EVERTEC, Inc. (EVTC) Earnings Call Transcript

Ladies and gentlemen, thank you for standing by. My name is Elaine and I will be your conference operator for today. At this time, I would like to welcome everyone to Evertech's second quarter 2026 earnings. I'd like to remind everyone that all lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad to raise your hand and enter the queue. would like to withdraw your questions, please press star 1 again. Thank you.

I will now turn the call over to Lili Arteaga, the skilled. Thank you and good afternoon. With me today are Max Schuessler, our President and Chief Executive Officer, and Carla Cruz-Jusino, Chief Financial Officer. Before we begin, I would like to remind everyone that this call may contain forward-looking statements and should be considered in conjunction with the following statements. cautionary statements contained in our earnings release and the company's most recent periodic SEC report. During today's call, management will provide certain information that will constitute non-GAAP financial measures under SEC rules. such as constant currency revenue, adjusted EBITDA, adjusted net income, and adjusted earnings per common share. Reconciliations to GAAP measures and certain additional information are also included in today's earnings release and related supplemental slides, which are available in the investor relations section of our company's website.

at www.evertechinc.com. I will now hand the call over to Mac. Thanks, Lily, and good afternoon, everyone. Before we begin, I'd like to officially welcome Lily Arteaga to Evertech. For those of you who have not yet had the opportunity to connect with her, we're excited to have Lily leading our investor relations function and look forward to working with her. her as we continue to strengthen our engagement with investors and the analyst community. With that, let me turn to our second quarter performance. Our results reflect solid execution across the business and progress on a long-term strategy. Starting on slide four, our priorities remain clear and consistent. We continue to strengthen Evertech's position as a leading financial technology and transaction processing company across Latin America and the Caribbean through a balanced approach of organic growth, strategic acquisitions, and disciplined capital allocation. We remain focused on deepening client relationships, expanding our capabilities, and increasing our presence in attractive markets across the region. The momentum we are seeing across the business, together with strategic investments and actions we have taken over the past several years, reinforces our confidence in our ability to deliver sustainable growth and long-term value for our shareholders. Before turning to our quarterly performance, I would like to address the cybersecurity incident we disclosed in June. We responded immediately, activated our incident response protocols, engaging external cybersecurity experts, and working closely with affected clients and authorities. Based on our response efforts and findings to date, we believe our incident response procedures operated as intended. Importantly, the incident did not disrupt our operations or our ability to serve our clients. While our remediation measures are ongoing, we are focused on supporting those affected, strengthening our environment, and maintaining the security and resilience of the critical infrastructure we operate. With that, let me turn to our second quarter performance. I will begin on slide five with an update on organic growth, which continues to be an important driver of value creation. During the quarter, we announced a strategic agreement with TransBank, Chile's leading payment solutions provider and one of the largest acquirers in Latin America. Under this multi-year agreement, which has an initial term of at least five years, Evertech will operate transactional processing environment, and selected technology platforms and services. The engagement represents one of the most significant commercial wins in our history. And on the revenue opportunity, this agreement deepens our strategic relevance in one of Latin America's most important markets and creates a foundation for continued growth with a key client over time. It also demonstrates the strength of our technology capabilities and the success of the investments we have made to build a scaled, trusted payment and technology platform across the region. We are also building momentum in Mexico. Recently, we signed a contract with CLIP, one of Mexico's leading financial ecosystem providers, serving nearly 1 million merchants. This agreement presents an early milestone in our acquiring services business in the country and serves as a strong proof point of our ability to compete and win in Mexico, one of the region's most important payments market. We are also continuing to leverage capabilities across our platform to expand into new customer segments and use cases in Puerto Rico. Earlier this year, we signed agreements with Metro Pistas, a toll road. operator and subsidiary of Albertus Infrastructura to support both card-present and card-not-present transactions. These relationships highlight our ability to bring together capabilities across the organization, including solutions acquired through prior strategic investments, such as Place to Pay. TransBank, Qlip, Metropistas, and other recent wins demonstrate our ability to to secure important organic growth opportunities and expand and fortify our presence across Latin America and the Caribbean. Turning to M&A, our approach remains disciplined and consistent. We continue to focus on businesses with scalable technology, strong market positions, recurring revenue streams, and opportunities to create value through integration, cross-selling, and innovation. and expanded client relationships. Turning to slide six, during their quarter, we completed the acquisition of Dementia. Strategically, Dementia strengthens our software capabilities for financial institutions, expands our addressable market, and increases our relevance within the Brazilian financial services ecosystem. While the integration remains in its early stages, we are encouraged by the progress made since closing. Our teams are working closely together and we remain focused on executing our integration plans, capturing commercial opportunities, and delivering value through expanded client relationships, cross-selling initiatives, and operational efficiencies. We believe Dementia can contribute meaningfully over time time through an expanded product portfolio, increased scale, and broader customer reach. Turning now to slide seven, we also completed the acquisition of BBchain, a provider of blockchain infrastructure, tokenization, digital custody, and digital asset solutions for financial institutions in Brazil. BBT strategically expands our platform beyond traditional payments and banking technology into next generation digital financial infrastructure. Beyond its financial contribution, although modest from a near-term revenue perspective, the acquisition broadens our ability to serve financial institutions across investment funds, fixed income lending, and digital assets, and reinforces our commitment to innovation. It creates opportunities to extend these capabilities to clients across Latin America over time. Together, our recent acquisitions of Syncia, Technobank, Demensa, and BBChain represent an important step in our strategy to build a larger, more diversified financial technology platform. By expanding our portfolio and broadening the range of solutions we can deliver, these businesses enhance our ability to serve clients across multiple product areas while creating additional opportunities. opportunities for growth over time. Before turning to our quarterly results, I would like to briefly touch on our AI initiatives on slide eight. Earlier this year, we introduced the governance framework and strategic approach that are guiding our adoption of AI across the organization. Since then, we have continued to advance those initiatives with a focus on three priorities, driving greater efficiency, fostering innovation, and further enhancing the service we deliver to our clients. employing AI across a broad range of use cases, including accelerating software development, improving incident management and service quality, enhancing fraud detection and risk monitoring capabilities, and supporting the development of new client-facing solutions. Several of these initiatives are already generating, encouraging results through improved productivity enhance quality, and faster delivery. While our efforts today remain focused on operational efficiency and execution excellence, we also see longer-term opportunities to enhance existing solutions, expand capabilities, and develop new offerings that create additional value for our clients. We believe AI will become an increasingly important enabler of how we operate, innovate, and serve our clients. Over time, we expect these capabilities to create opportunities to enhance both revenue growth and profitability. As these initiatives continue to mature, we expect to gain greater visibility into their impact and anticipate starting to incorporate these benefits into our financial outlook starting in 2027. Now turning to slide nine, I'll cover key highlights from our second quarter results. Revenue for the quarter was approximately $275 million, an increase of 20% compared to the prior year. Growth was driven by continued organic performance, contributions from recent acquisitions, and favorable foreign currency movements, reflecting the benefits of our balanced growth strategy and increasingly diversified business model. On a constant currency basis, revenue grew approximately 16% year over year. Adjusted EBITDA for the quarter was approximately $109 million, up 18% year-over-year, while adjusted EBITDA margin was 39.8%. This performance reflects the scalability of our business model and our ability to translate revenue growth into earnings while continuing to invest in strategic initiatives that support the business in the long term. EPS increased to $1.05 from $0.89 in the prior year. The increase was driven primarily by higher earnings and also benefited from the reduced share count resulting from share repurchase activity over the past several quarters. From a capital allocation perspective, we continue to execute against all three pillars of our strategy during the quarter. We invested in organic growth initiatives and completed the acquisition of Demensa while continuing to return capital to shareholders for our quarterly dividends and share repurchase program. During the quarter, we repurchased approximately 2 million shares for a total of $47 million and paid $3 million in dividends. At quarter end, approximately $83 million remained under our share repurchase authorization, and last week, the board replenished this authorization to $150 million. Our liquidity remained strong at approximately $420 million and paid $3 million in dividends. at quarter end, providing financial flexibility to invest in growth, support ongoing integration activities, and allocate capital toward the opportunities we believe will generate highest long-term returns for shareholders. Let me now provide an update on Puerto Rico, now beginning on slide 10. Our Puerto Rico business delivered another strong quarter and continues to provide a resilient foundation for Evertech. Merchant acquiring revenue grew 11% year over year, reflecting strong organic growth driven primarily by higher sales volume, non-transactional revenues, and an improvement in spread. Payment service revenue increased 8% year-over-year, driven by higher POS transaction volumes, the continued momentum in ATH mobile, particularly ATH mobile business, and a non-recurring volume-based benefit recognized during the quarter. As expected, business solutions reflected the previously discussed reset in year-over-year comparisons, resulting from the 10% growth in ATH mobile. contractual discount provided to Popular. More broadly, economic conditions in Puerto Rico remain favorable. Employment trends remain positive, while consumer spending and tourism activity continue to provide a stable backdrop for our business. During the quarter, the Puerto Rico government also authorized a $554 million tax relief program This environment continues to support Puerto Rico's role as a stable source of recurring cash flow and earnings for the company. Turning to slide 11, Latin America once again was a meaningful contributor to growth. Revenue increased 52% year-over-year on a reported basis, benefiting from the contribution of recent economic growth. acquisitions and continued organic growth across the region. Brazil has also benefited from the favorable foreign currency movements, which contributed approximately $9 million during the quarter. On a constant currency basis, our Latin America business grew 42% compared to the prior year. In summary, we're pleased with our second quarter performance and the continued progress we're making in executing our strategic priorities, Transbank, CLIP, Metro Pistas, and other recent wins demonstrate our ability to win important organic growth opportunities and expand and fortify our presence across Latin America and the Caribbean while the Mensa and BB chain broaden our capabilities and strengthen our platform offering. Collectively, we infrastructure. At the same time, our disciplined capital allocation framework allows us to invest in strategic initiatives while continuing to return capital to shareholders. With that, I will turn the call over to Karlyn.

Thank you, Max, and good afternoon, everyone. Turning to slide 13, I'll begin by reviewing Evertech's second quarter results. Total revenue for the quarter was $275 million, an increase of approximately 20% compared to the prior year quarter. Driven by organic growth across most of our segments, contributions from our recent Technobank and Demenza acquisitions, and favorable foreign currency movements primarily in Brazil. On a constant currency basis, growth was approximately 16%. Adjusted EBITDA increased 18% year-over-year to $109 million driven by the strong revenue growth. Adjusted EBITDA margin was 39.8% compared to 40.3% in the prior year. The modest decline primarily reflects the increasing contribution from Latin America, where we are capturing growth opportunities in markets with a different margin profile. adjusted net income increased 12% year-over-year to $65 million, reflecting strong adjusted EBITDA performance. This was partially offset by higher adjusted effective tax rate, higher depreciation and amortization expense, and the non-controlling interest associated with the Technobank acquisition completed in the fourth quarter of 2025. The higher adjusted effective tax rate primarily reflects the greater proportion of taxable income generated in higher tax for an individual. jurisdictions. Adjusted EPS was $1.05, an increase of 18% from the prior year, reflecting adjusted net income growth and the benefit of a lower share count resulting from repurchases completed during the current and prior periods. Before I turn to the discussion by segment, I would like to address several non-recurring items that were reflected in our GAAP results this quarter. First, there were a number of acquisition-related impacts primarily associated with the Demensa and Technobank acquisitions. These included higher depreciation and amortization expenses related to acquiring technology, tangible assets and increased interest expense resulting from the financing used to complete those acquisitions. Also, GAAP tax expense was impacted by discrete tax items, including taxes associated with a dividend distribution from a foreign subsidiary that was used to partially fund the DEMENSA acquisition. Second, we recorded impairment charges associated with our decision to exit our participation in a JV focused on developing payment services solutions in Latin America. This decision reflects our disciplined approach to capital allocation and our continued focus on deploying capital toward opportunities that are most closely aligned with our long-term strategic priorities. And finally, we incurred costs related to the response and remediation of the cyber incident disclosed in June. While these non-recurring items affected our reported results, our underlying operating performance remained strong, as reflected in our revenue growth, adjusted earnings, and the increased full-year outlooks. With that, $2 million driven by broad-based growth across multiple revenue drivers. Sales volume and transactions grew approximately 7% and 6% respectively, reflecting both the onboarding of new high volume merchants, as well as growth within our existing customer base. Revenue growth also benefited from a favorable transaction mix, which contributed to higher spread as well as pricing initiatives implemented during the current and prior year that drove higher non-transactional revenues. Results also reflected healthy consumer spending trends in Puerto Rico, including the benefit of the tax relief initiatives implemented. implemented by the Puerto Rico government during the quarter. Importantly, growth was driven by both volume expansion and spread improvement, reflecting the health of our merchant acquiring business and the effectiveness of our pricing initiative. Adjusted EBITDA for the segment was $22 million, with an adjusted EBITDA margin of 41.7%, down approximately 60 basis points from the prior year. decline primarily reflects higher processing costs associated with CPA-related increases within our Payments Puerto Rico segment. Overall results continue to reflect stable demand and healthy underlying transaction activity. Turning to slide 15, payment services revenue increased 8% year-over-year to $61 million. Growth was driven by continued momentum across our payment solutions, including ATH Mobile, particularly ATH Mobile Business, which continued to deliver double-digit growth in both volumes and transactions. We also benefited from approximately 12% year-over-year growth in BOS transactions, reflecting healthy consumer activity across Puerto Rico, as well as from the U.S. non-recurrent volume-based benefit recognized during the quarter. Adjusted EBITDA increased 12% year-over-year to $37 million, while adjusted EBITDA margin expanded approximately 210 basis points to 60.6%. Margin expansion was driven by the favorable contribution of the non-recurrent volume-based benefit, which was highly accretive given during the quarter. More broadly, the segment continues to benefit from growing transactions and volume activity and the scalability of our platforms, positioning us well for long-term growth opportunities. Turning to slide 16, Latin America Payments and Solutions was once again the largest contributor to our revenue and EBITDA growth during the quarter. Revenue increased 52% year-over-year to $131 million. Approximately $9 million of this growth was attributable to foreign currency movements, primarily respecting the appreciation of the Brazilian Rai compared to the prior year. On a confident currency basis, revenue grew approximately 42%. Growth was driven by the contributions from the DIMENSA and Technobank acquisitions, including Technobank's expansion into two additional states and Brazil. Our underlying organic performance was supported by business outsourcing services, licensing and platform revenues, and higher transaction volume across our digital solutions in Brazil. We also saw continued strength in payment, software, and data solutions throughout the region and increased services provided to Puerto Rico. On a reported basis, adjusted EBITDA increased 70% year over year to $40 million, while adjusted EBITDA margin expanded approximately 320 basis points to 30.3%. expansion was in part driven by the contribution from Technoburg, which carries a higher margin profile, partially offset by the inclusion of Demensa, which currently operates at lower margins than our existing Latin America business. The results do not yet reflect the benefit of future synergy opportunities that we expect to realize over time. on a constant currency basis, adjusted EBITDA was $38 million and the margin was 31.5%. Overall, our results continue to demonstrate the benefits of our Latin America strategy, including our ability to scale capabilities across markets, deepen client relationships, and expand our presence in attractive growth segments. Moving to slide 17 are the results of our business solutions segments. Revenue for the quarter was $59 million, a decrease of 9% year-over-year. As expected, the decline was primarily attributable to the 10% discount to Popular that became effective in October of last year. Adjusted EBITDA was $23 million, a decrease of 13% from the prior year, reflecting the impact of the 10% discount to popular. Adjusted EBITDA margin contracted approximately 200 basis points to 38.3%, also reflecting the impact of the discount, partially offset by the non-recurrence of project related expenses recorded in the prior year. Overall, segment performance was in line with our expectations and reflects the underlying stability of the business despite the anticipated impact of the popular pricing reset. Turning to slide 18, we have a summary of our corporate and other expenses. I just said EBITDA was negative $12 million for the quarter, representing 4.2% of total revenue. Turning to slide 19, I will now review our cash flow performance. Through the second quarter, we generated $91 million of net cash from operating activities, reflecting continued focus on working capital management and cash conversion. During the period, we deployed capital across multiple priorities, including acquiring Dementia for approximately $199 million and $73 million returned to shareholders through dividends and share repurchases. net debt increased by approximately $152 million, primarily reflecting financing activities related to the dementia acquisition during the quarter. We ended the quarter with $261 million of unresisted cash, excluding cash in settlement assets, compared to $306 million at year-end 2025. Turning to slide 20, our net debt position at quarter end was approximately $1 billion, comprised of $1.3 billion in total loan and short-term debt, offset by $261 million of unrestricted cash. Our weighted average interest rate was approximately 6%, a decrease of approximately 57%. basis points year-over-year, reflecting the benefit of debt repricing actions executed during the prior year, as well as lower interest rates. Net debt to trailing 12 months adjusted EBITDA was approximately 2.55 times compared to 1.95 times a year ago, remaining within our targeted leverage range of two to three times. This reflects the successful funding of the demand acquisition while maintaining significant financial flexibility. As of June 30th, total liquidity, which excludes restricted cash and includes available borrowing capacity, was approximately $420 million. Overall, our balance sheet remains strong and well-positioned to support both our strategic growth initiatives and ongoing capital return priorities. Turning now to our outlook for 2026 on slide 21. Based on our second quarter performance and our confidence in our ability to continue delivering strong results, we are increasing our full year expectations. For 2026, we now expect reported revenue to be in the range of $1,085,000,000 to $1,095,000,000, representing growth of 16.4% to 17.5% year-over-year. The increase in our outlook reflects continued strength across merchant acquiring and Latin America payments and solutions, modestly higher expectation for demenza, and the benefit of foreign exchange partially offset by slightly lower expected revenues in business solutions. Specifically, this outlook includes approximately 200 basis points of foreign currency tailwinds, driven primarily by the appreciation of the presumed NRI, relatively to the 2025 monthly average exchange rate used in our constant currency calculations. Importantly, a significant portion of this benefit was already realized in the first half of the year and is therefore reflected in our year-to-date results. On a constant currency basis, we now expect family growth for 2026 to be between 14.5% to 15.6%, compared to our prior outlook of 13.8% to 15%. Starting with the legacy business, we remain encouraged by the trends we see across our portfolio. Transaction activity remains healthy, particularly across our acquiring and payment businesses, and execution continues to be strong across the organization. These trends, combined with the continued momentum in Latin America, support our confidence in our Puerto Rico businesses, which continues to perform at or modestly above the assumptions embedded in our original outlook. At the segment level for Merchant Aquarium, we now expect high single-digit growth in 2026, supported by continued transactional and volume growth, as well as the benefit of the implementation of key merchant relationships. Between payments Puerto Rico and Caribbean, we continue to expect mid-single-digit growth driven by continued strength in ATH mobile and POS volumes, including processing services provided to the Latin America segment, partially offset by the impact of the popular discount. For Latin America payments and solutions, we now expect revenue growth within the low low 40s on a reported basis and mid to high 30s on a constant currency basis, reflecting continued execution across the region and the contributions from Dimensa and Tecnolab. Finally, in business solutions, we now expect revenues to decline in the mid-single digits. The revised outlook reflects the anticipated impact of the popular contract discount as well as delays in certain new business wins. As a reminder, the popular discount anniversary occurs in the fourth quarter, after which the associated headwind will no longer impact the over-year comparison. Overall, the increase in our outlook reflects the strength of our Java SFI business model, continued execution of our growth strategy, and the contribution from our recent acquisitions. Our outlook continues to assume an adjusted EBITDA margin of 39 to 40%, despite the increasing contribution from Latin America and the addition of the MENSA, which currently operates at a lower margin profile. We continue to expect margins to remain within this range, supported by favorable business myths and disciplined cost management activities. across a broader business. Adjusted EPS is now expected to grow between 8.8% and 11.7% from the $3.62 reported for 2025, or between 7.2% and 10% on a constant currency basis. The increase in our outlook reflects stronger operating performance and the benefit from the share repurchases made during the quarter. From an earnings perspective, our updated guidance continues to assume that the MSA will be EPS neutral to slightly accretive in 2025. This assumption remains unchanged and reflects the balance between operating contributions, integration timing, and associated financing costs. While stronger operating performance across the business is driving our increased outlook, we continue to expect certain items below adjusted EBITDA to limit the full translation into earnings growth, including higher interest expense, increased depreciation and amortization expense, higher non-controlling interest related to tech banks, and a shift in our tax profile. resulting from the greater contribution from Latin America. We continue to expect our effective tax rate to remain within a range of approximately 11% to 12% for the full year. Capital expenditures are still expected to be $90 million. In addition, we expect to continue returning capital to shareholders through dividends and, when appropriate, share repurchases. Overall, our increased 2026 outlook reflects stronger-than-expected performance across merchant acquiring in Latin America, continued progress integrating our recent acquisitions, and favorable underlying business trends. In summary, we delivered a strong second quarter, raised our full-year outlook, and remain well positioned to execute on our strategic priorities. We continue to see meaningful opportunities to drive growth and create long-term value for shareholders. operator, please open the line for questions.

Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and enter the queue. If you would like to withdraw your question, simply press star 1 again. For now, we will pause for just a moment to compile this Q&A roster. Your question comes from the line of Vasu Govil from the KBW. Your line is now open. Please go ahead. Thank you.

Thank you. Thanks for taking my question. Maybe, Mac, first one for you. Congrats on the win with Transbank in Chile. That's a pretty big one. Obviously, investors are interested in understanding how meaningful this relationship could be economically, the timing of when it could start contributing, and how this could of the agreement is similar or different from the same vendor relationship you had. So maybe if you could just elaborate on that, that would be super helpful.

Yes, so first, I mean, look, it's one of the most important contracts we've, commercial contracts we have, um, besides Popular. So it's, you know, a milestone for us and it gives us significant precedence in Chile and continues to validate our technology and our capabilities. We're already in the process, you know, going through the implementation and it'll be a migration of their existing merchant base. So once it is implemented, it'll ramp very quickly because it is a migration. It's a conversion versus just, you know, start with one merchant and then add the next. We expect it to start impacting second half of 2027, but really fully ramp in 2028. So we're incredibly excited with that and also with Clip. We also announced that we're doing a deal with Clip in Mexico, which is not as large as this deal, but from a reputational perspective, we're working with them. They have MeClip, which is their e-wallet. And we're using our acquiring switching technology to help enable that. And so we're pretty excited about that as well because it is a marquee account in Mexico.

Great. Thank you for that color. And then maybe a quick one for you, Carla. I heard the Dax relief initiatives that helped merchant acquiring in Puerto Rico. Was that a one-time tailwind or is that a benefit that you're expecting will continue? And then I think you also mentioned pricing as a tailwind. Could you remind us if this is a new round of pricing actions or some residual benefit from the prior repricing actions, just any color on that would be helpful.

Yes, so starting with the tax relief, that is a benefit that we do not necessarily anticipate to recur throughout the second half of the year. It was very specific to a tax relief effort that was approved by the local government specifically for the 2025 tax year. And then from a pricing initiative perspective, that is mainly attributed to two main pricing efforts that we executed, one of them being executed in the second half of 2025, and then the second one more recently, specifically now in Q2.

So, we should expect the benefit to sort of last with us for another four quarters.

Correct. For the one that was implemented in O&Q 2, definitely we will see that benefit throughout the rest of the year. Great. Thanks. I'll hop back in queue. Thanks, Mr.

YOUR NEXT QUESTION COMES FROM THE LINE OF JAMIE FROM SUSKEY HANA. HER LINE IS NOW OPEN.

Hi. Thank you. Congratulations on the strong results. I also wanted to ask about TransBankMAC. Actually, to step back, I want to ask about Chile more broadly. My recollection is that it was a national scheme that had been privatized in Chile. If I got that wrong, I apologize. If you could give us the cliff notes on where the banking system is in Chile and how that's evolving and –.

or if TransBank is participating in that. Thank you. Sure. No, no, good question. So TransBank was originally a monopoly that was all of the banks in Chile used to actually create the merchant acquiring business to support the issuing business. TransBank actually owned the merchant contracts and then each of the banks had equity ownership in TransBank. One of the first big banks to peel away and leave TransBank was Santander. And that was a deal that we announced some time ago, which is a similar deal. It's a processing deal that we do for Santander. And that was, at the time, that was a huge deal for us. And then Banco de Chile has also decided to leave TransBank. because they want to build and own their own merchant portfolio. And again, Banco de Chile selected us as well, and we announced that maybe a year or so ago. Now, TransBank is the remaining company, and there are many banks that still use TransBank for their merchant acquiring business. The banks still own TransBank. Transbank so it's still owned by all of the banks and it is still the largest payments the merchant acquire in Chile and given the success that we've worked with the two largest banks that we've worked with, Transbank has now decided that we have the right technology for them as well.

Wow, okay, now I get it. That is very cool. If you look across LATAM more generally, are there other countries that still have that sort of schema, or is this unusual down there? meaning like a national charter, or can you templatize this elsewhere?.

Yes. So, I mean, look, it is. In most countries, in many countries, there's actually two providers. One was typically the legacy MasterCard provider and one was Visa, and they were owned by the banks. And now both of those, like there are two in Colombia, and both of those now do Visa and MasterCard. So there still are legacy monopoly or duopoly businesses across. the region. And ultimately, if we can demonstrate our capabilities in some of these other countries, it could open up those opportunities as well.

All right, I'll drop back in the queue. Thank you. Great. Thank you, Dan.

Your next question comes from the line of Chris Kennedy from William Blair. Your line is now open. Please go ahead.