousands	2022		2021		Variance
Revenues	$	145,803	$	145,883	$	(80)	—	%
Operating costs and expenses
Cost of revenues, exclusive of depreciation and amortization	76,272		62,995		13,277		21	%
Selling, general and administrative expenses	26,001		17,126		8,875		52	%
Depreciation and amortization	19,712		18,745		967		5	%
Total operating costs and expenses	121,985		98,866		23,119		23	%
Income from operations	$	23,818	$	47,017	$	(23,199)	(49)	%

28

Revenues

Total revenues for the quarter ended September 30, 2022 were $145.8 million, relatively flat when compared with the prior year quarter. Revenue in Puerto Rico was negatively impacted by the close of the Popular Transaction, including the $6.9 million one-time credit granted upon closing. Revenues in the quarter were also negatively impacted by Hurricane Fiona, primarily the Company's Merchant Acquiring segment. These negative impacts were partially offset by the continued growth of the Company's digital solutions, specifically, ATH Movil Business, increased transaction volumes and one-time hardware and software sales. Additionally, the quarter benefited from revenue generated from the small acquisition completed in the second quarter. Latin America revenue reflected organic growth and revenue contribution from the BBR acquisition completed at the beginning of the quarter.

Cost of Revenues

Cost of revenues for the three months ended September 30, 2022 amounted to $76.3 million, an increase of $13.3 million or 21% when compared to the same period in the prior year. The increase in cost of revenues was primarily driven by an increase in cost of sales mainly due to the new revenue sharing agreement with Popular resulting from the Popular Transaction and costs incurred for hardware sales, an increase in personnel costs, mainly due to increased headcount in Latin America including the added headcount from the BBR acquisition, and an increase in printing supplies which have been impacted by the inflationary environment.

Selling, General and Administrative

Selling, general and administrative expenses for the three months ended September 30, 2022 amounted to $26.0 million, an increase of $8.9 million or 52% when compared to the same period in the prior year driven by an increase in professional fees related to corporate transactions, including the Popular Transaction related costs.

Depreciation and Amortization

Depreciation and amortization expense for the three months ended September 30, 2022 amounted to $19.7 million, an increase of $1.0 million or 5% when compared to the same period in the prior year. Increased expense during the three months is driven by the amortization of intangible assets created in connection with acquisitions completed in 2022.

Non-Operating Expenses

	Three months ended September 30,
In thousands	2022		2021		Variance
Interest income	$	807	$	504	$	303	60	%
Interest expense	(6,763)		(5,684)		(1,079)		(19)	%
Earnings of equity method investment	688		411		277		67	%
Loss on foreign currency remeasurement	(7,779)		(304)		(7,475)		2,459	%
Gain on sale of a business	135,642		—		135,642		—	%
Other income (expenses)	374		450		(76)		(17)	%
Total non-operating income (expenses)	$	122,969	$	(4,623)	$	127,592	2,760	%

Non-operating income for the three months ended September 30, 2022 amounted to $123.0 million, an increase of $127.6 million when compared to the same period in the prior year, as it includes the gain from the Popular Transaction of $135.6 million. Non-operating expenses in the quarter also reflect a $7.8 million loss from the remeasurement of assets and liabilities denominated in US dollars, as well as a $1.1 million increase in interest expense due to rising interest rates.

Income Tax Expense

	Three months ended September 30,
In thousands	2022		2021		Variance
Income tax expense	$	9,048	$	7,134	$	1,914	27	%

29

Income tax expense for the three months ended September 30, 2022 amounted to $9.0 million, an increase of $1.9 million when compared to the same period in the prior year. The effective tax rate for the period was 6.2%, compared with 16.8% in the 2021 period. The decrease in the effective tax rate was primarily driven by the impact of the Popular Transaction which was taxed at a preferential tax rate and the impact from the reversal of a potential liability for uncertain tax positions as a result of the expiration of the statute of limitation, partially offset by the impact of higher revenues in higher taxed jurisdictions, a shift in the mix of business in Puerto Rico and higher withholding taxes.

Comparison of the nine months ended September 30, 2022 and 2021

	Nine months ended September 30,
In thousands	2022		2021		Variance
Revenues	$	456,622	$	434,559	$	22,063	5	%
Operating costs and expenses
Cost of revenues, exclusive of depreciation and amortization	215,244		182,180		33,064		18	%
Selling, general and administrative expenses	66,436		49,980		16,456		33	%
Depreciation and amortization	58,432		56,091		2,341		4	%
Total operating costs and expenses	340,112		288,251		51,861		18	%
Income from operations	$	116,510	$	146,308	$	(29,798)	(20)	%

Revenues

Total revenues for the nine months ended September 30, 2022 were $456.6 million, an increase of $22.1 million compared to $434.6 million in the prior year. Revenue in Puerto Rico benefited from increased payment transaction volumes in addition to continued growth in the Company's digital solutions, ATH Movil Business, as well as revenue generated from an acquisition completed in the second quarter. Revenue also benefited from the printing contract entered into in June 2021, one-time software sales, partially offset by the impacts from the Popular Transaction, including the $6.9 million one-time credit granted upon closing of the Popular Transaction. Latin America revenue reflected organic growth and the revenue contribution from the BBR acquisition.

Cost of Revenues

Cost of revenues for the nine months ended September 30, 2022 amounted to $215.2 million, an increase of $33.1 million or 18% when compared to the same period in the prior year. The increase in cost of revenues includes a $4.1 million impairment loss related to a multi-year software development recorded during the second quarter, as well as an increase in personnel costs, mainly due to increased headcount in Latin America including the added headcount from the BBR acquisition, higher equipment expenses for cloud services as utilization continues to grow, an increase in printing supply expense and an increase in cost of sales due to the same factors explained above for the quarter.

Selling, General and Administrative

Selling, general and administrative expenses for the nine months ended September 30, 2022 amounted to $66.4 million, an increase by $16.5 million or 33% when compared to the same period in the prior year. The increase is driven by the same factors explained above for the quarter.

Depreciation and Amortization

Depreciation and amortization expense for the nine months ended September 30, 2022 amounted to $58.4 million, an increase of $2.3 million or 5% when compared to the same period in the prior year, mainly due to the same factors explained above for the quarter.

30

Non-Operating Expenses

	Nine months ended September 30,
In thousands	2022		2021		Variance
Interest income	$	2,279	$	1,343	$	936	70	%
Interest expense	(18,242)		(17,248)		(994)		(6)	%
Earnings of equity method investment	2,120		1,307		813		62	%
(Loss) gain on foreign currency remeasurement	(6,858)		652		(7,510)		(1,152)	%
Gain on sale of a business	135,642		—		135,642		—	%
Other income (expenses)	1,621		2,067		(446)		(22)	%
Total non-operating income (expenses)	$	116,562	$	(11,879)	$	128,441	1,081	%

Non-operating income for the nine months ended September 30, 2022 increased by $128.4 million to $116.6 million when compared to the same period in the prior year, primarily driven by the same factors explained above for the quarter, partially offset by a $0.9 million increase in interest income coupled with a $0.8 million increase in earnings from the Company's equity method investment.

Income Tax Expense

	Nine months ended September 30,
In thousands	2022		2021		Variance
Income tax expense	$	22,911	$	14,474	$	8,437	58	%

Income tax expense for the nine months ended September 30, 2022 amounted to $22.9 million, an increase of $8.4 million when compared to the same period in the prior year. The effective tax rate for the period was 9.8%, compared with 10.8% in the 2021 period. The decrease in the effective tax rate was driven by the same factors explained above for the quarter.

Factors and Trends Affecting the Results of Our Operations

The ongoing migration from cash and paper methods of payment to electronic payments continues to benefit the transaction- processing industry globally. We believe that the penetration of electronic payments in the markets in which we operate is significantly lower relative to the U.S. market, which, together with the ongoing shift from cash and paper methods of payment to electronic payments will continue to generate growth opportunities for our business. For example, currently the adoption of banking products, including electronic payments, in the Latin America and Caribbean region is lower relative to the mature U.S. and European markets. We believe that the unbanked and underbanked population in our markets will continue to shrink, and therefore drive incremental penetration and growth of electronic payments in Puerto Rico and other Latin America regions. We also benefit from the outsourcing of technology systems and processes trend for financial institutions and government. Many medium- and small-size institutions in the Latin American markets in which we operate have outdated computer systems and updating these IT legacy systems is financially and logistically challenging, which presents a business opportunity for us.

In recent years, consumer preference has accelerated its shift away from cash and paper payment methods, noting increased demand for omni-channel payment services that facilitate cashless and contactless transactions. The markets in which we operate, particularly Latin America and the Caribbean continue to grow and consumer preference is driving an increase for electronic payments usage. Latin America is one of the fastest-growing mobile markets globally, with a growing base of tech-savvy customers that demonstrate a preference for credit cards, digital wallets, contactless payments, and other value-added offerings. The region's FinTech sector is driving change via new contactless payment technology that are becoming popular alternatives to cash payments. We continue to believe that the attractive characteristics of our markets and our position across multiple services and sectors will continue to drive growth and profitability in our businesses.

On July 1, 2022, we closed the previously announced Popular Transaction, which includes extensions and amendments to the main commercial agreements with Banco Popular. The extension of the A&R ISO Agreement includes a revenue sharing provision which will be treated as an expense and has resulted, and we expect will continue to result in a decline to the Merchant Acquiring Segment Adjusted EBITDA and margin. The extension of the MSA includes a reduction in the CPI cap from 5% to 1.5%, as well as a retroactive one-time credit for the 5% CPI price increase applied to certain services since October

31

1, 2021 through closing, both of which negatively impacted our results of operations, and we expect will continue to negatively impact revenue and consequently, margin of our Business Solutions Segment and, to a lesser extent, the Payment Services – Puerto Rico Segment. Additionally, as part of the amendments to the MSA, there will be contractual revenue minimums through 2028. As part of the Popular Transaction, we also sold certain assets from our Business Solutions Segment to Banco Popular, which has resulted, and we expect will continue to result in a reduction in revenue and margin for this segment.

Finally, our financial condition and results of operations are, in part, dependent on the economic and general conditions of the geographies in which we operate. Rising interest rates, inflationary pressure and economic uncertainty in the markets in which we operate may affect consumer confidence which could result in a decrease in consumer spending and impact our financial results.

Segment Results of Operations

The Company operates in four business segments: Payment Services - Puerto Rico & Caribbean, Payment Services - Latin America, Merchant Acquiring, and Business Solutions.

The Payment Services - Puerto Rico & Caribbean segment revenues are comprised of revenues related to providing access to the ATH debit network and other card networks to financial institutions, including related services such as authorization, processing, management and recording of ATM and point of sale ("POS") transactions, and ATM management and monitoring. The segment revenues also include revenues from card processing services (such as credit and debit card processing, authorization and settlement and fraud monitoring and control to debit or credit issuers), payment processing services (such as payment and billing products for merchants, businesses and financial institutions and digital payment services to the government of Puerto Rico), ATH Movil (person-to-person) and ATH Business (person-to-merchant) digital transactions and EBT (which principally consist of services to the government of Puerto Rico for the delivery of benefits to participants). For ATH debit network and processing services, revenues are primarily driven by the number of transactions processed. Revenues are derived primarily from network fees, transaction switching and processing fees, and the leasing of POS devices. For card issuer processing, revenues are primarily dependent upon the number of cardholder accounts on file, transactions and authorizations processed, the number of cards embossed and other processing services. For EBT services, revenues are primarily derived from the number of beneficiaries on file.

The Payment Services - Latin America segment revenues consist of revenues related to providing access to the ATH network of ATMs and other card networks to financial institutions, including related services such as authorization, processing, management and recording of ATM and POS transactions, and ATM management and monitoring. The segment revenues also include revenues from card processing services (such as credit and debit card processing, authorization and settlement and fraud monitoring and control to debit or credit issuers), payment processing services (such as payment and billing products for merchants, businesses and financial institutions), as well as licensed software solutions for risk and fraud management and card payment processing. For network and processing services, revenues are primarily driven by the number of transactions processed. Revenues are derived primarily from transaction switching and processing fees, and the leasing of POS devices and network fees. For card issuer processing, revenues are primarily dependent upon the number of cardholder accounts on file, transactions and authorizations processed, the number of cards embossed, and other processing services.

The Merchant Acquiring segment consists of revenues from services that allow merchants to accept electronic methods of payment. In the Merchant Acquiring segment, revenues include a discount fee and membership fees charged to merchants, debit network fees and rental fees from POS devices and other equipment, net of credit card interchange and assessment fees charged by credit cards associations (such as VISA or MasterCard) or payment networks. The discount fee is generally a percentage of the transaction value. EVERTEC also charges merchants for other services that are unrelated to the number of transactions or the transaction value.

The Business Solutions segment consists of revenues from a full suite of business process management solutions in various product areas such as core bank processing, network hosting and management, IT professional services, business process outsourcing, item processing, cash processing, and fulfillment. Core bank processing and network services revenues are derived in part from a recurrent fixed fee and from fees based on the number of accounts on file (i.e. savings or checking accounts, loans, etc.), server capacity usage or computer resources utilized. Revenues from other processing services within the Business Solutions segment are generally volume-based and depend on factors such as the number of accounts processed. In addition, EVERTEC is a reseller of hardware and software products and these resale transactions are generally non-recurring.

In addition to the four operating segments described above, management identified certain functional cost areas that operate independently and do not constitute businesses in themselves. These areas could neither be concluded as operating segments nor could they be combined with any other operating segments. Therefore, these areas are aggregated and presented within the

32

“Corporate and Other” category in the financial statements alongside the operating segments. The Corporate and Other category consists of corporate overhead expenses, intersegment eliminations, certain leveraged activities and other non-operating and miscellaneous expenses that are not included in the operating segments. The overhead and leveraged costs relate to activities such as:

•marketing,

•corporate finance and accounting,

•human resources,

•legal,

•risk management functions,

•internal audit,

•corporate debt related costs,

•non-operating depreciation and amortization expenses generated as a result of merger and acquisition activity,

•intersegment revenues and expenses, and

•other non-recurring fees and expenses that are not considered when management evaluates financial performance at a segment level.

The Chief Operating Decision Maker ("CODM") reviews the operating segments separate financial information to assess performance and to allocate resources. Management evaluates the operating results of each of its operating segments based upon revenues and Adjusted EBITDA. Adjusted EBITDA is defined as EBITDA further adjusted to exclude unusual items and other adjustments. Adjusted EBITDA, as it relates to operating segments, is presented in conformity with ASC Topic 280, Segment Reporting, given that it is reported to the CODM for purposes of allocating resources. Segment asset disclosure is not used by the CODM as a measure of segment performance since the segment evaluation is driven by revenues and adjusted EBITDA. As such, segment assets are not disclosed in the notes to the accompanying unaudited condensed consolidated financial statements.

The following tables set forth information about the Company’s operations by its four business segments for the periods indicated below.

Comparison of the three months ended September 30, 2022 and 2021

Payment Services - Puerto Rico & Caribbean

	Three months ended September 30,
In thousands	2022			2021
Revenues	$	44,592		$	38,773
Adjusted EBITDA	$	25,020		$	21,805
Adjusted EBITDA Margin	56.1		%	56.2		%

Payment Services - Puerto Rico & Caribbean segment revenues for the three months ended September 30, 2022 increased by $5.8 million to $44.6 million when compared to the same period in the prior year. The increase in revenues was primarily driven by an increase in transaction volumes for POS processing, the ongoing growth from ATH Movil and ATH Business and an increase in issuing services. The revenue increase also includes the impact of the small acquisition completed in the second quarter. The segment continues to benefit from increases in transaction processing and monitoring revenue recognized for services provided to the Payment Services - Latin America Segment. These positive impacts were partially offset by the one-time credit granted to Popular. Adjusted EBITDA increased by $3.2 million to $25.0 million driven by the increase in revenues partially offset by higher operating expenses.

33

Payment Services - Latin America

	Three months ended September 30,
In thousands	2022			2021
Revenues	$	33,741		$	26,792
Adjusted EBITDA	$	3,210		$	9,991
Adjusted EBITDA Margin	9.5		%	37.3		%

Payment Services - Latin America segment revenues for the three months ended September 30, 2022 increased by $6.9 million to $33.7 million driven mainly by organic growth in all regions as well as revenue generated from the BBR acquisition completed at the beginning of the quarter. Furthermore, revenues benefited by an increase in intercompany software developments and transaction processing revenue recognized for services provided to the Payment Services - Puerto Rico & Caribbean segment. Adjusted EBITDA decreased by $6.8 million primarily due to a $7.8 million loss from foreign currency remeasurement of assets and liabilities denominated in US dollars and an increase in personnel costs, mainly due to higher headcount, as well as increases in fees for transaction processing and monitoring services from the Payment Services - Puerto Rico & Caribbean segment as more transactions are processed in our centralized platforms.

Merchant Acquiring

	Three months ended September 30,
In thousands	2022			2021
Revenues	$	36,911		$	37,606
Adjusted EBITDA	$	13,866		$	19,230
Adjusted EBITDA Margin	37.6		%	51.1		%

Merchant Acquiring segment revenues for the three months ended September 30, 2022 decreased by $0.7 million as the prior year quarter benefited from COVID related federal stimulus and the current year quarter reflects a shift in the mix of sales volume impacting our spread per transaction as well as the negative impact from Hurricane Fiona estimated to be approximately $1.0 million, partially offset by certain pricing initiatives implemented in the second quarter. Adjusted EBITDA decreased by $5.4 million driven by lower revenues, in addition to higher operating expenses, driven by the revenue sharing agreement with Popular as well as increased transaction processing costs resulting from lower average ticket per transaction.

Business Solutions

	Three months ended September 30,
In thousands	2022			2021
Revenues	$	49,306		$	58,134
Adjusted EBITDA	$	16,276		$	26,034
Adjusted EBITDA Margin	33.0		%	44.8		%

Business Solutions segment revenues for the three months ended September 30, 2022 decreased by $8.8 million to $49.3 million primarily driven by the impact from the Popular Transaction, specifically, the one-time credit granted to Popular upon closing amounting to $6.3 million and the impact from the sale of assets to Popular which the Company estimates at $30 million annually. These negative impacts were partially offset by revenue generated from projects completed in connection with closing of the Popular Transaction. Adjusted EBITDA decreased by $9.8 million to $16.3 million driven by the decrease in revenues as well as an increase in cost of sales and operating expenses, mainly cloud services and printing supplies, the latter of which has been impacted by the inflationary environment.

34

Comparison of the nine months ended September 30, 2022 and 2021

Payment Services - Puerto Rico & Caribbean

	Nine months ended September 30,
In thousands	2022			2021
Revenues	$	130,678		$	113,626
Adjusted EBITDA	$	72,647		$	66,228
Adjusted EBITDA Margin	55.6		%	58.3		%

Payment Services - Puerto Rico & Caribbean segment revenues for the nine months ended September 30, 2022 increased by $17.1 million to $130.7 million when compared to the same period in the prior year. The increase in revenues was primarily driven by an increase in transaction volumes, mainly POS processing, the continued strong digital payments growth from ATH Movil Business, higher issuing services and revenue contribution from the acquisition completed in the current year. Segment revenue also benefited from an increase in transaction processing and monitoring revenue recognized for services provided to the Payment Services - Latin America Segment. Adjusted EBITDA increased by $6.4 million to $72.6 million driven by the increase in revenues partially offset by higher operating expenses, including the $4.1 million impairment charge discussed in Cost of Revenues above, an increase in cloud services, higher personnel costs and the impact from the one-time credit granted upon closing of the Popular Transaction.

Payment Services - Latin America

	Nine months ended September 30,
In thousands	2022			2021
Revenues	$	93,308		$	77,641
Adjusted EBITDA	$	25,197		$	30,985
Adjusted EBITDA Margin	27.0		%	39.9		%

Payment Services - Latin America segment revenues for the nine months ended September 30, 2022 increased by $15.7 million to $93.3 million driven mainly by organic growth including revenue generated by new client contracts signed in prior years, the contribution from the BBR acquisition and higher revenues recognized for services provided to the Payment Services - Puerto Rico & Caribbean and Business Solutions segments. Adjusted EBITDA decreased by $5.8 million when compared to the same period in the prior year primarily due to the same factors explained above for the quarter.

Merchant Acquiring

	Nine months ended September 30,
In thousands	2022			2021
Revenues	$	111,079		$	106,808
Adjusted EBITDA	$	48,484		$	55,293
Adjusted EBITDA Margin	43.6		%	51.8		%

Merchant Acquiring segment revenues for the nine months ended September 30, 2022 increased by $4.3 million to $111.1 million mainly as a result of an increase in sales volume driven by nine months of contribution from the FirstBank expanded relationship compared to 7 months in the prior year, as well as the benefit of pricing initiatives implemented throughout the year partially offset by the benefits to prior year from COVID related federal stimulus, the impact from Hurricane Fiona as well as changes in the mix of volume towards lower margin merchants. Adjusted EBITDA decreased by $6.8 million as the increase in revenues was entirely offset by an increase in operating expenses driven by the impact of the revenue sharing agreement with Popular that began on July 1, 2022 and higher transaction processing costs as a result of a lower average ticket.

35

Business Solutions

	Nine months ended September 30,
In thousands	2022			2021
Revenues	$	176,620		$	179,438
Adjusted EBITDA	$	75,715		$	86,287
Adjusted EBITDA Margin	42.9		%	48.1		%

Business Solutions segment revenues for the nine months ended September 30, 2022 decreased by $2.8 million to $176.6 million primarily due to the same factors explained above for the quarter. Partially offsetting these negative impacts was the benefit from higher transactions and account volumes, contribution from the printing contract that began generating revenue in June of 2021, and one-time software and hardware sales. Adjusted EBITDA decreased by $10.6 million to $75.7 million as a result of the decrease in revenue, the impact from the sale of higher margin assets included in the Popular Transaction and an increase in cost of sales in connection with hardware sales completed during the year and operating expenses, mainly printing supplies expense that has been impacted by the inflationary environment.

Liquidity and Capital Resources

Our principal source of liquidity is cash generated from operations, and our primary liquidity requirements are the funding of working capital needs, capital expenditures, acquisitions, debt service, dividend payments and share repurchases. We also have a $125.0 million Revolving Facility, of which $119.1 million was available for borrowing as of September 30, 2022. The Company issues letters of credit against our Revolving Facility which reduce our availability of funds to be drawn.

As of September 30, 2022, we had cash and cash equivalents of $225.0 million, of which $111.5 million resides in our subsidiaries located outside of Puerto Rico for purposes of (i) funding the respective subsidiary’s current business operations and (ii) funding potential future investment outside of Puerto Rico. We intend to indefinitely reinvest these funds outside of Puerto Rico, and based on our liquidity forecast, we will not need to repatriate this cash to fund the Puerto Rico operations or to meet debt-service obligations. However, if in the future we determine that we no longer need to maintain cash balances within our foreign subsidiaries, we may elect to distribute such cash to the Company in Puerto Rico. Distributions from the foreign subsidiaries to Puerto Rico may be subject to tax withholding and other tax consequences. Additionally, our credit agreement imposes certain restrictions on the distribution of dividends from subsidiaries.

Based on our current level of operations, we believe our cash flows from operations and the available secured Revolving Facility will be adequate to meet our liquidity needs for the next twelve months. However, our ability to fund future operating expenses, dividend payments, capital expenditures, mergers and acquisitions, and our ability to make scheduled payments of interest, to pay principal on or refinance our indebtedness and to satisfy any other of our present or future debt obligations will depend on our future operating performance, which may be affected by general economic, financial and other factors beyond our control.

	Nine months ended September 30,
(In thousands)	2022		2021
Cash provided by operating activities	$	159,009	$	175,855
Cash used in investing activities	(106,002)		(60,305)
Cash used in financing activities	(99,508)		(74,077)
Effect of foreign exchange rate on cash, cash equivalents and restricted cash	4,260		215
(Decrease) increase in cash, cash equivalents and restricted cash	$	(42,241)	$	41,688

Net cash provided by operating activities for the nine months ended September 30, 2022 was $159.0 million compared to $175.9 million for the same period in the prior year. The $16.8 million decrease in cash provided by operating activities is primarily driven by the effects from the sale of a business to Popular and the one-time credit granted to them upon closing, partially offset by an increase in collections from accounts receivable and less cash used to pay down accounts payable and accrued liabilities as the Company continues to effectively manage working capital .

Net cash used in investing activities for the nine months ended September 30, 2022 was $106.0 million compared to $60.3 million for the same period in the prior year. The $45.7 million increase is driven by the BBR acquisition closed on July 1, 2022 for $44.4 million and a $7.3 million purchase of certificates of deposit, which were transferred upon closing of the BBR

36

acquisition, partially offset by lower capital expenditures of $1.2 million, proceeds from the maturity of available-for-sale debt securities of $1.0 million, as well as a decrease in acquisitions of customer relationships given that the prior year acquisition amounted to $14.8 million while the acquisition in the current year amounted to $10.6 million.

Net cash used in financing activities for the nine months ended September 30, 2022 was $99.5 million compared to $74.1 million for the same period in the prior year. The $25.4 million increase was mainly attributed to an increase in cash used to repurchase shares of our common stock of $48.1 million, partially offset by a decrease of $18.6 million in cash used to pay down long-term debt as in the prior year, in connection with the mandatory repayment clause, the Company repaid $17.8 million, as a result of excess cash flow calculation performed, while no mandatory repayment was required in the current year, and a $3.1 million decrease in withholding taxes paid on share-based compensation.

Capital Resources

Our principal capital expenditures are for hardware and computer software (purchased and internally developed) and additions to property and equipment. During the nine months ended September 30, 2022 and 2021, the Company invested approximately $44.6 million and $43.4 million, respectively. Additionally the Company acquired a business for $44.4 million, net of cash acquired, as well as $7.3 million in certificates of deposit in connection with this business acquisition in 2022. The Company acquired customer relationships amounting to $10.6 million and $14.8 million during the nine months ended September 30, 2022 and 2021, respectively. In 2021 acquired $3.0 million in available-for-sale debt securities. Generally, we fund capital expenditures with cash flow generated from operations and, if necessary, borrowings under our Revolving Facility.

Dividend Payments

On February 15, 2022, April 21, 2022 and July 28, 2022, respectively the Board declared quarterly cash dividends of $0.05 per share of common stock, which were paid on March 25, 2022, June 3, 2022 and September 2, 2022, respectively, to stockholders of record as of the close of business on February 25, 2022, May 2, 2022 and August 8, 2022, respectively.

On October 20, 2022, our Board declared a regular quarterly cash dividend of $0.05 per share on the Company’s outstanding shares of common stock. The dividend will be paid on December 2, 2022 to stockholders of record as of the close of business on November 1, 2022. The Board anticipates declaring this dividend in future quarters on a regular basis; however, future declarations of dividends are subject to the Board’s approval and may be adjusted as business needs or market conditions change.

Financial Obligations

Secured Credit Facilities

On November 27, 2018, EVERTEC and EVERTEC Group (“Borrower”) entered into a credit agreement providing for the secured credit facilities, consisting of a $220.0 million term loan A facility that matures on November 27, 2023 (the “2023 Term A Loan”), a $325.0 million term loan B facility that matures on November 27, 2024 (the “2024 Term B Loan”), and a $125.0 million revolving credit facility (the “Revolving Facility”) that matures on November 27, 2023, with a syndicate of lenders and Bank of America, N.A. (“Bank of America”), as administrative agent, collateral agent, swingline lender and line of credit issuer (collectively the “2018 Credit Agreement”).

The 2018 Credit Agreement requires mandatory repayment of outstanding principal balances based on a percentage of excess cash flow, provided that no such payment shall be due if the resulting amount of the excess cash flow multiplied by the applicable percentage is less than $10 million or if the leverage ratio is below 1.75x. On March 8, 2021, in connection with this mandatory repayment clause, the Company repaid $17.8 million, as a result of excess cash flow calculation performed for the year ended December 31, 2020. No mandatory repayment was required in the first quarter of 2022 in connection with the excess cash flow calculation performed for the year ended December 31, 2021 as the leverage ratio was below 1.75x.

The unpaid principal balance at September 30, 2022 of the 2023 Term A Loan and the 2024 Term B Loan was $163.4 million and $294.2 million, respectively. The additional borrowing capacity under our Revolving Facility at September 30, 2022 was $119.1 million. The Company issues letters of credit against the Revolving Facility which reduce the additional borrowing capacity of the Revolving Facility.

37

Notes Payable

In December 2019, EVERTEC Group entered into two non-interest bearing financing agreements amounting to $2.4 million to purchase software and maintenance, which were fully repaid in January 2022. As of December 31, 2021, the outstanding principal balance of the notes payable was $0.8 million. These notes were included in accounts payable in the Company's unaudited condensed consolidated balance sheets.

Interest Rate Swaps

As of September 30, 2022, the Company has an interest rate swap agreement, entered into in December 2018, which converts a portion of the interest rate payments on the Company's 2024 Term B Loan from variable to fixed: 

Swap Agreement	Effective date	Maturity Date	Notional Amount	Variable Rate	Fixed Rate
2018 Swap	April 2020	November 2024	$250 million	1-month LIBOR	2.89%

The Company has accounted for this agreement as a cash flow hedge.

As of September 30, 2022 and December 31, 2021, the carrying amount of the derivative included on the Company's unaudited condensed consolidated balance sheets was an asset of $7.1 million and a liability of $13.4 million, respectively. The fair value of this derivative is estimated using Level 2 inputs in the fair value hierarchy on a recurring basis. Refer to Note 7 of the unaudited condensed consolidated financial statements for disclosure of losses recorded on cash flow hedging activities.

During the three and nine months ended September 30, 2022 and 2021, the Company reclassified losses of $0.4 and $3.5 million respectively, from accumulated other comprehensive loss into interest expense compared to $1.8 million and $5.3 million for the corresponding periods in 2021. Based on current LIBOR rates, the Company expects to reclassify gains of $3.4 million from accumulated other comprehensive loss into interest expense over the next 12 months.

The cash flow hedge is considered highly effective.

Covenant Compliance

As of September 30, 2022, our secured leverage ratio was 1.41 to 1.00, as determined in accordance with the 2018 Credit Agreement. As of the date of filing of this Report, no event has occurred that constitutes an Event of Default or Default under our 2018 Credit Agreement.

Net Income Reconciliation to EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings per common share (Non-GAAP Measures)

We define “EBITDA” as earnings before interest, taxes, depreciation and amortization. We define “Adjusted EBITDA” as EBITDA further adjusted to exclude unusual items and other adjustments described below. Adjusted EBITDA by segment is reported to the chief operating decision maker for purposes of making decisions about allocating resources to the segments and assessing their performance. For this reason, Adjusted EBITDA, as it relates to our segments, is presented in conformity with ASC Topic 280, Segment Reporting, and is excluded from the definition of non-GAAP financial measures under the Securities and Exchange Commission's Regulation G and Item 10(e) of Regulation S-K. We define “Adjusted Net Income” as net income adjusted to exclude unusual items and other adjustments described below. We define “Adjusted Earnings per common share” as Adjusted Net Income divided by diluted shares outstanding.

We present EBITDA and Adjusted EBITDA because we consider them important supplemental measures of our performance and believe they are frequently used by securities analysts, investors and other interested parties in the evaluation of ourselves and other companies in our industry. In addition, our presentation of Adjusted EBITDA is substantially consistent with the equivalent measurements that are contained in the senior secured credit facilities in testing EVERTEC Group’s compliance with covenants therein such as the secured leverage ratio. We use Adjusted Net Income to measure our overall profitability because we believe better reflects our comparable operating performance by excluding the impact of the non-cash amortization and depreciation that was created as a result of merger and acquisition activity. In addition, in evaluating EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings per common share, you should be aware that in the future we may incur expenses such as those excluded in calculating them. Further, our presentation of these measures should not be construed as an inference that our future operating results will not be affected by unusual or nonrecurring items.

38

Some of the limitations of EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted earnings per common share are as follows:

•they do not reflect cash outlays for capital expenditures or future contractual commitments;

•they do not reflect changes in, or cash requirements for, working capital;

•although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect cash requirements for such replacements;

•in the case of EBITDA and Adjusted EBITDA, they do not reflect interest expense, or the cash requirements necessary to service interest, or principal payments, on indebtedness;

•in the case of EBITDA and Adjusted EBITDA, they do not reflect income tax expense or the cash necessary to pay income taxes; and

•other companies, including other companies in our industry, may not use EBITDA, Adjusted EBITDA, Adjusted Net Income, and Adjusted Earnings per common share or may calculate EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings per common share differently than as presented in this Report, limiting their usefulness as a comparative measure.

EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings per common share are not measurements of liquidity or financial performance under GAAP. You should not consider EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings per common share as alternatives to cash flows from operating activities or any other performance measures determined in accordance with GAAP, as an indicator of cash flows, as a measure of liquidity or as an alternative to operating or net income determined in accordance with GAAP.

A reconciliation of net income to EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings per common share is provided below:

	Three months ended September 30,				Nine months ended September 30,				Twelve months ended
(In thousands, except per share information)	2022		2021		2022		2021		September 30, 2022
Net income	$	137,739	$	35,260	$	210,161	$	119,955	$	251,349
Income tax expense	9,048		7,134		22,911		14,474		28,999
Interest expense, net	5,956		5,180		15,963		15,905		20,979
Depreciation and amortization	19,712		18,745		58,432		56,091		77,411
EBITDA	172,455		66,319		307,467		206,425		378,738
Equity income (loss) (1)	1,159		(411)		(273)		10		(678)
Compensation and benefits (2)	5,671		3,493		15,355		11,280		19,219
Transaction, refinancing and other fees (3)	(126,911)		369		(121,415)		1,205		(120,247)
Adjusted EBITDA	52,374		69,770		201,134		218,920		277,032
Operating depreciation and amortization (4)	(10,748)		(10,779)		(33,156)		(32,385)		(44,209)
Cash interest expense, net (5)	(5,645)		(4,926)		(15,132)		(14,946)		(19,990)
Income tax expense (6)	(8,908)		(9,125)		(27,910)		(24,416)		(35,178)
Non-controlling interest (7)	47		17		58		(55)		(48)
Adjusted net income	$	27,120	$	44,957	$	124,994	$	147,118	$	177,607
Net income per common share (GAAP):
Diluted	$	2.06	$	0.48	$	2.98	$	1.65
Adjusted Earnings per common share (Non-GAAP):
Diluted	$	0.40	$	0.62	$	1.77	$	2.02
Shares used in computing adjusted earnings per common share:
Diluted	67,045,809		72,876,253		70,588,915		72,817,707

39

1)Represents the elimination of non-cash equity earnings from our 19.99% equity investment in Dominican Republic, Consorcio de Tarjetas Dominicanas S.A. ("CONTADO"), net of dividends received.

2)Primarily represents share-based compensation and severance payments.

3)Represents fees and expenses associated with corporate transactions as defined in the 2018 Credit Agreement, the gain from the Popular transaction, a software impairment charge and a gain from sale of assets.

4)Represents operating depreciation and amortization expense, which excludes amounts generated as a result of merger and acquisition activity.

5)Represents interest expense, less interest income, as they appear on the condensed consolidated statements of income and comprehensive income, adjusted to exclude non-cash amortization of the debt issue costs, premium and accretion of discount.

6)Represents income tax expense calculated on adjusted pre-tax income using the applicable GAAP tax rate, adjusted for certain discrete items.

7)Represents the 35% non-controlling equity interest in Evertec Colombia, net of amortization for intangibles created as part of the purchase.

Seasonality

Our payment businesses generally experience moderate increased activity during the traditional holiday shopping periods and around other nationally recognized holidays, which follow consumer spending patterns.

Effect of Inflation

General inflation in the geographies in which we operate has risen to levels that have not been experienced in recent years, however, inflation has historically had a minimal net effect on our operating results given that overall inflation has been offset by sales and cost reduction actions. Rising prices for input costs, including wages and benefits, occupancy and general administrative costs, could potentially have a negative impact on our results of operations and financial condition which may not be readily recoverable from our customers. In addition, inflation has driven a rising interest rate environment, which has had an adverse effect on our cost of funding, as well as led to enhanced volatility on foreign currency exchange rates. While we proactively try to mitigate these rising costs, we may not be able to fully offset these impacts and these could result in negative effect on our results of operations.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risks arising from our normal business activities. These market risks principally involve the possibility of changes in interest rates that will adversely affect the value of our financial assets and liabilities or future cash flows and earnings. Market risk is the potential loss arising from adverse changes in market rates and prices.

Interest Rate Risks

We issued floating-rate debt which is subject to fluctuations in interest rates. Our secured credit facilities accrue interest at variable rates and only the 2024 Term B Loan is subject to a floor or a minimum rate. A 100 basis point increase in interest rates over our floor(s) on our debt balances outstanding as of September 30, 2022, under the secured credit facilities, would increase our annual interest expense by approximately $2.1 million. The impact on future interest expense as a result of future changes in interest rates will depend largely on the gross amount of our borrowings at that time.

As of September 30, 2022, the Company has an interest rate swap agreement, entered into in December 2018, which converts a portion of our outstanding variable rate debt to fixed.

The interest rate swap exposes us to credit risk in the event that the counterparty to the swap agreement does not or cannot meet its obligations. The notional amount is used to measure interest to be paid or received and does not represent the amount of exposure to credit loss. The loss would be limited to the amount that would have been received, if any, over the remaining life of the swap. The counterparty to the swap is a major US based financial institution and we expect the counterparty to be able to perform its obligations under the swap. We use derivative financial instruments for hedging purposes only and not for trading or speculative purposes

See Note 7 of the Unaudited Condensed Consolidated Financial Statements for additional information related to the secured credit facilities.

40

Foreign Exchange Risk

We conduct business in certain countries in Latin America for which we have determined that the functional currency is other than the US dollar. Given this, our operating results are exposed to volatility due to fluctuations in exchange rates for the countries' functional currencies. Non-functional currency transactions are remeasured into the functional currency which results in a foreign exchange gain or loss recorded through Other income (expenses). For the nine month periods ended September 30, 2022 and 202, the Company recognized foreign currency remeasurement losses of $6.9 million and gains of $0.7 million, respectively. For subsidiaries whose local currency is their functional currency, their assets and liabilities are translated into U.S. dollars at exchange rates at the balance sheet date, and revenues and expenses are translated using average exchange rates in effect during the period. The resulting foreign currency translation adjustments are reported in accumulated other comprehensive loss in the unaudited condensed consolidated balance sheets. As of September 30, 2022, the Company had $36.2 million in an unfavorable foreign currency translation adjustment as part of accumulated other comprehensive loss compared with an unfavorable foreign currency translation adjustment of $36.0 million as of December 31, 2021.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Management, under the direction of the Chief Executive Officer and the Chief Financial Officer, has evaluated, as of the end of the period covered by this Report on Form 10-Q, disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based upon their evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that as of September 30, 2022, the Company’s disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

There were no changes in the Company’s internal control over financial reporting (as such term is defined in Rule 13a -15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal quarter ended September 30, 2022 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

41

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We are defendants in various lawsuits or arbitration proceedings arising in the ordinary course of business. Management believes, based on the opinion of legal counsel and other factors, that the aggregated liabilities, if any, arising from such actions will not have a material adverse effect on the financial condition, results of operations and the cash flows of the Company.

Item 1A. Risk Factors

Other than the risk factor set forth below, there have been no material changes to the risk factors described in our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on February 25, 2022. For a discussion of the potential risks and uncertainties related to us, see "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2021.

The risks described in our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on February 25, 2022 are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or results of operations.

Banco Popular, our largest customer, is controlled by Popular, and the elimination of Popular's ownership of our common stock could adversely affect us.

For the year ended December 31, 2021, approximately 42% of our revenue was attributable to Banco Popular, a wholly owned subsidiary of Popular. Prior to closing the Popular Transaction on July 1, 2022, Popular owned approximately 17.5% of our common stock and historically had substantial influence over our policies and management. In connection with the closing of the Popular Transaction, Popular delivered 4.6 million shares of Evertec common stock that were owned by Popular in exchange for certain assets of EVERTEC Group, and the Company also modified and extended its main commercial agreements with Banco Popular. Furthermore, effective as of July 1, 2022, the stockholders agreement dated April 17, 2012 with Popular, which had granted them certain benefits as a shareholder of the Company, was terminated. On August 15, 2022, through a secondary offering, Popular sold its remaining shares of Evertec common stock and as of this date no longer holds any shares of our common stock. Evertec is no longer deemed a subsidiary of Popular under the Bank Holding Company Act.

The elimination of Popular's holdings of our common stock and the modification to commercial arrangements with Banco Popular may negatively impact our business relationship with Banco Popular and could have a material adverse effect on our business, financial condition, results of operations and cash flows, and could materially adversely affect the trading price of our common stock.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table summarizes repurchases of shares of the Company’s common stock in the three month period ended September 30, 2022:

Period	Total number of shares purchased	Average price paid per share	Total number of shares purchased as part of a publicly announced program (1)	Approximate dollar value of shares that may yet be purchased under the program
8/1/2022-8/31/2022	803,341	31.12
9/1/2022-9/30/2022	387,038	31.83	387,038
	1,190,379	31.35	387,038	102,467,677

(1) On February 24, 2022, the Company announced that its Board approved an increase to the current stock

repurchase program, authorizing the purchase of up to an aggregate of $150 million shares of the Company’s common stock under the program which expires on December 31, 2023.

Item 3. Defaults Upon Senior Securities

None.

42

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

43

Item 6. Exhibits

10.1*	Amendment No.1 to Asset Purchase Agreement by and among EVERTEC, Inc., Evertec Group, LLC, Popular, Inc. and Banco Popular de Puerto Rico, dated as of July 1, 2022.
10.2	Second Amended and Restated Master Service Agreement, dated as of July 1, 2022, among Popular, Inc., Banco Popular de Puerto Rico and Evertec Group, LLC and its subsidiaries (incorporated by reference to Exhibit 10.1 of EVERTEC, Inc.’s Current Report on Form 8-K filed on July 1, 2022, File No. 001-35872).
10.3	Second Amended and Restated Independent Sales Organization Sponsorship and Services Agreement, dated as of July 1, 2022, between Evertec Group, LLC and Banco Popular de Puerto Rico (incorporated by reference to Exhibit 10.2 of EVERTEC, Inc.’s Current Report on Form 8-K filed on July 1, 2022, File No. 001-35872).
31.1*	CEO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	CFO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	CEO Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**	CFO Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS XBRL*	Inline Instance document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH XBRL**	Inline Taxonomy Extension Schema
101.CAL XBRL**	Inline Taxonomy Extension Calculation Linkbase
101.DEF XBRL**	Inline Taxonomy Extension Definition Linkbase
101.LAB XBRL**	Inline Taxonomy Extension Label Linkbase
101.PRE XBRL**	Inline Taxonomy Extension Presentation Linkbase
104**	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*    Filed herewith.

**    Furnished herewith.

+     This exhibit is a management contract or a compensatory plan or arrangement.

44

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	EVERTEC, Inc. (Registrant)
Date: November 4, 2022	By:	/s/ Morgan Schuessler
		Morgan Schuessler Chief Executive Officer
Date: November 4, 2022	By:	/s/ Joaquin A. Castrillo-Salgado
		Joaquin A. Castrillo-Salgado Chief Financial Officer (Principal Financial and Accounting Officer)

45

EX-10.1

AMENDMENT NO. 1 TO

ASSET PURCHASE AGREEMENT

This AMENDMENT NO. 1 TO ASSET PURCHASE AGREEMENT (this “Amendment”), dated as of July 1, 2022, is entered into by and among Evertec, Inc., a corporation organized under the laws of the Commonwealth of Puerto Rico (“Seller Parent”), Evertec Group, LLC, a limited liability company organized under the laws of the Commonwealth of Puerto Rico and wholly owned Subsidiary of Seller Parent (“Seller”), Popular, Inc., a corporation organized under the laws of the Commonwealth of Puerto Rico (“Buyer Parent”) and Banco Popular de Puerto Rico, a bank chartered under the laws of the Commonwealth of Puerto Rico and wholly owned Subsidiary of Buyer Parent (“Buyer” and, together with Seller Parent, Seller and Buyer Parent, the “Parties” or each a “Party”). All capitalized terms used but not defined herein shall have the meanings specified in the Original Purchase Agreement (as defined below).

RECITALS

WHEREAS, Seller, Seller Parent, Buyer and Buyer Parent are parties to that certain Asset Purchase Agreement, dated as of February 24, 2022 (the “Original Purchase Agreement”, and as such may be amended from time to time, including pursuant to this Amendment, the “Purchase Agreement”), pursuant to which Seller has agreed to sell and transfer to Buyer, and Buyer has agreed to purchase and assume, as applicable, from Seller, the Transferred Assets and Assumed Liabilities, upon the terms and subject to the conditions set forth therein; and

WHEREAS, pursuant to Section 10.4 of the Original Purchase Agreement, the Parties have agreed to amend the Original Purchase Agreement pursuant to this Amendment, on the terms and conditions set forth herein.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing and the respective agreements set forth herein and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree that notwithstanding anything to the contrary set forth in the Original Purchase Agreement:

1.Delayed Transfer of NOWS Contract.

(a)In connection with that certain Software License Agreement between Everest party and Now Wireless Ltd. listed under Section VI of Schedule 1.1(b) to the Original Purchase Agreement (the “NOWS Contract”), the Parties each acknowledge and agree that:

(i)the NOWS Contract shall be retained by Seller and/or its Subsidiaries as of the Closing and shall not be assigned or transferred to Buyer until the NOWS Assignment Date (as defined below);

(ii)as promptly as practicable following the Closing, Seller shall use commercially reasonable efforts to install a replacement solution to NOW SMS in order to continue providing services related to the Retained Business (the “NOWS Migration”);

(iii)following the completion of the NOWS Migration, Seller and Buyer shall, as promptly as reasonably practicable, cause the assignment and transfer of such NOWS Contract to Buyer (the date of such assignment, the “NOWS Assignment Date”); and

(iv)during the period from the Closing Date and the NOWS Assignment Date, Seller and its Affiliates shall provide Buyer with the economic and operational equivalent of the transfer of the NOWS Contract at cost and otherwise on the terms and conditions set forth in the Transition Services Agreement.

2.PCAS Contracts.

(a)In connection with the (i) Attachment for Service Extension Support – Order Confirmation and Additional Terms, by and between Seller and IBM Corporation, as successor-in interest to Lombardi Software, Inc., dated June 29, 2021 and (ii) Mainline Information Systems - IBM Cloud Pak for Automation, dated December 5, 2019 (collectively, the “PCAS Contracts”):

(i)the PCAS Contracts shall not be Assigned Contracts but shall be De Novo Contracts;

(ii)the Asset Schedules to the Original Purchase Agreement are hereby amended to remove the PCAS Contracts from Schedule 1.1(b) to the Original Purchase Agreement and to add the PCAS Contracts to Schedule 1.11 to the Original Purchase Agreement; and

(iii)Seller and its Affiliates shall not be responsible for renewing any of the PCAS Contracts.

3.SendGrid Contracts.

(a)Item 3 under the heading named “Commercial Application Agreement” in Schedule 1.11 to the Original Purchase Agreement shall no longer be a Clone & Split Shared Contract but shall be a De Novo Shared Contract and is hereby amended and restated in its entirety as follows:

“3.    Terms of Service 2017, dated December 1, 2017, by and between SendGrid, Inc. and Seller, and Order Confirmation, dated January 30, 2018, by and between SendGrid, Inc. and Seller. (De Novo Shared Contract)”

4.Xpress Deposit.

(b)Section V of Schedule 1.1(b) to the Original Purchase Agreement is hereby amended and restated in its entirety as follows:

“1.    Amendment to Information Technology Services Agreement by and between Seller and Fidelity Information Services, LLC, dated September 30, 2020.

2.    FIS Xpress Deposit service under the Xpress Deposit Services Addendum, dated as of December 31, 2013, by and between Seller and Fidelity Information Services, LLC.

3    FIS Xpress Deposit service Order Form, dated as of October 3, 2019, to the Information Technology Services Agreement by and between Seller and Fidelity Information Services, LLC, dated September 30, 2020.”

2

5.RSA Adaptive Authentication.

(c)The following is hereby removed in its entirety from Schedule 1.1(a) to the Original Purchase Agreement:

“15.    Adaptive Authentication for Mi Banco RSA”

(d)Items 16 through 19 under Schedule 1.1(a) to the Original Purchase Agreement are hereby re-lettered to become new items 15 through 18 thereof.

6.MIBA: Mi Banco Adaptive Authentication.

(e)The following Channel Application is hereby incorporated to Schedule 1.1(a) to the Original Purchase Agreement:

“19.    MIBA: Mi Banco Adaptive Authentication”

7.Removal of De Novo Shared Contracts.

(f)The following is hereby removed in its entirety from the heading named “Middleware” in Schedule 1.11 to the Original Purchase Agreement:

“IIS Windows Servers (De Novo Shared Contract)”

(g)Each of the following is hereby removed in its entirety from the heading named “Developer Tools: Licensed” in Schedule 1.11 to the Original Purchase Agreement:

“eProjects / Clarity (De Novo Shared Contract)”

“Jira (De Novo Shared Contract)*”

(h)Each of the following is hereby removed in its entirety from the heading named “Developer Tools: Free / Open Source” in Schedule 1.11 to the Original Purchase Agreement:

“Dotcover (De Novo Shared Contract)”

“Mockito: powermock (De Novo Shared Contract)”

(i)The following is hereby removed in its entirety from the heading named “Professional Services Agreements” in Schedule 1.11 to the Original Purchase Agreement:

“Professional Services Agreement, by and between Seller and Knowledge Power Group, dated January 15, 2007, as amended by that certain Amendment No. 1 to the Professional Services Agreement, dated June 23, 2014. (De Novo Shared Contract)*”

8.Closing.

(j)Section 1.7(a) of the Original Purchase Agreement is hereby amended and restated in its entirety as follows:

3

“(a) The closing of the transactions contemplated hereby (the “Closing”) shall take place at 12:01 a.m., Eastern Time, on July 1, 2022 (the Closing Date”) at the offices of Latham & Watkins LLP, 1271 6th Ave, New York, New York 10020. The Closing will be deemed effective as of 12:01 a.m., Eastern Time, on the Closing Date for tax and accounting purposes (except as otherwise required by applicable Law).”

9.Additional De Novo Shared Contracts.

(k)The following is hereby added to Schedule 1.11 to the Original Purchase Agreement under the heading named “Developer Tools: Licensed”:

“Flyway (Red Gate)(De Novo Shared Contract)

(l)The following is hereby added to Schedule 1.11 to the Original Purchase Agreement under the heading named “Developer Tools: Free / Open Source”:

“Mockito (De Novo Shared Contract)

Powermock (De Novo Shared Contract)

WinSCP (De Novo Shared Contract)

PUTTY (De Novo Shared Contract)

Sharex (De Novo Shared Contract)

Notepad (De Novo Shared Contract)

Sourcetree (De Novo Shared Contract)

IntelliJ (De Novo Shared Contract)

WinMerge (De Novo Shared Contract)

Greenshot (De Novo Shared Contract)

Jacksum (De Novo Shared Contract)

7zip (De Novo Shared Contract)

SQL Server Manager (De Novo Shared Contract)

Captiva Cloud Toolkit (De Novo Shared Contract)

Cucumber (De Novo Shared Contract)

Debugger for Java (De Novo Shared Contract)

Docker Engine (De Novo Shared Contract)

Driver Chrome (De Novo Shared Contract)

4

Extends Report (De Novo Shared Contract)

Extension for Google Chrome y Firefox “Chropath” (De Novo Shared Contract)

Extension pack for Java (De Novo Shared Contract)

Gherkin full support (De Novo Shared Contract)

Gitbash (De Novo Shared Contract)

Gradle (De Novo Shared Contract)

Groovy (De Novo Shared Contract)

JD GUI (De Novo Shared Contract)

Language Support for Java/TM (De Novo Shared Contract)

Snippets and Syntax highlight for Gherkin (De Novo Shared Contract)

Test Runner for Java (De Novo Shared Contract)

Test NG (De Novo Shared Contract)

Transporter (De Novo Shared Contract)

Xming (De Novo Shared Contract)

Git (De Novo Shared Contract)

Java SDK (De Novo Shared Contract)

Snagit (De Novo Shared Contract)

Docker Desktop - Workstation (De Novo Shared Contract)”

(m)Item 6 under the heading named “Middleware” in Schedule 1.11 to the Original Purchase Agreement is hereby amended and restated in its entirety as follows to become Item 5 under such heading:

“Open JDK (Red Hat Open JDK) (De Novo Shared Contract)”

10.Section Reference in Original Purchase Agreement.

(n)Section 7.2(d) of the Original Purchase Agreement is hereby amended and restated in its entirety as follows:

“(d)    Buyer and Buyer Parent shall have received a certificate, dated the Closing Date and signed by a duly authorized representative of each of Seller Parent and Seller, stating on behalf of Seller Parent and Seller that each of the conditions set forth in Section 7.2(a), Section 7.2(b),Section 7.2(c), and Section 7.2(e) (Other Conditions to the Obligations of

5

Buyer Parent and Buyer) were satisfied or had been waived by Buyer as of the Closing Date.”

11.Definition of Financial Information.

(o)The definition of “Financial Information” in Section 11.1 of the Original Purchase Agreement is hereby amended and restated in its entirety as follows:

“Financial Information” means the unaudited, adjusted carve-out statement of revenue and expenses relating to the Acquired Services for the fiscal years ended December 31, 2019 and December 31, 2020 and the six (6) months ended June 30, 2021 and select balance sheet information relating to the Acquired Services as of December 31, 2020 and June 30, 2021, attached to Section 2.3 (Financial Information and 2020 Adjusted EBITDA) of the Seller Disclosure Schedule.”

12.Additional Transferred Intellectual Property.

Schedule 1.1(d) to the Original Purchase Agreement is hereby amended and restated in its entirety as Annex 1 attached hereto.

13.Additional Transferred Assets.

Schedule 1.1(h) to the Original Purchase Agreement is hereby amended and restated in its entirety as Annex 2 attached hereto.

14.T+1 Milestones.

The T+1 Milestone Schedule included as Annex B of the Original Purchase Agreement is hereby amended and restated in its entirety as Annex 3 attached hereto.

15.Certain Excluded Services.

(p)Item 2 under Schedule 1.2(g) to the Original Purchase Agreement is hereby amended by adding the following after last sentence of such item:

“Fees pursuant to these retained services shall be included in service code 3272.”

(q)Item 3 under Schedule 1.2(g) to the Original Purchase Agreement is hereby amended by adding the following after last sentence of such item:

“Fees pursuant to these retained services shall be included in service code 3273.”

(r)Item 5 under Schedule 1.2(g) to the Original Purchase Agreement is hereby amended by adding the following after last sentence of such item:

“Fees pursuant to these retained services shall be included in service code 3281.”

(s)Item 6 under Schedule 1.2(g) to the Original Purchase Agreement is hereby amended by adding the following after last sentence of such item:

6

“These transactions are related to applications TSMS (Purchase Alerts), 3DS (3D Secure), ESTA (Account Statement, E-commercial and Other Notifications), PerWeb notifications and DEBQ (Virtual Queueing). Fees pursuant to these retained services shall be included in service code 3271.”

16.Schedule Amendments.

(t)Schedule 1.1(a) of the Original Purchase Agreement shall be as set forth on Annex 4 attached hereto (which reflects the amendments set forth in this Amendment);

(u)Schedule 1.1(b) of the Original Purchase Agreement shall be as set forth on Annex 5 attached hereto (which reflects the amendments set forth in Amendment);

(v)Schedule 1.2(g) of the Original Purchase Agreement shall be as set forth on Annex 6 attached hereto (which reflects the amendments set forth in Amendment); and

(w)Schedule 1.11 of the Original Purchase Agreement shall be as set forth on Annex 7 attached hereto (which reflects the amendments set forth in Amendment).

17.No Waiver. The Parties each acknowledge and agree that (i) the Closing shall not constitute a waiver by either Party of Seller’s obligation under Section 1.1 of the Purchase Agreement to sell, transfer, convey, assign and deliver to Buyer the Transferred Assets at the Closing, in each case free and clear of all Encumbrances other than Permitted Encumbrances, and (ii) it shall not be a violation of Seller’s covenant and obligation under Section 1.1 of the Purchase Agreement if any Encumbrances other than Permitted Encumbrances on the Transferred Assets are released on the Closing Date after 12:01 a.m., Eastern Time.

18.Miscellaneous Provisions. Sections 10.2 (Notices), 10.3 (Entire Agreement), 10.4 (Amendment), 10.5 (Waivers), 10.6 (Severability), 10.7 (No Third Party Beneficiaries), 10.8 (Assignment), 10.9 (Governing Law; Submission to Jurisdiction; Waiver of Jury Trial), 10.10 (Remedies), 10.11 (Interpretation; Construction) and 10.12 (Counterparts and Electronic Signatures) of the Original Purchase Agreement are hereby incorporated by reference, mutatis mutandis.

19.Full Force and Effect. Each of the Parties confirms that this Amendment is intended to be a part of, and will serve as a valid, written amendment to, the Original Purchase Agreement. Except as otherwise set forth in this Amendment, this Amendment shall not by implication or otherwise alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Original Purchase Agreement, which are hereby ratified and affirmed in all respects and shall continue in full force and effect, and this Amendment will not operate as an extension or waiver by the parties to the Original Purchase Agreement of any other condition, covenant, obligation, right, power or privilege under the Original Purchase Agreement.

7

IN WITNESS WHEREOF, this Amendment has been signed by or on behalf of each of the Parties as of the date first above written.

BUYER:
Banco Popular de Puerto Rico
By:	/s/ Felix Hernandez
	Name: Felix Fernandez
	Title: Senior Vice President of Popular, Inc.
BUYER PARENT:
Popular, Inc.
By:	/s/ Felix Hernandez
	Name: Felix Fernandez
	Title: Senior Vice President

[Signature Page to Amendment No. 1 to Purchase Agreement]

SELLER:
Evertec, Inc.
By:	/s/ Luis A. Rodriguez
	Name: Luis A. Rodriguez
	Title: Executive Vice President, Chief Legal and Corporate Development Officer
SELLER PARENT:
Evertec Group, LLC
By:	/s/ Luis A. Rodriguez
	Name: Luis A. Rodriguez
	Title: Executive Vice President, Chief Legal and Corporate Development Officer

[Signature Page to Amendment No. 1 to Purchase Agreement]

EX-31.1

EXHIBIT 31.1

Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) or 15d-14(a)

I, Morgan Schuessler, certify that:

1.I have reviewed this report on Form 10-Q of EVERTEC, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 4, 2022	/s/ Morgan Schuessler
	Morgan Schuessler
	Chief Executive Officer

EX-31.2

EXHIBIT 31.2

Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or 15d-14(a)

I, Joaquin A. Castrillo-Salgado, certify that:

1.I have reviewed this report on Form 10-Q of EVERTEC, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 4, 2022	/s/ Joaquin A. Castrillo-Salgado
	Joaquin A. Castrillo-Salgado
	Chief Financial Officer

EX-32.1

EXHIBIT 32.1

Certification Pursuant to 18 U.S.C. Section 1350

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002 , the undersigned officer of EVERTEC, Inc. (the “Company”), does hereby certify, to such officer’s knowledge, that:

The Quarterly Report on Form 10-Q for the quarter ended September 30, 2022 (the “Form 10-Q”) of the Company fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 4, 2022	/s/ Morgan Schuessler
	Morgan Schuessler
	Chief Executive Officer

EX-32.2

EXHIBIT 32.2

Certification Pursuant to 18 U.S.C. 1350

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to 18 U.S.C. 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of EVERTEC, Inc. (the “Company”), does hereby certify, to such officer’s knowledge, that:

The Quarterly Report on Form 10-Q for the quarter ended September 30, 2022 (the “Form 10-Q”) of the Company fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 4, 2022	/s/ Joaquin A. Castrillo-Salgado
	Joaquin A. Castrillo-Salgado
	Chief Financial Officer

XML

Cover - shares	9 Months Ended
	Sep. 30, 2022	Oct. 28, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2022
Document Transition Report	false
Entity File Number	001-35872
Entity Registrant Name	EVERTEC, Inc.
Entity Incorporation, State or Country Code	PR
Entity Tax Identification Number	66-0783622
Entity Address, Address Line One	Cupey Center Building,
Entity Address, Address Line Two	Road 176, Kilometer 1.3,
Entity Address, City or Town	San Juan,
Entity Address, State or Province	PR
Entity Address, Postal Zip Code	00926
City Area Code	787
Local Phone Number	759-9999
Title of 12(b) Security	Common Stock, $0.01 par value per share
Trading Symbol	EVTC
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)		65,202,196
Entity Central Index Key	0001559865
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Amendment Flag	false

XML

Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Current Assets:
Cash and cash equivalents	$ 224,971	$ 266,351
Restricted cash	18,705	19,566
Accounts receivable, net	112,293	113,285
Prepaid expenses and other assets	40,992	37,148
Total current assets	396,961	436,350
Debt securities available-for-sale, at fair value	2,198	3,041
Investment in equity investee	14,071	12,054
Property and equipment, net	49,928	48,533
Operating lease right-of-use asset	17,799	21,229
Goodwill	417,819	393,318
Other intangible assets, net	196,316	213,288
Deferred tax asset	5,414	6,910
Net investment in leases	14	107
Derivative asset	7,070	0
Other long-term assets	13,378	9,926
Total assets	1,120,968	1,144,756
Current Liabilities:
Accrued liabilities	82,798	74,540
Accounts payable	33,489	28,484
Contract liability	17,051	17,398
Income tax payable	10,757	7,132
Current portion of long-term debt	28,813	19,750
Current portion of operating lease liability	6,007	5,580
Total current liabilities	178,915	152,884
Long-term debt	426,691	444,785
Deferred tax liability	7,998	2,369
Contract liability - long term	34,726	36,258
Operating lease liability - long-term	13,320	16,456
Derivative liability	0	13,392
Other long-term liabilities	4,063	8,344
Total liabilities	665,713	674,488
Commitments and contingencies (Note 14)
Stockholders’ equity
Preferred stock, par value $0.01; 2,000,000 shares authorized; none issued	0	0
Common stock, par value $0.01; 206,000,000 shares authorized; 65,588,270 shares issued and outstanding as of September 30, 2022 (December 31, 2021 - 71,969,856)	655	719
Additional paid-in capital	0	7,565
Accumulated earnings	480,740	506,051
Accumulated other comprehensive loss, net of tax	(29,586)	(48,123)
Total EVERTEC, Inc. stockholders’ equity	451,809	466,212
Non-controlling interest	3,446	4,056
Total equity	455,255	470,268
Total liabilities and equity	$ 1,120,968	$ 1,144,756

XML

Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Preferred stock par value (in usd per share)	$ 0.01	$ 0.01
Preferred stock authorized (in shares)	2,000,000	2,000,000
Preferred stock issued (in shares)	0	0
Common stock par value (in usd per share)	$ 0.01	$ 0.01
Common stock authorized (in shares)	206,000,000	206,000,000
Common stock issued (in shares)	65,588,270	71,969,856
Common stock outstanding (in shares)	65,588,270	71,969,856

XML

Unaudited Condensed Consolidated Statements of Income and Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Income Statement [Abstract]
Revenues (affiliates Note 16)	$ 145,803	$ 145,883	$ 456,622	$ 434,559
Operating costs and expenses
Cost of revenues, exclusive of depreciation and amortization	76,272	62,995	215,244	182,180
Selling, general and administrative expenses	26,001	17,126	66,436	49,980
Depreciation and amortization	19,712	18,745	58,432	56,091
Total operating costs and expenses	121,985	98,866	340,112	288,251
Income from operations	23,818	47,017	116,510	146,308
Non-operating income (expenses)
Interest income	807	504	2,279	1,343
Interest expense	(6,763)	(5,684)	(18,242)	(17,248)
Earnings of equity method investment	688	411	2,120	1,307
(Loss) gain on foreign currency remeasurement	(7,779)	(304)	(6,858)	652
Gain on sale of a business	135,642	0	135,642	0
Other income (expenses)	374	450	1,621	2,067
Total non-operating income (expenses)	122,969	(4,623)	116,562	(11,879)
Income before income taxes	146,787	42,394	233,072	134,429
Income tax expense	9,048	7,134	22,911	14,474
Net income	137,739	35,260	210,161	119,955
Less: Net loss attributable to non-controlling interest	(75)	(54)	(140)	(59)
Net income attributable to EVERTEC, Inc.’s common stockholders	137,814	35,314	210,301	120,014
Other comprehensive income (loss), net of tax of $716, $382, $1,442 and $817
Foreign currency translation adjustments	4,125	(6,942)	(210)	(7,823)
Gain on cash flow hedges	5,762	1,537	18,824	6,814
Unrealized (loss) gain on change in fair value of debt securities available-for-sale	(21)	8	(77)	97
Total comprehensive income attributable to EVERTEC, Inc.’s common stockholders	$ 147,680	$ 29,917	$ 228,838	$ 119,102
Net income per common share - basic attributable to EVERTEC, Inc.’s common stockholders (in usd per share)	$ 2.08	$ 0.49	$ 3.01	$ 1.66
Net income per common share - diluted attributable to EVERTEC, Inc.’s common stockholders (in usd per share)	$ 2.06	$ 0.48	$ 2.98	$ 1.65

XML

Unaudited Condensed Consolidated Statements of Income and Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Income Statement [Abstract]
Other comprehensive income (loss), tax	$ 716	$ 382	$ 1,442	$ 817
Revenues	$ 145,803	$ 145,883	$ 456,622	$ 434,559

XML

Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Earnings	Accumulated  Other Comprehensive Loss	Non-Controlling Interest
Beginning balance (in shares) at Dec. 31, 2020		72,137,678
Beginning balance at Dec. 31, 2020	$ 342,429	$ 721	$ 5,340	$ 379,934	$ (48,254)	$ 4,688
Changes in Stockholders’ Equity
Share-based compensation recognized	3,380		3,380
Repurchase of common stock (in shares)		(382,974)
Repurchase of common stock	(14,268)	$ (4)	(1,290)	(12,974)
Restricted stock units delivered (in shares)		411,739
Restricted stock units delivered	(8,728)	$ 4	(7,430)	(1,302)
Net income (loss)	35,604			35,503		101
Cash dividends declared on common stock, $0.05 per share	(3,605)			(3,605)
Other comprehensive income (loss)	1,195				1,576	(381)
Ending balance (in shares) at Mar. 31, 2021		72,166,443
Ending balance at Mar. 31, 2021	$ 356,007	$ 721	0	397,556	(46,678)	4,408
Changes in Stockholders’ Equity
Cash dividends declared (in usd per share)	$ 0.05
Beginning balance (in shares) at Dec. 31, 2020		72,137,678
Beginning balance at Dec. 31, 2020	$ 342,429	$ 721	5,340	379,934	(48,254)	4,688
Changes in Stockholders’ Equity
Net income (loss)	119,955
Ending balance (in shares) at Sep. 30, 2021		71,969,856
Ending balance at Sep. 30, 2021	427,930	$ 719	3,708	468,533	(49,166)	4,136
Beginning balance (in shares) at Mar. 31, 2021		72,166,443
Beginning balance at Mar. 31, 2021	356,007	$ 721	0	397,556	(46,678)	4,408
Changes in Stockholders’ Equity
Share-based compensation recognized	3,855		3,855
Repurchase of common stock (in shares)		(231,314)
Repurchase of common stock	(10,120)	$ (2)	(3,790)	(6,328)
Restricted stock units delivered (in shares)		34,727
Restricted stock units delivered	(65)		(65)
Net income (loss)	49,091			49,197		(106)
Cash dividends declared on common stock, $0.05 per share	(3,608)			(3,608)
Other comprehensive income (loss)	2,884				2,909	(25)
Ending balance (in shares) at Jun. 30, 2021		71,969,856
Ending balance at Jun. 30, 2021	$ 398,044	$ 719	0	436,817	(43,769)	4,277
Changes in Stockholders’ Equity
Cash dividends declared (in usd per share)	$ 0.05
Share-based compensation recognized	$ 3,708		3,708
Net income (loss)	35,260			35,314		(54)
Cash dividends declared on common stock, $0.05 per share	(3,598)			(3,598)
Other comprehensive income (loss)	(5,484)				(5,397)	(87)
Ending balance (in shares) at Sep. 30, 2021		71,969,856
Ending balance at Sep. 30, 2021	$ 427,930	$ 719	3,708	468,533	(49,166)	4,136
Changes in Stockholders’ Equity
Cash dividends declared (in usd per share)	$ 0.05
Beginning balance (in shares) at Dec. 31, 2021	71,969,856	71,969,856
Beginning balance at Dec. 31, 2021	$ 470,268	$ 719	7,565	506,051	(48,123)	4,056
Changes in Stockholders’ Equity
Share-based compensation recognized	4,279		4,279
Repurchase of common stock (in shares)		(521,643)
Repurchase of common stock	(21,179)	$ (5)	(6,193)	(14,981)
Restricted stock units delivered (in shares)		251,085
Restricted stock units delivered	(5,648)	$ 3	(5,651)
Net income (loss)	38,866			38,898		(32)
Cash dividends declared on common stock, $0.05 per share	(3,598)			(3,598)
Other comprehensive income (loss)	12,160				11,912	248
Ending balance (in shares) at Mar. 31, 2022		71,699,298
Ending balance at Mar. 31, 2022	$ 495,148	$ 717	0	526,370	(36,211)	4,272
Changes in Stockholders’ Equity
Cash dividends declared (in usd per share)	$ 0.05
Beginning balance (in shares) at Dec. 31, 2021	71,969,856	71,969,856
Beginning balance at Dec. 31, 2021	$ 470,268	$ 719	7,565	506,051	(48,123)	4,056
Changes in Stockholders’ Equity
Net income (loss)	$ 210,161
Ending balance (in shares) at Sep. 30, 2022	65,588,270	65,588,270
Ending balance at Sep. 30, 2022	$ 455,255	$ 655	0	480,740	(29,586)	3,446
Beginning balance (in shares) at Mar. 31, 2022		71,699,298
Beginning balance at Mar. 31, 2022	495,148	$ 717	0	526,370	(36,211)	4,272
Changes in Stockholders’ Equity
Share-based compensation recognized	5,165		5,165
Repurchase of common stock (in shares)		(357,114)
Repurchase of common stock	(14,036)	$ (4)	(3,466)	(10,566)
Restricted stock units delivered (in shares)		25,149
Restricted stock units delivered	(28)		(28)
Net income (loss)	33,556			33,589		(33)
Cash dividends declared on common stock, $0.05 per share	(3,579)			(3,579)
Other comprehensive income (loss)	(3,625)				(3,241)	(384)
Ending balance (in shares) at Jun. 30, 2022		71,367,333
Ending balance at Jun. 30, 2022	$ 512,601	$ 713	1,671	545,814	(39,452)	3,855
Changes in Stockholders’ Equity
Cash dividends declared (in usd per share)	$ 0.05
Share-based compensation recognized	$ 5,296		5,296
Repurchase of common stock (in shares)		(1,190,388)
Repurchase of common stock	(37,317)	$ (12)	(6,958)	(30,347)
Restricted stock units delivered (in shares)		485
Restricted stock units delivered	(9)		(9)
Net income (loss)	137,739			137,814		(75)
Cash dividends declared on common stock, $0.05 per share	(3,338)			(3,338)
Other comprehensive income (loss)	9,532				9,866	(334)
Common stock received in exchange of the sale of a Business (in shares)		(4,589,160)
Common stock received in exchange of the sale of a Business	$ (169,249)	$ (46)		(169,203)
Ending balance (in shares) at Sep. 30, 2022	65,588,270	65,588,270
Ending balance at Sep. 30, 2022	$ 455,255	$ 655	$ 0	$ 480,740	$ (29,586)	$ 3,446
Changes in Stockholders’ Equity
Cash dividends declared (in usd per share)	$ 0.05

XML

Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity (Parenthetical) - $ / shares				3 Months Ended
	Jul. 28, 2022	Apr. 21, 2022	Feb. 15, 2022	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021
Statement of Stockholders' Equity [Abstract]
Cash dividends declared (in usd per share)	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05

XML

Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Cash flows from operating activities
Net income (loss)	$ 210,161	$ 119,955
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	58,432	56,091
Amortization of debt issue costs and accretion of discount	1,187	1,423
Operating lease amortization	4,576	4,443
Provision for expected credit losses and sundry losses	3,363	1,428
Deferred tax benefit	(1,699)	(1,119)
Share-based compensation	14,740	10,943
Gain on sale of a business	(135,642)	0
Gain from sale of assets	0	(778)
Loss on disposition of property and equipment and impairment of software	4,691	1,168
Earnings of equity method investment	(2,120)	(1,307)
Dividend received from equity method investment	2,053	1,183
Loss (gain) on valuation of foreign currency	6,858	(652)
(Increase) decrease in assets:
Accounts receivable, net	3,503	(593)
Prepaid expenses and other assets	(3,417)	(3,070)
Other long-term assets	(4,389)	(339)
Increase (decrease) in liabilities:
Accrued liabilities and accounts payable	468	(773)
Income tax payable	2,921	(2,685)
Contract liability	1,344	(2,654)
Operating lease liabilities	(4,450)	(4,107)
Other long-term liabilities	(3,571)	(2,702)
Total adjustments	(51,152)	55,900
Net cash provided by operating activities	159,009	175,855
Cash flows from investing activities
Additions to software	(28,287)	(31,004)
Acquisition of customer relationships	(10,607)	(14,750)
Acquisitions, net of cash acquired	(44,369)	0
Property and equipment acquired	(16,313)	(12,388)
Proceeds from sales of property and equipment	77	805
Purchase of certificates of deposit	(7,264)	0
Proceeds from maturities of available-for-sale debt securities	1,015	0
Acquisition of available-for-sale debt securities	(254)	(2,968)
Net cash used in investing activities	(106,002)	(60,305)
Cash flows from financing activities
Statutory withholding taxes paid on share-based compensation	(5,685)	(8,793)
Repayment of short-term borrowings for purchase of equipment and software	(901)	(1,603)
Dividends paid	(10,515)	(10,811)
Repurchase of common stock	(72,532)	(24,388)
Repayment of long-term debt	(9,875)	(28,482)
Net cash used in financing activities	(99,508)	(74,077)
Effect of foreign exchange rate on cash, cash equivalents and restricted cash	4,260	215
Net (decrease) increase in cash, cash equivalents and restricted cash	(42,241)	41,688
Cash, cash equivalents and restricted cash at beginning of the period	285,917	221,105
Cash, cash equivalents and restricted cash at end of the period	243,676	262,793
Reconciliation of cash, cash equivalents and restricted cash
Cash and cash equivalents	224,971	244,129
Restricted cash	18,705	18,664
Cash, cash equivalents and restricted cash	243,676	262,793
Supplemental disclosure of cash flow information:
Cash paid for interest	18,523	16,289
Cash paid for income taxes	24,386	19,468
Supplemental disclosure of non-cash activities:
Payable due to vendor related to equipment and software acquired	0	739
Non-cash investing activities
Software exchanged for common stock	18,761	0
Goodwill exchanged for common stock	5,813	0
CDs transferred in the acquisition of a business	7,169	0
Non-cash financing and investing activities
Common stock received and retired for sale of a business	$ 169,249	$ 0

XML

The Company and Basis of Presentation

9 Months Ended

Sep. 30, 2022

Accounting Policies [Abstract]

The Company and Basis of Presentation

The Company and Basis of Presentation

The Company

EVERTEC, Inc. and its subsidiaries (collectively the “Company” or “EVERTEC”) is a leading full-service transaction processing business in Latin America and the Caribbean. The Company is based in Puerto Rico and provides a broad range of merchant acquiring, payment processing and business process management services. The Company provides services across 26 countries in the region. EVERTEC owns and operates the ATH network, one of the leading personal identification number ("PIN") debit and automated teller machine ("ATM") networks in the Caribbean and Latin America. In addition, EVERTEC provides a comprehensive suite of services for core bank processing and cash processing in Puerto Rico and technology outsourcing in the regions the Company serves. EVERTEC serves a broad and diversified customer base of leading financial institutions, merchants, corporations, and government agencies with solutions that are essential to their operations.

Basis of Presentation

The unaudited condensed consolidated financial statements of EVERTEC have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of the accompanying unaudited condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the unaudited condensed consolidated financial statements. Actual results could differ from these estimates.

Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted from these statements pursuant to the rules and regulations of the Securities and Exchange Commission and, accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the Audited Consolidated Financial Statements of the Company for the year ended December 31, 2021, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. In the opinion of management, the accompanying unaudited condensed consolidated financial statements, prepared in accordance with GAAP, contain all adjustments necessary for a fair presentation. Intercompany accounts and transactions are eliminated in consolidation. Certain amounts from prior periods have been reclassified to conform to the current period presentation.

XML

Recent Accounting Pronouncements

9 Months Ended

Sep. 30, 2022

Accounting Changes and Error Corrections [Abstract]

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Recently adopted accounting pronouncements

In October 2021, the FASB issued ASU 2021-08 to update ASC 805, Business Combinations, to require that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts. The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company selected to early adopt this guidance for its most recent business combination.

XML

Business Acquisitions and Dispositions

9 Months Ended

Sep. 30, 2022

Business Combination and Asset Acquisition [Abstract]

Business Acquisitions and Dispositions

Business Acquisitions and Dispositions

Acquisition of a Business

On July 1, 2022, EVERTEC's main operating subsidiary, EVERTEC Group closed on the acquisition of 100% of the share capital of BBR SpA ("BBR"), a payment solutions and business technology company with operations in Chile and Peru, by entering into a share purchase agreement (Contrato de Compraventa de Acciones), between EVERTEC Group and IG Capital, Cuatro R, Rivers and Brela ( collectively, the "Sellers"). As consideration for the purchase, the Company transferred to the sellers upon closing cash that amounted to $45.9 million and certificates of deposits that amounted to $7.3 million. The BBR acquisition increases the Company's payment solution offerings, provides access to larger merchants in Chile and expands the Company's physical presence into Peru.

The Company accounted for this transaction as a business combination. The following table details the preliminary fair value of assets acquired and liabilities assumed from the BBR acquisition:

	Assets/Liabilities (at fair value)
( In thousands)
Cash and cash equivalents	$	1,551
Accounts receivable, net	2,969
Property and equipment, net	3
Operating lease right-of-use asset	76
Goodwill	33,247
Other intangible assets, net	24,850
Deferred tax asset	267
Total assets acquired	62,963
Accounts payable	1,039
Contract liability	1,136
Operating lease liability	85
Deferred tax liability	7,614
Total liabilities assumed	$	9,874

The following table details the major groups of intangible assets acquired and the weighted average amortization period for these assets:

	Amount		Weighted-average life
(Dollar amounts in thousands)
Customer relationships	$	22,500	15
Trademark	1,250		5
Software packages	1,100		5
Total	$	24,850	14

Refer to Note 6 Goodwill and Other Intangible Assets for detail of goodwill allocated by reportable segments. The goodwill is primarily attributed to synergies. None of the goodwill is deductible for income tax purposes.

Revenues and earnings from the BBR acquisition were not material for either the three or nine months ended September 30, 2022. Pro forma results of operations have not been presented because the effect of this business combination is not material to the consolidated financial condition and results of operations.

Sale of a Business

On July 1, 2022, the Company closed on a definitive agreement with Banco Popular de Puerto Rico and its parent, Popular, to sell software and prepaid assets and transfer certain employees in connection with those assets (the "Business"). As consideration for the sale of the Business, Popular delivered 4.6 million shares of Evertec common stock held by Popular with a value of $169.2 million at close (the "Popular Transaction"). Additionally, management concluded that $15.4 million included in the Company's contract liability should be treated as consideration for the sale therefore, total consideration for the sale of the Business amounted to $184.7 million. The Company also modified and extended the main commercial agreements with Popular, including a 10-year extension of the Merchant Acquiring Independent Sales Organization Agreement, a 5-year extension of the ATH Network Participation Agreement and a 3-year extension of the MSA. The MSA modifications, among other things, includes the elimination of the exclusivity requirement which was the basis for a non-compete intangible asset recorded in 2010 as part of the original MSA that was amortized over a 15 year period. The Company also entered into new contracts and transition services agreements concurrently with the close of the Popular Transaction with terms between 3 months and 36 months.

Given the elimination of the exclusivity clause discussed above, the Company determined that the balance of the non-compete intangible asset on July 1, 2022 of $12.3 million, should be written off as a component of the gain on sale of a business. The Company also concluded that certain provisions in the new contracts and transition services agreements with Popular were not at fair value, therefore requiring that a portion of the gain be allocated to these contracts. The Company recorded a contract liability based on relative fair value of $11.7 million in connection with this conclusion.

The following table details the consideration for the sale of the business, major classes of assets and liabilities included in the business sale and the gain on sale of a business:

	July 1, 2022
(In thousands)
Common stock received in exchange for the sale of a business	$	169,249
Contract liability representing consideration for the sale of a business	15,426
Total consideration for the sale of a business	184,675
Goodwill	(5,813)
Other intangible assets, net	(31,011)
Prepaid expenses and other assets	(497)
Contract liability	(11,712)
Gain on sale of a business	$	135,642

XML

Debt Securities

9 Months Ended

Sep. 30, 2022

Investments, Debt and Equity Securities [Abstract]

Debt Securities

Debt Securities

The amortized cost, gross unrealized gains and losses recorded in OCI and estimated fair value of debt securities available-for-sale by contractual maturity as of September 30, 2022 and December 31, 2021 were as follows:

	September 30, 2022
(In thousands)			Gross unrealized
	Amortized cost		Gains	Losses	Fair Value
Costa Rica Government Obligations
After 1 to 5 years	$	2,219	—	(21)	$	2,198

	December 31, 2021
(In thousands)			Gross unrealized
	Amortized cost		Gains		Losses		Fair Value
Costa Rica Government Obligations
After 1 to 5 years	$	2,963	$	78	$	—	$	3,041

Debt securities are held by a trust in the Costa Rica National Bank as a collateral requirement for settlement activities. The Company may substitute securities as needed but must maintain certain levels of collateral based on transaction volumes.

For both the three and nine months period ended September 30, 2022, the Company purchased $0.3 million in debt securities that were classified as available-for-sale. No debt securities were sold during the nine months ended September 30, 2022, while $1.0 million matured during the same period. A provision for credit losses was not required for the periods presented above. Refer to Note 8 for disclosure requirements related to the fair value hierarchy.

XML

Property and Equipment, net

9 Months Ended

Sep. 30, 2022

Property, Plant and Equipment [Abstract]

Property and Equipment, net

Property and Equipment, net

Property and equipment, net consists of the following:

(In thousands)	Useful life in years	September 30, 2022		December 31, 2021
Buildings	30	$	1,387	$	1,359
Data processing equipment	3 - 5	151,545		141,359
Furniture and equipment	3 - 20	8,742		7,718
Leasehold improvements	5 -10	3,572		3,277
		165,246		153,713
Less - accumulated depreciation and amortization		(116,531)		(106,365)
Depreciable assets, net		48,715		47,348
Land		1,213		1,185
Property and equipment, net		$	49,928	$	48,533

Depreciation and amortization expense related to property and equipment for three and nine months ended September 30, 2022 amounted to $4.6 million and $13.9 million, respectively, compared to $4.2 million and $13.0 million for the corresponding periods in 2021.

During the nine months ended September 30, 2021, the Company recorded a loss on the disposition of damaged POS devices amounting to $0.5 million through cost of revenues.

XML

Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill, allocated by operating segments, were as follows (see Note 17):

(In thousands)	Payment Services - Puerto Rico & Caribbean		Payment Services - Latin America		Merchant Acquiring, net		Business Solutions		Total
Balance at December 31, 2021	$	160,972	$	48,402	$	138,121	$	45,823	$	393,318
Goodwill attributable to acquisition	—		33,247		—		—		33,247
Goodwill attributable to the sale of a business	—		—		—		(5,813)		(5,813)
Foreign currency translation adjustments	—		(2,933)		—		—		(2,933)
Balance at September 30, 2022	$	160,972	$	78,716	$	138,121	$	40,010	$	417,819

Goodwill is tested for impairment on an annual basis as of August 31, or more often if events or changes in circumstances indicate there may be impairment. The Company may test for goodwill impairment using a qualitative or a quantitative analysis. In a qualitative analysis, the Company assesses whether it is "more likely than not" that the fair value of a reporting unit is less than its carrying amount. In the quantitative analysis, the Company compares the estimated fair value of the reporting units to their carrying values, including goodwill. No impairment losses were recognized for the periods ended September 30, 2022 or 2021.

The carrying amount of other intangible assets at September 30, 2022 and December 31, 2021 was as follows:

		September 30, 2022
(In thousands)	Useful life in years	Gross amount		Accumulated amortization		Net carrying amount
Customer relationships	8 - 15	$	390,221	$	(295,170)	$	95,051
Trademarks	1 - 15	43,025		(37,638)		$	5,387
Software packages	3 - 10	332,767		(236,889)		$	95,878
Other intangible assets, net		$	766,013	$	(569,697)	$	196,316

		December 31, 2021
(Dollar amounts in thousands)	Useful life in years	Gross amount		Accumulated amortization		Net carrying amount
Customer relationships	8 - 14	$	357,991	$	(272,732)	$	85,259
Trademarks	2 - 15	41,901		(36,684)		5,217
Software packages	3 - 10	326,320		(217,643)		108,677
Non-compete agreement	15	56,539		(42,404)		14,135
Other intangible assets, net		$	782,751	$	(569,463)	$	213,288

In the second quarter of 2022, the Company acquired a customer relationship in Puerto Rico for $10.6 million that is being amortized over five years. Revenues and expenses in connection with this customer relationship are included as part of the Payment Services - Puerto Rico & Caribbean segment. As part of the BBR acquisition, the Company added a customer relationship amounting to $22.5 million, a trademark of $1.3 million, and software of $1.1 million, refer to Note 3- Business Acquisitions and Dispositions for further details. On July 1, 2022, in connection with the closing of the Popular Transaction, the remaining balance of the Non-compete agreement of $12.3 million was written off against the transaction gain. The Company no longer has non-compete intangibles on its Balance Sheets as of September 30, 2022. Refer to Note 3- Business Acquisitions and Dispositions for further details.

Amortization expense related to other intangibles for the three and nine months ended September 30, 2022 amounted to $15.2 million and $44.5 million, respectively, compared to $14.5 million and $43.0 million for the corresponding periods in 2021, respectively. During the nine months ended September 30, 2022, the Company recorded an impairment loss through cost of revenues of $4.1 million for a multi-year software development for which a reduction in future cash flows was projected. During the nine months ended September 30, 2021, the Company recorded an impairment charge through cost of revenues

amounting to $0.6 million for a software solution that will no longer be used. Both impairment charges affected the Company’s Payment Services – Puerto Rico & Caribbean segment.

The estimated amortization expense of the other intangible balances outstanding at September 30, 2022 for the next five years is as follows:

(Dollar amounts in thousands)
Remaining 2022	$	14,156
2023	53,108
2024	41,611
2025	16,218
2026	11,300

XML

Debt and Short-Term Borrowings

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

Debt and Short-Term Borrowings

Debt and Short-Term Borrowings

Total debt at September 30, 2022 and December 31, 2021 was as follows:

(In thousands)	September 30, 2022		December 31, 2021
2023 Term A Loan bearing interest at a variable interest rate (LIBOR plus applicable margin(1)(2))	$	162,930	$	170,875
2024 Term B Loan bearing interest at a variable interest rate (LIBOR plus applicable margin(1)(3))	292,574		293,660
Note payable due January 1, 2022(1)	—		758
Total debt	$	455,504	$	465,293

(1)Net of unaccreted discount and unamortized debt issue costs, as applicable.

(2)Applicable margin of 1.75% at September 30, 2022 and December 31, 2021.

(3)Subject to a minimum rate ("LIBOR floor") of 0% plus applicable margin of 3.50% at September 30, 2022 and December 31, 2021.

Secured Credit Facilities

On November 27, 2018, EVERTEC and EVERTEC Group, LLC ("EVERTEC Group") (collectively, the “Borrower”) entered into a credit agreement providing for the secured credit facilities, consisting of a $220.0 million term loan A facility that matures on November 27, 2023 (the “2023 Term A Loan"), a $325.0 million term loan B facility that matures on November 27, 2024 (the “2024 Term B Loan”), and a $125.0 million revolving credit facility (the “Revolving Facility”) that matures on November 27, 2023, with a syndicate of lenders and Bank of America, N.A. (“Bank of America”), as administrative agent, collateral agent, swingline lender and line of credit issuer (collectively the “2018 Credit Agreement”).

The 2018 Credit Agreement requires mandatory repayment of outstanding principal balances based on a percentage of excess cash flow, provided that no such payment shall be due if the leverage ratio is below 1.75x or the resulting amount of the excess cash flow multiplied by the applicable percentage is less than $10 million. On March 8, 2021, in connection with this mandatory repayment clause, the Company repaid $17.8 million, as a result of excess cash flow calculation performed for the year ended December 31, 2020. No mandatory repayment was required in 2022 in connection with the excess cash flow calculation performed for the year ended December 31, 2021 as the leverage ratio was below 1.75x.

The unpaid principal balance at September 30, 2022 of the 2023 Term A Loan and the 2024 Term B Loan was $163.4 million and $294.2 million, respectively. The additional borrowing capacity under our Revolving Facility at September 30, 2022 was $119.1 million. The Company issues letters of credit against the Revolving Facility which reduce the additional borrowing capacity of the Revolving Facility.

Notes Payable

In December 2019, EVERTEC Group entered into two non-interest bearing financing agreements amounting to $2.4 million to purchase software and maintenance, which were fully repaid in January 2022. As of December 31, 2021, the outstanding principal balance of the notes payable was $0.8 million. These notes were included in accounts payable in the Company's unaudited condensed consolidated balance sheets.

Interest Rate Swap

As of September 30, 2022, the Company has an interest rate swap agreement, entered into in December 2018, which converts a portion of the interest rate payments on the Company's 2024 Term B Loan from variable to fixed: 

Swap Agreement	Effective date	Maturity Date	Notional Amount	Variable Rate	Fixed Rate
2018 Swap	April 2020	November 2024	$250 million	1-month LIBOR	2.89%

The Company has accounted for this agreement as a cash flow hedge.

As of September 30, 2022 and December 31, 2021, the carrying amount of the derivative included on the Company's unaudited condensed consolidated balance sheets was an asset of $7.1 million and a liability $13.4 million, respectively. The fair value of this derivative is estimated using Level 2 inputs in the fair value hierarchy on a recurring basis. Refer to Note 8 for disclosure of losses recorded on cash flow hedging activities.

During the three and nine months ended September 30, 2022, the Company reclassified losses of $0.4 million and $3.5 million, respectively, from accumulated other comprehensive loss into interest expense compared to $1.8 million and $5.3 million for the corresponding periods in 2021. Based on current LIBOR rates, the Company expects to reclassify gains of $3.4 million from accumulated other comprehensive loss into interest expense over the next 12 months.

The cash flow hedge is considered highly effective.

XML

Financial Instruments and Fair Value Measurements

9 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

Financial Instruments and Fair Value Measurements

Financial Instruments and Fair Value Measurements

Recurring Fair Value Measurements

Debt Securities Available for Sale

The fair value of debt securities is estimated based on observable inputs, therefore classified as a Level 2 asset within the fair value hierarchy. The fair value of debt securities was $2.2 million and $3.0 million as of September 30, 2022 and December 31, 2021 respectively.

Derivative Instruments

The fair value of the Company's interest rate swap is estimated using Level 2 inputs under the fair value hierarchy. This derivative was in an asset position with a balance of $7.1 million as of September 30, 2022 and in a liability position with a balance of $13.4 million as of December 31, 2021.

Debt and Short-Term Borrowings

The fair values of the term loans at September 30, 2022 and December 31, 2021 were obtained using prices provided by third party service providers. Their pricing is based on various inputs such as market quotes, recent trading activity in a non-active market or imputed prices. These inputs are considered Level 3 inputs under the fair value hierarchy. Also, the pricing may include the use of an algorithm that could take into account movements in the general high yield market, among other variants. The secured term loans are not accounted for at fair value in the balance sheets.

The following table presents the carrying value, as applicable, and estimated fair value for financial instruments at September 30, 2022 and December 31, 2021:

	September 30, 2022		December 31, 2021
(In thousands)	Carrying Amount	Fair Value	Carrying Amount	Fair Value
Financial assets:
Costa Rica government obligations	2,198	2,198	3,041	3,041
Interest rate swap	7,070	7,070	—	—
Financial liabilities:
2023 Term A Loan	162,930	161,730	170,875	168,610
2024 Term B Loan	292,574	291,400	293,660	294,735
Interest rate swap	—	—	13,392	13,392

XML

Equity

9 Months Ended

Sep. 30, 2022

Equity [Abstract]

Equity

Equity

Accumulated Other Comprehensive Loss

The following table provides a summary of the changes in the balances of accumulated other comprehensive loss for the nine months ended September 30, 2022: 

(In thousands)	Foreign Currency Translation Adjustments		Cash Flow Hedges		Unrealized Gains (losses) on Debt Securities AFS		Total
Balance - December 31, 2021, net of tax	$	(35,971)	$	(12,261)	109		(48,123)
Other comprehensive (loss) income before reclassifications	(210)		15,320		(77)		15,033
Effective portion reclassified to net income	—		3,504		—		3,504
Balance - September 30, 2022, net of tax	$	(36,181)	$	6,563	$	32	$	(29,586)

XML

Share-based Compensation

9 Months Ended

Sep. 30, 2022

Share-Based Payment Arrangement [Abstract]

Share-based Compensation

Share-based Compensation

Long-term Incentive Plan ("LTIP")

During the three months ended March 31, 2020, 2021 and 2022, the Compensation Committee (the "Compensation Committee") of the Company's Board of Directors ("Board") approved grants of restricted stock units (“RSUs”) to executives and certain employees pursuant to the 2020 LTIP, 2021 LTIP and 2022 LTIP, respectively, all under the terms of the Company's 2013 Equity Incentive Plan.

On May 20, 2022 (the “Effective Date”), the Company's shareholders approved the Company's 2022 Equity Incentive Plan (the "2022 Plan") which replaced the Company's 2013 Equity Incentive Plan. All shares remaining available for grant under the 2013 Plan as of the Effective Date plus any shares of common stock of the Company covered by outstanding awards under the 2013 Plan as of the Effective Date that again become available for grant pursuant to the terms of the 2022 Plan as of the Effective Date, to the extent the shares underlying such awards are not issued because they are forfeited or settled or terminate without distribution of shares of common stock of the Company became available for issuance under the 2022 Plan on the Effective Date pursuant to the terms of the 2022 Plan.

The vesting of the RSUs is dependent upon service and/or performance conditions as defined in the award agreements. Employees that received time-based awards with service conditions are entitled to receive a specific number of shares of the Company’s common stock on the vesting date if the employee provides services to the Company through the vesting date. Time-based awards vest over a period of three years in substantially equal installments commencing on the grant date and ending on February 27 of each year for the 2020 LTIP, March 2 of each year for the 2021 LTIP, and February 25 of each year for the 2022 LTIP. In 2022, the Company also granted time-based awards with a three year service vesting period which will cliff vest on February 25, 2025.

For the performance-based awards under the 2020 LTIP, 2021 LTIP, and 2022 LTIP, the Compensation Committee established adjusted earnings before income taxes, depreciation and amortization ("Adjusted EBITDA") as the primary performance

measure while maintaining focus on total shareholder return through the use of a market-based total shareholder return ("TSR") performance modifier. The Adjusted EBITDA measure is based on annual targets and can produce a payout between 0% and 200%. The TSR modifier adjusts the shares earned based on the core Adjusted EBITDA performance upwards or downwards (+/- 25%) based on the Company’s relative TSR at the end of the three-year performance period as compared to the companies in the Russell 2000 Index. The Adjusted EBITDA performance measure will be calculated for the one-year period commencing on January 1 of the year of the grant and ending on December 31 of the same year, relative to the goals set by the Compensation Committee for this same period. The shares earned will be subject to an additional two-year service vesting period and will vest on February 27, 2023 for the 2020 LTIP, March 2, 2024 for the 2021 LTIP, and February 25, 2025 for the 2022 LTIP. Unless otherwise specified in the award agreement, or in an employment agreement, awards are forfeited if the employee voluntarily ceases to be employed by the Company prior to vesting.

The following table summarizes nonvested RSUs activity for the nine months ended September 30, 2022:

Nonvested RSUs	Shares	Weighted-average grant date fair value
Nonvested at December 31, 2021	1,086,329	$	34.73
Granted	709,302	41.90
Vested	(421,764)	33.02
Forfeited	(8,546)	37.10
Nonvested at September 30, 2022	1,365,321	$	38.97

For the three and nine months ended September 30, 2022, the Company recognized $5.3 million and $14.7 million of share-based compensation expense, respectively, compared with $3.7 million and $10.9 million for the corresponding periods in 2021.

As of September 30, 2022, the maximum unrecognized expense for RSUs was $32.0 million. The cost is expected to be recognized over a weighted average period of 2.0 years.

XML

Revenues

9 Months Ended

Sep. 30, 2022

Revenue from Contract with Customer [Abstract]

Revenues

Revenues

Disaggregation of Revenue

The Company disaggregates revenue from contracts with customers into primary geographical markets, nature of the products and services, and timing of transfer of goods and services. The Company's operating segments are determined by the nature of the products and services the Company provides and the primary geographical markets in which the Company operates. Revenue disaggregated by segment is discussed in Note 17, Segment Information.

In the following tables, revenue for each segment, excluding intersegment revenues, is disaggregated by timing of revenue recognition for the periods indicated.

	Three months ended September 30, 2022
(In thousands)	Payment Services - Puerto Rico & Caribbean		Payment Services - Latin America		Merchant Acquiring, net		Business Solutions		Total
Timing of revenue recognition
Products and services transferred at a point in time	$	89	$	973	$	—	$	3,790	$	4,852
Products and services transferred over time	29,456		29,068		36,911		45,516		140,951
	$	29,545	$	30,041	$	36,911	$	49,306	$	145,803

	Three months ended September 30, 2021
(In thousands)	Payment Services - Puerto Rico & Caribbean		Payment Services - Latin America		Merchant Acquiring, net		Business Solutions		Total
Timing of revenue recognition
Products and services transferred at a point in time	$	30	$	449	$	—	$	446	$	925
Products and services transferred over time	25,712		23,807		37,606		57,833		144,958
	$	25,742	$	24,256	$	37,606	$	58,279	$	145,883

	Nine months ended September 30, 2022
(In thousands)	Payment Services - Puerto Rico & Caribbean		Payment Services - Latin America		Merchant Acquiring, net		Business Solutions		Total
Timing of revenue recognition
Products and services transferred at a point in time	$	244	$	1,405	$	—	$	7,956	$	9,605
Products and services transferred over time	86,045		81,229		111,079		168,664		447,017
	$	86,289	$	82,634	$	111,079	$	176,620	$	456,622

	Nine months ended September 30, 2021
(In thousands)	Payment Services - Puerto Rico & Caribbean		Payment Services - Latin America		Merchant Acquiring, net		Business Solutions		Total
Timing of revenue recognition
Products and services transferred at a point in time	$	119	$	1,633	$	—	$	4,048	$	5,800
Products and services transferred over time	76,642		69,919		106,808		175,390		428,759
	$	76,761	$	71,552	$	106,808	$	179,438	$	434,559

Contract Balances

The following table provides information about contract assets from contracts with customers.

(In thousands)	September 30, 2022		December 31, 2021
Balance at beginning of period	$	1,715	$	2,796
Services transferred to customers	7,246		5,374
Transfers to accounts receivable	(3,861)		(6,455)
Balance at end of period	$	5,100	$	1,715

The current portion of contract assets is recorded as part of prepaid expenses and other assets, and the long-term portion is included in other long-term assets in the unaudited condensed consolidated balance sheets.

Accounts receivable, net as of September 30, 2022 amounted to $112.3 million. Contract liability and contract liability - long term at September 30, 2022 amounted to $17.1 million and $34.7 million, respectively, and may arise when consideration is received or due in advance from customers prior to performance. The contract liability is mainly comprised of upfront fees for implementation or set up activities, including fees charged in pre-production periods in connection with hosting services, as

well as amounts related to contracts entered into concurrently with the close of the Popular Transaction as described in Note 3- Business Acquisitions and Dispositions. Contract liabilities may also arise when consideration is received or due in advance from customers prior to performance. During the three and nine months ended September 30, 2022, the Company recognized revenue of $17.0 million and $29.0 million respectively that was included in the contract liability at December 31, 2021. During the three and nine months ended September 30, 2021, the Company recognized revenue of $5.3 million and $20.7 million that was included in the contract liability at December 31, 2020.

Transaction price allocated to the remaining performance obligations

The estimated aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially satisfied at September 30, 2022 is $1,061.8 million, which is expected to be recognized over the next 1 to 6 years. This amount consists of minimums on certain master services agreements, professional service fees for implementation or set up activities related to managed services and maintenance services typically recognized over the life of the contract, and professional service fees for customizations or development of on-premise licensing agreements, which are recognized over time based on inputs relative to the total expected inputs to satisfy a performance obligation.

XML

Current Expected Credit Losses

9 Months Ended

Sep. 30, 2022

Receivables [Abstract]

Current Expected Credit Losses

Current Expected Credit Losses

Allowance for Current Expected Credit Losses

Trade receivables from contracts with customers are financial assets analyzed by the Company under the expected credit loss model. To measure expected credit losses, trade receivables are grouped based on shared risk characteristics (i.e., the relevant industry sector and customer's geographical location) and days past due (i.e., delinquency status), while considering the following:

•Customers in the same geographical location share similar risk characteristics associated with the macroeconomic environment of their country.

•The Company has two main industry sectors: private and governmental. The private pool is comprised mainly of leading financial institutions, merchants and corporations, while the governmental pool is comprised of government agencies. The governmental customers possess different risk characteristics than private customers because although all invoices are due 30 days after issuance, governmental customers usually pay within 60 to 90 days after issuance (i.e., approximately 30 to 60 more days than private customers).

•The expected credit loss rate is likely to increase as receivables move to older aging buckets. The Company used the following aging categories to estimate the risk of delinquency status: (i) 0 days past due; (ii) 1-30 days past due; (iii) 31-60 days past due; (iv) 61-90 days past due; and (v) over 90 days past due.

The credit losses of the Company’s trade receivables have been low historically and most balances are collected within one year. Therefore, the Company determined that the expected loss rates should be calculated using the historical loss rates adjusted by macroeconomic factors. The historical rates are calculated for each of the aging categories used for pooling trade receivables. To determine the collected portion of each bucket, the collection time of each trade receivable is identified, to estimate the proportion of outstanding balances per aging bucket that ultimately will not be collected. This is used to determine the expectation of losses based on the history of uncollected trade receivables once the specific past due period is surpassed. The historical rates are adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of customers to settle the receivables by applying a country risk premium as the forward-looking macroeconomic factor. Specific reserves are established for certain customers for which collection is doubtful.

Rollforward of the Allowance for Expected Current Credit Losses

The following table provides information about the allowance for expected current credit losses on trade receivables.

(In thousands)	September 30, 2022		December 31, 2021
Balance at beginning of period	$	2,523	$	2,401
Current period provision for expected credit losses	649		819
Write-offs	(135)		(698)
Recoveries of amounts previously written-off	150		1
Balance at end of period	$	3,187	$	2,523

The Company does not have a delinquency threshold for writing-off trade receivables. The Company has a formal process for the review and approval of write-offs.

Impairment losses on trade receivables are presented as net impairment losses within cost of revenue, exclusive of depreciation and amortization in the unaudited condensed consolidated statements of income and comprehensive income. Subsequent recoveries of amounts previously written-off, when applicable are credited against the allowance for expected current credit losses within accounts receivable, net on the unaudited condensed consolidated balance sheets.

XML

Income Tax

9 Months Ended

Sep. 30, 2022

Income Tax Disclosure [Abstract]

Income Tax

Income Tax

The components of income tax expense for the three and nine months ended September 30, 2022 and 2021, respectively, consisted of the following:

	Three months ended September,				Nine months ended September 30,
(In thousands)	2022		2021		2022		2021
Current tax provision	$	9,537	$	7,306	$	24,610	$	15,593
Deferred tax benefit	(489)		(172)		(1,699)		(1,119)
Income tax expense	$	9,048	$	7,134	$	22,911	$	14,474

The Company conducts operations in Puerto Rico, the United States, and certain countries in Latin America. As a result, the income tax expense includes the effect of taxes paid to the government of Puerto Rico as well as foreign jurisdictions. The following table presents the components of income tax expense for the three and nine months ended September 30, 2022 and 2021, and its segregation based on location of operations:

	Three months ended September 30,				Nine months ended September 30,
(In thousands)	2022		2021		2022		2021
Current tax provision (benefit)
Puerto Rico	$	6,318	$	2,328	$	11,809	$	3,363
United States	44		57		107		132
Foreign countries	3,175		4,921		12,694		12,098
Total current tax provision	$	9,537	$	7,306	$	24,610	$	15,593
Deferred tax (benefit) provision
Puerto Rico	$	719	$	(258)	$	(321)	$	(778)
United States	54		116		9		(71)
Foreign countries	(1,262)		(30)		(1,387)		(270)
Total deferred tax benefit	$	(489)	$	(172)	$	(1,699)	$	(1,119)

Taxes payable to foreign countries by EVERTEC’s subsidiaries will be paid by such subsidiary and the corresponding liability and expense will be presented in EVERTEC’s consolidated financial statements.

As of September 30, 2022, the Company has $113.3 million of unremitted earnings from foreign subsidiaries, compared to $99.1 million as of December 31, 2021. The Company has not recognized a deferred tax liability on undistributed earnings for the Company’s foreign subsidiaries because these earnings are intended to be indefinitely reinvested.

As of September 30, 2022, the gross deferred tax asset amounted to $18.6 million and the gross deferred tax liability amounted to $19.4 million, compared to $22.3 million and $16.3 million, respectively, as of December 31, 2021. As of September 30, 2022, and December 31, 2021, there is a valuation allowance against the gross deferred tax asset of approximately $1.8 million and $1.4 million, respectively.

During the quarter ended September 30, 2022, the Company released $3.6 million of the previously recorded Puerto Rico liability for uncertain tax positions related to the net operating loss created by transaction costs from mergers and acquisitions as a result of the expiration of the statute of limitations.

Income tax expense differs from the amount computed by applying the Puerto Rico statutory income tax rate to the income before income taxes as a result of the following:

	Nine months ended September 30,
(In thousands)	2022		2021
Computed income tax at statutory rates	$	87,402	$	50,411
Differences in tax rates due to multiple jurisdictions	2,612		1,789
Effect of income subject to tax-exemption grant	(26,262)		(35,121)
Effect of the gain on sale of a business	(39,645)		—
Unrecognized tax (benefit) expense	(3,472)		(3,475)
Excess tax benefits on share-based compensation	169		(1,027)
Other, net	2,107		1,897
Income tax expense	$	22,911	$	14,474

XML

Net Income Per Common Share

9 Months Ended

Sep. 30, 2022

Earnings Per Share [Abstract]

Net Income Per Common Share

Net Income Per Common Share

The reconciliation of the numerator and denominator of the income per common share is as follows:

	Three months ended September 30,				Nine months ended September 30,
(In thousands, except per share information)	2022		2021		2022		2021
Net income available to EVERTEC, Inc.’s common shareholders	$	137,814	$	35,314	$	210,301	$	120,014
Weighted average common shares outstanding	66,398,547		71,969,856		69,906,483		72,082,082
Weighted average potential dilutive common shares (1)	647,262		906,397		682,432		735,625
Weighted average common shares outstanding - assuming dilution	67,045,809		72,876,253		70,588,915		72,817,707
Net income per common share - basic	$	2.08	$	0.49	$	3.01	$	1.66
Net income per common share - diluted	$	2.06	$	0.48	$	2.98	$	1.65

(1)Potential common shares consist of common stock issuable under RSUs awards using the treasury stock method.

On February 15, 2022, April 21, 2022 and July 28, 2022, respectively the Company's Board declared quarterly cash dividends of $0.05 per share of common stock, which was paid on March 25, 2022, June 3, 2022 and September 2, 2022, respectively to stockholders' of record on February 25, 2022, May 2, 2022 and August 8, 2022, respectively.

XML

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2022
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and ContingenciesEVERTEC is a defendant in a number of legal proceedings arising in the ordinary course of business. Based on the opinion of legal counsel and other factors, management believes that the final disposition of these matters will not have a material adverse effect on the business, results of operations, financial condition, or cash flows of the Company. The Company has identified certain claims as a result of which a loss may be incurred, but in the aggregate the loss would be insignificant. For other claims regarding proceedings that are in an initial phase, the Company is unable to estimate the range of possible loss, if any, but at this time believes that any loss related to such claims will not be material.

XML

Related Party Transactions

9 Months Ended

Sep. 30, 2022

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

In connection with closing of the Popular Transaction on July 1, 2022, the Company terminated the existing stockholder agreement with Popular, which granted Popular certain benefits as a shareholder of the Company. In addition, on August 15, 2022, through a secondary offering, Popular sold its remaining shares of common stock of Evertec and as of that date no longer holds any shares of Evertec common stock. Evertec is no longer considered a subsidiary of Popular under the Bank Holding Company Act of 1956, as amended (the "Bank Holding Company Act"). Given both the termination of the stockholder agreement and that Popular is no longer a shareholder of EVERTEC, management concluded that Popular is no longer a related party as of August 15, 2022.

The following table presents the Company’s transactions with Popular while they were deemed a related party during 2022 and for the three and nine months ended September 30, 2021:

	Three months ended September 30,				Nine months ended September 30,
(In thousands)	2022 (1)		2021		2022 (1)		2021
Total revenues	$	22,782	$	60,091	$	153,335	$	182,344
Cost of revenues	$	653	$	624	$	2,386	$	2,242
Operating lease cost and other fees	$	807	$	1,958	$	4,433	$	5,482
Interest earned from affiliate
Interest income	$	231	$	184	$	1,011	$	422

(1)Amounts presented through August 15, 2022.

The Company continues to have revenue concentration with Popular, revenues as a percentage of total revenues were 35% and 40% for the three and nine months ended September 30, 2022, respectively and 41% and 42%, for the comparable periods in 2021, respectively. Accounts receivable from Popular as of September 30, 2022 amounted to $36.4 million.

As of the December 31, 2021, EVERTEC had the following balances arising from transactions with related parties:

(In thousands)	December 31, 2021
Cash and restricted cash deposits in affiliated bank	$	187,602
Other due to/from affiliate
Accounts receivable	$	38,120
Prepaid expenses and other assets	$	1,763
Operating lease right-of-use assets	$	13,533
Other long-term assets	$	2,853
Accounts payable	$	5,601
Contract liabilities	$	40,982
Operating lease liabilities	$	14,019

XML

Segment Information

9 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Segment Information

Segment Information

The Company operates in four business segments: Payment Services - Puerto Rico & Caribbean, Payment Services - Latin America, Merchant Acquiring, and Business Solutions.

The Payment Services - Puerto Rico & Caribbean segment revenues are comprised of revenues related to providing access to the ATH debit network and other card networks to financial institutions, including related services such as authorization, processing, management and recording of ATM and point of sale ("POS") transactions, and ATM management and monitoring. The segment revenues also include revenues from card processing services (such as credit and debit card processing, authorization and settlement and fraud monitoring and control to debit or credit issuers), payment processing services (such as payment and billing products for merchants, businesses and financial institutions and digital payment services to the government of Puerto Rico), ATH Movil (person-to-person) and ATH Business (person-to-merchant) digital transactions and EBT (which principally consist of services to the government of Puerto Rico for the delivery of benefits to participants). For ATH debit network and processing services, revenues are primarily driven by the number of transactions processed. Revenues are derived primarily from network fees, transaction switching and processing fees, and the leasing of POS devices. For card issuer processing, revenues are primarily dependent upon the number of cardholder accounts on file, transactions and authorizations processed, the number of cards embossed and other processing services. For EBT services, revenues are primarily derived from the number of beneficiaries on file.

The Payment Services - Latin America segment revenues consist of revenues related to providing access to the ATH network of ATMs and other card networks to financial institutions, including related services such as authorization, processing, management and recording of ATM and POS transactions, and ATM management and monitoring. The segment revenues also include revenues from card processing services (such as credit and debit card processing, authorization and settlement and fraud monitoring and control to debit or credit issuers), payment processing services (such as payment and billing products for merchants, businesses and financial institutions), as well as licensed software solutions for risk and fraud management and card payment processing. For network and processing services, revenues are primarily driven by the number of transactions processed. Revenues are derived primarily from transaction switching and processing fees, and the leasing of POS devices and network fees. For card issuer processing, revenues are primarily dependent upon the number of cardholder accounts on file, transactions and authorizations processed, the number of cards embossed, and other processing services.

The Merchant Acquiring segment consists of revenues from services that allow merchants to accept electronic methods of payment. In the Merchant Acquiring segment, revenues include a discount fee and membership fees charged to merchants, debit network fees and rental fees from POS devices and other equipment, net of credit card interchange and assessment fees charged by credit cards associations (such as VISA or MasterCard) or payment networks. The discount fee is generally a percentage of the transaction value. EVERTEC also charges merchants for other services that are unrelated to the number of transactions or the transaction value.

The Business Solutions segment consists of revenues from a full suite of business process management solutions in various product areas such as core bank processing, network hosting and management, IT professional services, business process outsourcing, item processing, cash processing, and fulfillment. Core bank processing and network services revenues are derived in part from a recurrent fixed fee and from fees based on the number of accounts on file (i.e. savings or checking accounts, loans, etc.), server capacity usage or computer resources utilized. Revenues from other processing services within the Business Solutions segment are generally volume-based and depend on factors such as the number of accounts processed. In addition, EVERTEC is a reseller of hardware and software products and these resale transactions are generally non-recurring.

In addition to the four operating segments described above, management identified certain functional cost areas that operate independently and do not constitute businesses in themselves. These areas could neither be concluded as operating segments nor could they be combined with any other operating segments. Therefore, these areas are aggregated and presented within the “Corporate and Other” category in the financial statements alongside the operating segments. The Corporate and Other category consists of corporate overhead expenses, intersegment eliminations, certain leveraged activities and other non-operating and miscellaneous expenses that are not included in the operating segments. The overhead and leveraged costs relate to activities such as:

•marketing,

•corporate finance and accounting,

•human resources,

•legal,

•risk management functions,

•internal audit,

•corporate debt related costs,

•non-operating depreciation and amortization expenses generated as a result of merger and acquisition activity,

•intersegment revenues and expenses, and

•other non-recurring fees and expenses that are not considered when management evaluates financial performance at a segment level

The Chief Operating Decision Maker ("CODM") reviews the operating segments separate financial information to assess performance and to allocate resources. Management evaluates the operating results of each of its operating segments based upon revenues and Adjusted EBITDA. Adjusted EBITDA is defined as EBITDA further adjusted to exclude unusual items and other adjustments. Adjusted EBITDA, as it relates to operating segments, is presented in conformity with ASC Topic 280, Segment Reporting, given that it is reported to the CODM for purposes of allocating resources. Segment asset disclosure is not used by the CODM as a measure of segment performance since the segment evaluation is driven by revenues and Adjusted EBITDA. As such, segment assets are not disclosed in the notes to the accompanying unaudited condensed consolidated financial statements.

The following tables set forth information about the Company’s operations by its four business segments for the periods indicated:

	Three months ended September 30, 2022
(In thousands)	Payment Services - Puerto Rico & Caribbean		Payment Services - Latin America		Merchant Acquiring, net		Business Solutions		Corporate and Other (1)		Total
Revenues	$	44,592	$	33,741	$	36,911	$	49,306	$	(18,747)	$	145,803
Operating costs and expenses	$	26,960	$	28,513	$	25,261	$	38,522	$	2,729	$	121,985
Depreciation and amortization	$	5,116	$	4,104	$	1,045	$	3,745	$	5,702	$	19,712
Non-operating income (expenses)	$	385	$	(7,094)	$	348	$	136,218	$	(932)	$	128,925
EBITDA	23,133		2,238		13,043		150,747		(16,706)		172,455
Compensation and benefits (2)	1,557		972		498		503		2,141		$	5,671
Transaction, refinancing and other fees (3)	330		—		325		(134,974)		8,567		$	(125,752)
Adjusted EBITDA	$	25,020	$	3,210	$	13,866	$	16,276	$	(5,998)	$	52,374

(1)Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations.  Intersegment revenue eliminations predominantly reflect the $12.3 million processing fee from Payments Services - Puerto Rico & Caribbean to Merchant Acquiring, intercompany software developments and transaction processing of $3.7 million from Payment Services- Latin America to both Payment Services- Puerto Rico & Caribbean and Business Solutions, and transaction processing and monitoring fees of $2.8 million from Payment Services - Puerto Rico & Caribbean to Payment Services - Latin America.

(2)Primarily represents share-based compensation and severance payments.

(3)Primarily represents fees and expenses associated with corporate transactions as defined in the 2018 Credit Agreement, the gain from the Popular transaction and the elimination of non-cash equity earnings from our 19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A., net of dividends received.

	Three months ended September 30, 2021
(In thousands)	Payment Services - Puerto Rico & Caribbean		Payment Services - Latin America		Merchant Acquiring, net		Business Solutions		Corporate and Other (1)		Total
Revenues	$	38,773	$	26,792	$	37,606	$	58,134	$	(15,422)	$	145,883
Operating costs and expenses	21,420		22,209		19,922		37,412		(2,097)		98,866
Depreciation and amortization	3,989		2,809		1,010		4,691		6,246		18,745
Non-operating income (expenses)	203		1,844		281		551		(2,322)		557
EBITDA	21,545		9,236		18,975		25,964		(9,401)		66,319
Compensation and benefits (2)	260		755		255		70		2,153		3,493
Transaction, refinancing and other fees (3)	—		—		—		—		(42)		(42)
Adjusted EBITDA	$	21,805	$	9,991	$	19,230	$	26,034	$	(7,290)	$	69,770

(1)Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations.  Intersegment revenue eliminations predominantly reflect the $10.8 million processing fee from Payments Services - Puerto Rico & Caribbean to Merchant Acquiring and intercompany software developments and transaction processing of $2.4 million from Payment Services- Latin America to both Payment Services- Puerto Rico & Caribbean and Business Solutions, and transaction processing and monitoring fees of $2.2 million from Payment Services - Puerto Rico & Caribbean to Payment Services - Latin America.

(2)Primarily represents share-based compensation.

(3)Primarily represents fees and expenses associated with corporate transactions as defined in the 2018 Credit Agreement and the elimination of non-cash equity earnings from our 19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A, net dividends received.

	Nine months ended September 30, 2022
(In thousands)	Payment Services - Puerto Rico & Caribbean		Payment Services - Latin America		Merchant Acquiring, net		Business Solutions		Corporate and Other (1)		Total
Revenues	$	130,678	$	93,308	$	111,079	$	176,620	$	(55,063)	$	456,622
Operating costs and expenses	76,920		77,132		68,288		117,747		25		340,112
Depreciation and amortization	15,062		9,628		3,104		12,787		17,851		58,432
Non-operating income (expenses)	928		(3,365)		980		137,542		(3,560)		132,525
EBITDA	69,748		22,439		46,875		209,202		(40,797)		307,467
Compensation and benefits (2)	2,569		2,758		1,284		1,503		7,241		15,355
Transaction, refinancing and other fees (3)	330		—		325		(134,990)		12,647		(121,688)
Adjusted EBITDA	$	72,647	$	25,197	$	48,484	$	75,715	$	(20,909)	$	201,134

(1)Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations.  Intersegment revenue eliminations predominantly reflect the $36.5 million processing fee from Payments Services - Puerto Rico & Caribbean to Merchant Acquiring and intercompany software developments and transaction processing of $10.7 million from Payment Services - Latin America to both Payment Services - Puerto Rico & Caribbean and Business Solutions, and transaction processing and monitoring fees of $7.9 million from Payment Services - Puerto Rico & Caribbean to Payment Services - Latin America.

(2)Primarily represents share-based compensation and severance payments.

(3)Primarily represents fees and expenses associated with corporate transactions as defined in the 2018 Credit Agreement, the gain from the Popular transaction and the elimination of non-cash equity earnings from our 19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A., net of dividends received.

	Nine months ended September 30, 2021
(In thousands)	Payment Services - Puerto Rico & Caribbean		Payment Services - Latin America		Merchant Acquiring, net		Business Solutions		Corporate and Other (1)		Total
Revenues	$	113,626	$	77,641	$	106,808	$	179,438	$	(42,954)	$	434,559
Operating costs and expenses	61,270		63,020		55,762		110,276		(2,077)		$	288,251
Depreciation and amortization	11,813		8,695		2,631		14,085		18,867		$	56,091
Non-operating income (expenses)	618		5,348		835		2,494		(5,269)		$	4,026
EBITDA	64,787		28,664		54,512		85,741		(27,279)		206,425
Compensation and benefits (2)	781		2,321		781		1,193		6,204		$	11,280
Transaction, refinancing and other fees (3)	660		—		—		(647)		1,202		$	1,215
Adjusted EBITDA	$	66,228	$	30,985	$	55,293	$	86,287	$	(19,873)	$	218,920

(1)Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations.  Intersegment revenue eliminations predominantly reflect the $31.2 million processing fee from Payments Services - Puerto Rico & Caribbean to Merchant Acquiring and intercompany software developments and transaction processing of $6.6 million from Payment Services - Latin America to both Payment Services - Puerto Rico & Caribbean and Business Solutions, and transaction processing and monitoring fees of $5.1 million from Payment Services - Puerto Rico & Caribbean to Payment Services - Latin America.

(2)Primarily represents share-based compensation and severance payments.

(3)Primarily represents fees and expenses associated with corporate transactions as defined in the 2018 Credit Agreement and the elimination of non-cash equity earnings from our 19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A. net dividends received, a software impairment charge and a gain from the sale of the asset.

The reconciliation of EBITDA to consolidated net income is as follows:

	Three months ended September 30,				Nine months ended September 30,
(In thousands)	2022		2021		2022		2021
Total EBITDA	$	172,455	$	66,319	$	307,467	$	206,425
Less:
Income tax expense	9,048		7,134		22,911		14,474
Interest expense, net	5,956		5,180		15,963		15,905
Depreciation and amortization	19,712		18,745		58,432		56,091
Net income	$	137,739	$	35,260	$	210,161	$	119,955

XML

Subsequent Events	9 Months Ended
	Sep. 30, 2022
Subsequent Events [Abstract]
Subsequent Events	Subsequent EventsOn October 20, 2022, the Board declared a regular quarterly cash dividend of $0.05 per share on the Company’s outstanding shares of common stock. The dividend will be paid on December 2, 2022 to stockholders of record as of the close of business on November 1, 2022. The Board anticipates declaring this dividend in future quarters on a regular basis; however, future declarations of dividends are subject to the Board’s approval and may be adjusted as business needs or market conditions change.

XML

The Company and Basis of Presentation (Policies)

9 Months Ended

Sep. 30, 2022

Accounting Policies [Abstract]

The Company

The CompanyEVERTEC, Inc. and its subsidiaries (collectively the “Company” or “EVERTEC”) is a leading full-service transaction processing business in Latin America and the Caribbean. The Company is based in Puerto Rico and provides a broad range of merchant acquiring, payment processing and business process management services. The Company provides services across 26 countries in the region. EVERTEC owns and operates the ATH network, one of the leading personal identification number ("PIN") debit and automated teller machine ("ATM") networks in the Caribbean and Latin America. In addition, EVERTEC provides a comprehensive suite of services for core bank processing and cash processing in Puerto Rico and technology outsourcing in the regions the Company serves. EVERTEC serves a broad and diversified customer base of leading financial institutions, merchants, corporations, and government agencies with solutions that are essential to their operations.

Basis of Presentation

Basis of Presentation

The unaudited condensed consolidated financial statements of EVERTEC have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of the accompanying unaudited condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the unaudited condensed consolidated financial statements. Actual results could differ from these estimates.

Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted from these statements pursuant to the rules and regulations of the Securities and Exchange Commission and, accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the Audited Consolidated Financial Statements of the Company for the year ended December 31, 2021, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. In the opinion of management, the accompanying unaudited condensed consolidated financial statements, prepared in accordance with GAAP, contain all adjustments necessary for a fair presentation. Intercompany accounts and transactions are eliminated in consolidation. Certain amounts from prior periods have been reclassified to conform to the current period presentation.

Recently adopted accounting pronouncements

Recently adopted accounting pronouncements

In October 2021, the FASB issued ASU 2021-08 to update ASC 805, Business Combinations, to require that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts. The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company selected to early adopt this guidance for its most recent business combination.

XML

Business Acquisitions and Dispositions (Tables)

9 Months Ended

Sep. 30, 2022

Business Combination and Asset Acquisition [Abstract]

Schedule of preliminary fair value of assets acquired and liabilities assumed

The following table details the preliminary fair value of assets acquired and liabilities assumed from the BBR acquisition:

	Assets/Liabilities (at fair value)
( In thousands)
Cash and cash equivalents	$	1,551
Accounts receivable, net	2,969
Property and equipment, net	3
Operating lease right-of-use asset	76
Goodwill	33,247
Other intangible assets, net	24,850
Deferred tax asset	267
Total assets acquired	62,963
Accounts payable	1,039
Contract liability	1,136
Operating lease liability	85
Deferred tax liability	7,614
Total liabilities assumed	$	9,874

Schedule of major groups of intangible assets acquired and the weighted average amortization period

The following table details the major groups of intangible assets acquired and the weighted average amortization period for these assets:

	Amount		Weighted-average life
(Dollar amounts in thousands)
Customer relationships	$	22,500	15
Trademark	1,250		5
Software packages	1,100		5
Total	$	24,850	14

Summary of consideration for sale of business and major classes of assets and liabilities included in gain

The following table details the consideration for the sale of the business, major classes of assets and liabilities included in the business sale and the gain on sale of a business:

	July 1, 2022
(In thousands)
Common stock received in exchange for the sale of a business	$	169,249
Contract liability representing consideration for the sale of a business	15,426
Total consideration for the sale of a business	184,675
Goodwill	(5,813)
Other intangible assets, net	(31,011)
Prepaid expenses and other assets	(497)
Contract liability	(11,712)
Gain on sale of a business	$	135,642

XML

Debt Securities (Tables)

9 Months Ended

Sep. 30, 2022

Investments, Debt and Equity Securities [Abstract]

Debt securities available-for-sale by contractual maturity

The amortized cost, gross unrealized gains and losses recorded in OCI and estimated fair value of debt securities available-for-sale by contractual maturity as of September 30, 2022 and December 31, 2021 were as follows:

	September 30, 2022
(In thousands)			Gross unrealized
	Amortized cost		Gains	Losses	Fair Value
Costa Rica Government Obligations
After 1 to 5 years	$	2,219	—	(21)	$	2,198

	December 31, 2021
(In thousands)			Gross unrealized
	Amortized cost		Gains		Losses		Fair Value
Costa Rica Government Obligations
After 1 to 5 years	$	2,963	$	78	$	—	$	3,041

XML

Property and Equipment, net (Tables)

9 Months Ended

Sep. 30, 2022

Property, Plant and Equipment [Abstract]

Summary of property and equipment, net

Property and equipment, net consists of the following:

(In thousands)	Useful life in years	September 30, 2022		December 31, 2021
Buildings	30	$	1,387	$	1,359
Data processing equipment	3 - 5	151,545		141,359
Furniture and equipment	3 - 20	8,742		7,718
Leasehold improvements	5 -10	3,572		3,277
		165,246		153,713
Less - accumulated depreciation and amortization		(116,531)		(106,365)
Depreciable assets, net		48,715		47,348
Land		1,213		1,185
Property and equipment, net		$	49,928	$	48,533

XML

Goodwill and Other Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of changes in carrying amount of goodwill allocated by reportable segments

The changes in the carrying amount of goodwill, allocated by operating segments, were as follows (see Note 17):

(In thousands)	Payment Services - Puerto Rico & Caribbean		Payment Services - Latin America		Merchant Acquiring, net		Business Solutions		Total
Balance at December 31, 2021	$	160,972	$	48,402	$	138,121	$	45,823	$	393,318
Goodwill attributable to acquisition	—		33,247		—		—		33,247
Goodwill attributable to the sale of a business	—		—		—		(5,813)		(5,813)
Foreign currency translation adjustments	—		(2,933)		—		—		(2,933)
Balance at September 30, 2022	$	160,972	$	78,716	$	138,121	$	40,010	$	417,819

Summary of carrying amount of other intangible assets

The carrying amount of other intangible assets at September 30, 2022 and December 31, 2021 was as follows:

		September 30, 2022
(In thousands)	Useful life in years	Gross amount		Accumulated amortization		Net carrying amount
Customer relationships	8 - 15	$	390,221	$	(295,170)	$	95,051
Trademarks	1 - 15	43,025		(37,638)		$	5,387
Software packages	3 - 10	332,767		(236,889)		$	95,878
Other intangible assets, net		$	766,013	$	(569,697)	$	196,316

		December 31, 2021
(Dollar amounts in thousands)	Useful life in years	Gross amount		Accumulated amortization		Net carrying amount
Customer relationships	8 - 14	$	357,991	$	(272,732)	$	85,259
Trademarks	2 - 15	41,901		(36,684)		5,217
Software packages	3 - 10	326,320		(217,643)		108,677
Non-compete agreement	15	56,539		(42,404)		14,135
Other intangible assets, net		$	782,751	$	(569,463)	$	213,288

Summary of estimated amortization expenses

The estimated amortization expense of the other intangible balances outstanding at September 30, 2022 for the next five years is as follows:

(Dollar amounts in thousands)
Remaining 2022	$	14,156
2023	53,108
2024	41,611
2025	16,218
2026	11,300

XML

Debt and Short-Term Borrowings (Tables)

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

Summary of total debt

Total debt at September 30, 2022 and December 31, 2021 was as follows:

(In thousands)	September 30, 2022		December 31, 2021
2023 Term A Loan bearing interest at a variable interest rate (LIBOR plus applicable margin(1)(2))	$	162,930	$	170,875
2024 Term B Loan bearing interest at a variable interest rate (LIBOR plus applicable margin(1)(3))	292,574		293,660
Note payable due January 1, 2022(1)	—		758
Total debt	$	455,504	$	465,293

(1)Net of unaccreted discount and unamortized debt issue costs, as applicable.

(2)Applicable margin of 1.75% at September 30, 2022 and December 31, 2021.

(3)Subject to a minimum rate ("LIBOR floor") of 0% plus applicable margin of 3.50% at September 30, 2022 and December 31, 2021.

Summary of interest rate swap transaction

As of September 30, 2022, the Company has an interest rate swap agreement, entered into in December 2018, which converts a portion of the interest rate payments on the Company's 2024 Term B Loan from variable to fixed: 

Swap Agreement	Effective date	Maturity Date	Notional Amount	Variable Rate	Fixed Rate
2018 Swap	April 2020	November 2024	$250 million	1-month LIBOR	2.89%

XML

Financial Instruments and Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

Summary of carrying value and estimated fair values for financial instruments

The following table presents the carrying value, as applicable, and estimated fair value for financial instruments at September 30, 2022 and December 31, 2021:

	September 30, 2022		December 31, 2021
(In thousands)	Carrying Amount	Fair Value	Carrying Amount	Fair Value
Financial assets:
Costa Rica government obligations	2,198	2,198	3,041	3,041
Interest rate swap	7,070	7,070	—	—
Financial liabilities:
2023 Term A Loan	162,930	161,730	170,875	168,610
2024 Term B Loan	292,574	291,400	293,660	294,735
Interest rate swap	—	—	13,392	13,392

XML

Equity (Tables)

9 Months Ended

Sep. 30, 2022

Equity [Abstract]

Summary of changes in balances of accumulated other comprehensive loss

The following table provides a summary of the changes in the balances of accumulated other comprehensive loss for the nine months ended September 30, 2022: 

(In thousands)	Foreign Currency Translation Adjustments		Cash Flow Hedges		Unrealized Gains (losses) on Debt Securities AFS		Total
Balance - December 31, 2021, net of tax	$	(35,971)	$	(12,261)	109		(48,123)
Other comprehensive (loss) income before reclassifications	(210)		15,320		(77)		15,033
Effective portion reclassified to net income	—		3,504		—		3,504
Balance - September 30, 2022, net of tax	$	(36,181)	$	6,563	$	32	$	(29,586)

XML

Share-based Compensation (Tables)

9 Months Ended

Sep. 30, 2022

Share-Based Payment Arrangement [Abstract]

Summary of nonvested restricted shares and RSUs activity

The following table summarizes nonvested RSUs activity for the nine months ended September 30, 2022:

Nonvested RSUs	Shares	Weighted-average grant date fair value
Nonvested at December 31, 2021	1,086,329	$	34.73
Granted	709,302	41.90
Vested	(421,764)	33.02
Forfeited	(8,546)	37.10
Nonvested at September 30, 2022	1,365,321	$	38.97

XML

Revenues (Tables)

9 Months Ended

Sep. 30, 2022

Revenue from Contract with Customer [Abstract]

Summary of disaggregation of revenue

In the following tables, revenue for each segment, excluding intersegment revenues, is disaggregated by timing of revenue recognition for the periods indicated.

	Three months ended September 30, 2022
(In thousands)	Payment Services - Puerto Rico & Caribbean		Payment Services - Latin America		Merchant Acquiring, net		Business Solutions		Total
Timing of revenue recognition
Products and services transferred at a point in time	$	89	$	973	$	—	$	3,790	$	4,852
Products and services transferred over time	29,456		29,068		36,911		45,516		140,951
	$	29,545	$	30,041	$	36,911	$	49,306	$	145,803

	Three months ended September 30, 2021
(In thousands)	Payment Services - Puerto Rico & Caribbean		Payment Services - Latin America		Merchant Acquiring, net		Business Solutions		Total
Timing of revenue recognition
Products and services transferred at a point in time	$	30	$	449	$	—	$	446	$	925
Products and services transferred over time	25,712		23,807		37,606		57,833		144,958
	$	25,742	$	24,256	$	37,606	$	58,279	$	145,883

	Nine months ended September 30, 2022
(In thousands)	Payment Services - Puerto Rico & Caribbean		Payment Services - Latin America		Merchant Acquiring, net		Business Solutions		Total
Timing of revenue recognition
Products and services transferred at a point in time	$	244	$	1,405	$	—	$	7,956	$	9,605
Products and services transferred over time	86,045		81,229		111,079		168,664		447,017
	$	86,289	$	82,634	$	111,079	$	176,620	$	456,622

	Nine months ended September 30, 2021
(In thousands)	Payment Services - Puerto Rico & Caribbean		Payment Services - Latin America		Merchant Acquiring, net		Business Solutions		Total
Timing of revenue recognition
Products and services transferred at a point in time	$	119	$	1,633	$	—	$	4,048	$	5,800
Products and services transferred over time	76,642		69,919		106,808		175,390		428,759
	$	76,761	$	71,552	$	106,808	$	179,438	$	434,559

Summary of contract balances

The following table provides information about contract assets from contracts with customers.

(In thousands)	September 30, 2022		December 31, 2021
Balance at beginning of period	$	1,715	$	2,796
Services transferred to customers	7,246		5,374
Transfers to accounts receivable	(3,861)		(6,455)
Balance at end of period	$	5,100	$	1,715

XML

Current Expected Credit Losses (Tables)

9 Months Ended

Sep. 30, 2022

Receivables [Abstract]

Schedule of allowance for credit losses on trade receivables

The following table provides information about the allowance for expected current credit losses on trade receivables.

(In thousands)	September 30, 2022		December 31, 2021
Balance at beginning of period	$	2,523	$	2,401
Current period provision for expected credit losses	649		819
Write-offs	(135)		(698)
Recoveries of amounts previously written-off	150		1
Balance at end of period	$	3,187	$	2,523

XML

Income Tax (Tables)

9 Months Ended

Sep. 30, 2022

Income Tax Disclosure [Abstract]

Components of income tax expense

The components of income tax expense for the three and nine months ended September 30, 2022 and 2021, respectively, consisted of the following:

	Three months ended September,				Nine months ended September 30,
(In thousands)	2022		2021		2022		2021
Current tax provision	$	9,537	$	7,306	$	24,610	$	15,593
Deferred tax benefit	(489)		(172)		(1,699)		(1,119)
Income tax expense	$	9,048	$	7,134	$	22,911	$	14,474

Segregation of income tax expense based on location of operations

The following table presents the components of income tax expense for the three and nine months ended September 30, 2022 and 2021, and its segregation based on location of operations:

	Three months ended September 30,				Nine months ended September 30,
(In thousands)	2022		2021		2022		2021
Current tax provision (benefit)
Puerto Rico	$	6,318	$	2,328	$	11,809	$	3,363
United States	44		57		107		132
Foreign countries	3,175		4,921		12,694		12,098
Total current tax provision	$	9,537	$	7,306	$	24,610	$	15,593
Deferred tax (benefit) provision
Puerto Rico	$	719	$	(258)	$	(321)	$	(778)
United States	54		116		9		(71)
Foreign countries	(1,262)		(30)		(1,387)		(270)
Total deferred tax benefit	$	(489)	$	(172)	$	(1,699)	$	(1,119)

Schedule of income tax expense differs from computed income tax at statutory rates

Income tax expense differs from the amount computed by applying the Puerto Rico statutory income tax rate to the income before income taxes as a result of the following:

	Nine months ended September 30,
(In thousands)	2022		2021
Computed income tax at statutory rates	$	87,402	$	50,411
Differences in tax rates due to multiple jurisdictions	2,612		1,789
Effect of income subject to tax-exemption grant	(26,262)		(35,121)
Effect of the gain on sale of a business	(39,645)		—
Unrecognized tax (benefit) expense	(3,472)		(3,475)
Excess tax benefits on share-based compensation	169		(1,027)
Other, net	2,107		1,897
Income tax expense	$	22,911	$	14,474

XML

Net Income Per Common Share (Tables)

9 Months Ended

Sep. 30, 2022

Earnings Per Share [Abstract]

Schedule of reconciliation of numerator and denominator of income per common share

The reconciliation of the numerator and denominator of the income per common share is as follows:

	Three months ended September 30,				Nine months ended September 30,
(In thousands, except per share information)	2022		2021		2022		2021
Net income available to EVERTEC, Inc.’s common shareholders	$	137,814	$	35,314	$	210,301	$	120,014
Weighted average common shares outstanding	66,398,547		71,969,856		69,906,483		72,082,082
Weighted average potential dilutive common shares (1)	647,262		906,397		682,432		735,625
Weighted average common shares outstanding - assuming dilution	67,045,809		72,876,253		70,588,915		72,817,707
Net income per common share - basic	$	2.08	$	0.49	$	3.01	$	1.66
Net income per common share - diluted	$	2.06	$	0.48	$	2.98	$	1.65

(1)Potential common shares consist of common stock issuable under RSUs awards using the treasury stock method.

XML

Related Party Transactions (Tables)

9 Months Ended

Sep. 30, 2022

Related Party Transactions [Abstract]

Summary transactions with related parties

The following table presents the Company’s transactions with Popular while they were deemed a related party during 2022 and for the three and nine months ended September 30, 2021:

	Three months ended September 30,				Nine months ended September 30,
(In thousands)	2022 (1)		2021		2022 (1)		2021
Total revenues	$	22,782	$	60,091	$	153,335	$	182,344
Cost of revenues	$	653	$	624	$	2,386	$	2,242
Operating lease cost and other fees	$	807	$	1,958	$	4,433	$	5,482
Interest earned from affiliate
Interest income	$	231	$	184	$	1,011	$	422

(1)Amounts presented through August 15, 2022.

Summary of balances of transactions with related parties

As of the December 31, 2021, EVERTEC had the following balances arising from transactions with related parties:

(In thousands)	December 31, 2021
Cash and restricted cash deposits in affiliated bank	$	187,602
Other due to/from affiliate
Accounts receivable	$	38,120
Prepaid expenses and other assets	$	1,763
Operating lease right-of-use assets	$	13,533
Other long-term assets	$	2,853
Accounts payable	$	5,601
Contract liabilities	$	40,982
Operating lease liabilities	$	14,019

XML

Segment Information (Tables)

9 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Summary of information about operations by business segments

The following tables set forth information about the Company’s operations by its four business segments for the periods indicated:

	Three months ended September 30, 2022
(In thousands)	Payment Services - Puerto Rico & Caribbean		Payment Services - Latin America		Merchant Acquiring, net		Business Solutions		Corporate and Other (1)		Total
Revenues	$	44,592	$	33,741	$	36,911	$	49,306	$	(18,747)	$	145,803
Operating costs and expenses	$	26,960	$	28,513	$	25,261	$	38,522	$	2,729	$	121,985
Depreciation and amortization	$	5,116	$	4,104	$	1,045	$	3,745	$	5,702	$	19,712
Non-operating income (expenses)	$	385	$	(7,094)	$	348	$	136,218	$	(932)	$	128,925
EBITDA	23,133		2,238		13,043		150,747		(16,706)		172,455
Compensation and benefits (2)	1,557		972		498		503		2,141		$	5,671
Transaction, refinancing and other fees (3)	330		—		325		(134,974)		8,567		$	(125,752)
Adjusted EBITDA	$	25,020	$	3,210	$	13,866	$	16,276	$	(5,998)	$	52,374

(1)Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations.  Intersegment revenue eliminations predominantly reflect the $12.3 million processing fee from Payments Services - Puerto Rico & Caribbean to Merchant Acquiring, intercompany software developments and transaction processing of $3.7 million from Payment Services- Latin America to both Payment Services- Puerto Rico & Caribbean and Business Solutions, and transaction processing and monitoring fees of $2.8 million from Payment Services - Puerto Rico & Caribbean to Payment Services - Latin America.

(2)Primarily represents share-based compensation and severance payments.

(3)Primarily represents fees and expenses associated with corporate transactions as defined in the 2018 Credit Agreement, the gain from the Popular transaction and the elimination of non-cash equity earnings from our 19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A., net of dividends received.

	Three months ended September 30, 2021
(In thousands)	Payment Services - Puerto Rico & Caribbean		Payment Services - Latin America		Merchant Acquiring, net		Business Solutions		Corporate and Other (1)		Total
Revenues	$	38,773	$	26,792	$	37,606	$	58,134	$	(15,422)	$	145,883
Operating costs and expenses	21,420		22,209		19,922		37,412		(2,097)		98,866
Depreciation and amortization	3,989		2,809		1,010		4,691		6,246		18,745
Non-operating income (expenses)	203		1,844		281		551		(2,322)		557
EBITDA	21,545		9,236		18,975		25,964		(9,401)		66,319
Compensation and benefits (2)	260		755		255		70		2,153		3,493
Transaction, refinancing and other fees (3)	—		—		—		—		(42)		(42)
Adjusted EBITDA	$	21,805	$	9,991	$	19,230	$	26,034	$	(7,290)	$	69,770

(1)Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations.  Intersegment revenue eliminations predominantly reflect the $10.8 million processing fee from Payments Services - Puerto Rico & Caribbean to Merchant Acquiring and intercompany software developments and transaction processing of $2.4 million from Payment Services- Latin America to both Payment Services- Puerto Rico & Caribbean and Business Solutions, and transaction processing and monitoring fees of $2.2 million from Payment Services - Puerto Rico & Caribbean to Payment Services - Latin America.

(2)Primarily represents share-based compensation.

(3)Primarily represents fees and expenses associated with corporate transactions as defined in the 2018 Credit Agreement and the elimination of non-cash equity earnings from our 19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A, net dividends received.

	Nine months ended September 30, 2022
(In thousands)	Payment Services - Puerto Rico & Caribbean		Payment Services - Latin America		Merchant Acquiring, net		Business Solutions		Corporate and Other (1)		Total
Revenues	$	130,678	$	93,308	$	111,079	$	176,620	$	(55,063)	$	456,622
Operating costs and expenses	76,920		77,132		68,288		117,747		25		340,112
Depreciation and amortization	15,062		9,628		3,104		12,787		17,851		58,432
Non-operating income (expenses)	928		(3,365)		980		137,542		(3,560)		132,525
EBITDA	69,748		22,439		46,875		209,202		(40,797)		307,467
Compensation and benefits (2)	2,569		2,758		1,284		1,503		7,241		15,355
Transaction, refinancing and other fees (3)	330		—		325		(134,990)		12,647		(121,688)
Adjusted EBITDA	$	72,647	$	25,197	$	48,484	$	75,715	$	(20,909)	$	201,134

(1)Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations.  Intersegment revenue eliminations predominantly reflect the $36.5 million processing fee from Payments Services - Puerto Rico & Caribbean to Merchant Acquiring and intercompany software developments and transaction processing of $10.7 million from Payment Services - Latin America to both Payment Services - Puerto Rico & Caribbean and Business Solutions, and transaction processing and monitoring fees of $7.9 million from Payment Services - Puerto Rico & Caribbean to Payment Services - Latin America.

(2)Primarily represents share-based compensation and severance payments.

(3)Primarily represents fees and expenses associated with corporate transactions as defined in the 2018 Credit Agreement, the gain from the Popular transaction and the elimination of non-cash equity earnings from our 19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A., net of dividends received.

	Nine months ended September 30, 2021
(In thousands)	Payment Services - Puerto Rico & Caribbean		Payment Services - Latin America		Merchant Acquiring, net		Business Solutions		Corporate and Other (1)		Total
Revenues	$	113,626	$	77,641	$	106,808	$	179,438	$	(42,954)	$	434,559
Operating costs and expenses	61,270		63,020		55,762		110,276		(2,077)		$	288,251
Depreciation and amortization	11,813		8,695		2,631		14,085		18,867		$	56,091
Non-operating income (expenses)	618		5,348		835		2,494		(5,269)		$	4,026
EBITDA	64,787		28,664		54,512		85,741		(27,279)		206,425
Compensation and benefits (2)	781		2,321		781		1,193		6,204		$	11,280
Transaction, refinancing and other fees (3)	660		—		—		(647)		1,202		$	1,215
Adjusted EBITDA	$	66,228	$	30,985	$	55,293	$	86,287	$	(19,873)	$	218,920

(1)Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations.  Intersegment revenue eliminations predominantly reflect the $31.2 million processing fee from Payments Services - Puerto Rico & Caribbean to Merchant Acquiring and intercompany software developments and transaction processing of $6.6 million from Payment Services - Latin America to both Payment Services - Puerto Rico & Caribbean and Business Solutions, and transaction processing and monitoring fees of $5.1 million from Payment Services - Puerto Rico & Caribbean to Payment Services - Latin America.

(2)Primarily represents share-based compensation and severance payments.

(3)Primarily represents fees and expenses associated with corporate transactions as defined in the 2018 Credit Agreement and the elimination of non-cash equity earnings from our 19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A. net dividends received, a software impairment charge and a gain from the sale of the asset.

Reconciliation of EBITDA to consolidated net income

The reconciliation of EBITDA to consolidated net income is as follows:

	Three months ended September 30,				Nine months ended September 30,
(In thousands)	2022		2021		2022		2021
Total EBITDA	$	172,455	$	66,319	$	307,467	$	206,425
Less:
Income tax expense	9,048		7,134		22,911		14,474
Interest expense, net	5,956		5,180		15,963		15,905
Depreciation and amortization	19,712		18,745		58,432		56,091
Net income	$	137,739	$	35,260	$	210,161	$	119,955

XML

The Company and Basis of Presentation (Details)	Sep. 30, 2022 country
Accounting Policies [Abstract]
Number of countries where services are provided	26

XML

Business Acquisitions and Dispositions - Additional Information (Details) - USD ($) $ in Thousands, shares in Millions		3 Months Ended		9 Months Ended
	Jul. 01, 2022	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Business Acquisition [Line Items]
Gain on sale of a business		$ 135,642	$ 0	$ 135,642	$ 0
Popular | Collaborative Arrangement, Merchant Acquiring Independent Sales Organization Agreement
Business Acquisition [Line Items]
Main commercial agreements, extension period placed into effect	10 years
Popular | Collaborative Arrangement, ATH Network Participation Agreement
Business Acquisition [Line Items]
Main commercial agreements, extension period placed into effect	5 years
Popular | Collaborative Arrangement, Master Services Agreement
Business Acquisition [Line Items]
Main commercial agreements, extension period placed into effect	3 years
Exclusivity requirements eliminated with modifications, non-compete intangible asset amortization period	15 years
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Disposal Group, Popular
Business Acquisition [Line Items]
Common stock received in exchange for the sale of a business	$ 169,249
Contract liability representing consideration for the sale of a business	15,426
Disposal group, consideration	184,675
Contract liability	11,700
Gain on sale of a business	$ 135,642
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Disposal Group, Popular | Non-compete agreement
Business Acquisition [Line Items]
Write-off of non-compete intangible asset		$ 12,300		$ 12,300
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Disposal Group, Popular | Minimum
Business Acquisition [Line Items]
Transition services agreements, term	3 months
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Disposal Group, Popular | Maximum
Business Acquisition [Line Items]
Transition services agreements, term	36 months
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Disposal Group, Popular | Common Stock
Business Acquisition [Line Items]
Disposal group, consideration (in shares)	4.6
BBR, SpA Acquisition
Business Acquisition [Line Items]
Percentage of share capital acquired	100.00%
Acquisition, cash paid	$ 45,900
Acquisition, certificates of deposits transferred	$ 7,300

XML

Business Acquisitions and Dispositions - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Jul. 01, 2022	Dec. 31, 2021
Business Acquisition [Line Items]
Goodwill	$ 417,819		$ 393,318
BBR, SpA Acquisition
Business Acquisition [Line Items]
Cash and cash equivalents		$ 1,551
Accounts receivable, net		2,969
Property and equipment, net		3
Operating lease right-of-use asset		76
Goodwill		33,247
Other intangible assets, net		24,850
Deferred tax asset		267
Total assets acquired		62,963
Accounts payable		1,039
Contract liability		1,136
Operating lease liability		85
Deferred tax liability		7,614
Total liabilities assumed		$ 9,874

XML

Business Acquisitions and Dispositions - Finite-lived Intangible Assets Acquired (Details) - USD ($) $ in Thousands		3 Months Ended
	Jul. 01, 2022	Jun. 30, 2022
Customer relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Total		$ 10,600
BBR, SpA Acquisition
Acquired Finite-Lived Intangible Assets [Line Items]
Total	$ 24,850
Weighted-average life	14 years
BBR, SpA Acquisition | Customer relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Total	$ 22,500
Weighted-average life	15 years
BBR, SpA Acquisition | Trademark
Acquired Finite-Lived Intangible Assets [Line Items]
Total	$ 1,250
Weighted-average life	5 years
BBR, SpA Acquisition | Software packages
Acquired Finite-Lived Intangible Assets [Line Items]
Total	$ 1,100
Weighted-average life	5 years

XML

Business Acquisitions and Dispositions - Gain on Sale (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
	Jul. 01, 2022	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Gain on sale of a business		$ 135,642	$ 0	$ 135,642	$ 0
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Disposal Group, Popular
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Common stock received in exchange for the sale of a business	$ 169,249
Contract liability representing consideration for the sale of a business	15,426
Total consideration for the sale of a business	184,675
Goodwill	(5,813)
Other intangible assets, net	(31,011)
Prepaid expenses and other assets	(497)
Contract liability	(11,712)
Gain on sale of a business	$ 135,642

XML

Debt Securities - Amortized Cost, Gross Unrealized Gains and Losses (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Costa Rica Government Obligations
Amortized cost, after 1 to 5 years	$ 2,219	$ 2,963
Gross unrealized gains, after 1 to 5 years	0	78
Gross unrealized losses, after 1 to 5 years	(21)	0
Fair Value, after 1 to 5 years	$ 2,198	$ 3,041

XML

Debt Securities - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2022	Sep. 30, 2021
Investments, Debt and Equity Securities [Abstract]
Purchase of available-for sale debt securities	$ 300	$ 254	$ 2,968
Proceeds from maturities of available-for-sale debt securities		$ 1,015	$ 0

XML

Property and Equipment, net - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Property and Equipment, net
Property and equipment, gross	$ 165,246	$ 153,713
Less - accumulated depreciation and amortization	(116,531)	(106,365)
Depreciable assets, net	48,715	47,348
Land	1,213	1,185
Property and equipment, net	$ 49,928	48,533
Buildings
Property and Equipment, net
Useful life in years	30 years
Property and equipment, gross	$ 1,387	1,359
Data processing equipment
Property and Equipment, net
Property and equipment, gross	$ 151,545	141,359
Data processing equipment | Minimum
Property and Equipment, net
Useful life in years	3 years
Data processing equipment | Maximum
Property and Equipment, net
Useful life in years	5 years
Furniture and equipment
Property and Equipment, net
Property and equipment, gross	$ 8,742	7,718
Furniture and equipment | Minimum
Property and Equipment, net
Useful life in years	3 years
Furniture and equipment | Maximum
Property and Equipment, net
Useful life in years	20 years
Leasehold improvements
Property and Equipment, net
Property and equipment, gross	$ 3,572	$ 3,277
Leasehold improvements | Minimum
Property and Equipment, net
Useful life in years	5 years
Leasehold improvements | Maximum
Property and Equipment, net
Useful life in years	10 years

XML

Property and Equipment, net - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Property, Plant and Equipment [Abstract]
Depreciation and amortization expense related to property and equipment	$ 4.6	$ 4.2	$ 13.9	$ 13.0
Loss on disposition of damaged POS devices				$ 0.5

XML

Goodwill and Other Intangible Assets - Goodwill by Segments (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2022 USD ($)
Changes in the Carrying Amount of Goodwill
Beginning balance	$ 393,318
Goodwill attributable to acquisition	33,247
Goodwill attributable to the sale of a business	(5,813)
Foreign currency translation adjustments	(2,933)
Ending balance	417,819
Payment Services - Puerto Rico & Caribbean
Changes in the Carrying Amount of Goodwill
Beginning balance	160,972
Goodwill attributable to acquisition	0
Goodwill attributable to the sale of a business	0
Foreign currency translation adjustments	0
Ending balance	160,972
Payment Services - Latin America
Changes in the Carrying Amount of Goodwill
Beginning balance	48,402
Goodwill attributable to acquisition	33,247
Goodwill attributable to the sale of a business	0
Foreign currency translation adjustments	(2,933)
Ending balance	78,716
Merchant Acquiring, net
Changes in the Carrying Amount of Goodwill
Beginning balance	138,121
Goodwill attributable to acquisition	0
Goodwill attributable to the sale of a business	0
Foreign currency translation adjustments	0
Ending balance	138,121
Business Solutions
Changes in the Carrying Amount of Goodwill
Beginning balance	45,823
Goodwill attributable to acquisition	0
Goodwill attributable to the sale of a business	(5,813)
Foreign currency translation adjustments	0
Ending balance	$ 40,010

XML

Goodwill and Other Intangible Assets - Additional Information (Details) - USD ($)		3 Months Ended			9 Months Ended		12 Months Ended
	Jul. 01, 2022	Sep. 30, 2022	Jun. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Acquired Finite-Lived Intangible Assets [Line Items]
Impairment of goodwill					$ 0	$ 0
Amortization expense for intangible assets		$ 15,200,000		$ 14,500,000	44,500,000	43,000,000
BBR, SpA Acquisition
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible asset acquired	$ 24,850,000
Customer relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible asset acquired			$ 10,600,000
Useful life in years			5 years
Customer relationships | BBR, SpA Acquisition
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible asset acquired	22,500,000
Trademarks | BBR, SpA Acquisition
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible asset acquired	1,250,000
Software packages
Acquired Finite-Lived Intangible Assets [Line Items]
Impairment charge					4,100,000	$ 600,000
Software packages | BBR, SpA Acquisition
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible asset acquired	$ 1,100,000
Non-compete agreement
Acquired Finite-Lived Intangible Assets [Line Items]
Useful life in years							15 years
Non-compete agreement | Disposal Group, Disposed of by Sale, Not Discontinued Operations | Disposal Group, Popular
Acquired Finite-Lived Intangible Assets [Line Items]
Write-off of non-compete intangible asset		$ 12,300,000			$ 12,300,000

XML

Goodwill and Other Intangible Assets - Other Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended	12 Months Ended
	Jun. 30, 2022	Sep. 30, 2022	Dec. 31, 2021
Acquired Finite-Lived Intangible Assets [Line Items]
Gross amount		$ 766,013	$ 782,751
Accumulated amortization		(569,697)	(569,463)
Net carrying amount		196,316	213,288
Customer relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Useful life in years	5 years
Gross amount		390,221	357,991
Accumulated amortization		(295,170)	(272,732)
Net carrying amount		$ 95,051	$ 85,259
Customer relationships | Minimum
Acquired Finite-Lived Intangible Assets [Line Items]
Useful life in years		8 years	8 years
Customer relationships | Maximum
Acquired Finite-Lived Intangible Assets [Line Items]
Useful life in years		15 years	14 years
Trademarks
Acquired Finite-Lived Intangible Assets [Line Items]
Gross amount		$ 43,025	$ 41,901
Accumulated amortization		(37,638)	(36,684)
Net carrying amount		$ 5,387	$ 5,217
Trademarks | Minimum
Acquired Finite-Lived Intangible Assets [Line Items]
Useful life in years		1 year	2 years
Trademarks | Maximum
Acquired Finite-Lived Intangible Assets [Line Items]
Useful life in years		15 years	15 years
Software packages
Acquired Finite-Lived Intangible Assets [Line Items]
Gross amount		$ 332,767	$ 326,320
Accumulated amortization		(236,889)	(217,643)
Net carrying amount		$ 95,878	$ 108,677
Software packages | Minimum
Acquired Finite-Lived Intangible Assets [Line Items]
Useful life in years		3 years	3 years
Software packages | Maximum
Acquired Finite-Lived Intangible Assets [Line Items]
Useful life in years		10 years	10 years
Non-compete agreement
Acquired Finite-Lived Intangible Assets [Line Items]
Useful life in years			15 years
Gross amount			$ 56,539
Accumulated amortization			(42,404)
Net carrying amount			$ 14,135

XML

Goodwill and Other Intangible Assets - Estimated Amortization Expenses (Details) $ in Thousands	Sep. 30, 2022 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Remaining 2022	$ 14,156
2023	53,108
2024	41,611
2025	16,218
2026	$ 11,300

XML

Debt and Short-Term Borrowings - Total Debt (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Debt Instrument [Line Items]
Total debt	$ 455,504	$ 465,293
Note Payable due on January 1, 2022 | Notes Payable
Debt Instrument [Line Items]
Note payable due January 1, 2022	0	758
Term A due on November 27,2023 | Credit Facility
Debt Instrument [Line Items]
Credit facility	$ 162,930	$ 170,875
Margin interest rate	1.75%	1.75%
Term B due on November 27, 2024 | Credit Facility
Debt Instrument [Line Items]
Credit facility	$ 292,574	$ 293,660
Term B due on November 27, 2024 | Credit Facility | LIBOR
Debt Instrument [Line Items]
Margin interest rate	3.50%	3.50%
Minimum variable rate	0.00%	0.00%

XML

Debt and Short-Term Borrowings - Additional Information (Details)		1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
	Mar. 08, 2021 USD ($)	Jan. 31, 2022 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2019 USD ($) agreement	Nov. 27, 2018 USD ($)
Debt Instrument [Line Items]
Mandatory prepayment trigger, minimum leverage ratio							1.75
Losses reclassified from accumulated other comprehensive loss into income			$ 400,000	$ 1,800,000	$ 3,500,000	$ 5,300,000
Gains expected to be reclassified from accumulated other comprehensive loss into income in the next 12 months			3,400,000		3,400,000
Carrying Amount
Debt Instrument [Line Items]
Interest rate swap			7,070,000		7,070,000			$ 0
Derivative, liability position			0		0			13,392,000
Fair Value, Level 2 | Carrying Amount
Debt Instrument [Line Items]
Interest rate swap			7,100,000		7,100,000
Derivative, liability position								$ 13,400,000
Credit Agreement 2018
Debt Instrument [Line Items]
Mandatory prepayment trigger, minimum leverage ratio								1.75
Mandatory prepayment trigger, minimum value of excess cash flow							$ 10,000,000
Credit facility, payment	$ 17,800,000
Notes Payable | December 2019 Financing Agreement
Debt Instrument [Line Items]
Number of financing agreements | agreement									2
Non interest bearing financing agreement									$ 2,400,000
Repayment of notes payable		$ 2,400,000
Notes payable								$ 800,000
Term A due on November 27,2023 | Credit Facility
Debt Instrument [Line Items]
Secured credit facilities			163,400,000		163,400,000
Term A due on November 27,2023 | Credit Facility | Credit Agreement 2018
Debt Instrument [Line Items]
Maximum amount under credit facilities										$ 220,000,000
Term B due on November 27, 2024 | Credit Facility
Debt Instrument [Line Items]
Secured credit facilities			294,200,000		294,200,000
Term B due on November 27, 2024 | Credit Facility | Credit Agreement 2018
Debt Instrument [Line Items]
Maximum amount under credit facilities										325,000,000
Senior Secured Revolving Credit Facility | Credit Facility
Debt Instrument [Line Items]
Additional borrowing capacity available under the revolving facility			$ 119,100,000		$ 119,100,000
Senior Secured Revolving Credit Facility | Credit Facility | Credit Agreement 2018
Debt Instrument [Line Items]
Maximum amount under credit facilities										$ 125,000,000

XML

Debt and Short-Term Borrowings - Summary of Interest Rate Swap Transaction (Details) - 2018 Interest Rate Swap Agreement	9 Months Ended
	Sep. 30, 2022 USD ($)
Derivative [Line Items]
Notional Amount	$ 250,000,000
1-month LIBOR
Derivative [Line Items]
Fixed Rate	2.89%

XML

Financial Instruments and Fair Value Measurements - Additional Information (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Financial liabilities:
Debt securities, available-for-sale	$ 2,198	$ 3,041
Carrying Amount
Financial liabilities:
Interest rate swap	7,070	0
Derivative, liability position	0	13,392
Fair Value, Level 2
Financial liabilities:
Debt securities, available-for-sale	2,200	3,000
Fair Value, Level 2 | Carrying Amount
Financial liabilities:
Interest rate swap	$ 7,100
Derivative, liability position		$ 13,400

XML

Financial Instruments and Fair Value Measurements - Carrying Value and Estimated Fair Values (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Financial assets:
Costa Rica government obligations	$ 2,198	$ 3,041
Carrying Amount
Financial assets:
Interest rate swap	7,070	0
Financial liabilities:
Interest rate swap	0	13,392
Carrying Amount | Credit Facility | 2023 Term A Loan
Financial liabilities:
Senior secured term loan	162,930	170,875
Carrying Amount | Credit Facility | 2024 Term B Loan
Financial liabilities:
Senior secured term loan	292,574	293,660
Fair Value
Financial assets:
Interest rate swap	7,070	0
Financial liabilities:
Interest rate swap	0	13,392
Fair Value | Credit Facility | 2023 Term A Loan
Financial liabilities:
Senior secured term loan	161,730	168,610
Fair Value | Credit Facility | 2024 Term B Loan
Financial liabilities:
Senior secured term loan	291,400	294,735
Costa Rica government obligations | Carrying Amount
Financial assets:
Costa Rica government obligations	2,198	3,041
Costa Rica government obligations | Fair Value
Financial assets:
Costa Rica government obligations	$ 2,198	$ 3,041

XML

Equity - Changes in Balances of Accumulated Other Comprehensive Loss (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2022 USD ($)
Changes in Accumulated Other Comprehensive Income (Loss)
Beginning balance	$ 470,268
Other comprehensive (loss) income before reclassifications	15,033
Effective portion reclassified to net income	3,504
Ending balance	455,255
Foreign Currency Translation Adjustments
Changes in Accumulated Other Comprehensive Income (Loss)
Beginning balance	(35,971)
Other comprehensive (loss) income before reclassifications	(210)
Effective portion reclassified to net income	0
Ending balance	(36,181)
Cash Flow Hedges
Changes in Accumulated Other Comprehensive Income (Loss)
Beginning balance	(12,261)
Other comprehensive (loss) income before reclassifications	15,320
Effective portion reclassified to net income	3,504
Ending balance	6,563
Unrealized Gains (losses) on Debt Securities AFS
Changes in Accumulated Other Comprehensive Income (Loss)
Beginning balance	109
Other comprehensive (loss) income before reclassifications	(77)
Effective portion reclassified to net income	0
Ending balance	32
Total
Changes in Accumulated Other Comprehensive Income (Loss)
Beginning balance	(48,123)
Ending balance	$ (29,586)

XML

Share-based Compensation - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expenses	$ 5.3	$ 3.7	$ 14.7	$ 10.9
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum unrecognized expense for RSU's	$ 32.0		$ 32.0
Unrecognized compensation cost, weighted average period of recognition (in years)			2 years
Time Based Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period (in years)			3 years
Awards with Performance Conditions
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period (in years)			3 years
Performance adjustment percent			25.00%
Performance measurement period (in years)			1 year
Requisite service period (in years)			2 years
Awards with Performance Conditions | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance payout percent			0.00%
Awards with Performance Conditions | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance payout percent			200.00%

XML

Share-based Compensation - Nonvested Restricted Shares and RSUs Activity (Details) - Restricted Shares and RSUs	9 Months Ended
	Sep. 30, 2022 $ / shares shares
Shares
Beginning balance (in shares) | shares	1,086,329
Granted (in shares) | shares	709,302
Vested (in shares) | shares	(421,764)
Forfeited (in shares) | shares	(8,546)
Ending balance (in shares) | shares	1,365,321
Weighted-average grant date fair value
Beginning balance (in usd per share) | $ / shares	$ 34.73
Granted (in usd per share) | $ / shares	41.90
Vested (in usd per share) | $ / shares	33.02
Forfeited (in usd per share) | $ / shares	37.10
Ending balance (in usd per share) | $ / shares	$ 38.97

XML

Revenues - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Disaggregation of Revenue [Line Items]
Revenues	$ 145,803	$ 145,883	$ 456,622	$ 434,559
Products and services transferred at a point in time
Disaggregation of Revenue [Line Items]
Revenues	4,852	925	9,605	5,800
Products and services transferred over time
Disaggregation of Revenue [Line Items]
Revenues	140,951	144,958	447,017	428,759
Payment Services - Puerto Rico & Caribbean
Disaggregation of Revenue [Line Items]
Revenues	29,545	25,742	86,289	76,761
Payment Services - Puerto Rico & Caribbean | Products and services transferred at a point in time
Disaggregation of Revenue [Line Items]
Revenues	89	30	244	119
Payment Services - Puerto Rico & Caribbean | Products and services transferred over time
Disaggregation of Revenue [Line Items]
Revenues	29,456	25,712	86,045	76,642
Payment Services - Latin America
Disaggregation of Revenue [Line Items]
Revenues	30,041	24,256	82,634	71,552
Payment Services - Latin America | Products and services transferred at a point in time
Disaggregation of Revenue [Line Items]
Revenues	973	449	1,405	1,633
Payment Services - Latin America | Products and services transferred over time
Disaggregation of Revenue [Line Items]
Revenues	29,068	23,807	81,229	69,919
Merchant Acquiring, net
Disaggregation of Revenue [Line Items]
Revenues	36,911	37,606	111,079	106,808
Merchant Acquiring, net | Products and services transferred at a point in time
Disaggregation of Revenue [Line Items]
Revenues	0	0	0	0
Merchant Acquiring, net | Products and services transferred over time
Disaggregation of Revenue [Line Items]
Revenues	36,911	37,606	111,079	106,808
Business Solutions
Disaggregation of Revenue [Line Items]
Revenues	49,306	58,279	176,620	179,438
Business Solutions | Products and services transferred at a point in time
Disaggregation of Revenue [Line Items]
Revenues	3,790	446	7,956	4,048
Business Solutions | Products and services transferred over time
Disaggregation of Revenue [Line Items]
Revenues	$ 45,516	$ 57,833	$ 168,664	$ 175,390

XML

Revenues - Contract Balances (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Revenue, Contract Balances [Roll Forward]
Balance at beginning of period	$ 1,715	$ 2,796
Services transferred to customers	7,246	5,374
Transfers to accounts receivable	(3,861)	(6,455)
Balance at end of period	$ 5,100	$ 1,715

XML

Revenues - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Accounts receivable, net	$ 112,293		$ 112,293		$ 113,285
Contract liability	17,051		17,051		17,398
Contract liability - long term	34,726		34,726		$ 36,258
Revenue recognized that was included in unearned income	17,000	$ 5,300	29,000	$ 20,700
Professional Services, All Other Contracts | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Transaction price allocated to performance obligations that are unsatisfied or partially satisfied	$ 1,061,800		$ 1,061,800
Professional Services, All Other Contracts | Minimum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, period of expected timing of satisfaction (in years)	1 year		1 year
Professional Services, All Other Contracts | Maximum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, period of expected timing of satisfaction (in years)	6 years		6 years

XML

Current Expected Credit Losses - Allowance Roll Forward (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at beginning of period	$ 2,523	$ 2,401
Current period provision for expected credit losses	649	819
Write-offs	(135)	(698)
Recoveries of amounts previously written-off	150	1
Balance at end of period	$ 3,187	$ 2,523

XML

Income Tax - Components of Income Tax Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Income Tax Disclosure [Abstract]
Current tax provision	$ 9,537	$ 7,306	$ 24,610	$ 15,593
Deferred tax benefit	(489)	(172)	(1,699)	(1,119)
Income tax expense	$ 9,048	$ 7,134	$ 22,911	$ 14,474

XML

Income Tax - Tax Expense Based on Location (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Current tax provision (benefit)
Puerto Rico	$ 6,318	$ 2,328	$ 11,809	$ 3,363
United States	44	57	107	132
Foreign countries	3,175	4,921	12,694	12,098
Total current tax provision	9,537	7,306	24,610	15,593
Deferred tax (benefit) provision
Puerto Rico	719	(258)	(321)	(778)
United States	54	116	9	(71)
Foreign countries	(1,262)	(30)	(1,387)	(270)
Total deferred tax benefit	$ (489)	$ (172)	$ (1,699)	$ (1,119)

XML

Income Tax - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Income Tax Disclosure [Abstract]
Unremitted earnings from foreign subsidiaries	$ 113.3	$ 99.1
Gross deferred tax asset	18.6	22.3
Gross deferred tax liability	19.4	16.3
Gross deferred tax asset, valuation allowance	1.8	$ 1.4
Reduction in uncertain tax positions, result of expiration of statue of limitation	$ 3.6

XML

Income Tax - Income Tax Expense Differs from Computed Income Tax at Statutory Rates (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Income Tax Disclosure [Abstract]
Computed income tax at statutory rates			$ 87,402	$ 50,411
Differences in tax rates due to multiple jurisdictions			2,612	1,789
Effect of income subject to tax-exemption grant			(26,262)	(35,121)
Effect of the gain on sale of a business			(39,645)	0
Unrecognized tax (benefit) expense			(3,472)	(3,475)
Excess tax benefits on share-based compensation			169	(1,027)
Other, net			2,107	1,897
Income tax expense	$ 9,048	$ 7,134	$ 22,911	$ 14,474

XML

Net Income Per Common Share - Reconciliation of Income Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Earnings Per Share [Abstract]
Net income available to EVERTEC, Inc.’s common shareholders	$ 137,814	$ 35,314	$ 210,301	$ 120,014
Weighted average common shares outstanding (in shares)	66,398,547	71,969,856	69,906,483	72,082,082
Weighted average potential dilutive common shares (in shares)	647,262	906,397	682,432	735,625
Weighted average common shares outstanding - assuming dilution (in shares)	67,045,809	72,876,253	70,588,915	72,817,707
Net income per common share - basic (in usd per share)	$ 2.08	$ 0.49	$ 3.01	$ 1.66
Net income per common share - diluted (in usd per share)	$ 2.06	$ 0.48	$ 2.98	$ 1.65

XML

Net Income Per Common Share - Additional Information (Details) - $ / shares				3 Months Ended
	Jul. 28, 2022	Apr. 21, 2022	Feb. 15, 2022	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021
Earnings Per Share [Abstract]
Cash dividends declared (in usd per share)	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05

XML

Related Party Transactions - Transactions with Related Parties (Details) - Popular - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Transactions with Third Party
Total revenues	$ 22,782	$ 60,091	$ 153,335	$ 182,344
Cost of revenues	653	624	2,386	2,242
Operating lease cost and other fees	807	1,958	4,433	5,482
Interest earned from affiliate
Interest income	$ 231	$ 184	$ 1,011	$ 422

XML

Related Party Transactions - Additional Information (Details) - Popular - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Transactions with Third Party
Accounts receivable, related party	$ 36.4		$ 36.4
Customer Concentration Risk | Total Revenue
Transactions with Third Party
Total percentage of revenues from Popular	35.00%	41.00%	40.00%	42.00%

XML

Related Party Transactions - Balances of Transactions (Details) $ in Thousands	Dec. 31, 2021 USD ($)
Related Party Transactions [Abstract]
Cash and restricted cash deposits in affiliated bank	$ 187,602
Other due to/from affiliate
Accounts receivable	38,120
Prepaid expenses and other assets	1,763
Operating lease right-of-use assets	13,533
Other long-term assets	2,853
Accounts payable	5,601
Contract liabilities	40,982
Operating lease liabilities	$ 14,019

XML

Segment Information - Operations by Segments (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($) segment	Sep. 30, 2021 USD ($)
Segment Reporting Information [Line Items]
Number of operating business segments (in segment) | segment			4
Revenues	$ 145,803	$ 145,883	$ 456,622	$ 434,559
Operating costs and expenses	121,985	98,866	340,112	288,251
Depreciation and amortization	19,712	18,745	58,432	56,091
Non-operating income (expenses)	128,925	557	132,525	4,026
EBITDA	172,455	66,319	307,467	206,425
Compensation and benefits	5,671	3,493	15,355	11,280
Transaction, refinancing and other fees	(125,752)	(42)	(121,688)	1,215
Adjusted EBITDA	$ 52,374	$ 69,770	$ 201,134	$ 218,920
Consorcio de Tarjetas Dominicanas S.A.
Segment Reporting Information [Line Items]
Equity investment	19.99%	19.99%	19.99%	19.99%
Payment Services - Puerto Rico & Caribbean
Segment Reporting Information [Line Items]
Revenues	$ 29,545	$ 25,742	$ 86,289	$ 76,761
Payment Services - Latin America
Segment Reporting Information [Line Items]
Revenues	30,041	24,256	82,634	71,552
Merchant Acquiring, net
Segment Reporting Information [Line Items]
Revenues	36,911	37,606	111,079	106,808
Business Solutions
Segment Reporting Information [Line Items]
Revenues	49,306	58,279	176,620	179,438
Operating Segments | Payment Services - Puerto Rico & Caribbean
Segment Reporting Information [Line Items]
Revenues	44,592	38,773	130,678	113,626
Operating costs and expenses	26,960	21,420	76,920	61,270
Depreciation and amortization	5,116	3,989	15,062	11,813
Non-operating income (expenses)	385	203	928	618
EBITDA	23,133	21,545	69,748	64,787
Compensation and benefits	1,557	260	2,569	781
Transaction, refinancing and other fees	330	0	330	660
Adjusted EBITDA	25,020	21,805	72,647	66,228
Operating Segments | Payment Services - Latin America
Segment Reporting Information [Line Items]
Revenues	33,741	26,792	93,308	77,641
Operating costs and expenses	28,513	22,209	77,132	63,020
Depreciation and amortization	4,104	2,809	9,628	8,695
Non-operating income (expenses)	(7,094)	1,844	(3,365)	5,348
EBITDA	2,238	9,236	22,439	28,664
Compensation and benefits	972	755	2,758	2,321
Transaction, refinancing and other fees	0	0	0	0
Adjusted EBITDA	3,210	9,991	25,197	30,985
Operating Segments | Merchant Acquiring, net
Segment Reporting Information [Line Items]
Revenues	36,911	37,606	111,079	106,808
Operating costs and expenses	25,261	19,922	68,288	55,762
Depreciation and amortization	1,045	1,010	3,104	2,631
Non-operating income (expenses)	348	281	980	835
EBITDA	13,043	18,975	46,875	54,512
Compensation and benefits	498	255	1,284	781
Transaction, refinancing and other fees	325	0	325	0
Adjusted EBITDA	13,866	19,230	48,484	55,293
Operating Segments | Business Solutions
Segment Reporting Information [Line Items]
Revenues	49,306	58,134	176,620	179,438
Operating costs and expenses	38,522	37,412	117,747	110,276
Depreciation and amortization	3,745	4,691	12,787	14,085
Non-operating income (expenses)	136,218	551	137,542	2,494
EBITDA	150,747	25,964	209,202	85,741
Compensation and benefits	503	70	1,503	1,193
Transaction, refinancing and other fees	(134,974)	0	(134,990)	(647)
Adjusted EBITDA	16,276	26,034	75,715	86,287
Corporate and Other
Segment Reporting Information [Line Items]
Revenues	(18,747)	(15,422)	(55,063)	(42,954)
Operating costs and expenses	2,729	(2,097)	25	(2,077)
Depreciation and amortization	5,702	6,246	17,851	18,867
Non-operating income (expenses)	(932)	(2,322)	(3,560)	(5,269)
EBITDA	(16,706)	(9,401)	(40,797)	(27,279)
Compensation and benefits	2,141	2,153	7,241	6,204
Transaction, refinancing and other fees	8,567	(42)	12,647	1,202
Adjusted EBITDA	(5,998)	(7,290)	(20,909)	(19,873)
Payment Processing | Corporate and Other
Segment Reporting Information [Line Items]
Revenues	12,300	10,800	36,500	31,200
Software Developments and Transaction Processing | Corporate and Other
Segment Reporting Information [Line Items]
Revenues	3,700	2,400	10,700	6,600
Transaction Processing and Monitoring Fees | Corporate and Other
Segment Reporting Information [Line Items]
Revenues	$ 2,800	$ 2,200	$ 7,900	$ 5,100

XML

Segment Information - Income from Segments to Consolidated Net Income (Details) - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2021
Segment Reporting [Abstract]
Total EBITDA	$ 172,455			$ 66,319			$ 307,467	$ 206,425
Less:
Income tax expense	9,048			7,134			22,911	14,474
Interest expense, net	5,956			5,180			15,963	15,905
Depreciation and amortization	19,712			18,745			58,432	56,091
Net income	$ 137,739	$ 33,556	$ 38,866	$ 35,260	$ 49,091	$ 35,604	$ 210,161	$ 119,955

XML

Subsequent Events (Details) - $ / shares					3 Months Ended
	Oct. 20, 2022	Jul. 28, 2022	Apr. 21, 2022	Feb. 15, 2022	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021
Subsequent Event [Line Items]
Cash dividends declared (in usd per share)		$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05
Subsequent Event
Subsequent Event [Line Items]
Cash dividends declared (in usd per share)	$ 0.05