EVERTEC, Inc. EVTC

The business

EVERTEC is the largest transaction processor in Puerto Rico and the Caribbean, with operations expanded into Brazil and broader Latin America through acquisitions over the past four years. The company operates five segments: Payment Services Puerto Rico & Caribbean (the legacy franchise including ATH Móvil, the dominant Puerto Rico payments network), Payment Services Latin America (Brazil-anchored after the Sinqia and Tecnobank acquisitions), Merchant Acquiring (point-of-sale and e-commerce processing for Puerto Rico merchants), Business Solutions (IT outsourcing primarily to Banco Popular), and Corporate. The engine is the dual-track growth model: the Puerto Rico franchise compounds at mid-single digits with structurally high margins (the island-economy dominance gives EVTC near-monopoly economics on ATH Móvil), while the LatAm segment is expected to grow in the high-30s in FY26 on the back of Sinqia, Tecnobank, and the newly acquired Dimensa businesses.

The qualitative fact the financials understate is the Pix-related Sinqia incident and its overhang on the stock. In late 2025, Sinqia identified unauthorized activity in its environment connected to Brazil's Pix instant-payments system, involving approximately R$710 million of unauthorized transactions affecting two financial-institution customers. The Brazilian Central Bank suspended Sinqia from processing transactions in the Brazilian Payments System (SPB) and Pix pending review of remediation actions. This is the principal driver of the 39% drawdown from $38 to $23: the FY26 LatAm guide implicitly assumes Sinqia returns to Pix processing during 2026, but the timing is dependent on the BCB's review pace. The Q1 2026 print at +8% revenue and $0.38 GAAP EPS (down 24% YoY) reflects the partial impact of the suspension plus elevated remediation costs.