Good morning, everyone, welcome to EVERTEC's Conference Call. Today's conference call is being recorded. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. At this time, I would like to turn the call over to Beatriz Brown-Sáenz of Investor Relations. Please go ahead.
Thank you. With me today are Mac Schuessler, our President and Chief Executive Officer, Joaquin Castrillo, our Chief Financial Officer, and Alberto López-Gaffney, our Chief Corporate Development 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 cautionary statements contained in our 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 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 release and related supplemental slides, which are available on the investor relations section of our company website at www.evertecinc.com. I will now hand the call over to Mac.
Thanks, Beatriz. We appreciate you joining us today on such short notice. We are announcing the acquisition of Sinqia, which we believe is a truly transformative deal that moves EVERTEC into the next stage of evolution for the company. We have a tremendous amount of respect for Sinqia, its management team, and everything they have accomplished. The results-driven culture and operating philosophy are values that we both share. Sinqia is a leader in its industry, providing software solutions to financial institutions in Brazil and a very complementary set of assets with very little direct overlap with what we have been doing at EVERTEC. I'm also pleased to announce that we provided some preliminary second quarter financial results, which are above our expectations. Joaquin will cover some details on Q2 in a few minutes, but let me begin the Sinqia discussion with some background on slide two.
As we have detailed in previous calls, we have been on a mission over the past eight years to transform EVERTEC into the fintech leader of Puerto Rico and Latin America, with a focus on five very strategic imperatives of service, footprint expansion, product development and innovation, and most recently, strengthening and transforming our relationship with Popular. This last step, which we completed a year ago, strengthened our relationship with our largest customer while also freeing us up from regulatory hurdles, enabling us to pursue M&A more actively. In the past, I've spoken about our approach to M&A, with potential deals falling into three categories: deals that take advantage of the leverage and scale that we have, deals that get us into new countries, or deals that provide new products that we can leverage into other regions.
This is a deal that checks all of the boxes we look for in a transaction and aligns perfectly with our overarching strategy of becoming the fintech leader for the Latin region. In one step, we have reduced our Puerto Rico concentration, we dramatically expanded our presence in an attractive geography like Brazil, increased our addressable markets, and increased our product offering by now adding software solutions for the banking and financial services industry. As a combined company, we are uniquely positioned to deliver an unmatched suite of distinctive software and payment solutions to our combined customer base. Now turning to slide three, I will walk you through the highlights of why we believe Brazil is an attractive market for expansion. As you know, EVERTEC has had a small presence in Brazil historically, which we expanded modestly a few months ago with the paySmart acquisition.
With the acquisition of Sinqia, we'll become one of the leading players providing solutions to financial institutions in the largest and one of the most attractive markets in Latin America, a market with strong secular growth trends. Brazil is a relatively stable market with a large and profitable financial services industry. They have one of the largest inventories of gross financial assets in Latin America. The country has a strong history of democracy and privatization with a relatively stable currency. The financial services markets have been stable with lower risk while generating higher growth relative to other countries in the region. We believe this provides a great opportunity to drive growth over the foreseeable future. Turning to slide four, I will provide some color around the company and what they do. Sinqia is a market leader in software for financial services in Brazil.
They've been a public company since 2013, have delivered consistent double-digit organic growth, and have been successfully executing a roll-up strategy through acquisitions in a very fragmented market that has resulted in a 52% overall revenue CAGR of the past four years. They have a profitable software model with close to 85% recurring revenue and a very diversified customer base that provides predictable cash flows. Moving to slide five, a key highlight of this deal is that Sinqia will bring new products and customers to the EVERTEC platform. The company has developed leading software modules that provide complete solutions across four core verticals: banks, funds, pensions, and consortium. They also have developed horizontal solutions, digital and services, that provide a better customer experience across those verticals. Importantly for us is also the fact that they are serving over 900 customers.
Their revenues are fairly distributed across all of their offerings, and they, just like EVERTEC, are serving some of the largest institutions within each vertical, a testament to the quality of their products. Let me now go down a little deeper on Sinqia's market segments, beginning on slide six. The addressable market for Sinqia solutions for banks is approximately $800 million, and they hold an approximate 5% market share in a market that's highly fragmented and where we understand the largest players do not hold more than 10%-15% market share. We expect the bank population in Brazil will continue to grow, and outsourcing of core banking functions will keep increasing. Thus, plenty of growth opportunity remains for bank products.
We believe there is an even larger $900 million market for Sinqia's products with banks in other Latin American countries, some of which we already have a presence in and an existing client base to leverage. On slide seven, funds represent a smaller market opportunity today at roughly $120 million in Brazil and $130 million in other Latin countries. We expect growth will be higher as Brazil's increasingly educated population migrates their savings to funds and stocks away from traditional banks. Sinqia has one of the more complete offerings in the market, addressing different structures, types, and classes of funds, and this full product set has positioned Sinqia as one of the leaders in this vertical, with potential for upsell to existing clients.
Turning to slide eight, the pension market in Brazil is approximately $70 million, Sinqia is a leading player with roughly 40% market share and one of the most complete offerings in the market. While the number of pension funds in Brazil is expected to remain steady, the average ticket per fund is expected to increase, which provides room for organic growth. We also believe there's opportunity to expand this business to other Latin countries as well. On slide nine, the consortium market is a smaller market opportunity that is mostly unique to Brazil, we do expect the market to grow. Sinqia has a strong position with approximately 70% market share in this segment, with an opportunity to upsell additional products and better technology into the current customer base.
More importantly, this is a niche in Brazil that addresses the less sophisticated, unbanked population and which has seen accelerated growth over the past few years. Slide 10 summarizes Sinqia's strong market position across the four verticals they serve. They're a top three player for all their services, with an opportunity for continued upsell and organic growth. Inorganic growth continues to be an opportunity going forward, mainly for the banks, funds, and pensions verticals, where markets are still fairly fragmented, providing for an opportunity to gain market share through acquisitions. We also see an opportunity to grow some of these solutions outside of Brazil, using our existing distribution network and client base for the banks and funds verticals.
Turning to slide 11, we break down how this acquisition allows EVERTEC, with a combination of Sinqia, to tap into the much larger profit pool of financial inclusion in Latam by providing differentiated solutions. We're going to take EVERTEC payments into Brazil and into Sinqia's customer base. At the same time, Sinqia's strategy out of Brazil and into our other countries. We believe there is an important opportunity to cross-sell our payment services into the Sinqia customer base over time, especially given that Sinqia's offering today does not offer payment modules as do some of their main competitors. We also believe there will be an opportunity to export some of Sinqia's product portfolio outside of Brazil into EVERTEC's customer base across the region. This will allow us to dramatically expand the profit pools we have exposure to across Latin America.
Our addressable market opportunity is a subset of this overall market size. The key point here is that the combination of EVERTEC and Sinqia together more than doubles the profit pools we address separately. Let me now turn the call over to Alberto to cover some of the details of the transaction.
Thanks, Mac. I will begin my comments on slide 12, which summarize the transaction highlights. EVERTEC will be paying BRL 27.19 per share for each Sinqia share, subject to a ticking fee, adjusting pricing between signing and closing. The ticking fee is based on Brazil's Fed funds rate, the Selic, and is capped at BRL 1 per share. The BRL 27.19 per share represents an approximate 24% premium to the price as of July 19th, and an enterprise value of approximately $591 million. Consideration to Sinqia shareholders will be in the form of 90% cash and 10% in EVERTEC stock, as this structure allowed for higher deal certainty and speed to close versus an all-cash transaction. Nonetheless, we intend to offset the dilution created by the share issuance by repurchasing stock in the open market.
From a closing perspective, we expect the transaction to be completed in the fourth quarter after Sinqia holds a shareholder meeting to approve the transaction. That will require a simple majority vote. As of signing, we have entered into an agreement with shareholders representing approximately 40% of Sinqia's outstanding shares to vote in favor of the transaction, significantly diminishing execution risk. Let me now turn the call over to Joaquin, who will cover some of the financial impacts the transaction will have on EVERTEC.
Thanks, Alberto. Turning to slide 13, let me discuss why this transaction is compelling for EVERTEC from a financial perspective. First, our acquisition of Sinqia expands our exposure to faster growth geographies in Latin America, with a larger presence in Brazil that should drive faster top-line growth. Sinqia has been consistently growing their top-line organically in the low double- digits to low teens, and is expected to continue to grow organically at a faster pace than EVERTEC. This is true even if we don't achieve any revenue synergies, and as Mac highlighted, we see the potential for top-line synergies in both directions, as we can bring EVERTEC payment processing to many of Sinqia's clients and potentially Sinqia's banking modules to EVERTEC's clients.
The deal achieves our objective to further diversify our business geographically towards LatAm. This deal will increase our LatAm mix to approximately 37% of sales, up from the low 20s in recent quarters. Our business model becomes even stronger, with more recurring revenues, sticky product offerings that complement one another, and a much larger presence in a key country in Latin America. From a margin perspective, as expected, and as we have communicated in the past, growing faster in LatAm will come with some margin pressure. This will be the case with the acquisition, as Sinqia's margin contribution is lower than the EVERTEC's corporate average, thus we expect a lower overall margin for EVERTEC once the transaction closes.
As always, we'll continue to work on identifying areas where we can be more efficient and revenue models that allow for economies of scale and then give us the opportunity to expand this margin over time, which we believe is achievable given the types of products and the presence of Sinqia in Brazil. We expect the transaction to be breakeven to slightly accretive in 2094 adjusted EPS and accretive to 2025. As Mac noted, we do believe there is potential for revenue synergies over time, which would increase both our revenue growth rate and the amount of earnings accretion achieved.
We plan to finance this transaction with cash on hand and committed financing of approximately $600 million. We expect this would raise our debt ratio from 0.9 times as of last quarter to almost three times, which is within our target debt ratio of 2-3 times adjusted EBITDA. We are not providing any additional guidance around the combined company at this time. We expect to provide some additional details once the transaction has closed. Let's turn to slide 14 for a few brief comments on our preliminary second quarter results, which were very strong, with all of our segments delivering growth above our expectations. We have provided some preliminary results in our press release and will follow up with full financials and our earnings call on July 26th.
We expect to report total revenue for the second quarter in a range of $166 million-$167 million, or growth of 2%-4% and above our expectations. We expect to report adjusted EBITDA of $73 million-$74 million, with an adjusted EBITDA margin in a range of 44%-45%, also above our expectations. Finally, we expect GAAP EPS in a range of $0.42-$0.45 and adjusted EPS in a range of $0.70-$0.72, also above our expectations entering the quarter. The revenue strength we expect to report was driven by increasing sales and transaction volumes as well as better spreads.
Revenue growth benefited from the two small acquisitions completed over the past year in LatAm, partially offset by the impact from the assets sold as part of the Popular transaction last year, impacting our business solutions segment. Growth was particularly strong in Latin America and expected to reflect growth in the high 20s% year-over-year. As noted, all other segments also exceeded our internal expectation. As it relates to margin, the better-than-expected results reflect leverage from strong top-line growth and cost initiatives implemented by the team around headcount, cloud costs, and efficiency initiatives in an effort to bring back our profitability after the Popular transaction, and also considering our more active pipeline into LatAm, which we knew would continue to put pressure on margin. Turning now to slide 15, let me provide a brief update to 2023 guidance.
We now expect 2023 revenue to come in a range of $652 million-$658 million, or growth of 5.4%-6.4%. This is above our previous revenue guidance of $644 million-$652 million. We expect GAAP EPS in a range of $1.82-$1.91, and adjusted EPS in a range of $2.75-$2.83, or growth of 9%-12%. This is above our prior expectations of adjusted EPS in a range of $2.59-$2.68, with the increase in part due to an expectation of higher adjusted EBITDA margin in the 43%-44% range, versus our prior expectation of margins in the 42%-43% range.
There are no changes to our assumptions for tax rate or CapEx at this time. Let me now turn the call back over to Mac to recap the call.
Thanks, Joaquín. Slide 16 provides a nice summary of the power of this combination of Sinqia and EVERTEC. In sum, we believe that together we will be the Latin American fintech leader. Combining EVERTEC's payments engine with Sinqia's financial software platform will offer customers one-stop shopping for the leading technologies they need to run their businesses. The result will be a faster growing company that is more geographically diverse, with increased product and technology breadth, higher recurring revenues, and a much larger profit pool to tap into. Operator, please go ahead and open the line for questions.
We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two.
At this time, we will pause momentarily to assemble our roster. The first question comes from Vasu Govil with KBW. Please go ahead.
Thank you for taking my question. Congrats on the deal. Good stuff. Just, Mac, quickly on, if you could put a finer point on sort of what you see as the biggest sources of revenue synergies coming out of the deal? If there were any way to dimensionalize, you know, how big the revenue synergy potential could be and how quickly you could start to see some of that materialize? Thank you.
Thanks, Vasu. As we said in the, on the call earlier, you know, none of those synergies are in the current sort of information that we've given you. What we're excited about is currently, Sinqia does not have payment products. As you notice, they have most of the big banks, pension funds, even these consortiums, and they don't have payment products. The opportunity for us now to take our payment products and bring those into Brazil, which is by far the largest market in Latin America, is incredibly exciting to us. The second piece is some of their products, right? Particularly around banks and around funds, we believe are exportable outside of Brazil, so there's an opportunity to do that as well.
We also think there's still M&A opportunity within Brazil across these four verticals, and potentially to roll up assets outside of Brazil in these verticals, too. Those are the different revenue synergies that we'll factor in over time. We don't have any numbers that we're providing at this time around those synergies, but as we give you guidance going into 2024, that, you know, the 2024 synergies will be baked into that guidance.
Thank you. Just my quick follow-up, just on the M&A point that you made. I think I'm estimating you'll probably end up at roughly three turns leverage. You know, what sort of capacity do you see continuing to have to do more deals in Brazil?
Hey, Vasu. As we said, we expect this to still have us below three times, and we are funding this mostly with new committed financing. We continue to have flexibility with our revolver and we expect to still have cash on hand. We continue to feel we have enough flexibility to continue to execute on the strategy going forward.
I'll say, I mean, I introduced Alberto on one of our previous calls. He's with us today, and we're pretty excited to have him as part of the team. He's demonstrated very quickly, with the rest of the team, Luis, Joaquin, everybody that's worked on this deal, that, you know, we're continuing to be focused on M&A, and we have an active pipeline. We will continue to look for opportunities this year and next.
Great. Thank you very much.
Thanks, Vasu.
The next question comes from Bryan Keane with Deutsche Bank. Please go ahead.
Hey, guys, congratulations. I guess just maybe some thoughts on how this deal came about. Were you guys aware of Sinqia for a while? Had you been any relationship prior to that? I guess, why Sinqia, you know, in Brazil? Obviously, Brazil, a key market in Latin America that you guys wanted to get into, but there's, you know, other different players that you probably had looked at. What made Sinqia so attractive?
Thanks for the question. Look, after we finished the Popular deal, we had the opportunity to be more aggressive on M&A. We immediately started looking at all of the potential targets across Latin America. We began to focus really on Brazil, given the size of the market, the criticality of participating in that market, if we wanna scale the company to the size that we think, you know, is our full potential. We met those guys early in the year, spent some time with the management team and the investors, we're really impressed. You know, look, it's a great team. They're similar to EVERTEC in that sort of it's a tech-enabled business, just like us. They're focused on Latin America, similar to EVERTEC. They primarily focus on financial services customers, just like we do. We're not competing with our customers.
We're actually supporting them with technology. They're used to running mission-critical assets, just as EVERTEC does. I love the fact they're a public company. They use their same auditors. They know sort of the cadence of being part of a public company. We're incredibly excited and thought that this was a good match.
Got it. That's helpful. Just as a follow-up, I just wanna make sure I understand the cross synergy. When EVERTEC brings its payments solutions over to Sinqia's clients, how would that work, or where's the opportunity there? You would think that most banks already have a payment option, and not clear to me that the funds or pension or consortium area has a big payment opportunity, but maybe there's some avenues that I'm not thinking about.
Yeah. Look, I mean, if you look at the presentation and the material we walked you through, seven of the 10 largest banks do business with Sinqia. Of course, many of these financial institutions do have payment products today, just like Santander did in Chile, they chose to go to a different product, which was more competitive, more innovative, that's why they're now running with us, their product in Chile, and they're doing incredibly well in the market. We're gonna provide, you know, an alternative to these banks. Some of the other verticals. I mean, we also have B2B businesses, right? As they look at their B2B flow, that's an opportunity as well.
Got it. Thanks so much.
Thank you.
The next question comes from John Davis with Raymond James. Please go ahead.
Hey, good morning, guys. I'll add my congrats. Joaquin, I just wanna make sure, I think the assumption for break even in 2024, that assumes no cost to revenue synergies. I just wanna make sure I understand that correctly?
That's right. We have not included as part of our model any merger-related revenue synergies or cost synergies.
Okay, two other kind of quick questions there. You know, can you give us a sense of the rate on the $600 million of debt, you know, what you're paying and any impact on the tax rate? I know obviously you guys have a pretty low tax rate, but not sure how Brazil's tax rate will kind of impact the overall.
On the committed financing, we do have some terms that we are, I guess, not going into detail at this point. Our expectation is that there's a possibility for us to take out that committed financing over in the process of signing to close. I guess we'll have better information as to what the impact to that is going to be once we close. In terms of, what was the second part of the question?
Just tax rate, like.
In terms of the tax rate? Yes. Obviously, Brazil has a much higher tax rate than what is the effective tax rate to Puerto Rico. I will say we are looking at different alternatives within Brazil that provide us with certain efficiencies. For example, in Brazil, you can take advantage of goodwill as a deductible item for tax purposes. That is an item that today Sinqia is taking advantage of, and that we are looking to potentially also take advantage of on a go-forward basis to reduce our tax rate in Brazil.
Okay, great. Then, Mac, I understand you're not gonna give any sort of numbers, but just trying to understand directionally, the revenue synergy opportunity of kind of selling payment products in Brazil to Sinqia's customer base? You know, is that like multiples bigger than selling Sinqia products to your existing customer base? Is it, like, similar? Just trying to understand kind of the revenue synergy opportunity going both ways.
Yeah, look, we're not gonna, I mean, unfortunately, we're not gonna provide more information around that. We haven't even closed. As we continue to get closer to the close, and as we look at, you know, guidance for 2024, we'll provide more color around what we think this asset could do. Right now, you know, that's a big part of the rationale for the acquisition. As we said, it's not baked into the information we've given you today.
Okay. Thanks, guys.
Thank you.
The next question comes from Chris Kennedy with William Blair. Please go ahead.
Good morning. Thanks for taking the question, and congratulations on the deal. Mac, what gave you confidence that Sinqia is integrating its 24 acquisitions that it's done since its history?
Yeah, look, you know, they've acquired 24 companies over the last 10 years. They're still performing well in the market. If you look at how they're growing, how they're engaging with their customers, they've done a very good job of continuing to grow the company. We do believe when we combine the two companies, there are gonna be opportunities to maybe speed up some of the platform integration. And we do believe that with our capital, we can continue to invest in sort of their organic business and make sure that they continue to have some of the best products across the segments and help them grow inorganically as well by continuing to buy assets in Brazil and outside of Brazil. There are things that we think we can help them improve, just like we've done here.
We've consolidated some of our platforms as we've made acquisitions, and that's where we think this deal makes sense, because there's a lot that they do well that we're gonna learn from, but there's some things that we've done well that we think we can help them with as well.
Got it. Thank you for that. Just a follow-up to that, is there an opportunity to expand margins within Sinqia's core business?
Yeah, look, I mean, I think you know, I mean, we're very focused on margins as a company. As we've grown our LatAm segment, we've been very focused on margins. You can see from the quarter that post the Popular deal, we've been very focused on margins. We do believe that with the right focus, we continue to maintain and potentially expand the margins of our company over time.
I'll also add that if you just look at what Sinqia independently has been doing, they have been improving their margin over time. I think that the combination provides for areas of efficiency that we'll continue to identify. If you look at the types of products that they have, again, complementary to ours, that you can scale up and over time also drive economies of scale. We do believe that there's an opportunity here with time to focus on margin.
Great. Thanks for taking the questions.
The next question comes from James Faucette with Morgan Stanley. Please go ahead.
Hey, good morning, everybody. Thanks a lot for hosting us this morning. Wanted to ask, you know, if we back into the numbers that you provided on Sinqia's growth rate's been quite good. Can you help us understand what has been organic or versus inorganic, at least in the recent past? Given their Sinqia's, you know, very good acquisition history, should we expect them to continue to do or the combined companies continue to be able to do those types of acquisitions on a go-forward basis to continue to add size and scale to Sinqia itself?
I'll start with the answer. First, I would say, you know, the good news is it's a public company, so you can go back and see how they've performed over time. I would also reiterate, this is a very good management team, and we're incredibly impressed with what they've accomplished. Part of their success has been their M&A capabilities. We plan to continue to focus on that. Again, they're very competent in how they have managed that in the past and going forward, and we think our access to capital will help them potentially accelerate that. As it relates to organic versus inorganic, Joaquin, do you want to give?
Yeah, sure. I think we've actually laid out on page four of the deck a breakdown that includes both organic and inorganic. They've been growing organically in the teams. We actually have a 15% CAGR over the period presented. We continue to expect that they will continue to grow at a similar pace on a go-forward basis, organically.
Got it. Got it. Thanks for pointing us back to that. Just more broadly, and I know Vasu asked about acquisitions and capacity, what are you seeing in the market from an opportunity perspective throughout Latin America?
[on Earth] deals and valuations starting to open up into a range where you feel like you can be a little bit more active?
First off, we like the valuation of this deal, so that's one of the things. This makes sense strategically, you know, like I walked through the rationale earlier, but also financially. The financial sort of components of this deal, we're very, very pleased with, right? And how that fits in. Generally, with what we're seeing with the market, Alberto, do you wanna provide a little bit of color?
Yeah. Clearly, this company provide us with an amazing platform in Brazil, and as you actually have a very strong local platform, additional opportunities may arise. When it comes to other markets beyond Brazil, Mexico is a clear market of focus of ours, and the Andean region, of course, goes without saying, regions where we already have a very good operation. Those are, I believe, the key areas, okay? When it comes to, I would say, verticals, okay, clearly payments is at the core of what we do. At the same time, this acquisition allows us to venture into actually being a real competitive and strong software provider in the region.
Thanks a lot for all the color, gentlemen. Congrats.
Thank you.
Again, if you have a question, please press star, then one. The next question comes from Jamie Friedman with Susquehanna. Please go ahead.
Jamie, are you there?
Excuse me, Mr. Friedman, your line is open. Did you have a question? It seems that he is unable to respond at this time, although his line is open. If I may then-
Oh, I'm sorry, guys. Can you hear me?
Oh, go ahead.
Hello?
We can hear you now.
We can hear you.
I'm so sorry about that. Let me echo the congratulations. Joaquin, I was just wondering, are there any nuances to the accounting you lay out on page fout? Because it seems like this is a very software-driven business. I know sometimes when there are software acquisitions, there could be subtleties to accounting.
Nothing that I would highlight, Jamie, that would kind of rise to the level of having to, let's say, have a long conversation on it. The good thing about this, as actually we lay on the out on that page, is 85% of this revenue is recurring. That actually gives us a very good, let's say, very good visibility into cash flows and revenues on a go-forward basis. Yes, there are some implementations that we know occur from time to time and some services that might be one time, and we're gonna be looking at that in detail, but we don't expect any significant accounting issues or let's say, changes as a result of this.
Maybe for Mac or Albert, I'm just curious, did you look at any payments companies? I realize this way you get the tech and software-enabled side, and you have your own payment solutions, but there are a lot of attractive payment assets in Brazil as well. Did you happen to look at any of those down there?
Great question. Absolutely. I mean, we look at payment assets all the time. What we liked about, and we continue to, right? Sometimes what you'll find with the payment assets in Latin America is, at certain points in time, they may be overvalued and too expensive. They may be legacy assets where we think revenue is gonna trite over time. We're very cautious as we look at not just payments, but that it makes sense financially for our investors. What we do like about this, beyond just payments, as what Alberto López-Gaffney said earlier, this really opens up a much larger addressable market so that we can continue to scale and grow the company over time. It is, there are, over time, as we've talked about, there will be revenue synergies because it has a similar customer base. We're, you know, we're serving...
As Latin America, you know, grows, their middle class, and as the unbanked increases, we're now in several verticals, which allows us to take advantage of that. Over time, there should be cost synergies, right? As we consolidate data centers, as we look at using shared development areas. Over a long period of time, we believe, this opens up larger market opportunities for the company, and it provides synergies on both the revenue and cost side over time. We will continue to focus on payments, but this really expands, you know, the future of the company.
Thank you.
This concludes our question and answer session. I would like to turn the conference back over to Mac Schuessler for any closing remarks.
I wanna thank everybody for joining the call so early this morning and on such a quick notice. We again, we're very excited about this acquisition. I wanna thank the team for working on it, for Alberto, for Luis, for Joaquin, for Diego. The entire management team has really, you know, helped get this deal done in a very quick manner. We also look forward to talking to you next week on our earnings call. Thanks, operator. You can close the call.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.