EVERTEC, Inc.

Previous wording

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 month period ended March 31, 2025 and 2024 and (ii) the financial condition as of March 31, 2025. 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 year ended December 31, 2024, included in the Company’s Annual Report on Form 10-K as filed with the SEC on March 3, 2025 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 that involve risks and uncertainties. Our actual results may differ from those indicated in the forward-looking statements. See “Forward-Looking Statements” for a discussion of the risks, uncertainties and assumptions associated with these statements.

Current wording

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 six months ended June 30, 2025 and 2024 and (ii) the financial condition as of June 30, 2025. 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 year ended December 31, 2024, included in the Company’s Annual Report on Form 10-K as filed with the SEC on March 3, 2025 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 that involve risks and uncertainties. Our actual results may differ from those indicated in the forward-looking statements. See “Forward-Looking Statements” for a discussion of the risks, uncertainties and assumptions associated with these statements.

Previous wording

EVERTEC is a leading full-service transaction-processing business and financial technology provider in Latin America, Puerto Rico and the Caribbean, providing a broad range of merchant acquiring, payment services and business solutions. We believe we are one of the largest merchant acquirers in Latin America based on total number of transactions and we also believe we are the largest merchant acquirer in the Caribbean. We serve 26 countries out of 24 offices, including our headquarters in Puerto Rico. We own and operate the ATH network, which we believe is one of the leading debit networks in Brazil. We process over ten billion transactions annually through a system of electronic payment networks in Puerto Rico and Latin America and provide a comprehensive suite of services for core banking, cash processing, fulfillment in Puerto Rico and a "one stop shop" set of access to products for the financial sector in Latin America, which includes solutions such as core banking, investments, asset management, pension funds and consortium. Additionally, we offer managed services, managed security services and payment transactions fraud monitoring to all the regions where we do business. 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 America region.

Current wording

EVERTEC is a leading full-service transaction-processing business and financial technology provider in Latin America, Puerto Rico and the Caribbean, providing a broad range of merchant acquiring, payment services and business solutions. We believe we are one of the largest merchant acquirers in Latin America based on total number of transactions and we also believe we are the largest merchant acquirer in the Caribbean. We serve 26 countries out of 24 offices, including our headquarters in Puerto Rico. We own and operate the ATH network, which we believe is one of the leading debit networks in Brazil. We process over ten billion transactions annually through a system of electronic payment networks in Puerto Rico and Latin America and provide a comprehensive suite of services for core banking, cash processing, fulfillment in Puerto Rico and a "one stop shop" set of products for the financial sector in Latin America, which include solutions such as core banking, investments, asset management, pension funds and consortium. Additionally, we offer managed services, managed security services and payment transactions fraud monitoring to all the regions where we do business. 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 America region.

Previous wording

The ongoing migration from cash and paper methods of payment to electronic payments continues to benefit the transaction- processing industry globally. We continue to 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 systems and updating these IT legacy systems is financially and logistically challenging, which presents a business opportunity for us.

Current wording

The ongoing migration from cash and paper methods of payment to electronic payments continues to benefit the transaction- processing industry globally. We continue to 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, 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 systems and updating these IT legacy systems is financially and logistically challenging, which presents a business opportunity for us.

Previous wording

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 ongoing migration to digital payment methods continues to benefit the transaction-processing industry globally. Technologies such as contactless payments, QR codes, tap to pay, mobile commerce, “e-wallets” and advanced and smart POS devices continue to drive the shift away from cash and other traditional payment methods. The Company has benefited from an increase in transaction volumes for these types of payment solutions. As consumers and merchants increase demand for contactless and mobility-based solutions, the Company has continued to innovate and invest, expanding the footprint and functionality of digital solutions such as Placetopay, our e-commerce gateway platform, our wallet ATH Movil and ATH Business, and Paystudio our issuing and acquiring processing platform. Additionally, aligned with this trend, the Company has also developed PIX 2.0 to take advantage of Brazil's fastest instant money transfer system, PIX. We believe that the ongoing shift to digital payments will continue to generate substantial growth opportunities for our business.

Current wording

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 ongoing migration to digital payment methods continues to benefit the transaction-processing industry globally. Technologies such as contactless payments, QR codes, tap to pay, mobile commerce, “e-wallets” and advanced and smart POS devices continue to drive the shift away from cash and other traditional payment methods. The Company has benefited from an increase in transaction volumes for these types of payment solutions. As consumers and merchants increase demand for contactless and mobility-based solutions, the Company has continued to innovate and invest, expanding the footprint and functionality of digital solutions such as Placetopay, our e-commerce gateway platform, our wallet ATH Movil and ATH Business, and Paystudio our issuing and acquiring processing platform. Additionally, aligned with this trend, the Company has also developed software to take advantage of Brazil's fastest instant money transfer system, PIX. We believe that the ongoing shift to digital payments will continue to generate substantial growth opportunities for our business.

Previous wording

On September 30, 2010, EVERTEC Group entered into a 15-year Master Service Agreement ("MSA"), and several related agreements with Popular. On July 1, 2022, we modified and extended the main commercial agreements with Popular, including obtaining 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 (as amended, the "A&R ISO Agreement"). The A&R ISO Agreement, which defines our merchant acquiring relationship with Popular, now includes revenue sharing provisions with Popular. The MSA modifications also include the elimination of the exclusivity requirement, the inclusion of annual MSA minimums through September 30, 2028, a 10% discount on certain MSA services beginning in October of 2025 and adjustments to the 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 (collectively with the contract amendments, the "Popular Transaction"). On August 15, 2022, through a secondary offering, Popular sold its remaining shares of EVERTEC common stock. EVERTEC is no longer deemed a subsidiary of Popular under the Bank Holding Company Act. Popular continues to be the Company’s largest customer and for the three months ended March 31, 2025 approximately 31% of our revenues were generated from this relationship.

Current wording

On September 30, 2010, EVERTEC Group entered into a 15-year Master Service Agreement ("MSA"), and several related agreements with Popular. On July 1, 2022, we modified and extended the main commercial agreements with Popular, including obtaining 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 (as amended, the "A&R ISO Agreement"). The A&R ISO Agreement, which defines our merchant acquiring relationship with Popular, now includes revenue sharing provisions with Popular. The MSA modifications also include the elimination of the exclusivity requirement, the inclusion of annual MSA minimums through September 30, 2028, a 10% discount on certain MSA services beginning in October of 2025 and adjustments to the 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 (collectively with the contract amendments, the "Popular Transaction"). On August 15, 2022, through a secondary offering, Popular sold its remaining shares of EVERTEC common stock. EVERTEC is no longer deemed a subsidiary of Popular under the Bank Holding Company Act. Popular continues to be the Company’s largest customer and for the six months ended June 30, 2025 approximately 31% of our revenues were generated from this relationship.

Previous wording

Total revenue for the three months ended March 31, 2025 was $228.8 million, an increase of 11% compared with $205.3 million in the prior year period, as a result of organic growth across all of the Company's segments and the contribution from the acquisitions completed in the fourth quarter of 2024. Merchant acquiring revenue benefited from an improvement in spread and sales volume growth. Payments Puerto Rico revenue benefited from increased revenues from ATH Movil and transaction growth. Latin America revenues are being positively impacted by the contribution from acquisitions completed in the prior year, continued organic growth across the region, and the benefit from pricing initiatives. Business Solutions revenue increased as a result of projects completed throughout the prior year as well as an increase in hardware and software sales.

Current wording

Total revenue for the three months ended June 30, 2025 was $229.6 million, an increase of 8% compared with $212.0 million in in the prior year quarter driven by organic growth in all of the Company's segments and the contribution from the acquisitions completed in the fourth quarter of 2024. Merchant acquiring revenue benefited from an improvement in spread as we continue to benefit from pricing initiatives implemented in the prior year. Payments Puerto Rico revenue benefited from increased revenues from ATH Movil, and transaction growth. Latin America revenue benefited from continued organic growth across the entire region and the contribution from acquisitions completed in the prior year. Business Solutions revenue increased as a result of projects completed throughout the prior year and an increase in IT consulting services.

Previous wording

Depreciation and amortization expense for the three months ended March 31, 2025 amounted to $28.5 million, a decrease of $6.0 million or 17% when compared to the same period in the prior year. The decrease was primarily driven by intangible assets that became fully amortized during the prior year.

Current wording

Depreciation and amortization expense for the three months ended June 30, 2025 amounted to $28.3 million, a decrease of $4.6 million or 14% when compared to the same period in the prior year. The decrease was primarily driven by intangible assets that became fully amortized during the prior year.

Previous wording

Income tax expense for the three months ended March 31, 2025 amounted to $4.1 million, compared to an income tax benefit in the prior year quarter of $0.3 million. The effective tax rate for the period was 11.1%, compared with 1.8% in the prior year period. The increase in the effective tax rate was primarily driven by growth in Latin America jurisdictions, which have higher tax rates, lower interest expense driven by a lower interest rate and the debt repricing completed in the prior year, and a non-recurring discrete item recorded during the quarter.

Current wording

Income tax expense for the three months ended June 30, 2025 amounted to $4.1 million, compared to an income tax expense in the prior year quarter of $1.1 million. The effective tax rate for the period was 9.0%, compared with 3.3% in the prior year period. The increase in the effective tax rate was primarily driven by growth in Latin America jurisdictions, which have higher tax rates, and lower interest expense driven by a lower interest rate and the debt repricing completed in the prior year, coupled with the non-recurring reversal of a potential liability for uncertain tax positions as a result of the expiration of the statute of limitation during the prior year.

Previous wording

Cost of revenues, exclusive of depreciation and amortization, for the three months ended March 31, 2025 amounted to $114.6 million, an increase of $12.2 million or 12% when compared to the same period in the prior year. This increase was primarily related to the increase in cost of sales in connection with hardware and software sales, an increase in personnel costs, partially due to the increased headcount from acquisitions completed in the fourth quarter of the prior year, higher professional fees related to strategic projects and an increase in cloud services, partially offset by the reversal of a contingency accrual in the prior year quarter.

Current wording

Cost of revenues, exclusive of depreciation and amortization, for the six months ended June 30, 2025 amounted to $224.7 million, an increase of $24.7 million or 12% when compared to the same period in the prior year. This increase was primarily related to the increase in cost of sales in connection with hardware and software sales, an increase in personnel costs, partially due to the increased headcount from acquisitions completed in the fourth quarter of the prior year, higher professional fees related to strategic projects and an increase in cloud services, partially offset by the reversal of contingency accruals.

Previous wording

Selling, general and administrative expenses for the three months ended March 31, 2025 amounted to $36.2 million, an increase of $0.6 million or 2% when compared to the same period in the prior year. This increase was mainly driven by an increase in personnel costs, partially offset by lower professional fees.

Current wording

Selling, general and administrative expenses for the six months ended June 30, 2025 amounted to $71.3 million, a decrease of $2.5 million or 3% when compared to the same period in the prior year. This decrease was mainly driven by lower professional fees, partially offset by an increase in personnel costs.

Previous wording

Non-operating expenses for the three months ended March 31, 2025 decreased by $3.9 million to $12.3 million when compared to the same period in the prior year. The decrease was mainly related to decrease in foreign currency remeasurement loss of $3.6 million, a decrease in interest expense of $3.0 million driven by a lower interest rate and the debt repricing completed in the prior year and an increase in earnings from equity method investments of $1.0 million. This impact was partially offset by a decrease in Other income, net as the prior year included unrealized gains of $2.8 million on the change in fair value of equity securities while no gains were recognized in the current year.

Current wording

Non-operating expenses for the six months ended June 30, 2025 decreased by $2.5 million to $23.4 million when compared to the same period in the prior year. The decrease was mainly related to a decrease in interest expense of $4.9 million driven by a lower interest rate and the debt repricing completed in the prior year and a decrease in foreign currency remeasurement losses of $2.6 million, as the current year has a gain compared with losses in the prior year. This impact was partially offset by a decrease in Other income, net as the prior year included realized gains of $2.8 million from changes in fair value of equity securities, while no such gains were recognized in the current year. Additionally, the prior year benefited from a decrease in the estimated payout of deferred consideration related to business combinations.

Previous wording

Payment Services - Puerto Rico & Caribbean segment revenues for the three months ended March 31, 2025 increased by $2.1 million to $55.2 million when compared to the same period in the prior year. The increase in revenues was primarily driven by continued growth from ATH Movil, primarily ATH Business, as well as transaction growth partially offset by lower revenue from services provided to the Latin America Payments and Solutions segment. Segment Adjusted EBITDA increased by $1.1 million to $31.4 million, driven by revenue growth, which was partially offset by higher infrastructure and programming expenses.

Current wording

Payment Services - Puerto Rico & Caribbean segment revenues for the three months ended June 30, 2025 increased by $2.2 million to $56.4 million when compared to the same period in the prior year. The increase in revenues was primarily driven by continued growth from ATH Movil, primarily ATH Business, as well as transaction growth partially offset by lower revenue from services provided to the Latin America Payments and Solutions segment. Segment Adjusted EBITDA increased by $1.7 million to $33.0 million, driven by revenue growth, which was partially offset by higher infrastructure and maintenance expenses.

Previous wording

Merchant Acquiring segment revenues for the three months ended March 31, 2025 increased by $4.6 million to $47.6 million when compared to the same period in the prior year. The revenue increase was primarily driven by an improvement in spread and sales volume growth. Segment Adjusted EBITDA increased by $4.1 million to $20.4 million driven by the increase in revenues, partially offset by an increase in revenue sharing expense as well as processing costs from the higher transactions.

Current wording

Merchant Acquiring segment revenues for the three months ended June 30, 2025 increased by $2.0 million to $47.3 million when compared to the same period in the prior year. The revenue increase was primarily driven by an improvement in spread driven by pricing initiatives implemented in the prior year and sales volume growth. Segment Adjusted EBITDA increased by $1.8 million to $20.0 million driven by the increase in revenues, partially offset by processing costs as a result of higher transactions and an increase in revenue sharing expense.

Previous wording

Business Solutions segment revenues for the three months ended March 31, 2025 increased by $7.4 million to $65.6 million as compared to the prior year period. This increase was primarily driven by projects completed in the prior year, mainly for Popular, and an increase in hardware and software sales. Segment Adjusted EBITDA decreased by $0.8 million as compared to the prior year period primarily due to an increase in cost of sales as a result of the hardware and software sales and incremental professional fees for strategic projects.

Current wording

Business Solutions segment revenues for the three months ended June 30, 2025 increased by $2.2 million to $64.5 million as compared to the prior year period. This increase was primarily driven by projects completed in the prior year, mainly for Popular, and an increase in IT consulting services in the current year quarter. Segment Adjusted EBITDA decreased by $3.8 million as compared to the prior year period primarily due to an increase in cost of sales, an increase in software maintenance and cloud expenses and incremental professional fees for strategic projects.

Previous wording

Latin America Payments and Solutions segment revenues for the three months ended March 31, 2025 increased by $9.6 million to $83.8 million when compared to the same period in the prior year, driven by organic revenue growth, which benefited from pricing initiatives, the contribution from acquisitions completed in the fourth quarter of 2024, which are contributing at a higher margin, and non-recurring revenue recognized in the quarter. Segment Adjusted EBITDA increased by $8.6 million primarily driven by the increase in revenues and a lower provision for operational losses.

Current wording

Latin America Payments and Solutions segment revenues for the six months ended June 30, 2025 increased by $20.9 million to $169.8 million when compared to the same period in the prior year, driven by organic revenue growth, which benefited from pricing initiatives, the contribution from acquisitions completed in the fourth quarter of 2024, which are contributing at a higher margin, and non-recurring revenue recognized in the first half of the year, partially offset by the impact from foreign currency exchange and client attrition. Segment Adjusted EBITDA increased by $14.4 million primarily driven by the same factors explained above for the quarter and higher reversals of contingency accruals.

Previous wording

As of March 31, 2025, we had cash and cash equivalents of $265.9 million, of which $214.0 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 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.

Current wording

As of June 30, 2025, we had cash and cash equivalents of $290.6 million, of which $229.8 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 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.

Previous wording

Net cash provided by operating activities for the three months ended March 31, 2025 was $37.6 million compared to $40.7 million for the same period in the prior year, driven by working capital requirements.

Current wording

Net cash provided by operating activities for the six months ended June 30, 2025 was $86.1 million compared to $131.3 million for the same period in the prior year, driven by working capital requirements.

Previous wording

Net cash used in investing activities for the three months ended March 31, 2025 was $22.3 million compared to $22.0 million for the same period in the prior year and a result of an increase of $0.4 million in additions to software and purchases of property, plant and equipment.

Current wording

Net cash used in investing activities for the six months ended June 30, 2025 was $42.7 million compared to $50.2 million for the same period in the prior year and a result of a decrease of $14.0 million in additions to software and purchases of property, plant and equipment, partially offset by proceeds from the sale of equity securities in the prior year of $5.9 million, while none in the current year.

Previous wording

Net cash used in financing activities for the three months ended March 31, 2025 was $27.5 million compared to $21.1 million for the same period in the prior year, as the prior year included cash drawn from the Revolving Facility of $80.0 million of which $70.0 million were used to fund the accelerated share repurchase program. During the current year period, the Company exercised the right to acquire the remaining non-controlling interest in a company in Brazil for $5.2 million. Partially offsetting this was a decrease in cash used for settlement activities of $5.9 million, a $1.1 million decrease in withholding taxes paid on share-based compensation and $1.7 million decrease in other financing activities.

Current wording

Net cash used in financing activities for the six months ended June 30, 2025 was $40.3 million compared to $85.8 million for the same period in the prior year, as the prior year included cash used to fund the accelerated share repurchase program of $70 million in addition to a decrease in other financing activities of $2.8 million. During the current year period there was a decrease in cash provided from settlement activities of $19.5 million and the Company exercised the right to acquire the remaining non-controlling interest in a company in Brazil for $5.2 million.

Previous wording

Our principal capital expenditures are for hardware and computer software (purchased and internally developed) and additions to our property and equipment. During the three months ended March 31, 2025 and 2024, we invested approximately $22.3 million and $21.9 million in our capital resources, respectively. Generally, we fund capital expenditures with cash generated from operations and, if necessary, borrowings under our Revolving Facility.

Current wording

Our principal capital expenditures are for hardware and computer software (purchased and internally developed) and additions to our property and equipment. During the six months ended June 30, 2025 and 2024, we invested approximately $42.3 million and $56.3 million in our capital resources, respectively. Generally, we fund capital expenditures with cash generated from operations and, if necessary, borrowings under our Revolving Facility.

Previous wording

On February 20, 2025, the Company's Board declared quarterly cash dividends of $0.05 per share of common stock, which was paid on March 21, 2025 to stockholders' of record on March 3, 2025. On May 2, 2025, our Board declared a regular quarterly cash dividend of $0.05 per share on the Company’s outstanding shares of common stock. The dividend is expected to be paid on June 6, 2025 to stockholders of record as of the close of business on May 13, 2025. 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.

Current wording

On February 20, 2025, the Company's Board declared quarterly cash dividends of $0.05 per share of common stock, which was paid on March 21, 2025 to stockholders of record as of March 3, 2025. On May 2, 2025, the Board declared a regular quarterly cash dividend of $0.05 per share which was paid on June 6, 2025 to stockholders of record as of the close of business on May 13, 2025. On July 24, 2025, our Board declared a regular quarterly cash dividend of $0.05 per share on the Company’s outstanding shares of common stock. The dividend is expected to be paid on September 5, 2025 to stockholders of record as of the close of business on August 4, 2025. 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.

Previous wording

At March 31, 2025, the unpaid principal balance of the TLA Facility and TLB Facility were $423.6 million and $540.0 million, respectively. The additional borrowing capacity for the Revolving Facility at March 31, 2025 was $193.9 million, considering letters of credit issued. The Company issues letters of credit against the Revolving Facility which reduce the additional borrowing capacity of the Revolving Facility.

Current wording

At June 30, 2025, the unpaid principal balance of the TLA Facility and TLB Facility were $417.7 million and $540.0 million, respectively. The additional borrowing capacity for the Revolving Facility at March 31, 2025 was $193.9 million, considering letters of credit issued. The Company issues letters of credit against the Revolving Facility which reduce the additional borrowing capacity of the Revolving Facility.

Previous wording

As part of the Company’s merger and acquisition activities, the Company may enter into agreements by which a portion of the purchase price is financed directly by the seller. At March 31, 2025 and December 31, 2024, the unpaid principal balance of these agreements amounted to $6.2 million and $9.9 million, respectively. Obligations bear interest at rates ranging from 6.2% to 12.95% with maturities ranging from October 2025 through March 2027. The current portion of the deferred consideration is included in accounts payable and the long-term portion is included in other long-term liabilities on the Company's unaudited condensed consolidated balance sheet.

Current wording

As part of the Company’s merger and acquisition activities, the Company may enter into agreements by which a portion of the purchase price is financed directly by the seller. At June 30, 2025 and December 31, 2024, the unpaid principal balance of these agreements amounted to $6.5 million and $9.9 million, respectively. Obligations bear interest at rates ranging from 5.6% to 12.9% with maturities ranging from October 2025 through March 2027. The current portion of the deferred consideration is included in accounts payable and the long-term portion is included in other long-term liabilities on the Company's unaudited condensed consolidated balance sheet.

Previous wording

In September 2023, EVERTEC Group entered into a non-interest bearing financing agreement amounting to $10.1 million to purchase software and maintenance which the Company recorded on a discounted basis using an implied interest of 6.9%. As of March 31, 2025, the outstanding principal balance of the note payable on a discounted basis was $6.5 million. The current portion of the note is included in accounts payable and the long-term portion is included in other long-term liabilities on the Company's unaudited condensed consolidated balance sheet.

Current wording

In September 2023, EVERTEC Group entered into a non-interest bearing financing agreement amounting to $10.1 million to purchase software and maintenance which the Company recorded on a discounted basis using an implied interest of 6.9%. As of June 30, 2025, the outstanding principal balance of the note payable on a discounted basis was $6.0 million. The current portion of the note is included in accounts payable and the long-term portion is included in other long-term liabilities on the Company's unaudited condensed consolidated balance sheet.

Previous wording

As of March 31, 2025, the Company has three interest rate swap agreements which convert a portion of the interest rate payments on the Company's Term Loan Facilities from variable to fixed. The interest rate swaps are used to hedge the market risk from changes in interest rates corresponding with the Company's variable rate debt. The interest rate swaps are designated as cash flow hedges and are considered highly effective. Cash flows from the interest rate swaps are included in the accrued liabilities and accounts payable line item in the Company's unaudited condensed consolidated statements of cash flows. Changes in the fair value of the interest rate swaps are recognized in other comprehensive income (loss) until the gains or losses are reclassified to earnings. Gains or losses reclassified to earnings are presented within interest expense in the accompanying condensed consolidated statements of income and comprehensive income (loss).

Current wording

As of June 30, 2025, the Company has three interest rate swap agreements which convert a portion of the interest rate payments on the Company's Term Loan Facilities from variable to fixed. The interest rate swaps are used to hedge the market risk from changes in interest rates corresponding with the Company's variable rate debt. The interest rate swaps are designated as cash flow hedges and are considered highly effective. Cash flows from the interest rate swaps are included in the accrued liabilities and accounts payable line item in the Company's unaudited condensed consolidated statements of cash flows. Changes in the fair value of the interest rate swaps are recognized in other comprehensive income (loss) until the gains or losses are reclassified to earnings. Gains or losses reclassified to earnings are presented within interest expense in the accompanying unaudited condensed consolidated statements of income and comprehensive income (loss).

Previous wording

At March 31, 2025, the carrying amount of the derivatives included on the Company's unaudited condensed consolidated balance sheet was an asset of $1.7 million and a liability of $3.9 million. At December 31, 2024, the carrying amount of the derivatives was an asset of $4.3 million and a liability of $1.4 million. The fair value of these derivatives are estimated using Level 2 inputs in the fair value hierarchy on a recurring basis. Refer to Note 8 for disclosure of gains (losses) recorded on cash flow hedging activities.

Current wording

At June 30, 2025, the carrying amount of the derivatives included on the Company's unaudited condensed consolidated balance sheet was an asset of $0.2 million and a liability of $5.1 million. At December 31, 2024, the carrying amount of the derivatives was an asset of $4.3 million and a liability of $1.4 million. The fair value of these derivatives are estimated using Level 2 inputs in the fair value hierarchy on a recurring basis. Refer to Note 8 for disclosure of gains (losses) recorded on cash flow hedging activities.

Previous wording

During the three month period ended March 31, 2025, the Company reclassified gains of $0.7 million, from accumulated other comprehensive income (loss) into interest expense compared to gains of $1.7 million for the corresponding period in 2024. Based on expected SOFR rates, the Company expects to reclassify losses of $0.9 million from accumulated other comprehensive (loss) income into interest expense over the next 12 months.

Current wording

During the three and six months ended June 30, 2025, the Company reclassified gains of $0.8 million and $1.5 million, respectively, from accumulated other comprehensive income (loss) into interest expense compared to gains of $1.7 million and $4.1 million, respectively, for the corresponding period in 2024. Based on expected SOFR rates, the Company expects to reclassify gains of $0.4 million from accumulated other comprehensive income (loss) into interest expense over the next 12 months.

Previous wording

As of March 31, 2025, the total secured net leverage ratio was 2.04 to 1.00. As of the date of filing of this Report, no event has occurred that constitutes an Event of Default or Default.

Current wording

As of June 30, 2025, the total secured net leverage ratio was 1.95 to 1.00. As of the date of filing of this Report, no event has occurred that constitutes an Event of Default or Default.

Previous wording

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

Current wording

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

Previous wording

Our consolidated financial statements are prepared in accordance with GAAP. In connection with the preparation of our financial statements, we are required to make estimates and assumptions about future events and apply judgments that affect the reported amounts of certain assets and liabilities, and in some instances, the reported amounts of revenues and expenses during the period. We base our assumptions, estimates, and judgments on historical experience, current events, and other factors that management believes to be relevant at the time our condensed consolidated financial statements are prepared. However, because future events are inherently uncertain and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material. For a description of the Company’s critical accounting estimates, refer to “Part II—Item 7-Management’s Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Estimates” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the SEC on March 3, 2025.

Current wording

Our unaudited condensed consolidated financial statements are prepared in accordance with GAAP. In connection with the preparation of our financial statements, we are required to make estimates and assumptions about future events and apply judgments that affect the reported amounts of certain assets and liabilities, and in some instances, the reported amounts of revenues and expenses during the period. We base our assumptions, estimates, and judgments on historical experience, current events, and other factors that management believes to be relevant at the time our unaudited condensed consolidated financial statements are prepared. However, because future events are inherently uncertain and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material. For a description of the Company’s critical accounting estimates, refer to “Part II—Item 7-Management’s Discussion and Analysis of