Good afternoon, everyone, welcome to the EVERTEC, Inc. second quarter 2014 earnings conference call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Luis Cabrera, Senior Vice President, Treasury, Investor Relations, and Corporate Development. Please go ahead, sir.
Thank you, operator. Good afternoon, everyone. Welcome to EVERTEC's second quarter 2014 earnings call. I'm Luis Cabrera, Senior Vice President, Head of Investor Relations for EVERTEC. With me today is Peter Harrington, our President and CEO, and Juan José Román, Executive Vice President and Chief Financial Officer. A replay of this call will be available until Wednesday, August 13, 2014. Access information for the replay is listed in today's financial press release, which is available on our website under the Investor Relations tab. As a reminder, this call may not be taped or otherwise reproduced without EVERTEC prior consent. Before we begin, I would like to remind everyone that this call may contain forward-looking statements as they are defined under the Private Securities Litigation Reform Act of 1995. These forward-looking statements about our expectations for future performance are subject to known and unknown risks and uncertainties.
EVERTEC cautions that these statements are not guarantees of future performance. All forward-looking statements made today reflect our current expectations only, we undertake no obligation to update any statements to reflect events that occur after this call. Please refer to the company's most recent annual report on Form 10-K filed with the SEC for factors that could cause our actual results to differ materially from any forward-looking statements. During today's call, management will provide certain information that will constitute non-GAAP financial measures under SEC rules, such as adjusted EBITDA, adjusted net income, adjusted net income per share. Reconciliations to GAAP measures and certain additional information are also included in today's earnings press release. We'll begin by turning the call over to Peter Harrington, our President and CEO. Peter?
Thanks, Luis, good afternoon, everyone. Thanks for joining us on today's call. We had another good quarter, highlighted by merchant acquiring and payment processing revenue growth of 9% year-over-year, adjusted EBITDA margin expansion of 130 basis points to 50%, and adjusted earnings per share growth of 17% to $0.41. Revenue growth in our payments business outside of Puerto Rico remained strong in the second quarter, increasing 10% compared with Q2 of last year. We continued to see good growth in all of our non-Puerto Rican markets, driven by demand for our card product and POS processing solutions. Within Puerto Rico, transaction growth was solid despite the ongoing economic headwinds, as POS processing transactions were up 7% on a year-over-year basis. As our results for the first half of 2014 indicate, demand for our payment services remains solid across our entire Latin American footprint.
Our new business pipeline continues to build into the second half of the year. Looking forward, our outlook for our payments businesses remains positive based on our leading market position, our demonstrated ability to gain share in all of our markets, and the ongoing secular cash-to-card conversion trend, which is driving consistent growth of electronic payments across our entire market footprint. I want to share with you a few new business developments in payments, which show that we continue to successfully execute on our growth plan. First, we are now in the final steps of acquiring the principal member license for Visa Colombia. This means we can sponsor any financial institution that is not a direct Visa member to issue Visa-branded cards or acquire Visa transactions under the EVERTEC license.
While having this license allows us to be a direct acquirer of Visa transactions, as we've stated in the past, this is not our strategy. Instead, we're aiming to find one or more partners whose commercial relationships we can leverage, and they in turn can leverage our members' license, scale, network, and expertise. Next, I'd like to give you a quick update on the new Puerto Rico Value Added Tax project, which we announced last quarter. As a reminder, we developed and are now hosting an integrated merchant portal for the reporting and payment of the new tax. The new VAT tax will go live in August, and we will continue to expect that this service will yield additional payment processing revenue as new merchants are included in the portal throughout the year. Now for Business Solutions. Business Solutions revenue declined 4% year-over-year in the second quarter to $44.9 million.
Growth in the segment continued to be affected by lower levels of hardware and software sales versus the particularly strong sales we had in the first and second quarters of last year. It's worth mentioning, however, that excluding hardware and software sales, Business Solutions revenue grew 2% in the second quarter, in line with the first quarter results, excluding hardware and software, and also consistent with our expectation of low single-digit growth for the business. Overall, we continue to see solid demand for our recurring Business Solution products and services such as network solutions and IT consulting, and we continue to sign new deals. For example, in July, we were awarded a contract with the Puerto Rico Police Department to provide a new data protection infrastructure. We were also recently awarded a contract to implement kiosks to provide digital information network throughout the largest mall in the Caribbean.
Turning now to our full-year 2014 outlook. We continue to look for upper single-digit revenue growth in our payment businesses, driven by the positive market trends that I just discussed. In addition, our adjusted EPS guidance of $1.65 to $1.71 remains unchanged. As our first and second quarter results have shown, lower margin hardware and software sales have very little impact on the profitability growth, and as a result, we have either met or exceeded our EPS expectations in the first half of the year, despite the revenue shortfall. However, based on our current visibility into hardware and software sales for the remainder of 2014, we now believe there is significantly higher risk that we will not achieve our overall growth target for Business Solutions this year.
As a result, we are adjusting our 2014 total revenue growth guidance range to 3%-4%, from the 5%-7% previously indicated. While we continue to see new business opportunities, this segment is more susceptible to delays in client decision-making, and in some cases because of the current economic situation in Puerto Rico, thus increasing the risk that hardware and software sales will be lower than previously expected. In summary, our second quarter results were solid, and we've entered the second half of the year with strong momentum in our payment businesses. The hardware and software components of our Business Solutions unit are creating a drag on our top-line results. Because of the strength of our business model, we continue to achieve greater profitability and strong free cash flow.
We continue to take the steps necessary to position EVERTEC for accelerated growth over time, and we are confident in our ability to succeed given our strong market position, best-in-class network and services, and unmatched track record of delivering value to our customers. I will now turn the call over to our CFO, Juan José, who will take you through our financial results in more detail. Juan José.
Thank you. Good afternoon, everyone. As Peter mentioned, in the second quarter, the payment side of our business performed very well, with both merchant acquiring and payment processing revenue growing 9% year-over-year. On the Business Solutions side, similar to the first quarter, we again have a difficult year-over-year comparison due to the particularly high level of hardware and software sales we booked in the second quarter of 2013. Nevertheless, operating leverage in our payment-related businesses, combined with our ongoing focus on managing costs, again enabled us to increase profitability. In the second quarter, we delivered over 100 basis points of adjusted EBITDA margin expansion and strong double-digit adjusted net income and EPS growth. Let's go through the results in more detail. Total consolidated revenue was $91.1 million, an increase of 2% compared with $89.2 million in the prior year period.
Turning to our segments, merchant acquiring net revenue increased 9% to $19.8 million from $18.2 million in the prior year period. Payment processing revenue also increased 9% to $26.4 million in the second quarter, up from $24.3 million in the prior year period. Growth was driven mainly by new customer additions and an increase in accounts on file within our card product business, as well as an increase in ATH and POS processing transactions. In addition, as we discussed with you in our Q1 call, in the second quarter, we recognized approximately $0.65 million of revenue from the Department of Education program we process in Puerto Rico. We recognized no revenue from this program in the second quarter of 2013. Excluding the educational program, our payment processing revenue would have increased approximately 6% year-over-year.
Our payments-related businesses outside of Puerto Rico continued to grow at a strong pace in Q2, up 10% versus the prior year, driven mainly by card product processing. Additionally, POS volume growth within Puerto Rico was up a solid 7% compared with the prior year. Our Business Solutions segment revenue decreased 4% to $44.9 million in the second quarter, compared with $46.7 million in the prior year period. Similar to the first quarter, this decrease was due almost entirely to a $2.9 million decline in hardware and software product sales in the quarter, partly offset by increased revenue from other products and services, including network solutions and IT consulting. Moving to expenses on a GAAP basis, our second quarter total operating expenses were down by approximately 9% compared with the prior year period.
Cost of revenue, excluding depreciation and amortization, was $38.8 million, a decrease of $2.9 million or 7% from the corresponding 2013 period. This decline was due primarily to a reduction in cost of sales resulting from lower level of hardware and software product sales. Selling, general, and administrative expenses for the quarter were $10.5 million, down $2.2 million or 17% from the corresponding 2013 period. This decrease was due mainly to a one-time $3.1 million non-cash charge taken in the second quarter of 2013 in connection with the vesting of all our Tranche B and Tranche C stock options as a result of our IPO. The decrease was partly offset by $1.1 million in professional fees related to our debt offering in the second quarter of 2014, which was withdrawn for reasons I will explain in a few minutes.
Depreciation and amortization expense decreased $1.5 million, or 8%, compared with the prior year. The decrease is related primarily to lower amortization of software packages that became fully depreciated. Income from operations for the second quarter was $25.4 million, an increase of 50% compared with $16.9 million in the corresponding 2013 period. Total non-operating expenses were $5.7 million, a decrease of $81.2 million from the corresponding 2013 period. The decrease was driven mainly by two non-recurring expenses incurred in the second quarter of 2013. First, a $58.5 million loss related to the extinguishment of debt as a result of our debt refinancing in April 2013. Second, a $16.7 million expense associated with the termination of our consulting agreements with Apollo and Popular. In addition, our interest expense declined by $3.2 million as a result of our refinancing last year.
GAAP income tax expense in the second quarter was $2 million, versus an income tax benefit of $5 million in the prior year period. Cash income tax expense was approximately $0.4 million, versus approximately $1 million in the prior year. We expect cash taxes to return to a more normalized rate beginning in the third quarter. As of June 30, 2014, we had approximately $68 million of NOLs available to offset future tax payments related to our operations in Puerto Rico. Adjusted EBITDA for the second quarter was $45.5 million, an increase of $2.1 million, or 5%, from $43.4 million in the corresponding 2013 period. The increase in adjusted EBITDA was due mostly to revenue growth and operating leverage in our merchant acquiring and payment processing businesses. Adjusted EBITDA margin was 50%, up 130 basis points from 48.7% in the prior year period.
Adjusted net income in the second quarter was $32.2 million, up 11% from $28.9 million in the prior year. This increase was due mainly to adjusted EBITDA growth and lower levels of operating depreciation and amortization expense and cash taxes. Moving to our balance sheet. As of June 30, we reported $27.8 million of unrestricted cash and $698.6 million of total short-term borrowings and long-term debt. During the quarter, we made a mandatory repayment of approximately $4.8 million on borrowings outstanding on our Term A and Term B senior secured credit facilities, paid $17 million on our revolving line of credit, and paid dividends of $7.8 million. As of June 30, total liquidity, which includes unrestricted cash and available borrowing capacity under our revolver, was approximately $104.8 million.
For the second quarter, our free cash flow, defined as adjusted EBITDA minus CapEx, cash interest expense, and cash income taxes, was $32.2 million, up 10% compared with the prior year period. Now, I would like to briefly address the $400 million senior notes offering, which we withdrew from the market in June. Our aim was to opportunistically access the debt capital markets to enhance our already strong balance sheet with longer-term, low fixed-rate capital. However, as we went through the process, we concluded that it was not the right time to move forward, given the cost of capital achievable was not attractive to the company. We do not need to refinance any of our existing debt at this time. Our balance sheet is strong and have no significant maturities over the next four years. As you know, we generate significant annual free cash flow.
All of this means we maintain considerable financial flexibility, and if we choose, we can pursue new debt financing alternatives at a time that is beneficial to us and our shareholders. We remain committed to the prudent return of capital to shareholders. This afternoon, we announced that our board of directors declared a regular quarterly dividend of $0.10 per common share. Now on to our guidance. As Peter mentioned, we now expect total revenue growth in 2014 to be between 3%-4%, compared with our prior outlook of 5%-7% growth. Our updated revenue guidance reflect greater risk to the hardware and software portion of our Business Solutions segment. We continue to expect adjusted EBITDA growth of at least 100 basis points higher than our revenue growth, and fully diluted earnings per share of between $1.65 and $1.71.
We now expect full year 2014 operating depreciation and amortization expense of approximately $31 million, compared with $32 million previously. We continue to expect cash interest expense of approximately $23 million and fully diluted shares of approximately $79.2 million.
We expect 2014 cash income tax expense of $2 million compared to $3 million previously. Our 2014 effective tax rate, on a GAAP basis, remains between 10% and 12%. With that, operator, we will now open up the call for questions.
Thank you. If you'd like to ask a question, please signal by pressing *1 on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press *1 to ask a question. Our first question will come from Jim Schneider with Goldman Sachs.
Good afternoon. Thanks for taking my question. I understand that the hardware and software is relatively immaterial to your EBITDA contributions to keeping your earnings guidance unchanged, but can you give us a little bit of color around the hardware and software bookings in the pipeline, whether you think that any of that business is pushing out to the back half of the year, so you're being conservative on the full-year outlook, or do you think that most of this may not happen at all in 2014 and may just get pushed into 2015 or canceled altogether?
I would say that we probably see at this point that more of it will get pushed to 2015 from 2014. We do have opportunities that we will execute on in the second half of the year, but given some of the projects that we expected in 2014, that clearly won't happen until 2015. I think you need to understand that a lot of this hardware and software comes from current customers, where we already have a recurring revenue stream and maybe where we've had a contract and they are now upgrading to newer versions of hardware and software. We will continue to generate the recurring revenue. It's just that refresh that has now probably been pushed to 2015.
Okay, that's helpful. Thanks. I was wondering if you could just give us any update on your partnerships for processing in Colombia in terms of the two customers that you've already signed up. When should we expect to start to see revenue materialize from those customers?
Yeah, nothing's changed there. We are implementing, we expect to see the first revenue by year-end in the fourth quarter. We are very much in the midst of going through the implementation process, nothing has changed from the last quarter. We expect to bring that first customer online by end of year.
That's helpful. Thanks so much.
As a reminder, it is star one for questions, our next question will come from Tien-tsin Huang. Go ahead, sir.
Great. Thank you. Just following up on that, just on the hardware-software sales, is it broad-based or is it really Popular that's driving some of that? I'm curious maybe just on Popular, how their spend is tracking versus plan. I noticed they paid back TARP, so just wanted to get an update there.
Okay. I would say that the hardware shortfall is less Popular and more the government when you look at what we had expected in 2014. Popular's revenue, give or take, is roughly flat and in line with where we expected it.
Okay. No big change there. Fair enough. That's good to know. Peter, I think in the past you've talked a little bit about sort of new deals and bookings and backlog. I know you don't give us hard numbers there, but can you just compare for us sort of year-to-date how bookings backlog compares to this year versus last year?
I would say it's right in line. We signed a couple of new customers in the second quarter. Right now, based on what I'm seeing, we should have a year that looks a lot like 2013 as far as new customer sales on the payment side. We don't really track, because of the nature of the Business Solutions side, some of all the smaller deals that we do in the network and BPO business. On the payment side, we're in line with where we were last year.
Okay. That's good to know. Just last one from me. Sounds like Puerto Rico is pretty stable. That's good. There's been a lot of rumblings of different changes regulatory-wise in different parts of Latin America. I know you're not big in Mexico. I know that there's that tax change there. Anything to call out that may be good or bad relative to when we last got together with respect to the regulation situation around payments? Thanks.
No, I don't see anything around the payment side. I think clearly there's been, again, a considerable amount of noise related to Puerto Rico. I think that what we're seeing is probably some of the impact of that is the pushing out of some of these projects to refresh the hardware and software. As you saw in the numbers, we don't see it on the payment side of the business. We're still seeing consumption, just as we have. As I've been telling you every quarter, we've been running at 7%-8% year-over-year growth, and that continues. To be honest with you, we're seeing the same thing already in the beginning of this third quarter. That trend, I don't see any impact to it.
No, that's good. That's consistent. Ironically, actually a little better than the ISO performance sounds like this quarter in the U.S. That is ironic. Anyway, appreciate that. I'm all set up.
Okay. Thanks, Tien-tsin.
Our next question will come from George Mihalos from Credit Suisse.
Great. Thanks for taking my question. Just to sort of build on the prior question from Tien-tsin, Peter, any update with regard to signing another merchant alliance obviously outside of Colombia? I thought there was perhaps something else in the pipeline that could be imminent.
Yeah, it is. I don't have any news for you, George. It's out there. I think we've gotten to a point where we're waiting on them. I think they've got probably some stuff they're working through internally, but we still feel good about it. It's just, I don't have any real update for you. We're still there.
Okay.
What I think is a positive of the Colombia thing is now, as I told you before, I had to wait to get this before I could actually go have conversations. Now I'm in a position where we can start focusing on that, to find our partner in Colombia.
Okay, great. Is your sense that that's not at this point going to materially weigh on how you're thinking about 2015 growth? The push out of the-
No
merchant lines? Okay, great.
No.
Just last question from me. I think you had mentioned that revenue growth outside of Puerto Rico was low double digit, call it about 10%. Did that decelerate a bit from what you saw in 2Q?
No, I think Well, it did from, if you on a real basis of six, I think we grew 16% in the first quarter.
Okay.
As we've said before, it's not really deceleration. It's that if you look back at what we published in the third and the fourth quarter of last year, it goes up and down a little bit because as you can imagine, it has to do with the size of the customers I put on. If I put on big customers last year and smaller customers this year in the quarter, then obviously the number is affected. I wouldn't read anything more than that. This is how it's going. You'll see some quarters it will be in the low teens, some quarters it will be in the mid-teens. I think that's what you'll see.
Okay, great.
We still think it will run somewhere around 15%, give or take, year-over-year.
Okay. Thank you.
Our next question will come from Brian Keane with Deutsche Bank.
Yeah. Hi, guys. Just want to follow up on that. On the international growth, is there areas of strength versus areas of weakness that you can talk about that you saw in the quarter?
No, not really. We don't give it out. We don't give the market by market. I would just tell you that we continue to sign business in a number of the markets we're in. We're seeing growth in sales in all of our markets like we did last year, and we're seeing the growth. It's driven, again, a lot of this is driven by two things, the sales we had last year and the cash to card conversion. We're seeing that pretty uniform across the markets.
Okay. Just to follow up on Business Solutions, what does the revenue guidance for the year now come out to be for Business Solutions? Do we expect a rebound in the first quarter of 2015, or is the visibility still unclear when that rebound will be in Business Solutions?
For the rest of the year, Business Solutions, maybe the second half will be around 4% growth versus last year. Yes. Well, we still have not looked into 2015, the reality is, we expect to be better than 2014, mostly because of the impact really this year, hardware and software will be lower, so we expect to be more normalized here, starting Q1 of next year.
Okay. All right. That's helpful. Thanks. That's all I have.
Our next question will come from Fatone Bogole from Bank of America Merrill Lynch.
Yes. Thanks for taking my question. Most of them have been answered already, but just once again, what the current Puerto Rico situation, how is that affecting EVERTEC specifically, and what are you hearing from clients? Thanks.
Well, again, if you look at it from an EVERTEC perspective, let's separate it. Like we said, on the payment side, we've seen really no impact, in that we continue to see growth in the payment transactions. Again, we have probably more visibility to this than anybody. We're seeing just very consistent growth, year-over-year on the payment side of the business, and you see that in the numbers. On the Business Solutions side, we have seen no impact to Popular at this point. Popular is behaving exactly from a revenue perspective for EVERTEC as we had expected really to behave and in line with what it's done last year. We don't see any negative impact to Popular. It makes up the majority of the revenue in Business Solutions. We do think there is a lot of uncertainty in the government side.
I think you're seeing that in some of these projects that are not being upgraded as quickly as we had expected them to be. I'll be honest, we think it's just timing. We think they're going to have to upgrade at some point. It's just they're trying to balance the budget for the first time in 22 years. I think that probably has more play in it than anything else.
I see. All right. Thank you. Just to clarify again, Business Solutions' weakness was mainly due to government. Is that right, or?
Well, it was mainly due to hardware and software, but in the hardware and software, it was predominantly government contracts.
I see. Okay. For merchant acquiring and payment processing, is it okay to assume that you're expecting high single-digit growth for the second half?
Yep.
Okay. That's all I had. Thank you.
Okay.
Up next, we have Cris Kennedy with People.
Hi. Thanks. Good evening, guys. I just wanted to ask a follow-up on the international expansion front, the strategy and the plans to Finding an acquiring partner either in Colombia or other markets like Costa Rica, Panama.
We're looking at public for you guys at this point. I just want to know, just take a temperature on how you feel about the multi-year outlook. I mean, is this whether you're trying to get discouraged about or is it just simply that
No
you need to take the temperature of the water and maybe about pipe by market. How are things trending from a sample of potentially getting something done in calendar 2014?
Yeah. I think as we've said before, this is a new experience for the partners that we're talking to. This is not a common practice in our footprint. We're the ones trying to lead this in the market. Yes, we clearly have learned that it will take longer than we had originally expected. I am no more confident than I was before. Colombia is a different story. We really couldn't move in Colombia until we had access to licenses. Now we feel very good about Colombia because we have finally gotten the Visa license, which gives us the ability now to actually go into the market. Now, as we said in the script, we could go in as Evertec. That's not the strategy that we have been pursuing or will pursue. We want to partner with a financial institution.
Okay, great. For Puerto Rico for a second, it sounds like it's remarkably stable. Any inflection in terms of just consumer spending and spending on cards? Is this sort of 7% rate? It's been very consistent for the last several quarters. Any movement either way on that front?
It has been so consistent that there is nothing that we see that tells us that that's going to change. We have gone through a lot of noise as you know here over the last give or take, what? six, nine months. It hasn't changed. The consumer confidence in the market if anything, has had absolutely no impact. I think this is very isolated. There's been a lot of noise, it's not about the consumer, it's about the government. We would see it, believe me. We would see it before anybody else saw it.
Okay, great. Thanks so much.
Okay.
Up next, we have Bob Napoli from William Blair.
Hey, guys. Good afternoon.
Bob.
Any chance we could get hardware and software sales number for 2013? I think I asked last quarter. I mean, it's just such a huge difference in margin that it would be great if you broke that out. I mean, what did you have in full year 2013, and what do you have year to date in 2014?
Let us look at that. I don't have that in front of me. Me or Juan we'll get back to you on that, Bob.
Okay.
Yeah. Again, I just want to remind, last year was around 3%, 3.5% give and take. This year obviously will run even lower than that. At least give you a good sense of where the number is.
3% of total revenue, Juan?
Of total revenue.
Okay.
Like three and a half. Around that.
Just in the non Puerto Rico growth, as you look at expecting that to continue in mid double digits, what markets are you getting the majority of that growth today, and where do you expect to be getting it over the next couple of years?
Obviously it comes from the bigger markets that we operate in today. Okay?
Panama I mean
What I'm saying is if you look at our footprint today, Bob, right?
Yes.
Our bigger markets would be Panama, it would be Costa Rica, it would be the Dominican Republic. Those are our bigger markets in our current footprint, right? That's where obviously, the bigger banks are, and we're seeing the majority of the transactions. Right?
Yeah.
We're seeing growth in El Salvador, we're seeing growth in Guatemala, and Curaçao and a number of other markets. If you look in the grand scheme, those are fairly smaller markets. The future, obviously, the growth will come from places like Colombia. I mean, that's where the majority of the growth will come from as we go forward.
Okay.
That story really hasn't changed much, Bob.
Any different thoughts on return of capital and share buybacks? I mean, you're generating a lot of capital paying down debt. How much longer do you want to pay down debt? I know you'd love to do an acquisition or to buy a portfolio, but it doesn't sound like you're that close to anything material on that front. What are your thoughts as far as share repurchases?
Yeah. For now it has not changed. We continue focus obviously investing in the company. In terms of our debt repayment, as I said today, we continue paying down our revolver. You should expect that that will continue. We expect to pay all of it during this year. We will continue doing the mandatory debt repayment, right? After that, we will have a discussion with our board to evaluate what other alternatives we will do, including the buyback. As we said, buyback last year was very positive for our shareholders. It's a consideration for us to discuss with our board.
As I said, you will see us paying down fully our revolver.
From an M&A perspective, Peter, you're not really seeing any material opportunities at this point?
Not for 2014, no.
Okay. Great. Thank you very much.
Okay.
At this time, we have one question remaining in the queue. Once again, if you would like to ask a question or if you have a follow-up question, please press star one. We'll take our next question from Smitty Siretha Pramod from Morgan Stanley.
Yes. Hi, Peter and Juan.
How you doing?
Good, thank you. Just a follow-up question on the international expansion plans, especially on the merchant acquiring alliance front. Just wondering, do you think it'd be possible to accelerate the timeframe of signing some of these alliances if you were to contribute some of your own capital-
No
to further JV?
No, I don't think so, because I would be happy to do that today. It isn't that we're reluctant to commit capital. As we just said, that would be my first use of capital before I would even pay down the revolver and do a buyback. My first use of capital would always be to invest in the business. No, that isn't going to help the process. We're more than happy to do that today.
Maybe just to follow up on the international front. A while back you guys talked about introducing new products like dynamic currency conversion and such. Can you give us an update in terms of what's in the pipeline for new products and new geographies that you are likely to enter outside of the merchant acquiring alliance front?
There is no substantial product offering that I would highlight to you today. We're always adding functionality to the platform, but there's nothing that stands out like dynamic currency conversion or ATH, the person-to-person payment product that we launched. There isn't anything today that's imminent that I would put on the table to you.
Okay, thank you.
It appears there are no further questions at this time. Mr. Harrington, I'd like to turn the conference back to you for any additional or closing remarks.
Thank you, operator. In summary, we had a solid second quarter. We continue to add business from new and existing customers. We continue to invest to support long-term growth. We're driving greater profitability by leveraging our attractive business model. I want to thank you for your support, and I look forward to speaking with you again on our third quarter earnings call. Operator, you may now end the call.
This does conclude today's-