Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 13, 2023 | Jun. 30, 2022 | |
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Transition Report | false | ||
Entity File Number | 001-38504 | ||
Entity Registrant Name | EVO Payments, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 82-1304484 | ||
Entity Address, Address Line One | Ten Glenlake Parkway | ||
Entity Address, Address Line Two | South Tower, Suite 950 | ||
Entity Address, City or Town | Atlanta | ||
Entity Address, State or Province | GA | ||
Entity Address, Postal Zip Code | 30328 | ||
City Area Code | 770 | ||
Local Phone Number | 336-8463 | ||
Title of 12(b) Security | Class A common stock, par value $0.0001 per share | ||
Trading Symbol | EVOP | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1,104,291,965 | ||
Auditor Name | Deloitte & Touche LLP | ||
Auditor Firm ID | 34 | ||
Auditor Location | New York, New York | ||
Entity Central Index Key | 0001704596 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Class A Common Stock | |||
Entity Common Stock, Shares Outstanding | 48,430,396 | ||
Class D Common Stock | |||
Entity Common Stock, Shares Outstanding | 3,741,074 | ||
Common Units | |||
Entity Common Stock, Shares Outstanding | 32,163,538 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 356,459 | $ 410,368 |
Accounts receivable, net | 20,107 | 16,065 |
Other receivables | 23,624 | 18,087 |
Inventory | 8,113 | 4,210 |
Settlement processing assets | 732,284 | 311,681 |
Other current assets | 26,875 | 20,514 |
Total current assets | 1,167,462 | 780,925 |
Equipment and improvements, net | 69,957 | 68,506 |
Goodwill, net | 528,555 | 385,651 |
Intangible assets, net | 386,688 | 200,726 |
Deferred tax assets | 241,652 | 238,261 |
Operating lease right-of-use assets | 40,980 | 34,704 |
Investment in equity securities, at fair value | 35,818 | 25,398 |
Other assets | 19,703 | 19,214 |
Total assets | 2,490,815 | 1,753,385 |
Current liabilities: | ||
Settlement lines of credit | 5,033 | 7,887 |
Current portion of long-term debt | 14,092 | 14,058 |
Accounts payable | 7,309 | 6,889 |
Accrued expenses and other current liabilities | 157,347 | 127,060 |
Settlement processing obligations | 861,080 | 422,109 |
Current portion of operating lease liabilities, inclusive of related party liability of $0.7 million and $1.3 million at December 31, 2022 and December 31, 2021, respectively | 8,283 | 7,122 |
Total current liabilities | 1,053,144 | 585,125 |
Long-term debt, net of current portion | 623,196 | 568,632 |
Deferred tax liabilities | 25,330 | 22,207 |
Tax receivable agreement obligations, inclusive of related party liability of $171.9 million and $169.4 million at December 31, 2022 and December 31, 2021, respectively | 182,726 | 180,143 |
Operating lease liabilities, net of current portion, inclusive of related party liability of $0.1 million and $1.0 million at December 31, 2022 and December 31, 2021, respectively | 34,504 | 28,948 |
Other long-term liabilities | 12,687 | 7,891 |
Total liabilities | 1,931,587 | 1,392,946 |
Commitments and contingencies | ||
Redeemable non-controlling interests | 1,515,450 | 1,029,090 |
Redeemable preferred stock (par value, $0.0001 per share), Authorized, Issued and Outstanding - 152,250 shares at December 31, 2022 and December 31, 2021. Liquidation preference: $178,559 and $168,309 at December 31, 2022 and December 31, 2021, respectively | 174,531 | 164,007 |
Shareholders' equity (deficit): | ||
Additional paid-in capital | ||
Accumulated deficit attributable to Class A common stock | (928,187) | (652,871) |
Accumulated other comprehensive loss | (7,954) | (9,154) |
Total EVO Payments, Inc. shareholders' deficit | (936,136) | (662,020) |
Nonredeemable non-controlling interests | (194,617) | (170,638) |
Total deficit | (1,130,753) | (832,658) |
Total liabilities, redeemable non-controlling interests, redeemable preferred stock, and shareholders' deficit | 2,490,815 | 1,753,385 |
Class A Common Stock | ||
Shareholders' equity (deficit): | ||
Common stock | 5 | 5 |
Class D Common Stock | ||
Shareholders' equity (deficit): | ||
Common stock |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Operating lease liabilities, related party current | $ 700 | $ 1,300 |
Tax receivable agreement, related party | 171,900 | 169,400 |
Operating lease liabilities, related party non current | $ 100 | $ 1,000 |
Redeemable preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Redeemable preferred stock shares authorized (in shares) | 152,250 | 152,250 |
Redeemable preferred stock shares issued (in shares) | 152,250 | 152,250 |
Redeemable preferred stock shares outstanding (in shares) | 152,250 | 152,250 |
Redeemable preferred stock liquidation preference | $ 178,559 | $ 168,309 |
Class A Common Stock | ||
Shareholders' equity (deficit): | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock shares issued (in shares) | 48,423,077 | 47,446,061 |
Common stock shares outstanding (in shares) | 48,423,077 | 47,446,061 |
Class D Common Stock | ||
Shareholders' equity (deficit): | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock shares authorized (in shares) | 32,000,000 | 32,000,000 |
Common stock shares issued (in shares) | 3,741,074 | 3,783,074 |
Common stock shares outstanding (in shares) | 3,741,074 | 3,783,074 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive (Loss) Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Consolidated Statements of Operations and Comprehensive (Loss) Income | |||
Revenue | $ 543,082 | $ 496,645 | $ 439,101 |
Operating expenses: | |||
Cost of services and products | 89,370 | 75,765 | 84,336 |
Selling, general, and administrative | 309,539 | 266,117 | 250,676 |
Depreciation and amortization | 84,143 | 83,389 | 85,924 |
Impairment of intangible assets | 0 | 0 | 802 |
Total operating expenses | 483,052 | 425,271 | 421,738 |
Other operating income | 6,939 | ||
Income from operations | 66,969 | 71,374 | 17,363 |
Other expense: | |||
Interest income | 3,136 | 1,651 | 1,172 |
Interest expense | (17,641) | (23,161) | (30,160) |
Gain on investment in equity securities | 7,313 | 237 | 17,574 |
Other (expense) income, net | (3,226) | (10,375) | 3,007 |
Total other expense | (10,418) | (31,648) | (8,407) |
Income before income taxes | 56,551 | 39,726 | 8,956 |
Income tax expense | (36,245) | (22,037) | (13,122) |
Net income (loss) | 20,306 | 17,689 | (4,166) |
Less: Net income attributable to non-controlling interests in consolidated entities | 11,596 | 9,003 | 7,189 |
Less: Net income (loss) attributable to non-controlling interests of EVO Investco, LLC | 3,431 | 33 | (9,679) |
Net income (loss) attributable to EVO Payments, Inc. | 5,279 | 8,653 | (1,676) |
Less: Accrual of redeemable preferred stock paid-in-kind dividends | 10,524 | 9,889 | 6,528 |
Net loss attributable to Class A common stock | $ (5,245) | $ (1,236) | $ (8,204) |
Earnings per share | |||
Basic | $ (0.11) | $ (0.03) | $ (0.20) |
Diluted | $ (0.11) | $ (0.03) | $ (0.20) |
Weighted-average Class A common stock outstanding | |||
Basic | 47,979,393 | 47,092,937 | 41,980,163 |
Diluted | 47,979,393 | 47,092,937 | 41,980,163 |
Comprehensive income (loss): | |||
Net income (loss) | $ 20,306 | $ 17,689 | $ (4,166) |
Change in fair value of interest rate swap, net of tax | (1,126) | 1,591 | (465) |
Change in fair value of cross currency swap, net of tax | (44) | ||
Unrealized (loss) gain on foreign currency translation adjustment, net of tax | (2,726) | (28,336) | 8,774 |
Other comprehensive (loss) income | (3,896) | (26,745) | 8,309 |
Comprehensive income (loss) | 16,410 | (9,056) | 4,143 |
Less: Comprehensive income attributable to non-controlling interests in consolidated entities | 10,052 | 3,237 | 8,774 |
Less: Comprehensive loss attributable to non-controlling interests of EVO Investco, LLC | (121) | (10,747) | (5,948) |
Comprehensive income (loss) attributable to EVO Payments, Inc. | $ 6,479 | $ (1,546) | $ 1,317 |
Consolidated Statements of Op_2
Consolidated Statements of Operations and Comprehensive (Loss) Income (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Consolidated Statements of Operations and Comprehensive (Loss) Income | |||
Change in fair value of interest rate swap, tax (expense) benefit | $ 0.2 | $ (0.2) | $ 0.1 |
Change in fair value of cross currency swap, tax benefit | 0.1 | ||
Unrealized (loss) gain on foreign currency translation adjustment, tax benefit (expense) | $ 5.6 | $ 4.1 | $ (2.5) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity (Deficit) - USD ($) $ in Thousands | Total equity (deficit) | Total EVO Payments, Inc. equity/(deficit) | Common Stock Class A Common Stock | Common Stock Class B Common Stock | Common Stock Class C Common Stock | Common Stock Class D Common Stock | Additional paid-in capital | Accumulated deficit attributable to Class A common stock | Accumulated other comprehensive income (loss) | Noncontrolling interests | Redeemable preferred stock | Total |
Redeemable Preferred Stock | ||||||||||||
Issuance of redeemable preferred stock, net of issuance costs | $ 147,590 | |||||||||||
Issuance of redeemable preferred stock, net of issuance costs (shares) | 152,000 | |||||||||||
Accrual of redeemable preferred stock paid-in-kind dividends | $ 6,528 | |||||||||||
Ending balance at Dec. 31, 2020 | $ 154,118 | |||||||||||
Ending balance (shares) at Dec. 31, 2020 | 152,000 | |||||||||||
Beginning balance at Dec. 31, 2019 | $ (882,647) | $ (589,299) | $ 4 | $ 3 | $ (587,358) | $ (1,948) | $ (293,348) | |||||
Beginning balance (in shares) at Dec. 31, 2019 | 41,234,000 | 34,164,000 | 2,322,000 | 4,355,000 | ||||||||
Statements of Changes in Equity | ||||||||||||
Net income (loss) | (3,017) | (1,676) | (1,676) | (1,341) | ||||||||
Cumulative translation adjustment | 3,531 | 3,190 | 3,190 | 341 | ||||||||
Distributions | 24 | 24 | ||||||||||
Secondary Offering | 51,350 | (43,484) | $ 1 | $ (34,540) | (8,945) | 94,834 | ||||||
Secondary Offering (in shares) | 4,152,000 | (2,000,000) | (2,152,000) | |||||||||
Fair value adjustment in connection with purchase of Blueapple Class B shares | (1,650) | (1,436) | (1,436) | (214) | ||||||||
Share-based compensation expense | 20,664 | 20,664 | 20,664 | |||||||||
Vesting of equity awards | (1,345) | (1,345) | (1,345) | |||||||||
Vesting of equity awards (in shares) | 197,000 | |||||||||||
Exercise of stock options | 6,145 | 6,145 | 6,145 | |||||||||
Exercise of stock options (in shares) | 405,000 | |||||||||||
Exchanges of Class C and Class D common stock for Class A common stock | (16,658) | (16,658) | 16,658 | |||||||||
Exchanges of Class C and Class D common stock for Class A common stock (in shares) | 414,000 | (602,000) | 188,000 | |||||||||
Deferred taxes in connection with increase in ownership of EVO Investco, LLC | 2,995 | 2,995 | 2,995 | |||||||||
Tax receivable agreement in connection with share exchanges | 4,548 | 4,548 | 4,548 | |||||||||
Accrual of redeemable preferred stock paid-in-kind dividends | (6,528) | (6,528) | (6,528) | |||||||||
Change in fair value of interest rate swap | (242) | (197) | (197) | (45) | ||||||||
eService redeemable non-controlling interest fair value adjustment | (19,664) | (18,036) | (43,105) | 25,069 | (1,628) | |||||||
Blueapple redeemable non-controlling interest fair value adjustment | (33,382) | (33,039) | (353,175) | 320,136 | (343) | |||||||
Reclassification of additional paid-in-capital to accumulated deficit | 420,999 | (420,999) | ||||||||||
Ending balance at Dec. 31, 2020 | (859,218) | (674,156) | $ 5 | $ 3 | (675,209) | 1,045 | (185,062) | |||||
Ending balance (in shares) at Dec. 31, 2020 | 46,402,000 | 32,164,000 | 1,720,000 | 2,391,000 | ||||||||
Beginning balance at Dec. 31, 2019 | $ 1,052,448 | |||||||||||
Redeemable non-controlling interests | ||||||||||||
Net income (loss) | (1,149) | |||||||||||
Cumulative translation adjustment | 5,243 | |||||||||||
Contributions | 505 | |||||||||||
Distributions | (4,537) | |||||||||||
Sale of Class A common stock in Secondary Offering, net of underwriter fees | (51,350) | |||||||||||
Fair value adjustment in connection with purchase of Blueapple Class B shares | 1,650 | |||||||||||
Change in fair value of interest rate swap | (223) | |||||||||||
eService redeemable non-controlling interest fair value adjustment | 19,664 | |||||||||||
Blueapple redeemable non-controlling interest fair value adjustment | 33,382 | |||||||||||
Ending balance at Dec. 31, 2020 | 1,055,633 | |||||||||||
Redeemable Preferred Stock | ||||||||||||
Accrual of redeemable preferred stock paid-in-kind dividends | $ 9,889 | |||||||||||
Ending balance at Dec. 31, 2021 | $ 164,007 | $ 164,007 | ||||||||||
Ending balance (shares) at Dec. 31, 2021 | 152,000 | 152,250 | ||||||||||
Statements of Changes in Equity | ||||||||||||
Net income (loss) | 8,908 | 8,653 | 8,653 | 255 | ||||||||
Cumulative translation adjustment | (12,257) | (10,999) | (10,999) | (1,258) | ||||||||
Distributions | (213) | (213) | ||||||||||
Cancellation of Class B common stock (in shares) | (32,164,000) | |||||||||||
Share-based compensation expense | 27,419 | 27,419 | 27,419 | |||||||||
Vesting of equity awards | (4,577) | (4,577) | (4,577) | |||||||||
Vesting of equity awards (in shares) | 266,000 | |||||||||||
Exercise of stock options | 7,866 | 7,866 | 7,866 | |||||||||
Exercise of stock options (in shares) | 450,000 | |||||||||||
Exchanges of Class C and Class D common stock for Class A common stock | (15,038) | (15,038) | 15,038 | |||||||||
Exchanges of Class C and Class D common stock for Class A common stock (in shares) | 328,000 | (121,000) | (207,000) | |||||||||
Conversion of Class C common stock to Class D common stock (in shares) | (1,599,000) | 1,599,000 | ||||||||||
Cancellation of Class B common stock | $ (3) | 3 | ||||||||||
Deferred taxes in connection with increase in ownership of EVO Investco, LLC | 255 | 255 | 255 | |||||||||
Tax receivable agreement in connection with share exchanges | 380 | 380 | 380 | |||||||||
Accrual of redeemable preferred stock paid-in-kind dividends | (9,889) | (9,889) | (9,889) | |||||||||
Change in fair value of interest rate swap | 884 | 800 | 800 | 84 | ||||||||
eService redeemable non-controlling interest fair value adjustment | (12,597) | (11,693) | (22,331) | 10,638 | (904) | |||||||
Blueapple redeemable non-controlling interest fair value adjustment | 25,009 | 23,244 | (75,616) | 98,860 | 1,765 | |||||||
BCI Pagos redeemable non-controlling interest fair value adjustment | (4,628) | (4,285) | (4,285) | (343) | ||||||||
Reclassification of additional paid-in-capital to accumulated deficit | 95,813 | (95,813) | ||||||||||
Ending balance at Dec. 31, 2021 | (832,658) | (662,020) | $ 5 | (652,871) | (9,154) | (170,638) | $ (832,658) | |||||
Ending balance (in shares) at Dec. 31, 2021 | 47,446,000 | 3,783,000 | ||||||||||
Redeemable non-controlling interests | ||||||||||||
Net income (loss) | 8,781 | |||||||||||
Cumulative translation adjustment | (16,079) | |||||||||||
Contributions | 1,487 | |||||||||||
Distributions | (13,655) | |||||||||||
Change in fair value of interest rate swap | 707 | |||||||||||
eService redeemable non-controlling interest fair value adjustment | 12,597 | |||||||||||
BCI Pagos redeemable non-controlling interest fair value adjustment | 4,628 | |||||||||||
Blueapple redeemable non-controlling interest fair value adjustment | (25,009) | |||||||||||
Ending balance at Dec. 31, 2021 | 1,029,090 | |||||||||||
Redeemable Preferred Stock | ||||||||||||
Accrual of redeemable preferred stock paid-in-kind dividends | $ 10,524 | |||||||||||
Ending balance at Dec. 31, 2022 | $ 174,531 | $ 174,531 | ||||||||||
Ending balance (shares) at Dec. 31, 2022 | 152,000 | 152,250 | ||||||||||
Statements of Changes in Equity | ||||||||||||
Net income (loss) | 6,329 | 5,279 | 5,279 | 1,050 | ||||||||
Cumulative translation adjustment | 1,489 | 1,814 | 1,814 | (325) | ||||||||
Distributions | (4,270) | (3,449) | (3,449) | (821) | ||||||||
Share-based compensation expense | 29,223 | 29,223 | 29,223 | |||||||||
Vesting of equity awards | (3,675) | (3,675) | (3,675) | |||||||||
Vesting of equity awards (in shares) | 454,000 | |||||||||||
Exercise of stock options | 9,566 | 9,566 | 9,566 | |||||||||
Exercise of stock options (in shares) | 481,000 | |||||||||||
Exchanges of Class D common stock for Class A common stock | (1,895) | (1,895) | 1,895 | |||||||||
Exchanges of Class D common stock for Class A common stock (in shares) | 42,000 | (42,000) | ||||||||||
Deferred taxes in connection with increase in ownership of EVO Investco, LLC | 206 | 206 | 206 | |||||||||
Change in ownership of nonredeemable non-controlling interest | 2,396 | 2,396 | (2,396) | |||||||||
Tax receivable agreement in connection with share exchanges | 47 | 47 | 47 | |||||||||
Accrual of redeemable preferred stock paid-in-kind dividends | (10,524) | (10,524) | (10,524) | |||||||||
Change in fair value of interest rate swap | (645) | (590) | (590) | (55) | ||||||||
Change in fair value of cross currency swap, net of tax | (26) | (24) | (24) | (2) | ||||||||
eService redeemable non-controlling interest fair value adjustment | (28,635) | (26,575) | (20,659) | (5,916) | (2,060) | |||||||
Blueapple redeemable non-controlling interest fair value adjustment | (288,301) | (267,672) | (340,950) | 73,278 | (20,629) | |||||||
BCI Pagos redeemable non-controlling interest fair value adjustment | 3,490 | 3,240 | 3,240 | 250 | ||||||||
NBG Pay redeemable non-controlling interest fair value adjustment | (12,369) | (11,483) | (11,483) | (886) | ||||||||
Reclassification of additional paid-in-capital to accumulated deficit | $ 346,904 | (346,904) | ||||||||||
Ending balance at Dec. 31, 2022 | $ (1,130,753) | $ (936,136) | $ 5 | $ (928,187) | $ (7,954) | $ (194,617) | $ (1,130,753) | |||||
Ending balance (in shares) at Dec. 31, 2022 | 48,423,000 | 3,741,000 | ||||||||||
Redeemable non-controlling interests | ||||||||||||
Net income (loss) | 13,977 | |||||||||||
Cumulative translation adjustment | (4,215) | |||||||||||
Contributions | 3,201 | |||||||||||
Distributions | (11,703) | |||||||||||
Acquired RNCI | 159,784 | |||||||||||
Change in fair value of interest rate swap | (481) | |||||||||||
Change in fair value of cross currency swap. | (18) | |||||||||||
eService redeemable non-controlling interest fair value adjustment | 28,635 | |||||||||||
BCI Pagos redeemable non-controlling interest fair value adjustment | (3,490) | |||||||||||
Blueapple redeemable non-controlling interest fair value adjustment | 288,301 | |||||||||||
NBG Pay redeemable non-controlling interest fair value adjustment. | 12,369 | |||||||||||
Ending balance at Dec. 31, 2022 | $ 1,515,450 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 20,306 | $ 17,689 | $ (4,166) |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 84,143 | 83,389 | 85,924 |
Gain on sale of investment | (336) | ||
Gain on investment in equity securities | (7,313) | (237) | (17,574) |
Amortization of deferred financing costs | 1,185 | 2,427 | 2,675 |
Loss on unamortized deferred financing costs | 3,471 | ||
Loss on extinguishment of debt | 2,196 | ||
Loss on disposal of equipment and improvements | 1,308 | 1,741 | |
Share-based compensation expense | 29,223 | 27,419 | 20,664 |
Deferred taxes, net | 4,475 | 8,258 | 2,599 |
Other | (1,029) | 4,983 | (4,873) |
Changes in operating assets and liabilities, net of effect of acquisitions: | |||
Accounts receivable, net | (3,655) | 293 | (267) |
Other receivables | (5,339) | 1,652 | 4,020 |
Inventory | (4,067) | 801 | 3,993 |
Other current assets | (1,084) | (4,610) | (1,413) |
Operating lease right-of-use assets | 7,825 | 6,554 | 7,825 |
Other assets | (3,713) | (3,802) | 3,466 |
Accounts payable | 1,395 | 2,475 | (8,326) |
Accrued expenses and other current liabilities | 29,584 | 10,728 | (895) |
Settlement processing funds, net | 20,159 | (49,566) | 34,157 |
Operating lease liabilities | (7,694) | (7,584) | (8,571) |
Other | (1,333) | (4,247) | (4,623) |
Net cash provided by operating activities | 163,068 | 103,597 | 116,020 |
Cash flows from investing activities: | |||
Acquisition of businesses, net of cash acquired | (192,315) | (18,809) | |
Purchase of equipment and improvements | (36,232) | (33,395) | (20,481) |
Acquisition of intangible assets | (23,595) | (22,550) | (6,821) |
Return of capital on equity method investment | 906 | ||
Collections of notes receivable | 50 | 429 | |
Net cash used in investing activities | (252,142) | (74,704) | (25,967) |
Cash flows from financing activities: | |||
Net repayments of settlement lines of credit | (2,598) | (5,584) | (19,896) |
Proceeds from long-term debt | 158,034 | 725,600 | 185,250 |
Repayments of long-term debt | (104,534) | (728,769) | (301,843) |
Deferred financing costs paid | (5,927) | ||
Deferred and contingent consideration paid | (3,633) | (610) | (2,130) |
Secondary offering proceeds | 115,538 | ||
Purchase of LLC Interests, Class B and Class D common stock in connection with the secondary offerings | (115,538) | ||
Repurchases of shares to satisfy minimum tax withholding | (3,675) | (4,577) | (1,345) |
Proceeds from issuance of redeemable preferred stock | 149,250 | ||
Redeemable preferred stock issuance costs | (1,660) | ||
Proceeds from exercise of common stock options | 9,566 | 7,866 | 6,145 |
Distributions to non-controlling interest holders | (12,524) | (13,868) | (4,513) |
Contribution from non-controlling interest holders | 3,201 | 1,487 | 505 |
Net cash provided by (used in) financing activities | 43,837 | (24,382) | 9,763 |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (8,162) | (12,435) | 14,634 |
Net (decrease) increase in cash, cash equivalents, and restricted cash | (53,399) | (7,924) | 114,450 |
Cash, cash equivalents, and restricted cash, beginning of year | 410,615 | 418,539 | 304,089 |
Cash, cash equivalents, and restricted cash, end of year | $ 357,216 | $ 410,615 | $ 418,539 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Description of Business and Summary of Significant Accounting Policies | |
Description of Business and Summary of Significant Accounting Policies | (1) Description of Business and Summary of Significant Accounting Policies (a) Description of Business EVO, Inc. is a Delaware corporation whose primary asset is its ownership of approximately 57.4% of the membership interests of EVO, LLC as of December 31, 2022. EVO, Inc. was incorporated on April 20, 2017 for the purpose of completing the Reorganization Transactions in order to consummate the IPO and to carry on the business of EVO, LLC. EVO, Inc. is the sole managing member of EVO, LLC and operates and controls all of the businesses and affairs conducted by EVO, LLC and its subsidiaries (the “Group”). The Company is a leading payment technology and services provider, offering an array of innovative, reliable, and secure payment solutions to merchants across the Americas and Europe and servicing more than 700,000 merchants across more than 50 markets. The Company supports all major card types in the markets it serves. The Company provides card-based payment processing services to small and middle market merchants, multinational corporations, government agencies, and other business and nonprofit enterprises located throughout the Americas and Europe. These services enable merchants to accept credit and debit cards and other electronic payment methods as payment for their products and services by providing terminal devices, card authorization, data capture, funds settlement, risk management, fraud detection, and chargeback services. The Company also offers value-added solutions such as gateway solutions, online hosted payments page capabilities, mobile-based SMS integrated payment collection services, security tokenization and encryption solutions at the physical and virtual POS, DCC, ACH, Level 2 and Level 3 data processing, management reporting solutions, loyalty programs, and Visa Direct, among other ancillary solutions. Other industry-specific processing capabilities are also in our product suite, such as recurring billing, multi-currency authorization, and cross-border processing and settlement. The Company operates two reportable segments: the Americas and Europe. (b) Merger with Global Payments Inc. On August 1, 2022, EVO, Inc. entered into the Merger Agreement with Global Payments and Merger Sub. Subject to the terms and conditions of the Merger Agreement, Global Payments has agreed to acquire EVO, Inc. in an all-cash transaction for $34.00 per share of Class A common stock. The Merger Agreement contains representations, warranties, covenants, closing conditions, and termination rights customary for transactions of this type. Until the earlier of the termination of the Merger Agreement and the effective time of the Merger, the Company has agreed to operate in the ordinary course of business and has agreed to certain other operating covenants, as set forth in the Merger Agreement. The Merger is expected to close in the first quarter of 2023, subject to customary closing conditions. (c) Basis of Presentation and Use of Estimates Certain prior period amounts have been reclassified to conform to the current year presentation where applicable. The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported assets and liabilities, as of the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the period. Actual results could differ from those estimates. Estimates used for accounting purposes include, but are not limited to, valuation of RNCI, evaluation of realizability of deferred tax assets, determination of liabilities under the tax receivable agreement, determination of liabilities and corresponding right-of-use assets arising from lease agreements, determination of assets or liabilities arising from derivative transactions, determination of fair value of share-based compensation, establishment of severance liabilities, establishment of allowance for doubtful accounts, and assessment of impairment of goodwill and intangible assets. (d) Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company. As the sole managing member of EVO, LLC, the Company exerts control over the Group. In accordance with ASC 810, Consolidation (e) Cash and Cash Equivalents, Restricted Cash, Settlement Related Cash and Merchant Reserves Cash and cash equivalents include all cash balances and highly liquid securities with original maturities of three months or less. Cash balances often exceed federally insured limits; however, concentration of credit risk is limited due to the payment of funds on the same day or the day following receipt in satisfaction of the settlement process. Included in cash and cash equivalents are settlement-related cash and merchant reserves. Settlement-related cash represents funds that the Company holds when the incoming amount from the card networks precedes the funding obligation to the merchant. Settlement-related cash balances are not restricted, however these funds are generally paid out in satisfaction of settlement processing obligations and therefore are not available for general purposes. As of December 31, 2022 and 2021, settlement-related cash balances were $157.1 million and $133.3 million, respectively. Merchant reserves represent funds collected from the Company’s merchants that serve as collateral to minimize contingent liabilities associated with any losses that may occur under the respective merchant agreements. While this cash is not restricted in its use, the Company believes that maintaining merchant reserves to collateralize merchant losses strengthens its fiduciary standings with its card network sponsors and is in accordance with the guidelines set by the card networks. As of December 31, 2022 and 2021, merchant reserves were $96.4 million and $101.6 Restricted cash represents funds held as a liquidity reserve at our Chilean and Greek subsidiaries, as required by local regulations. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported in the consolidated balance sheets to the total amount shown in the consolidated statements of cash flows: December 31, December 31, 2022 2021 (In thousands) Cash and cash equivalents $ 356,459 $ 410,368 Restricted cash included in other assets 757 247 Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows $ 357,216 $ 410,615 (f) Accounts Receivable and Other Receivables Accounts receivable include amounts due from ISOs and merchants related to the transaction processing services and sale of POS equipment and peripherals. Other receivables include advances to merchants, amounts of foreign value-added taxes to be recovered through regular business operations, and other amounts due to the Company. Receivable balances are stated net of allowance for doubtful accounts. The Company regularly evaluates its receivables for collectability. The Company analyzes historical losses, the financial position of its customers and known or expected trends when estimating the allowance for doubtful accounts. As of December 31, 2022 $8.8 (g) Inventory Inventory consists primarily of electronic POS terminals and prepaid mobile phone cards and is stated at the lower of cost or net realizable value. Cost is determined based on the first-in, first-out (“FIFO”) method. (h) Earnings Per Share Basic earnings per share of Class A common stock is calculated pursuant to the two-class method as a result of the issuance of 152,250 shares of Series A Convertible Preferred Stock (the “Preferred Stock”) on April 21, 2020. The Preferred Stock is considered a participating security because the holders of Preferred Stock are entitled, on an as-converted basis, to participate in and receive any dividends declared or paid on the Class A common stock, and no dividends may be paid to holders of Class A common stock unless full participating dividends are concurrently paid to holders of Preferred Stock. The two-class method is an earnings allocation formula that determines earnings per share for common stock and participating securities according to dividend and participation rights in undistributed earnings. Under this method, all earnings, distributed and undistributed, are allocated to common stock and participating securities based on their respective rights to receive dividends. The Preferred Stock is not included in the computation of basic earnings per share in periods in which the Company reports a net loss, as the Preferred Stock holders are not contractually obligated to share in the net losses. However, the cumulative dividends that accrete on the Preferred Stock for the period reduce the net income or increase the net loss allocated to common stockholders. Earnings per share is not separately presented for Class B common stock, Blueapple LLC Interests, Class C common stock, and Class D common stock since they have no economic rights to the earnings of the Company. Diluted earnings per share of Class A common stock is calculated using the more dilutive of the (a) treasury stock method and as-converted method or (b) the two-class method. Class B common stock, which was automatically cancelled on May 25, 2021, and Blueapple LLC Interests are not considered when calculating diluted earnings per share as this class of common stock and LLC Interests may not convert to Class A common stock. Class C common stock, which was automatically converted into one share of Class D common stock on May 25, 2021, and Class D common stock are considered in the calculation of diluted earnings per share on an if-converted basis as these classes, together with the paired LLC Interests, have exchange rights that could result in additional shares of Class A common stock being issued. Potentially dilutive shares issuable upon conversion of the Preferred Stock are considered in the calculation of diluted earnings per share on an if-converted basis. All other potentially dilutive securities are determined based on the treasury stock method. Refer to Note 4, “Earnings Per Share,” and Note 21, “Shareholders’ Equity,” for further information. (i) Settlement Processing Assets and Obligations Settlement processing assets and obligations represent intermediary balances arising in our settlement process. Refer to Note 3, “Settlement Processing Assets and Obligations, ” (j) Equipment and Improvements Equipment and improvements are stated at cost less accumulated depreciation. Card processing equipment, office equipment, computer software, and furniture and fixtures are depreciated over their respective estimated useful lives on a straight-line basis. Leasehold improvements are depreciated over the lesser of the estimated useful life of the asset or the lease term. Maintenance and repairs, which do not extend the useful life of the respective assets, are recognized as expense when incurred. Refer to Note 8, “Equipment and Improvements,” for further information. (k) Deferred Financing Costs The costs associated with obtaining debt financing are capitalized and amortized over the term of the related debt. Such costs are presented as a reduction of the long-term debt. (l) Goodwill and Intangible Assets The Company regularly evaluates whether events and circumstances have occurred that indicate the carrying amounts of goodwill and other intangible assets may not be recoverable. Goodwill represents the excess of the consideration transferred over the fair value of identifiable net assets acquired through business combinations. The Company evaluates its goodwill for impairment annually as of October 1, or more frequently, if an event occurs or circumstances change that indicate the fair value of a reporting unit might be below its carrying amount. Our reporting units are consistent with our segments: the Americas and Europe. ASC 350, Intangibles - Goodwill and Other, allows the Company to conduct a qualitative assessment to determine whether it is necessary to perform a quantitative goodwill impairment test. As of October 1, 2022 and 2021, the Company performed a qualitative assessment to evaluate the goodwill for indicators of impairment. A qualitative assessment includes consideration of macroeconomic conditions, industry and market considerations, changes in certain costs, overall financial performance of each reporting unit, and other relevant entity-specific events. In performing its qualitative assessment, the Company considered the results of its quantitative impairment test performed in 2020 and the financial performance of the reporting units during 2022 and 2021. Based upon such assessment, the Company determined that it was more likely than not that the fair values of these reporting units exceeded their carrying amounts as of the date of the impairment test. There were no significant events or changes in the circumstances since the date of the Company’s annual impairment test that would have required a reassessment of the results as of December 31, 2022 and 2021. As of December 31, 2022, there are no indefinite-lived intangible assets other than goodwill. Finite-lived assets include merchant contract portfolios and customer relationships, marketing alliance agreements, trademarks, internally developed and acquired software, and non-competition agreements, and are stated net of accumulated amortization and impairment charges and foreign currency translation adjustments. Merchant contract portfolios and customer relationships consist of merchant or customer contracts acquired from third parties that will generate revenue for the Company. The useful lives of these assets are determined using forecasted cash flows, which are based on, among other factors, the estimates of revenue, expenses, and attrition associated with the underlying portfolio of merchant or customer accounts. The useful lives are determined based upon the period of time over which a significant portion of the economic value of such assets is expected to be realized. The useful life of merchant contract portfolios and customer relationships ranges from 5 to 19 years . Amortization of these assets is recognized under an accelerated method, which approximates the expected distribution of the portfolios’ forecasted cash flows. Marketing alliance agreements are amortized on a straight-line basis over the term of the agreements, which range from 5 to 21 years . Trademarks are amortized on a straight-line basis over the period of time during which a significant portion of the economic value of such assets is expected to be realized, which ranges from 2 to 20 years . Internally developed and acquired software is amortized on a straight-line basis over the estimated useful lives, which range from 3 to 10 years . The estimated useful lives of the software are based on various factors, including obsolescence, technology, competition, and other economic factors. The costs related to the internally developed software are capitalized during the developmental phase of a project, and amortization commences when the software is placed into use by the Company. The costs incurred during the preliminary project stage are expensed as incurred. Non-competition agreements are amortized on a straight-line basis over the term of the agreement, which is 3 years. When factors indicate that a long-lived asset should be assessed for impairment, the Company evaluates whether the carrying value of the asset will be recovered through the future undiscounted cash flows from the ongoing use of the asset, and if applicable, its eventual disposition. When the carrying value exceeds its fair value, an impairment loss is recognized in an amount equal to the difference. Refer to Note 9, “Goodwill and Intangible Assets,” for further information. (m) Derivatives The Company recognizes derivatives on the consolidated balance sheets at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of a particular derivative, whether the Company has elected to designate or not designate such derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a cash flow hedge. Investments in foreign operations with functional currencies other than the reporting currency are subject to foreign currency risk as foreign instruments are remeasured each period resulting in fluctuations in the cumulative translation adjustment (CTA) section within other comprehensive (loss) income. Net investment hedge accounting offers protection from remeasurement risk as changes in fair value of the derivative are also recorded in CTA. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting. The Company uses a forward contract, foreign currency swap, and window forward contracts to mitigate its exposure to fluctuations in foreign currency exchange rates. The Company elected not to designate the instruments as a hedge and they are not subject to hedge accounting. The Company entered into a cross currency swap to hedge the risk of fluctuations in the exchange rate related to a net investment in a foreign subsidiary. The Company designated the cross currency swap as a net investment hedge. Changes in the fair value of a net investment hedge are recorded in accumulated other comprehensive loss and reclassified into earnings when the hedged net investment is sold or substantially liquidated. Components excluded from the assessment of effectiveness will be recognized in earnings using a systematic and rational method over the life of the hedging instrument. Changes in the fair value of a derivative that is designated as, and meets all the required criteria for, a cash flow hedge are recorded in accumulated other comprehensive loss and reclassified into earnings as the underlying hedged item affects earnings. Changes in the fair value of a derivative that is not designated as a cash flow hedge are recorded as a component of other (expense) income. Refer to Note 14, “Derivatives,” and Note 18, “Fair Value,” for further information on the derivative instruments. (n) Revenue Recognition The Company adopted Accounting Standards Update (“ASU”) 2014-09, Revenue From Contracts With Customers The Company primarily earns revenue from payment processing services. The payment processing services involve capturing, routing, and clearing transactions through the applicable payment network. The Company obtains authorization for each transaction and requests funds settlement from the card issuing financial institution through the payment network. In addition, the Company also earns revenue from the sale and rental of electronic POS equipment. The Company’s revenue consists primarily of transaction-based fees that are made up of a significant volume of low-dollar transactions, sourced from multiple systems, platforms, and applications. The payment processing is highly automated, and is based on contractual terms with merchants. Because of the nature of payment processing services, the Company relies on automated systems to process and record the revenue transactions. Netting against the revenue is certain commissions for referral partners and third party processing and assessment costs The Company’s core performance obligation is to provide continuous access to the Company’s processing services in order to be able to process as many transactions as its customers require on a daily basis over the contract term, as the timing and quantity of transactions to be processed is not determinable. Under a stand-ready obligation, the Company’s performance is defined by each time increment rather than by the underlying activities satisfied over time based on days elapsed. Because the service of standing ready is substantially the same each day, and has the same pattern of transfer to the customer, the Company has determined that its stand-ready performance obligation comprises a series of distinct days of service. The Company’s contractual agreements outline the pricing related to payment processing services including fixed fees and pricing related to the sale or rental of POS equipment. Given the nature of the promise to stand ready to provide payment processing services and the fees which are based on unknown quantities of services to be performed over the contract term, the consideration related to the payment processing services is determined to be variable consideration. The variable consideration is usage-based and the variability is satisfied each day the services are provided to the customer. The Company allocates variable fees to the distinct day of service to which it relates, considering the services performed each day in order to allocate the appropriate amount of total fees to that day. Therefore, the Company recognizes revenue for payment processing services over time on a daily basis based on the services performed on that day. Revenue from the sale of POS equipment is recognized at a point in time when the POS equipment is shipped and title passes to the customer. Revenue recognized at a point in time is not material. Revenue from the rental of electronic POS equipment is recognized over time. ASC 606 requires disclosure of the aggregate amount of the transaction price allocated to unsatisfied performance obligations; however, as permitted by the standard, the Company has elected to exclude from this disclosure any contracts with an original duration of one year or less and any variable consideration that meets specified criteria. As discussed above, the Company’s core performance obligation is a stand-ready obligation comprised of a series of distinct days of service, and revenue related to this performance obligation is generally billed and recognized as the services are performed. The variable consideration allocated to this performance obligation meets the specified criteria for disclosure exclusion. The aggregate fixed consideration portion of customer contracts with an initial contract duration greater than one year is not material. The Company follows the requirements of ASC 606-10, Principal Agent Considerations For payment processing services, the determination of gross versus net recognition for interchange, card network fees, and commissions depends on whether the Company controls the good or service before it is transferred to the merchant or whether the Company is acting as an agent of a third party. The Company frequently enters into agreements with third parties under which the third party engages the Company to provide payment processing services to all of their customers. Under these agreements the third party acts as supplier of products or services by achieving most of the shared risks and rewards of customer contracts and the Company passes the third party’s share of merchant receipts to them as commissions. The Company incurs interchange and card network fees from the card issuers and payment networks respectively, and does not have the ability to direct the use of or receive the benefits from the services provided by the card issuers or the payment networks. The Company has no discretion over which card issuing bank will be used to process a transaction and is unable to direct the activity of the merchant to another card issuing bank. Interchange and card network rates are pre-established by the card networks, and the Company has no latitude in determining these fees. Therefore, the Company is acting as an agent with respect to these services. Revenue generated from payment processing is presented net of interchange, card network fees, and certain commissions. Commissions payable to referral and reseller partners are recognized as incurred. (o) Share-Based Compensation The Company follows ASC 718, Compensation: Stock Compensation (p) Income Taxes Subsequent to consummation of the Reorganization Transactions and the IPO, the Company is subject to United States federal, state and local income taxes. The Company's subsidiaries are subject to income taxes in the respective jurisdictions in which they operate. Prior to the consummation of the Reorganization Transactions and the IPO, provision for United States federal, state, and local income tax was not material, as EVO, LLC is a limited liability company and is treated as a pass-through entity for United States federal, state, and local income tax purposes. Deferred Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the consolidated financial statements and tax basis of assets and liabilities using enacted jurisdictional tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates is recognized in the consolidated statements of operations and comprehensive income (loss) in the period that includes the enactment date. The Company recognizes deferred tax assets to the extent that it is expected that these assets are more likely than not to be realized. The Company evaluates the realizability of the deferred tax assets, and to the extent that the Company estimates that it is more likely than not that a benefit will not be realized, the carrying amount of the deferred tax assets is reduced with a valuation allowance. As a part of this evaluation, the Company assesses all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations, to determine whether sufficient future taxable income will be generated to realize existing deferred tax assets. The Company has identified objective and verifiable negative evidence in the form of cumulative losses on an unadjusted basis in certain jurisdictions over the preceding twelve quarters ended December 31, 2022. The Company also evaluated its historical core earnings by jurisdiction, after adjusting for certain nonrecurring items. On the basis of this assessment, and after considering future reversals of existing taxable temporary differences, the Company established valuation allowances in the current and prior periods to reduce the carrying amount of deferred tax assets to an amount that is more likely than not to be realized in certain European jurisdictions. In the United States, with the exception of the interest expense limitation and a stand alone domestic subsidiary, the Company concluded that its indefinite lived deferred tax assets will be realizable and recorded no valuation allowance. In arriving at this determination, the Company considered both (i) historical core earnings, after adjusting for certain nonrecurring items, and (ii) the projected future profitability of its core operations and the impact of enacted changes in the application of the interest expense limitation rules beginning in 2022. As of December 31, 2022 and 2021, a valuation allowance of $14.9 $11.6 Uncertain Tax Positions The Company records uncertain tax positions in accordance with ASC 740, Income Taxes The Company is subject to tax audits in various jurisdictions and regularly assesses the likely outcome of such audits in order to determine the need for liabilities for uncertain tax benefits. The Company continually evaluates the appropriateness of liabilities for uncertain tax positions, considering factors such as statutes of limitations, audits, proposed settlements, and changes in tax law. Refer to Note 12, “Income Taxes,” for further information. (q) Nonredeemable Non-controlling Interests and Redeemable Non-controlling Interests Non-controlling interests relate to the portion of equity in a consolidated subsidiary not attributable, directly or indirectly, to the Company. Where redemption of such non-controlling interests is solely within the control of the Company, such interests are reflected in the consolidated balance sheets as “Nonredeemable non-controlling interests.” RNCI refers to non-controlling interests that are redeemable upon the occurrence of an event that is not solely within the Company’s control and is reported in the mezzanine section between total liabilities and shareholders’ deficit, as temporary equity in the Company’s consolidated balance sheets. The Company adjusts RNCI balance to reflect its estimate of the maximum redemption amount each reporting period. Refer to Note 17, “Redeemable Non-controlling Interests,” for further information. (r) Foreign-Currency Translation The Company has operations in foreign countries whose functional currency is the local currency. Gains and losses on transactions and monetary assets and liabilities, denominated in currencies other than the functional currency, are included in the net income or loss for the period. The assets and liabilities of subsidiaries whose functional currency is a foreign currency are translated at the period-end exchange rates. Income statement items are translated at the average monthly rates for the year. The resulting translation adjustment is recorded as a component of other comprehensive (loss) income and is included in shareholders’ deficit. (s) Fair-Value Measurements The Company follows ASC 820, Fair Value Measurements The Company uses the hierarchy prescribed in ASC 820 for fair value measurements, based on the available inputs to the valuation and the degree to which they are observable or not observable in the market. The three levels of the hierarchy are as follows: Level 1 Inputs — Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date; Level 2 Inputs — · quoted prices for similar assets or liabilities in active markets; · quoted prices for identical or similar assets or liabilities in markets that are not active; · inputs other than quoted prices that are observable for the asset or liability; or · inputs that are derived principally from or corroborated by observable market data by correlation or other means; Level 3 Inputs — Unobservable inputs for the asset or liability used to measure fair value allowing for inputs reflecting the Company’s assumptions about what other market participants would use in pricing the asset or liability, including assumptions about risk. (t) Investment in equity securities The Company’s accounting treatment for investments in equity securities differs for those with and without readily determinable fair values. Investments in equity securities with readily determinable fair values are recorded at fair value on the consolidated balance sheets with changes in fair value at each reporting period recognized on the consolidated statements of operations and comprehensive income (loss). Investments in equity securities without readily determinable fair value are recorded at cost, less impairment, if any, plus or minus observable price changes in orderly transactions of an identical or similar investment of the same issuer. (u) Segment Reporting The Company has two operating segments: the Americas and Europe. The Company’s reportable segments are the same as its operating segments. The alignment of the Company’s segments is designed to establish lines of business that support the geographical markets in which the Company operates and allows the Company to further globalize its solutions while working seamlessly with teams across these markets. The America’s segment comprises the geographical markets of the United States, Canada, Mexico, and Chile. The Europe segment comprises the geographical markets of |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2022 | |
Revenue | |
Revenue | (2) Revenue The Company primarily earns revenue from payment processing services, and has contractual agreements with its customers that set forth the general terms and conditions of the service relationship, including line item pricing, payment terms and contract duration. The Company also earns revenue from the sale and rental of electronic POS equipment. The revenue recognized from the sale and rental of POS equipment totaled $36.2 million, $38.9 million, and $39.3 million for the years ended December 31, 2022, 2021, and 2020, respectively. The Company disaggregates revenue based on reporting segment and division. The Company’s divisions are as follows: ● Direct – Represents the direct solicitation of merchants through referral relationships, including financial institutions and the Company’s direct sales channel. The Company has long-term, exclusive referral relationships with leading international financial institutions that represent thousands of branch locations which actively pursue new merchant relationships on the Company’s behalf. The Company also utilizes a direct sales team, including outbound telesales, to build and maintain relationships with its merchants and referral partners. The Company also has referral arrangements with ISOs that refer merchants to the Company. ● Tech-enabled – Represents merchants requiring a technical integration at the point of sale between the Company and a third party software vendor whereby the third party passes information to our systems to enable payment processing. These merchant acquiring arrangements are supported by partnerships with independent software providers, integrated software dealers, and eCommerce gateway providers. In the United States, this division also supports B2B customers via proprietary solutions sold directly to merchants and via enterprise resource planning software dealers and integrators. ● Traditional – Represents the Company’s heritage United States portfolio composed primarily of ISO relationships where the merchant portfolio is not actively managed by the Company. The Company is not focused on this sales model and it will represent an increasingly smaller portion of the business over time. Year Ended December 31, 2022 Americas Europe Total (In thousands) Divisions: Direct $ 143,116 $ 170,324 $ 313,440 Tech-enabled 138,741 51,833 190,574 Traditional 39,068 — 39,068 Totals $ 320,925 $ 222,157 $ 543,082 Year Ended December 31, 2021 Americas Europe Total (In thousands) Divisions: Direct $ 130,752 $ 148,538 $ 279,290 Tech-enabled 134,360 40,924 175,284 Traditional 42,071 — 42,071 Totals $ 307,183 $ 189,462 $ 496,645 Year Ended December 31, 2020 Americas Europe Total (In thousands) Divisions: Direct $ 113,442 $ 128,458 $ 241,900 Tech-enabled 117,882 35,410 153,292 Traditional 43,909 — 43,909 Totals $ 275,233 $ 163,868 $ 439,101 |
Settlement Processing Assets an
Settlement Processing Assets and Obligations | 12 Months Ended |
Dec. 31, 2022 | |
Settlement Processing Assets and Obligations | |
Settlement Processing Assets and Obligations | (3) Settlement Processing Assets and Obligations Settlement processing assets and obligations represent intermediary balances within the settlement process involving the movement of funds between consumers, card issuers, card networks, the Company, and its merchants. The Company processes funds settlement through two models, the sponsorship model and the direct membership model. In certain markets, the Company operates under the sponsorship model whereby the Company has a sponsorship agreement with a bank that is a member of the various card networks (collectively, the “Member Banks”) providing for the funds settlement by such Member Banks on behalf of the Company related to the transactions processed by the Company through card networks, such as Visa and MasterCard. Under the sponsorship model, it is the responsibility of the Member Bank to ensure that the Company adheres to the standards of the card networks. In other markets, the Company operates under the direct membership model whereby the Company has direct membership with the various card networks for the funds settlement related to the transactions processed by the Company through the card networks. As a direct member under the direct membership model, it is the responsibility of the Company to adhere to the standards of the card networks. The card networks operate as an intermediary between the card issuing banks, on the one hand, and, as applicable, either the Member Banks or the Company (under the sponsorship model or the direct membership model, respectively), on the other hand, whereby funds are received by the card issuing banks and remitted to the Member Bank or the Company, as applicable, via the card networks on a daily basis. The Company then remits these funds to its merchants, either through a Member Bank under the sponsorship model, or directly to merchants under the direct membership model. Incoming funds due from the card networks on behalf of the card issuing bank are classified as receivables from card networks in the table below, whereas the funds due from the Company to its merchants are classified as settlement liabilities due to merchants. The Company enters into agreements with its merchants which outline the fees charged by the Company for processing payment transactions and performing funds settlement. Fees are either settled daily or monthly on a net basis or monthly through an invoice arrangement. Receivables from merchants as presented below represent amounts to be either net settled or invoiced to the Company’s merchants related to the various fees associated with the payment processing and funds settlement services provided by the Company. As described in Note 1, “Description of Business and Summary of Significant Accounting Policies,” the Company collects funds from merchants that serve as collateral to mitigate potential future losses, and recognizes a corresponding liability which is presented as merchant reserves within the settlement processing obligations. Refer to the table below. While receivables from card networks and settlement liabilities due to merchants represent intermediary balances in the transaction settlement process, timing differences, interchange expense, merchant reserves and exception items cause differences between the amount the Company receives through the Member Banks from the card networks and the amount funded to merchants. A summary of settlement processing assets and obligations is as follows: December 31, December 31, 2022 2021 (In thousands) Settlement processing assets: Receivable from card networks $ 629,500 $ 209,734 Receivable from merchants 102,784 101,947 Totals $ 732,284 $ 311,681 Settlement processing obligations: Settlement liabilities due to merchants $ (764,664) $ (320,537) Merchant reserves (96,416) (101,572) Totals $ (861,080) $ (422,109) |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share | |
Earnings Per Share | (4) Earnings Per Share The following table sets forth the computation of the Company's basic and diluted earnings per share of Class A common stock, as well as the anti-dilutive shares excluded (in thousands, except share and per share data): Year Ended December 31, Year Ended December 31, Year Ended December 31, 2022 2021 2020 Numerator: Net income (loss) attributable to EVO Payments, Inc. $ 5,279 $ 8,653 $ (1,676) Less: Accrual of redeemable preferred stock paid-in-kind dividends 10,524 9,889 6,528 Undistributed loss attributable to shares of Class A common stock $ (5,245) $ (1,236) $ (8,204) Denominator: Weighted-average Class A common stock outstanding 47,979,393 47,092,937 41,980,163 Effect of dilutive securities — — — Total dilutive securities 47,979,393 47,092,937 41,980,163 Earnings per share: Basic $ (0.11) $ (0.03) $ (0.20) Diluted $ (0.11) $ (0.03) $ (0.20) Weighted-average anti-dilutive securities: Redeemable preferred stock 152,250 152,250 106,076 Stock options 5,517,739 5,828,309 5,040,423 RSUs 1,672,902 1,364,534 1,166,526 RSAs 72 418 4,256 PSUs 257,639 — — Class C common stock — 658,847 2,132,497 Class D common stock 3,765,469 3,227,836 4,245,743 |
Tax Receivable Agreement
Tax Receivable Agreement | 12 Months Ended |
Dec. 31, 2022 | |
Tax Receivable Agreement | |
Tax Receivable Agreement | (5) Tax Receivable Agreement In connection with the IPO, the Company entered into a Tax Receivable Agreement (“TRA”) that requires the Company to make payments to the Continuing LLC Owners that are generally equal to 85% of the applicable cash tax savings, if any, realized as a result of favorable tax attributes that will be available to the Company as a result of the Reorganization Transactions, exchanges of LLC Interests and paired Class C common stock or paired Class D common stock for Class A common stock, purchases or redemptions of LLC Interests, and payments made under the TRA. Payments will occur only after the filing of U.S. federal and state income tax returns and realization of cash tax savings from the favorable tax attributes. Due to net losses attributable to the Company in prior years, there were no realized tax savings attributable to the TRA, therefore no payments have been made related to the TRA obligation. As a result of the purchases of LLC Interests and the exchanges of LLC Interests and paired shares of Class C common stock and paired Class D common stock for shares of Class A common stock sold in connection with and following the IPO, through December 31, 2022, the Company’s deferred tax asset and payment liability pursuant to the TRA were approximately $215.0 million ($175.4 million net of amortization) and $182.7 million, respectively at December 31, 2022, and approximately $211.9 million ($184.1 million net of amortization) and $180.1 million, respectively at December 31, 2021. The Company recorded a corresponding increase to paid-in capital for the difference between the TRA liability and the related deferred tax asset. The amounts recorded as of December 31, 2022, approximate the current estimate of expected tax savings and are subject to change after the filing of the Company’s U.S. federal and state income tax returns. Future payments under the TRA with respect to subsequent exchanges would be in addition to these amounts. For the TRA, the cash savings realized by the Company are computed by comparing the actual income tax liability of the Company to the amount of such taxes the Company would have been required to pay had there been no increase to the tax basis of the assets from member exchanges or sales of LLC Interests, and no tax benefit as a result of the Net Operating Losses (“NOLs”) generated by the increase in the Company’s tax basis of the assets in EVO, LLC. Subsequent adjustments of the TRA obligations due to certain events (e.g., changes to the expected realization of NOLs or changes in tax rates) will be recognized within other (expense) income in the consolidated statements of operations and comprehensive income (loss). In May 2021, pursuant to the Company’s amended and restated certificate of incorporation, each outstanding share of Class C common stock was automatically converted into one share of Class D common stock. Refer to Note 21, “Shareholders’ Equity,” for further information. On August 1, 2022, EVO, Inc. entered into the Merger Agreement with Global Payments and Merger Sub. In connection with the execution and delivery of the Merger Agreement, EVO, Inc., EVO, LLC, and certain other parties to the TRA entered into Amendment No. 1 to the TRA (the “TRA Amendment”), pursuant to which such parties agreed to certain terms with respect to the treatment of the TRA upon the consummation of the Merger. In the event the Merger Agreement is terminated, the TRA Amendment will no longer be of any force and effect. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2022 | |
Acquisitions | |
Acquisitions | (6) Acquisitions The acquisitions described below have an immaterial financial impact on both an individual basis and in the aggregate. As such pro forma disclosures are not provided. 2022 Acquisitions (a) NBG Pay Single Member Societe Anonyme In December 2022, a subsidiary of EVO, Inc. acquired 51% ownership of NBG Pay from NBG for €158.1 million ($166.3 million, based on the foreign exchange rate at the time of the acquisition). EVO and NBG formed the joint venture to establish a long-term strategic partnership to provide merchant acquiring and payment processing services in Greece. NBG will refer customers to NBG Pay and EVO will manage and provide its market leading card acceptance solutions through its proprietary products and processing platforms. The Company, on a preliminary basis, allocated the cost of acquiring the 51% interest in NBG Pay to the assets and liabilities assumed based on their fair values at the date of acquisition as follows: As of the Estimated acquisition date Useful Life Definite-lived intangible assets (In thousands ) Customer relationships $ 46,070 7 years Marketing alliance agreement 156,730 20 years Other liabilities, net (111) Goodwill 123,400 Total purchase price 326,089 Less: fair value of redeemable non-controlling interest (159,784) Total consideration, net of cash acquired $ 166,305 The allocation of the purchase price above is preliminary and subject to further adjustment, pending additional refinement and final completion of valuations. Thus, the measurements of fair value set forth above are subject to change. The Company expects to finalize the valuations as soon as practical, but not later than one year from the acquisition date. Goodwill generated from the NBG Pay acquisition is deductible for tax purposes. NBG Pay is presented in the Company’s Europe segment. (b) Electronic Data Processing Source S.A. In December 2022, a subsidiary of EVO, Inc. completed the acquisition of 100% of the outstanding shares of EDPS, a leading merchant service provider in Greece, in order to enhance the Company’s in-market tech-enabled capabilities. The total consideration paid for the acquisition was €26.0 million ($27.4 million, based on the foreign exchange rate at the time of the acquisition), which includes an upfront payment of €20.0 million and a deferred payment of €6.0 million payable 18 months after the closing date. The preliminary purchase price allocation of the net assets acquired in the EDPS acquisition is provided in the table below: As of the Estimated acquisition date Useful Life Definite-lived intangible assets (In thousands ) Acquired software $ 1,160 5 years Customer relationships 6,530 7 years Deferred tax liabilities (1,692) Other assets, net 2,046 Goodwill 19,355 Total purchase price $ 27,399 The allocation of the purchase price above is preliminary and subject to further adjustment, pending additional refinement and final completion of valuations. Thus, the measurements of fair value set forth above are subject to change. The Company expects to finalize the valuations as soon as practical, but not later than one year from the acquisition date. Goodwill generated from the EDPS acquisition is not deductible for tax purposes. EDPS is presented in the Company’s Europe segment. (c) North49 Business Solutions, Inc. In May 2022, a subsidiary of EVO, Inc. completed the acquisition of 100% of the outstanding shares of North49 Business Solutions, Inc. (“North49”), a certified Sage development partner based in Canada, to provide enhanced B2B integrated payment solutions for Sage customers. North49 is presented in the Company’s Americas segment. This acquisition was not significant, individually or in the aggregate, to the Company’s financial position, results of operations, or cash flows. 2021 Acquisitions (a) Anderson Zaks Limited In July 2021, a subsidiary of EVO, Inc. completed the acquisition of 100% of the outstanding shares of Anderson Zaks Ltd., an omni-channel payment gateway provider based in the United Kingdom. Anderson Zaks Ltd. is presented in the Company’s Europe segment. (b) Pago Fácil In June 2021, subsidiaries of EVO, Inc. completed the acquisition of 100% of the outstanding shares of Pago Fácil Tecnologia SpA and PST Pago Fácil SpA (together, “Pago Fácil”), a leading eCommerce payment gateway in Chile, in partnership with its joint venture partner BCI. The total consideration paid for the acquisition was $20.9 million, which includes an upfront payment of $18.0 million and deferred considerations of $0.9 million and $2.0 million payable 9 months and 18 months after the closing date, respectively. The deferred considerations of $0.9 million and $2.0 million were paid in full in March 2022 and December 2022, respectively. The purchase price allocation, which was finalized during the quarter ended June 30, 2022, is provided within the table below: As of the Estimated acquisition date Useful Life Definite-lived intangible assets (In thousands ) Acquired software $ 9,400 5 years Customer relationships 3,000 7 years Trademarks 440 2 years Non-compete agreement 150 3 years Deferred tax liabilities (3,507) Other assets, net 855 Goodwill 10,562 Total purchase price $ 20,900 Goodwill generated from the Pago Fácil acquisition is not deductible for tax purposes. Pago Fácil is presented in the Company’s Americas segment. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases | |
Leases | (7) Leases The Company’s leases consist primarily of real estate and personal property leases throughout the markets in which the Company operates. At contract inception, the Company determines whether an arrangement is or contains a lease, and for each identified lease, evaluates the classification as operating or financing. The Company had no finance leases as of December 31, 2022 and 2021. Leased assets and obligations are recognized at the lease commencement date based on the present value of fixed lease payments to be made over the term of the lease. Renewal and termination options are factored into determination of the lease term only if the option is reasonably certain to be exercised. The weighted-average remaining lease term was 5.54 years and 6.36 years as of December 31, 2022 and 2021, respectively. The Company had no significant short-term leases as of December 31, 2022 and 2021. The Company’s leases do not provide a readily determinable implicit interest rate and the Company uses its incremental borrowing rate to measure the lease liability and corresponding right-of-use asset. The incremental borrowing rates were determined based on a portfolio approach considering the Company’s current secured borrowing rate adjusted for market conditions and the length of the lease term. The weighted-average discount rates used in the measurement of lease liabilities were 6.03% and 5.81% as of December 31, 2022 and 2021, respectively. Operating lease cost is recognized on a straight-line basis over the lease term. Operating lease costs were $12.7 $10.8 2.8 Cash paid for amounts included in the measurement of operating lease liabilities for each of the years ended December 31, 2022 and 2021 were $9.4 As of December 31, 2022, maturities of lease liabilities are as follows: (In thousands) Years ending: 2023 $ 10,169 2024 9,765 2025 8,823 2026 8,207 2027 6,770 2028 and thereafter 7,040 Total future minimum lease payments (undiscounted) 50,774 Less: present value discount (7,987) Present value of lease liability $ 42,787 |
Equipment and Improvements
Equipment and Improvements | 12 Months Ended |
Dec. 31, 2022 | |
Equipment and Improvements | |
Equipment and Improvements | (8) Equipment and Improvements Equipment and improvements consisted of the following: Estimated Useful Lives in December 31, December 31, Years 2022 2021 (In thousands) Card processing equipment 3-5 $ 170,390 $ 155,843 Office equipment 3-5 47,225 44,393 Computer software 3-5 58,398 60,226 Leasehold improvements various 19,919 17,883 Furniture and fixtures 5-7 5,193 4,433 Totals 301,125 282,778 Less accumulated depreciation (228,419) (213,761) Foreign currency translation adjustment (2,749) (511) Totals $ 69,957 $ 68,506 Depreciation expense related to equipment and improvements was $31.4 million, $37.8 million, and $40.6 In the year ended December 31, 2022 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | (9) Goodwill and Intangible Assets Intangible assets, net consist of the following: December 31, 2022 Gross carrying value Accumulated amortization Accumulated impairment charges Translation and other adjustments Net (In thousands) Merchant contract portfolios and customer relationships $ 350,320 $ (211,032) $ (5,685) $ (30,230) $ 103,373 Marketing alliance agreements 354,145 (100,261) (7,557) (19,407) 226,920 Internally developed and acquired software 136,382 (68,627) (9,324) (4,647) 53,784 Trademarks, definite-lived 20,851 (14,536) - (3,765) 2,550 Non-compete agreements 150 (66) - (23) 61 Total $ 861,848 $ (394,522) $ (22,566) $ (58,072) $ 386,688 December 31, 2021 Gross carrying value Accumulated amortization Accumulated impairment charges Translation and other adjustments Net (In thousands) Merchant contract portfolios and customer relationships $ 297,056 $ (197,187) $ (5,685) $ (30,713) $ 63,471 Marketing alliance agreements 197,412 (79,811) (7,557) (20,896) 89,148 Internally developed and acquired software 110,396 (53,110) (10,191) (3,236) 43,859 Trademarks, definite-lived 22,068 (13,427) (901) (3,596) 4,144 Non-compete agreements 6,612 (6,487) - (21) 104 Total $ 633,544 $ (350,022) $ (24,334) $ (58,462) $ 200,726 Amortization expense related to intangible assets was $52.7 As of December 31, 2022, the gross carrying value of non-compete agreements, internally developed software, and definite-lived trademarks were reduced by $6.5 million, $2.2 million, and $1.2 million, respectively, with an offset to accumulated amortization, accumulated impairment charges, and translation and other adjustments, for fully amortized or previously impaired intangible assets. Due to the termination of the Liberbank marketing alliance agreement and the change in recoverability of the Banco Popular marketing alliance agreement, amortization of the respective intangible assets of $5.7 million was accelerated and as a result, their net book values were zero as of December 31, 2022. In the year ended December 31, 2021, gross intangible assets and accumulated depreciation were each reduced by $2.3 million, related to the expiration of a marketing alliance agreement. Estimated amortization expense to be recognized during each of the five years subsequent to December 31, 2022: (In thousands) Years ending: 2023 $ 64,233 2024 52,222 2025 42,661 2026 31,970 2027 26,842 2028 and thereafter 168,760 Total $ 386,688 For each of the years ended December 31, 2022 and 2021, there were no impairments. The following represents intangible assets, net by segment: December 31, December 31, 2022 2021 (In thousands) Intangible assets, net: Americas Merchant contract portfolios and customer relationships $ 41,466 $ 49,435 Marketing alliance agreements 51,438 56,996 Internally developed and acquired software 40,229 28,812 Trademarks, definite-lived 1,269 1,497 Non-compete agreements 61 104 Total 134,463 136,844 Europe Merchant contract portfolios and customer relationships 61,907 14,036 Marketing alliance agreements 175,482 32,152 Internally developed and acquired software 13,555 15,047 Trademarks, definite-lived 1,281 2,647 Total 252,225 63,882 Total intangible assets, net $ 386,688 $ 200,726 The change in the carrying amount of goodwill for the years ended December 31, 2022 Reportable Segment Americas Europe Total (In thousands) Goodwill, gross, as of December 31, 2020 $ 266,848 $ 140,551 $ 407,399 Accumulated impairment losses — (24,291) (24,291) Goodwill, net, as of December 31, 2020 266,848 116,260 383,108 Business combinations 10,562 3,921 14,483 Foreign currency translation adjustment (2,480) (9,460) (11,940) Goodwill, net, as of December 31, 2021 $ 274,930 $ 110,721 $ 385,651 Goodwill, gross, as of December 31, 2021 $ 274,930 $ 135,012 $ 409,942 Accumulated impairment losses — (24,291) (24,291) Goodwill, net, as of December 31, 2021 274,930 110,721 385,651 Business combinations 6,790 142,755 149,545 Foreign currency translation adjustment (948) (5,693) (6,641) Goodwill, net, as of December 31, 2022 $ 280,772 $ 247,783 $ 528,555 |
Accounts Payable, Accrued Expen
Accounts Payable, Accrued Expenses, and Other Current Liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Accounts Payable, Accrued Expenses, and Other Current Liabilities | |
Accounts Payable, Accrued Expenses, and Other Current Liabilities | (10) Accounts Payable, Accrued Expenses, and Other Current Liabilities The Company’s accounts payable, accrued expenses, and other current liabilities consisted of the following: December 31, December 31, 2022 2021 (In thousands) Compensation and related benefits $ 19,558 $ 23,205 Third-party processing and payment network fees 46,257 43,529 Trade payables 7,177 6,089 Taxes payable 37,723 20,399 Commissions payable to third parties 15,750 16,025 Unearned revenue 4,327 4,723 Other 33,864 19,979 Total accounts payable, accrued expenses, and other current liabilities $ 164,656 $ 133,949 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions | |
Related Party Transactions | (11) Related party balances consist of the following: December 31, December 31, 2022 2021 (In thousands) Due from related parties, current $ 697 $ 782 Due to related parties, current (4,638) (4,207) Due to related parties, long-term (185) (185) Due from related parties, current, consists primarily of receivables due from a non-controlling interest holder of a consolidated subsidiary, which are included as a component of other current assets on the consolidated balance sheets. Due to related parties, current, consists of $3.6 $3.0 1.0 $1.2 Due to related parties, long-term, consists of ISO commission reserves in connection with an unconsolidated investee, which are included as a component of other long-term liabilities on the consolidated balance sheets. The Company leases office space located at 515 Broadhollow Road in Melville, New York from 515 Broadhollow, LLC. 515 Broadhollow, LLC is majority owned, directly and indirectly, by the Company’s founder and chairman. As of December 31, 2022 and 2021, the liability related to this lease amounted to $0.5 million and $1.9 million, respectively, and is included in the operating lease liabilities on the consolidated balance sheets. The Company leases vehicles from a non-controlling interest holder of a consolidated subsidiary. As of December 31, 2022 and 2021, these lease liabilities amounted to $0.2 million and $0.4 million, respectively, and are included in the operating lease liabilities on the consolidated balance sheets. A portion of the TRA obligation is payable to members of management and current employees. Refer to Note 5, “Tax Receivable Agreement,” for further information on the tax receivable agreement. Related party commission expense incurred with unconsolidated investees of the Company amounted to $ 11.7 The Company provides certain professional and other services to Blueapple Inc. (“Blueapple”), a member and holder of LLC interests of EVO, LLC. Blueapple is controlled by entities affiliated with the Company’s founder and chairman. The expense related to these services was $0.2 million for each of the years ended December 31, 2022, 2021, and 2020. The Company, through two wholly owned subsidiaries and one unconsolidated investee, conducts business under ISO agreements with a relative of the Company’s founder and chairman pursuant to which the relative of the Company’s founder and chairman provides certain marketing services and equipment in exchange for a commission based on the volume of transactions processed for merchants acquired by the relative of the Company’s founder and chairman. For the years ended December 31, 2022, 2021, and 2020, the Company paid commissions of less than $0.1 million, $0.1 NFP is the Company’s benefit and insurance broker and 401(k) manager. NFP is a portfolio company of MDP and one of the Company’s executive officers owns a minority interest in NFP. For the years ended December 31, 2022, 2021, and 2020, the Company paid $1.1 million, $1.2 million, and $0.7 million in brokerage fees and other expenses to NFP, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Taxes | |
Income Taxes | (12) Income Taxes Domestic and foreign income before income taxes is as follows for the years ended December 31: 2022 2021 2020 (In thousands) Domestic $ (28,541) $ (21,242) $ (37,043) Foreign 85,092 60,968 45,999 Income (loss) before income taxes $ 56,551 $ 39,726 $ 8,956 Income tax expense is comprised of the following for the years ended December 31: 2022 2021 2020 (In thousands) Current: Foreign $ 30,929 $ 13,978 $ 10,594 Federal 392 (226) 61 State 449 (43) (15) Total current income tax expense 31,770 13,709 10,640 Deferred: Foreign (1,810) 11,399 2,637 Federal 5,467 (2,769) (96) State 818 (302) (59) Total deferred income tax expense (benefit) 4,475 8,328 2,482 Totals $ 36,245 $ 22,037 $ 13,122 The Company’s effective tax rate, as applied to income before income taxes, differ from federal statutory rates as follows for the years ended December 31: 2022 2021 2020 Federal statutory rate 21.0% 21.0% 21.0% State taxes, net of federal benefit (2.4) (12.5) 26.3 Foreign tax rate differential (0.3) (0.2) (0.4) Decrease in U.S. valuation allowance — — (28.6) Non-controlling interest (11.0) (9.9) 1.2 Other miscellaneous permanent differences 2.9 (2.4) (21.0) Remeasurement of deferred tax assets (0.6) (6.1) (4.4) Undistributed earnings of foreign subsidiaries — 0.1 4.2 U.S. federal tax related to foreign effectively connected income — 0.1 2.7 Mexico income tax provision 26.5 20.0 85.8 Poland income tax provision 15.6 18.0 75.7 German income tax provision 6.7 8.9 — Spain income tax provision — — (29.1) Other foreign tax provisions 3.0 4.0 13.1 Increase in U.S. valuation allowance 1.8 — — Increase in Foreign valuation allowance 0.9 14.5 — Effective tax rate 64.1% 55.5% 146.5% The primary components of deferred tax items were as follows as of December 31: 2022 2021 (In thousands) Deferred tax assets: U.S. net operating losses (1) $ 30,777 $ 29,569 U.S. interest limitation (1) 614 — Partnership basis adjustment (1) 175,358 184,119 Other partnership basis items (1) 31,218 24,235 Foreign net operating losses 13,338 12,014 Foreign intangibles 1,573 1,345 Foreign accrued expenses and other temporary differences 8,007 5,653 260,885 256,935 Valuation allowance (14,887) (11,634) Deferred tax asset 245,998 245,301 Deferred tax liabilities: Acquisition related intangibles (27,122) (23,656) Foreign equipment and improvements (1,130) (2,070) Foreign accrued expenses and other temporary differences (1,424) (3,521) Deferred tax liability (29,676) (29,247) Net $ 216,322 $ 216,054 (1) The following table includes the valuation allowance associated with the deferred tax assets recognized as tax expense in the consolidated statements of operations and comprehensive income (loss) for the years ended December 31, 2022, 2021, and 2020. Valuation Allowance (In thousands) Beginning balance, January 1, 2020 $ 8,152 Additions to deferred tax assets in foreign jurisdictions 1,097 Reduction of U.S. interest limitation (2,558) Reductions to deferred tax assets in foreign jurisdictions (1,601) December 31, 2020 $ 5,090 Additions to deferred tax assets in foreign jurisdictions 8,389 Reductions to deferred tax assets in foreign jurisdictions (1,845) December 31, 2021 $ 11,634 Additions to deferred tax assets in U.S. jurisdictions 999 Additions to deferred tax assets in foreign jurisdictions 3,833 Reductions to deferred tax assets in foreign jurisdictions (1,579) December 31, 2022 $ 14,887 The following table includes the total net operating losses carryforwards by country and years which they are available to offset future taxable income as of December 31, 2022: Net Operating Available Losses Years (In thousands) United States $ 133,617 Indefinite Spain 26,041 Indefinite Gibraltar 21,456 Indefinite Mexico 5,457 2023-2032 Chile 4,584 Indefinite Ireland 3,069 Indefinite Czech Republic 2,784 2023-2027 UK 670 Indefinite Canada 550 2023-2042 Greece 383 2023-2027 Gross unrecognized tax benefits increased by $ 5.2 The Company recognizes interest and penalties related to unrecognized tax benefits within the income tax expense line in the accompanying consolidated statements of operations and comprehensive income (loss). Accrued interest and penalties are included within the other long-term liabilities line in the consolidated balance sheets. The following table reconciles the beginning and ending balance of gross unrecognized tax benefits: 2022 (In thousands) Beginning Balance at January 1, 2022 $ 1,027 Lapses of statues of limitations — Increases in balances related to tax positions taken during prior periods (including those related to acquisitions made during the year) 10,888 Decreases in balances related to tax positions taken during prior periods — Increases in balances related to tax positions taken during current period — Decreases in balances related to settlements with taxing authorities (5,651) Ending Balance at December 31, 2022 $ 6,264 As of December 31, 2022, the total amount of gross unrecognized income tax benefits that, if recognized, would affect that provision for income taxes is $6.3 EVO, LLC’s domestic or foreign subsidiary’s income tax filings are periodically audited by the local tax authorities. EVO, LLC’s open tax years by major taxing jurisdictions are as follows: Jurisdiction Years United States 2019-2022 Mexico 2017-2022 Poland 2017-2022 Germany 2017-2022 |
Long-Term Debt and Lines of Cre
Long-Term Debt and Lines of Credit | 12 Months Ended |
Dec. 31, 2022 | |
Long-Term Debt and Lines of Credit | |
Long-Term Debt and Lines of Credit | (13) Long-Term Debt and Lines of Credit Credit Facility In November 2021, EVO Payments International, LLC (“EPI”), a wholly-owned subsidiary of EVO, Inc., entered into a Second Restatement Agreement to Amended and Restated Credit Agreement (the “Restatement Agreement”) by and among EPI, as borrower, the subsidiaries of the borrower identified therein, as guarantors, Citibank, N.A., as administrative agent, Truist Bank, as the successor administrative agent and the lenders party thereto, to amend and restate our existing senior secured credit facilities (as amended and restated by the Restatement Agreement, the “Senior Secured Credit Facilities”). As of December 31, 2022, the Senior Secured Credit Facilities include revolver commitments of $200.0 million that mature in November 2026 and a $588.0 million term loan that matures in November 2026. In connection with the Senior Secured Credit Facilities refinanced under the Restatement Agreement, a loss of $5.7 million was presented within other (expense) income in the consolidated statements of operations and comprehensive income (loss) for the year ended December 31, 2021. The total loss of $5.7 million includes a debt extinguishment loss of $2.2 million and a loss of $3.5 million related to unamortized deferred financing costs. The Senior Secured Credit Facilities provide the Company with the capacity to support both domestic and international growth, as well as fund general operating needs. The loans under the Senior Secured Credit Facilities bear interest at an annual rate equal to, at EPI’s option, (a) a base rate, plus an applicable margin or (b) LIBOR, plus an applicable margin. The applicable margin for base rate loans ranges from 0.75% to 1.75% per annum and for LIBOR loans ranges from 1.75% to 2.75% per annum, in each case based upon achievement of certain consolidated leverage ratios. In addition to paying interest on outstanding principal, EPI is required to pay a commitment fee to the lenders in respect of the unutilized revolving commitments thereunder ranging from 0.25% to 0.375% per annum based upon achievement of certain consolidated leverage ratios. The Senior Secured Credit Facilities include provisions that provide for the eventual replacement of LIBOR as a reference rate with the Secured Overnight Financing Rate (as defined therein) or otherwise an alternate benchmark rate that has been selected by the administrative agent and EPI and not objected to by a majority of the lenders. As of December 31, 2022, the term loan had an interest rate of 6.14% and the revolving credit facility had interest rates of 8.25% for prime rate revolver, 6.40% for three-month LIBOR revolver, and 6.14% for one-month LIBOR revolver. All amounts outstanding under the Senior Secured Credit Facilities are secured, subject to permitted liens and other exceptions, by a first-priority lien on the capital stock owned by EPI or by any guarantor in each of EPI’s or their respective subsidiaries (limited, in the case of capital stock of foreign subsidiaries and first tier domestic subsidiaries substantially all the assets of which are the capital stock of foreign subsidiaries, to 65% of the voting stock and 100% of the non-voting stock of such subsidiaries) and a first-priority lien on substantially all of EPI’s and each guarantor’s present and future intangible and tangible assets (subject to customary exceptions). The Senior Secured Credit Facilities also contain a number of significant negative covenants. These covenants, among other things, restrict, subject to certain exceptions, EPI’s and its controlled subsidiaries ability to: incur indebtedness; create liens; engage in mergers or consolidations; make investments, loans and advances; pay dividends or other distributions and repurchase capital stock; sell assets; engage in certain transactions with affiliates; enter into sale and leaseback transactions; make certain accounting changes; and make prepayments on junior indebtedness. The Senior Secured Credit Facilities also contain a financial covenant that requires EPI to remain under a maximum consolidated leverage ratio determined on a quarterly basis with step-downs over time. The Borrower may elect to increase the maximum consolidated leverage level with which it must comply by 0.5x up to two times during the term upon the consummation of a “material acquisition.” As a result of these restrictions, substantially all of the net assets of EPI at December 31, 2022 were restricted from distribution to EVO, LLC or any of its members. The Company currently intends to retain all available funds and any future earnings for use in the operation of its business. In addition, the Senior Secured Credit Facilities contain certain customary representations and warranties, affirmative covenants, and events of default. If an event of default occurs, the lenders under the Senior Secured Credit Facilities will be entitled to take various actions, including the acceleration of amounts due thereunder and exercise of the remedies on the collateral. As of December 31, 2022 and 2021, the Company was in compliance with all its financial covenants under the Senior Secured Credit Facilities. As of December 31, 2022 and 2021, the Company’s long-term debt consists of the following: December 31, December 31, 2022 2021 (In thousands) Term loan $ 573,300 $ 588,000 Revolver 68,200 — Less debt issuance costs (4,212) (5,310) Total long-term debt 637,288 582,690 Less current portion of long-term debt, net of current portion of debt issuance costs (14,092) (14,058) Total long-term debt, net of current portion $ 623,196 $ 568,632 Principal payment requirements on the above obligations in each of the years remaining subsequent to December 31, 2022 are as follows: Years ending: (In thousands) 2023 $ 14,700 2024 29,400 2025 44,100 2026 553,300 Total $ 641,500 Upon the consummation of the Merger, our Senior Secured Credit Facilities will be paid off in full. However, there can be no assurance that the Merger will be consummated within the anticipated timeline or at all. Settlement Lines of Credit The Company maintains intraday and overnight facilities to fund its settlement obligations. These facilities are short-term in nature, have variable interest rates, are subject to annual review and are denominated in local currency but may, in some cases, facilitate borrowings in multiple currencies. At December 31, 2022 and December 31, 2021, the Company had $5.0 million and $8.0 million outstanding under these lines of credit, respectively, with additional capacity of $296.5 million and $142.6 million, respectively, to fund its settlement obligations. The weighted-average interest rates on these borrowings were 8.7% and 5.2% as of December 31, 2022 and 2021, respectively. |
Derivatives
Derivatives | 12 Months Ended |
Dec. 31, 2022 | |
Derivatives | |
Derivatives | (14) Derivatives Designated Derivatives Interest Rate Swap In 2020, the Company entered into an interest rate swap with a notional amount of $500.0 million to reduce a portion of the exposure to fluctuations in LIBOR interest rates associated with our variable-rate term loan. The interest rate swap had a fixed rate of 0.2025% and matured on December 31, 2022. The interest rate swap was designated as an effective cash flow hedge involving the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreement without exchange of the underlying notional amount. The Company performed a regression analysis at inception of the hedging relationship in which it compared the historical monthly changes in the termination clean price of the actual designated interest rate swap to the historical monthly changes in the termination clean price of a hypothetically perfect interest rate swap with terms that exactly match the hedged transactions and a fair value of zero at its inception using 37 different forward curves. Based on the regression results, the Company determined that the hedging instrument was highly effective at inception. On an ongoing basis, the Company assessed hedge effectiveness prospectively and retrospectively. The hedge continued to be highly effective until its maturity on December 31, 2022. The interest rate swap was recognized at fair value in the consolidated balance sheets. The table below presents the fair value of the interest rate swap and its classification on the consolidated balance sheets as of December 31, 2021: December 31, 2021 Balance Sheet Fair Value Location (In thousands) Interest Rate Swap - current portion Other current assets $ 1,297 Since the Company designated the swap as an effective cash flow hedge that qualified for hedge accounting, unrealized gains or losses resulting from adjusting the swap to fair value were recorded as a component of other comprehensive (loss) income and subsequently reclassified into interest expense in the same period during which the hedged transaction affected earnings. Cash flows resulting from settlements were presented as a component of cash flows from operating activities within the consolidated statements of cash flows. The table below presents the effect of hedge accounting on accumulated other comprehensive loss for the years ended December 31, 2022, 2021, and 2020: Year Ended Year Ended Year Ended December 31, 2022 December 31, 2021 December 31, 2020 (In thousands) Beginning accumulated derivative gain (loss) in accumulated other comprehensive loss $ 1,297 $ (533) $ — Derivative gain (loss) recognized in the current period in accumulated other comprehensive loss 6,257 1,354 (653) Less: Derivative gain (loss) reclassified from accumulated other comprehensive loss to interest expense 7,554 (476) (120) Ending accumulated derivative gain (loss) in accumulated other comprehensive loss $ — $ 1,297 $ (533) The table below presents the effect of hedge accounting on the consolidated statements of operations and comprehensive income (loss) for the years ended December 31, 2022, 2021, and 2020: Year Ended Year Ended Year Ended December 31, 2022 December 31, 2021 December 31, 2020 (In thousands) Total interest expense including the effects of cash flow hedges $ (17,641) $ (23,161) $ (30,160) Derivative gain (loss) reclassified from accumulated other comprehensive loss into interest expense $ 7,554 $ (476) $ (120) Cross Currency Swap In April 2022, the Company entered into a float-to-float cross currency swap to hedge the risk of fluctuations in the exchange rate related to a net investment in a foreign subsidiary. The Company delivered a notional amount of $26.2 million and received a notional amount of EUR 25.0 million on the initial exchange date of November 15, 2022 and will deliver EUR 25.0 million and receive $26.2 million on the maturity date of November 15, 2027. The cross currency swap is designated as a net investment hedge involving the receipt of functional currency floating rate amounts from a counterparty in exchange for the Company making foreign currency floating rate payments over the life of the agreement. The loss on the swap prior to designation was recorded in earnings. The cross currency swap is recognized at fair value in the consolidated balance sheets. The table below presents the fair value of the cross currency swap and its classification on the consolidated balance sheets as of December 31, 2022: December 31, 2022 Balance Sheet Fair Value Location (In thousands) Cross Currency Swap - current portion Other current assets $ 451 Cross Currency Swap - long-term portion Other long-term liabilities $ (610) The Company recognized in earnings the initial value of the component excluded from the assessment of effectiveness using a systematic and rational method over the life of the hedging instrument. Any changes in the fair value of a net investment hedge are recorded in accumulated other comprehensive loss and reclassified into earnings when the hedged net investment is sold or substantially liquidated. The table below presents the effect of the Company’s net investment hedge on accumulated other comprehensive loss for the year ended December 31, 2022: Amount of Gain (Loss) Recognized in OCI Location of Gain (Loss) Reclassified from AOCI into Income Amount of Gain (Loss) Reclassified from AOCI into Income Year Ended December 31, 2022 (In thousands) Cross Currency Swap $ (51) Interest expense $ 141 Non-designated Derivatives In April 2022, the Company entered into a forward contract to mitigate exposure to fluctuations in foreign currency exchange rates related to certain foreign intercompany balances. The terms of the contract provide for an exchange of a notional amount of GBP 34.5 million for MXN 960.1 million, calculated using the contract rate as applicable at the settlement date. The forward contract is recognized at fair value in the consolidated balance sheets. The table below presents the fair value of the forward contract and its classification on the consolidated balance sheets as of December 31, 2022: December 31, 2022 Settlement Balance Sheet Fair Value Date Location (In thousands) Forward Contract April 13, 2023 Other current assets $ 6,530 The Company did not designate the forward contract as an accounting hedge. Any unrealized gain or loss resulting from adjusting the forward to fair value is recorded as a component of other (expense) income, to offset the unrealized gain or loss recorded within other (expense) income from the remeasurement of the intercompany balance being hedged. Cash flows resulting from the settlement will be presented as a component of cash flows from operating activities within the consolidated statements of cash flows. The table below presents the unrealized gain (loss) on the consolidated statements of operations and comprehensive income (loss) for the year ended December 31, 2022: Location of Year Ended Unrealized Gain December 31, 2022 Forward Contract Other income $ 6,530 |
Supplemental Cash Flows Informa
Supplemental Cash Flows Information | 12 Months Ended |
Dec. 31, 2022 | |
Supplemental Cash Flows Information | |
Supplemental Cash Flows Information | (15) Supplemental Cash Flows Information Supplemental cash flow disclosures and non-cash investing and financing activities are as follows: Years Ended December 31, 2022 2021 2020 (In thousands) Supplemental disclosure of cash flow data: Interest paid $ 16,226 $ 20,917 $ 30,962 Income taxes paid 17,901 10,259 13,429 Supplemental disclosure of non-cash investing and financing activities: Operating lease liabilities arising from obtaining new or modified right-of-use assets $ 14,908 $ 9,845 $ 3,347 Decrease in operating lease liabilities and corresponding right-of-use assets resulting from lease modifications — (3,158) (6,801) Software and equipment assets acquired by assuming directly related liabilities — — 11,603 Deferred consideration payable 11,616 3,439 — Contingent consideration payable — 472 — Accrual of redeemable preferred stock paid-in-kind-dividends 10,524 9,889 6,528 Exchanges of Class C and Class D common stock for Class A common stock 1,895 15,038 16,658 Secondary offering — — 43,484 |
Redeemable Preferred Stock
Redeemable Preferred Stock | 12 Months Ended |
Dec. 31, 2022 | |
Redeemable Preferred Stock. | |
Redeemable Preferred Stock | (16) Redeemable Preferred Stock On April 21, 2020, the Company issued 152,250 shares of Preferred Stock. The Company received approximately $ 149.3 million in total net proceeds from the sale of the Preferred Stock and incurred approximately $ 1.7 million in stock issuance costs as part of the sale. The Preferred Stock ranks senior to the Class A common stock with respect to dividends and distributions on liquidation, winding-up, and dissolution. Each share of Preferred Stock had an initial liquidation preference of $1,000 per share. Holders of shares of Preferred Stock are entitled to cumulative, paid-in-kind (“PIK”) dividends, which are payable semi-annually in arrears by increasing the liquidation preference for each outstanding share of Preferred Stock. These PIK dividends accrue at an annual rate of (i) 6.00% per annum for the first ten years and (ii) 8.00% per annum thereafter. At the 2021 annual meeting of stockholders, the Company’s stockholders voted to approve the elimination of the limitation on conversion of the Preferred Stock in the event the conversion results in Class A Common Stock ownership in excess of 19.99% if the aggregate voting power as required by Nasdaq Listing Rule 5635. Holders of Preferred Stock are also entitled, on an as-converted basis, to participate in and receive any dividends declared or paid on the Class A Common Stock, and no dividends may be paid to holders of Class A Common Stock unless full participating dividends are concurrently paid to holders of Preferred Stock. The Preferred Stock’s initial carrying value is recorded at a discount to its liquidation preference. In accordance with the SEC’s Staff Accounting Bulletin Topic 5.Q, Increasing Rate Preferred Stock , the discount is considered an carrying value of the preferred stock has been increased by $10.5 million, $9.9 million, and $6.5 million, respectively, for the accretion of the PIK dividend. Each holder of Preferred Stock has the right, at its option, to convert its Preferred Stock, in whole or in part, into fully paid and non-assessable shares of Class A Common Stock, at any time. The number of shares of Class A Common Stock into which a share of Preferred Stock will convert at any time is equal to the product of (i) the then-effective conversion rate and (ii) the quotient obtained by dividing the sum of the then-effective liquidation preference per share of Preferred Stock and the amount of any accrued and unpaid PIK dividends by the initial liquidation preference of $1,000. The conversion rate of the Preferred Stock was initially set at 63.2911 shares of Class A Common Stock, based on an implied conversion price of $15.80 per share of Class A Common Stock. The conversion rate is subject to customary anti-dilution adjustments, including in the event of any stock split, stock dividend, recapitalization or similar events. The Company has the right to settle any conversion at the request of a holder of Preferred Stock in cash based on the last reported sale price of the Class A Common Stock. Subject to certain conditions, the Company may, at its option, require conversion of all (but not less than all) of the outstanding shares of Preferred Stock to Class A Common Stock if, for at least 20 trading days during the 30 consecutive trading days immediately preceding notification of the election to convert, the last reported closing price of the Company’s Class A common stock is at least (i) 180% of the conversion price prior to the fourth semi-annual PIK dividend payment date, (ii) 170% of the conversion price on or after the fourth and prior to the sixth semi-annual PIK dividend payment date, (iii) 160% of the conversion price on or after the sixth and prior to the eighth semi-annual PIK dividend payment date, or (iv) 150% of the conversion price on or after the eighth semi-annual PIK dividend payment date. If the Company elects to mandatorily convert all outstanding shares of Preferred Stock prior to the sixth semi-annual PIK dividend payment date, then, for purposes of such conversion, the liquidation preference of each outstanding share of Preferred Stock will be increased by the compounded amount of all remaining scheduled PIK dividend payments on the Preferred Stock through, and including, the sixth semi-annual PIK dividend payment date. The holders of the Preferred Stock are generally entitled to vote with the holders of the shares of Class A common stock on all matters submitted for a vote to the Class A common stockholders (voting together with the holders of shares of Class A common stock as one class) on an as-converted basis, subject to certain limitations. The Preferred Stock may be redeemed by the Company at any time after ten years for a cash purchase price equal to the liquidation preference as of the redemption date plus accumulated and unpaid regular PIK dividends. If the Company undergoes a change of control (as defined in the certificate of designations for the Preferred Stock), each holder of Preferred Stock may require the Company to repurchase all or a portion of its then-outstanding shares of Preferred Stock for cash consideration equal to 150% of the then-current liquidation preference per share of Preferred Stock plus accumulated and unpaid dividends, if any (or, if the repurchase date for such change of control is on or after the sixth semi-annual PIK dividend payment date, 100% of the liquidation preference per share of Series A Preferred Stock plus accumulated and unpaid value. In connection with the execution and delivery of the Merger Agreement, the holders of Preferred Stock agreed to convert the Preferred Stock into Class A common stock effective immediately prior to the closing of the Merger. |
Redeemable Non-controlling Inte
Redeemable Non-controlling Interests | 12 Months Ended |
Dec. 31, 2022 | |
Redeemable Non-controlling Interests | |
Redeemable Non-controlling Interests | (17) Redeemable Non-controlling Interests The Company owns 66% of eService, the Company’s Polish subsidiary. The eService shareholders’ agreement includes a provision whereby PKO Bank Polski, the owner of 34% of eService, has the option to compel the Company to purchase the shares of eService held by PKO Bank Polski, at a price per share based on the fair value of the shares. The option expires on January 1, 2024. Because the exercise of this option is not solely within the Company’s control, the Company has classified this interest as RNCI and presents the redemption value within the mezzanine equity section of the consolidated balance sheets. At each balance sheet date, the RNCI is reported at its redemption value, which represents the estimated fair value, with a corresponding adjustment to additional paid-in capital, or accumulated deficit in absence of additional paid-in capital. In October 2020, the Company, through its Mexican subsidiary, formed a joint venture with BCI, pursuant to which the Company owns 50.1% and BCI owns 49.9% of the equity of BCI Pagos pursuant to the terms of a shareholders agreement between the parties. Under the shareholders agreement, BCI has the option to compel the Company to purchase BCI’s shares in BCI Pagos at a price per share based on the fair value of the shares. The option became effective two years after the agreement date. Because the exercise of this option is not solely within the Company’s control, the Company has classified this interest as RNCI and presents the redemption value within the mezzanine equity section of the consolidated balance sheets. At each balance sheet date, the RNCI is reported at its redemption value, which represents the estimated fair value, with a corresponding adjustment to additional paid-in capital, or accumulated deficit in absence of additional paid-in capital. In December 2022, the Company, through one of its subsidiaries, formed a joint venture with NBG, pursuant to which the Company owns 51% and NBG owns 49% of the equity of NBG Pay pursuant to the terms of the shareholders agreement between the parties. Under the shareholders agreement, NBG has the option, under certain limited circumstances, to compel the Company to purchase NBG’s shares in NBG Pay at a price set forth in the transaction agreements. In addition, beginning December 2025, NBG has the option to compel the Company to purchase NBG’s shares in the Greek subsidiary at a price per share based on the fair value of the shares. Because the exercise of this option is not solely within the Company’s control, the Company has classified this interest as RNCI and presents the redemption value within the mezzanine equity section of the consolidated balance sheets. At each balance sheet date, the RNCI is reported at its redemption value, which represents the estimated fair value, with a corresponding adjustment to additional paid-in capital, or accumulated deficit in absence of additional paid-in capital. As of December 31, 2022, EVO, Inc. owns 57.4% of EVO, LLC. The EVO, LLC operating agreement includes a provision whereby Blueapple may deliver a sale notice to EVO, Inc., upon receipt of which EVO, Inc. will use its commercially reasonable best efforts to pursue a public offering of shares of its Class A common stock and use the net proceeds therefrom to purchase LLC Interests from Blueapple. Upon receipt of such a sale notice, the Company may elect, at the Company’s option (determined solely by its independent directors (within the meaning of the rules of the Nasdaq stock market) who are disinterested), to cause EVO, LLC to instead redeem the applicable LLC Interests for cash; provided that Blueapple consents to any election by the Company to cause EVO, LLC to redeem the LLC Interests based on the fair value of the Company’s Class A common shares on such date. Because this option is not solely within the Company’s control, the Company has classified this interest as RNCI and reports the RNCI at redemption value, which represents the fair value, as temporary within the mezzanine equity section of the consolidated balance sheets. The changes in redemption value are recorded with a corresponding adjustment to additional paid-in capital, or accumulated deficit in the absence of additional paid-in capital. The following table details the components of RNCI for the years ended December 31, 2022 and 2021: Blueapple eService BCI Pagos NBG Pay Total (In thousands) Beginning balance, January 1, 2022 $ 823,386 $ 198,531 $ 7,173 $ — $ 1,029,090 Contributions — — 3,201 — 3,201 Distributions — (11,703) — — (11,703) Acquired RNCI — — — 159,784 159,784 Net income (loss) attributable to RNCI 3,070 12,578 (1,365) (306) 13,977 Unrealized (loss) gain on foreign currency translation adjustment (2,671) (3,978) 203 2,231 (4,215) Unrealized loss on change in fair value of interest rate swap (481) — — — (481) Unrealized loss on change in fair value of cross currency swap (18) — — — (18) Increase (decrease) in the maximum redemption amount of RNCI 288,301 46,334 (5,643) 19,996 348,988 Allocation of eService fair value RNCI adjustment to Blueapple (17,699) — — — (17,699) Allocation of BCI Pagos fair value RNCI adjustment to Blueapple 2,153 — — — 2,153 Allocation of NBG Pay fair value RNCI adjustment to Blueapple (7,627) — — — (7,627) Ending balance, December 31, 2022 $ 1,088,414 $ 241,762 $ 3,569 $ 181,705 $ 1,515,450 Blueapple eService BCI Pagos Total (In thousands) Beginning balance, January 1, 2021 $ 868,738 $ 186,436 $ 459 $ 1,055,633 Contributions — — 1,487 1,487 Distributions — (13,655) — (13,655) Net income (loss) attributable to RNCI 47 10,329 (1,595) 8,781 Unrealized loss on foreign currency translation adjustment (10,313) (5,045) (721) (16,079) Unrealized gain on change in fair value of interest rate swap 707 — — 707 (Decrease) increase in the maximum redemption amount of RNCI (25,009) 20,466 7,543 3,000 Allocation of eService fair value RNCI adjustment to Blueapple (7,869) — — (7,869) Allocation of BCI Pagos fair value RNCI adjustment to Blueapple (2,915) — — (2,915) Ending balance, December 31, 2021 $ 823,386 $ 198,531 $ 7,173 $ 1,029,090 |
Fair Value
Fair Value | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value | |
Fair Value | (18) Fair Value The table below presents information about items, which are carried at fair value on a recurring basis: December 31, 2022 (In thousands) Level 1 Level 2 Level 3 Total Cash equivalents $ 40,443 $ — $ — $ 40,443 Contingent consideration — — (625) (625) Blueapple RNCI (1,088,414) — — (1,088,414) eService RNCI — — (241,762) (241,762) NBG Pay RNCI — — (181,705) (181,705) BCI Pagos RNCI — — (3,569) (3,569) Cross currency swap — (159) — (159) Forward contract — 6,530 — 6,530 Investment in equity securities — 35,818 — 35,818 Total $ (1,047,971) $ 42,189 $ (427,661) $ (1,433,443) December 31, 2021 (In thousands) Level 1 Level 2 Level 3 Total Cash equivalents $ 95,919 $ — $ — $ 95,919 Contingent consideration — — (611) (611) Blueapple RNCI (823,386) — — (823,386) eService RNCI — — (198,531) (198,531) BCI Pagos RNCI — — (7,173) (7,173) Interest rate swap — 1,297 — 1,297 Investment in equity securities — 25,398 — 25,398 Total $ (727,467) $ 26,695 $ (206,315) $ (907,087) Cash equivalents consist of a money market fund that is valued using a market price in an active market (Level 1). Level 1 instrument valuations are obtained from real-time quotes for transactions in active exchange markets involving identical assets. Contingent consideration relates to potential payments that the Company may be required to make associated with acquisitions. The fair values are based on the present value of expected payments made to the acquired businesses in accordance with the provisions outlined in the respective purchase agreements. These estimates are based on inputs not observable in the market and thus represent a Level 3 measurement. The estimated fair value of Blueapple’s RNCI is derived from the closing stock price of the Company’s Class A common stock on the last day of the period. The estimated fair value of eService’s RNCI is determined utilizing an income approach, weighted at 50%, based on the forecasts of expected future cash flows, and the market approach, weighted at 50%, based on the guideline public company data. In applying the income approach, significant unobservable inputs included (i) the weighted-average cost of capital (“WACC”) used to discount the future cash flows, which were 14.5% and 12.0%, based on the markets in which the business operates and (ii) growth rates used within the future cash flows, which were up to 12.9% and 12.3%, based on historic trends, current and expected market conditions, and management’s forecast assumptions as of December 31, 2022 and 2021, respectively. A future increase in the WACC would result in a decrease in the fair value of RNCI in eService. Conversely, a decrease in the WACC would result in an increase in the fair value of RNCI in eService. In applying the market approach, the ranges of the valuation multiples as of December 31, 2022 were 5.25x-5.75x and 9.25x-10.75x for revenue and EBITDA, respectively. The ranges of the valuation multiples as of December 31, 2021 were 4.75x-5.25x and 9.25x-10.75x for revenue and EBITDA, respectively. The estimated fair value of NBG Pay’s RNCI and redemption value of the put option embedded in RNCI, approximates its carrying amount as of December 31, 2022, given the proximity of the transaction date (i.e. formation of the joint venture) and the measurement date. The estimated fair value of BCI Pagos’ RNCI is determined utilizing an income approach, weighted at 50%, based on the forecasts of expected future cash flows, and the market approach, weighted at 50%, based on the guideline public company data. In applying the income approach, significant unobservable inputs included (i) the WACC used to discount the future cash flows, which were 19.0%, and 17.0%, based on the markets in which the business operates and (ii) growth rates used within the future cash flows, which were up to 30.0% and 17.9%, based on historic trends, current and expected market conditions, and management’s forecast assumptions as of December 31, 2022 and 2021, respectively. A future increase in the WACC would result in a decrease in the fair value of RNCI in BCI Pagos. Conversely, a decrease in the WACC would result in an increase in the fair value of RNCI in BCI Pagos. In applying the market approach, the ranges of the valuation multiples as of December 31, 2022 were 1.25x-2.25x and 9.50x In May 2020, the Company entered into an interest rate swap to reduce a portion of the exposure to fluctuations in LIBOR interest rates associated with its variable-rate debt, which matured on December 31, 2022. The fair value of the interest rate swap was determined based on the present value of the estimated future net cash flows using the LIBOR forward rate curve as of December 31, 2021. The future interest rates are derived from observable market interest rate curves and thus fall within Level 2 of the valuation hierarchy. The credit valuation adjustment associated with the derivative, related to the likelihood of default by the Company and the counterparty, was not significant to the overall valuation. As a result, the fair value of the interest rate swap is classified as Level 2 of the fair value hierarchy. As described in Note 14, “Derivatives,” the fair value of the interest rate swap was a $1.3 million asset at December 31, 2021. In April 2022, the Company entered into a cross currency swap to hedge the risk of fluctuations in the exchange rate related to a net investment in a foreign subsidiary. The fair value of the cross currency swap was determined based on the cash flows of the swap contract, forward foreign exchange points and interest rate market data, which are derived from readily observable market inputs. The credit valuation adjustment associated with the derivative, related to the likelihood of default by the Company and the counterparty, was significant to the overall valuation. As a result, the fair value of the cross currency swap is classified as Level 2 of the fair value hierarchy. As described in Note 14, “Derivatives,” the fair value of the cross currency swap was a $0.2 million liability at December 31, 2022. In April 2022, the Company entered into a forward contract to mitigate exposure to fluctuations in foreign currency exchange rates related to certain foreign intercompany balances. The fair value of the forward contract was determined based on an estimate of the expected cash flows using the mark-to-market rate as of December 31, 2022. The Company also considers counterparty credit risk in the determination of fair value. The mark-to-market rates are derived from observable inputs and thus fall within Level 2 of the valuation hierarchy. As described in Note 14, “Derivatives,” the fair value of the forward contract was a $6.5 million asset at December 31, 2022. The Company was a member of Visa Europe Limited (“Visa Europe”) through certain of the Company’s subsidiaries in Europe. In 2016, Visa Inc. (“Visa”) acquired all of the membership interests in Visa Europe. As part of the proceeds from the sale of its membership interests, one of the Company’s subsidiaries received shares of Visa Series C preferred stock and another subsidiary received economic rights relating to shares of Visa Series C preferred stock under a contractual arrangement with a former member of Visa Europe. The Visa Series C preferred stock is convertible into Visa Series A preferred stock at periodic intervals over the 12 year period following the acquisition date at Visa’s discretion. In July 2022 and September 2020, Visa issued a partial conversion and conversion adjustment with respect to its Series C preferred stock. Pursuant to the partial conversion and conversion adjustment, holders of Series C preferred stock received shares of Series A preferred stock and the conversion ratio for such holder’s shares of Series C preferred stock was reduced. The Series A preferred stock is convertible into shares of Visa Class A common stock upon a transfer to any holder that is eligible to hold Visa Class A common stock. Holders of Series A preferred stock are able to effectuate a transfer to an eligible holder through a sales facility established by Visa’s transfer agent or through a third party broker. The Visa Series A preferred stock, which is presented in investments in equity securities on the consolidated balance sheets, is reported at fair value. In connection with the measurement of the investment in Visa Series A preferred stock at fair value, the Company recognized gains of $7.3 million, $0.2 million, and $17.6 million for the years ended December 31, 2022, 2021, and 2020, respectively. The fair value of Visa Series A preferred stock is determined using a market approach based on the quoted market price of Visa Class A common stock, and as a result is classified as Level 2 of the fair value hierarchy. The remaining Visa Series C preferred stock is carried at cost in the amount of €3.5 million and €6.5 million ($4.0 million and $7.4 million based on the foreign exchange rate at the time of the acquisition) as of December 31, 2022 and 2021, respectively, and is presented in other assets on the consolidated balance sheets. The estimated fair value of the remaining Visa Series C preferred stock of $10.4 $20.3 The estimated fair value of receivables, settlement processing assets and obligations, due to and from related parties and settlement lines of credit approximate their respective carrying values due to their short term nature. The estimated fair value of long-term debt as of December 31, 2022 and 2021 was $641.5 million and $588.0 million, respectively, which approximated its carrying value as long-term debt bore interest based on prevailing variable market rates and as such was categorized as a Level 2 in the fair value hierarchy. There were no transfers in or out of Level 3 from other levels in the fair value hierarchy for the years ended December 31, 2022 and 2021. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies. | |
Commitments and Contingencies | (19) Commitments and Contingencies Litigation One of the Company’s financial institution referral partners, Grupo Banco Popular, was acquired by Santander in June 2017, which has adversely impacted the Company’s business in Spain. Revenues from this channel have declined significantly due primarily to reduced merchant referrals following Santander’s consolidation of Grupo Banco Popular branches and the bank’s lack of performance of certain of its obligations under our agreements. The Company believes that its agreements with Santander, including the bank’s referral obligations, remain in full force and effect. In December 2020, the Company filed a claim in the Court of First Instance in Madrid, Spain seeking recovery in connection with Santander’s breach of certain of its exclusivity, non-compete and merchant referral obligations under the commercial agreements between the parties. The trial commenced in November 2022. In December 2022, the court issued a ruling dismissing the Company’s claims. The Company filed an appeal in January 2023 to reverse this ruling. The appeal is ongoing and the outcome and timing of a decision on the appeal remain uncertain. The Company cannot at this time determine the likelihood of any outcome or any damages that may be awarded to it. There can be no assurance as to when or if the Company will recover the amounts to which the Company believes it is entitled. The Company is also party to various claims and lawsuits incidental to its business. The Company does not believe the ultimate outcome of such matters, individually or in the aggregate, will have a material adverse effect on the Company’s financial position, results of operations, or cash flows. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2022 | |
Segment Information | |
Segment Information | (20) Segment Information Information on segments and reconciliations to revenue and net income (loss) attributable to the shareholders of EVO, Inc. and members of EVO, LLC are set forth below. Segment profit, which is the measure used by our chief operating decision maker to evaluate the performance of and allocate resources to our segments, is calculated as segment revenue less (1) segment expenses, plus (2) segment income from unconsolidated investees, plus (3) segment other income, net, less (4) segment non-controlling interests. Certain corporate-wide governance functions, as well as depreciation and amortization, are not allocated to our segments. The Company does not evaluate performance or allocate resources based on segment assets, and therefore, such information is not presented. Year Ended December 31, 2022 2021 2020 (In thousands) Segment revenue: Americas $ 320,925 $ 307,183 $ 275,233 Europe 222,157 189,462 163,868 Revenue $ 543,082 $ 496,645 $ 439,101 Segment profit: Americas $ 143,297 $ 135,081 $ 106,052 Europe 80,992 63,588 65,448 Total segment profit 224,289 198,669 171,500 Corporate (51,463) (35,628) (34,157) Depreciation and amortization (84,143) (83,389) (85,924) Net interest expense (14,505) (21,510) (28,988) Provision for income tax expense (36,245) (22,037) (13,122) Share-based compensation expense (29,223) (27,419) (20,664) Less: Net income (loss) attributable to non-controlling interests of EVO Investco, LLC 3,431 33 (9,679) Net income (loss) attributable to EVO Payments, Inc. $ 5,279 $ 8,653 $ (1,676) Capital expenditures: Americas $ 15,148 $ 14,080 $ 9,716 Europe 21,084 19,315 10,765 Consolidated total capital expenditures $ 36,232 $ 33,395 $ 20,481 The Company’s long-lived assets, which consist of equipment and improvements, net, and operating lease right-of-use assets, by geographic location are as follows: December 31, December 31, 2022 2021 (In thousands) Long-lived assets: Poland $ 32,517 $ 31,534 United States 27,285 30,228 Mexico 17,264 18,554 Other 33,871 22,894 Totals $ 110,937 $ 103,210 Revenue is attributed to individual countries based on the location where the relationship is managed. For the year ended December 31, 2022, revenue in the United States, Mexico, and Poland, as a percentage of total consolidated revenue, was 34.6%, 20.9%, and 17.8%, respectively. For the year ended December 31, 2021, revenue in the United States, Mexico, and Poland, as a percentage of total consolidated revenue, was 38.0%, 20.5%, and 17.6%, respectively. For the year ended December 31, 2020, revenue in the United States, Mexico, and Poland, as a percentage of total consolidated revenue, was 41.2%, 18.5%, and 18.0%, respectively. For the years ended December 31, 2022, 2021, and 2020, there is no one customer that represents more than 10% of total revenue. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2022 | |
Shareholders' Equity | |
Shareholders' Equity | (21) Shareholders’ Equity EVO, Inc. was incorporated under the laws of the State of Delaware on April 20, 2017. On May 25, 2018, we completed the IPO and shares of our Class A common stock began trading on the Nasdaq stock exchange on May 23, 2018 under the symbol “EVOP.” In connection with the IPO, we completed the Reorganization Transactions to implement an “Up-C” capital structure. As a result of the Reorganization Transactions and the IPO, EVO, Inc. is the sole managing member of EVO, LLC and a holding company whose principal assets are the LLC Interests and the preferred membership interests (“Preferred LLC Interests”) in EVO, LLC. As the sole managing member of EVO, LLC, the Company operates and controls all of the business and affairs of EVO, LLC and its subsidiaries. The Company has the sole voting interest in, and controls the management of, EVO, LLC. Therefore, EVO, Inc. has consolidated the financial results of EVO, LLC and its subsidiaries. From the date of the Reorganization Transactions and the IPO until May 24, 2021, the Company had four classes of common stock: Class A common stock, Class B common stock (classified as redeemable non-controlling interest), Class C common stock (classified as non-redeemable non-controlling interest) and Class D common stock (classified as non-redeemable non-controlling interest). On May 25, 2021, pursuant to the Company’s amended and restated certificate of incorporation, all 32,163,538 outstanding shares of Class B common stock were automatically cancelled for no consideration, and each outstanding share of Class C common stock was automatically converted into one share of Class D common stock. Following the cancellation of Class B common stock, Blueapple continues to hold 32,163,538 LLC Interests and maintains all of its rights under the EVO LLC Agreement. Following these changes in the Company’s equity capital structure, the Company has two classes of common stock outstanding: Class A common stock and Class D common stock. The Company has one class of preferred stock outstanding, which is convertible into shares of Class A common stock. The Preferred Stock was issued on April 21, 2020 in connection with an investment by MDP. Refer to Note 16, “Redeemable Preferred Stock,” for additional details regarding the transaction. The voting and economic rights associated with our classes of common and preferred stock are summarized in the following table: Class of Common Stock Holders Voting rights Economic rights Class A common stock Public, MDP, Executive Officers, and Current and Former Employees One vote per share Yes Class D common stock MDP and Current and Former Employees, and Executive Officers One vote per share No Series A Preferred Stock MDP On an as-converted basis Yes Following the cancellation of Class B common stock on May 25, 2021, Blueapple continues to hold 32,163,538 LLC Interests and maintains all of its rights under the EVO LLC Agreement, including the sale right that provides that, upon the receipt of a sale notice from Blueapple, the Company will use its commercially reasonable best efforts to pursue a public offering of shares of Class A common stock and use the net proceeds therefrom to purchase LLC Interests from Blueapple. Upon the Company’s receipt of such a sale notice, the Company may elect, at its option (determined solely by its independent directors (within the meaning of the rules of Nasdaq) who are disinterested), to cause EVO, LLC to instead redeem the applicable LLC Interests for cash; provided that Blueapple consents to any election by the Company to cause EVO, LLC to redeem the LLC Interests. Continuing LLC Owners (other than Blueapple) have an exchange right providing that, upon receipt of an exchange notice from such Continuing LLC Owners, the Company will exchange the applicable LLC Interests from such Continuing LLC Owners for newly issued shares of its Class A common stock on a one-for-one basis pursuant to an exchange agreement (the “Exchange Agreement”). Upon its receipt of such an exchange notice, the Company may elect, at its option (determined solely by its independent directors (within the meaning of the rules of Nasdaq) who are disinterested), to cause EVO, LLC to instead redeem the applicable LLC Interests for cash; provided that such Continuing LLC Owners consents to any election by the Company to cause EVO, LLC to redeem the LLC Interests. In the event that Continuing LLC Owners do not consent to an election by the Company to cause EVO, LLC to redeem the LLC Interests, the Company is required to exchange the applicable LLC Interests for newly issued shares of Class A common stock. If the Company elects to cause EVO, LLC to redeem LLC Interests for cash in lieu of exchanging LLC Interests for newly issued shares of its Class A common stock, the Company will offer the other Continuing LLC Owners the right to have their respective LLC Interests redeemed in an amount up to such person’s pro rata share of the aggregate LLC Interests to be redeemed. The Company is not required to redeem any LLC Interests from Blueapple or any other Continuing LLC Owners in response to a sale notice from Blueapple if the Company elects to pursue, but is unable to complete, a public offering of shares of its Class A common stock. Continuing LLC Owners also hold certain registration rights pursuant to a registration rights agreement. MDP holds demand registration rights that require the Company to register shares of Class A common stock held by it, including any Class A common stock received upon its exchange of Class A common stock for its LLC Interests, or upon conversion of any shares of Preferred Stock held by MDP. All Continuing LLC Owners (other than Blueapple) hold customary piggyback registration rights, which includes the right to participate on a pro rata basis in any public offering the Company conducts in response to its receipt of a sale notice from Blueapple. Blueapple also has the right, in connection with any public offering the Company conducts (including any offering conducted as a result of an exercise by MDP of its registration rights), to request that the Company uses its commercially reasonable best efforts to pursue a public offering of shares of its Class A common stock and use the net proceeds therefrom to purchase a like amount of Blueapple’s LLC Interests. In connection with the execution and delivery of the Merger Agreement, certain Continuing LLC Owners have agreed to exchange their LLC Interests for shares of Class A common stock subject to, and effective immediately prior to, the closing of the Merger. |
Stock Compensation Plans and Sh
Stock Compensation Plans and Share-Based Compensation Awards | 12 Months Ended |
Dec. 31, 2022 | |
Stock Compensation Plans and Share-Based Compensation Awards | |
Stock Compensation Plans and Share-Based Compensation Awards | (22) Stock Compensation Plans and Share-Based Compensation Awards The Company provides share-based compensation awards to its employees under the Amended and Restated 2018 Omnibus Incentive Stock Plan (the “Amended and Restated 2018 Plan”). The original Omnibus Equity Incentive Plan (the “2018 Plan”) was adopted in conjunction with the Company’s IPO and became effective on May 22, 2018. In February 2020, the Company adopted the Amended and Restated 2018 Plan, which was approved by the Company’s stockholders at the Company’s 2020 annual meeting of stockholders held in June 2020. The Amended and Restated 2018 Plan amended and restated the 2018 Plan in its entirety and increased the number of shares of the Company’s Class A common stock available for grant and issuance under the 2018 Plan from 7,792,162 shares to 15,142,162 shares. The Amended and Restated 2018 Plan was further amended in November 2021 solely to clarify certain provisions in anticipation of the implementation of the Company’s performance-based equity awards. The Amended and Restated 2018 Plan provides for accelerated vesting under certain conditions. The following table summarizes share-based compensation expense, and the related income tax benefit recognized for share-based compensation awards. Share-based compensation expense is presented within selling, general, and administrative expenses within the consolidated statements of operations and comprehensive income (loss): Year Ended December 31, 2022 2021 2020 Share-based compensation expense $ 29,223 $ 27,419 $ 20,664 Income tax benefit $ (4,871) $ (4,053) $ (3,406) Restricted stock units Service-Based Restricted Stock Units The Company recognized share-based compensation expense for RSUs granted of $17.3 million, $13.4 8.5 , respectively. A summary of RSUs activity is as follows (in thousands, except per share data): Number of RSUs Weighted-average grant date fair value Balance at December 31, 2020 1,149 $ 22.92 Granted 711 25.74 Vested (428) 23.25 Forfeited (93) 22.36 Balance at December 31, 2021 1,339 $ 24.35 Granted 1,000 23.85 Vested (604) 22.78 Forfeited (91) 24.29 Balance at December 31, 2022 1,644 $ 24.62 As of December 31, 2022 and 2021, three installments over a period of three years from the grant date. The weighted-average remaining vesting period over which expense will be recognized for unvested RSUs is 1.8 years as of December 31, 2022 and 2.0 $10.0 Stock options Service-Based Stock Options The Company recognized share-based compensation expense for the service-based stock options granted of $8.6 $12.5 12.1 , respectively. A summary of service-based stock option activity is as follows (in thousands, except per share and term data): Number of Options Weighted-average grant date fair value Weighted-average exercise price Weighted-average remaining contractual term Total intrinsic value Balance at December 31, 2020 5,084 $ 7.60 $ 21.06 8.36 $ 30,405 Granted 1,115 9.76 25.73 — — Exercised (450) 6.27 17.48 — 4,886 Forfeited (258) 8.42 23.45 — — Balance at December 31, 2021 5,491 $ 8.11 $ 22.19 7.67 $ 19,802 Granted — — — — — Exercised (481) 7.31 19.87 — 5,112 Forfeited (138) 9.15 25.32 — — Balance at December 31, 2022 4,872 $ 8.15 22.32 6.66 $ 56,136 Exercisable at December 31, 2022 3,337 $ 7.74 $ 20.80 6.29 $ 43,522 As of December 31, 2022 and 2021, total unrecognized share-based compensation expense related to unvested service-based stock options was $8.0 million and $17.7 the Chief Executive Officer (“CEO”)) Market and Service-Based Stock Options During the quarter ended March 31, 2021, 287,395 For the purpose of calculating share-based compensation expense, the fair value of this grant was determined through the application of the Monte-Carlo simulation model with the following assumptions: Expected life (in years) 7.00 Weighted-average risk-free interest rate 1.15% Expected volatility 34.65% Dividend yield 0.00% Exercise price $ 25.46 The Company recognizes share-based compensation expense related to this award with market-based and service-based conditions over the derived service period of 3.0 years using the graded vesting method. The Company recognized share-based compensation expense for these stock options of $1.0 million and $1.5 $1.4 1.0 Performance-stock units Performance and service based stock units During the quarter ended March 31, 2022, the Compensation Committee of the Board of Directors granted 151,187 Performance Stock Units (“PSUs”) with a grant date fair value of approximately $3.6 million to the Company’s executive officers under the Company’s long-term incentive plan. The PSUs will cliff vest three years from the grant date at a range between 0% and 200% based upon annual performance cycles and settle in Class A common stock. The vesting criteria is based on financial performance measures including revenue and EPS growth targets. The Company recognized share-based compensation expense for PSUs granted of $1.2 million for the year ended December 31, 2022 . , Market and service-based performance stock units During the quarter ended March 31, 2022, the Compensation Committee of the Board of Directors granted 151,187 market and service-based performance stock units (“MPSUs”) with a grant date fair value of approximately $ 3.9 For the purpose of calculating share-based compensation expense, the fair value of this grant was determined through the application of the Monte-Carlo simulation model with the following assumptions: Expected life (in years) 3.10 Weighted-average risk-free interest rate 1.74% Expected volatility 47.62% Dividend yield 0.00% Estimated grant date fair value (per share) $ 23.69 The Company recognized share-based compensation expense for these MPSUs of $1.1 million for the year ended December 31, 2022. As of December 31, 2022, total unrecognized share-based compensation expense related to these MPSUs was $2.8 million. The weighted-average remaining vesting period over which expense will be recognized for these MPSUs is 2.2 years as of December 31, 2022. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2022 | |
Employee Benefit Plans | |
Employee Benefit Plans | (23) Employee Benefit Plans The Company maintains retirement plans for employees in various countries where the Company maintains an office. Each plan is subject to allowable contributions and limitations based on local country laws and regulations covering retirement plans. In each location and plan, the Company, at its discretion, may contribute to the plan and, depending on location, the Company may match a percentage of the employee contributions. The Company’s contributions are vested over time, at different rates depending on location. The Company recognized a contribution expense of $ 2.1 2.0 |
Schedule I - Condensed Financia
Schedule I - Condensed Financial Information of Parent Company | 12 Months Ended |
Dec. 31, 2022 | |
Schedule I | |
Schedule I - Condensed Financial Information of Parent Company | December 31, December 31, 2022 2021 Assets Due from related parties $ 323 $ 223 Other current assets 68 59 Total current assets 391 282 Deferred tax asset, net 235,901 237,042 Total assets $ 236,292 $ 237,324 Liabilities and Shareholders' Deficit Accrued expenses $ 391 $ 282 Total current liabilities 391 282 Tax receivable agreement obligations, inclusive of related party liability of $171.9 million and $169.4 million at December 31, 2022 and 2021, respectively 182,726 180,143 Net deficit in investment in a subsidiary 814,780 554,912 Total liabilities 997,897 735,337 Redeemable preferred stock (par value, $0.0001 per share), Authorized, Issued and Outstanding – 152,250 shares at December 31, 2022 and December 31, 2021. Liquidation preference: $178,559 and $168,309 at December 31, 2022 and December 31, 2021, respectively 174,531 164,007 Shareholders' deficit: Class A common stock (par value, $0.0001 per share), Authorized - 200,000,000 shares, Issued and Outstanding - 48,423,077 and 47,446,061 shares at December 31, 2022 and 2021, respectively 5 5 Class D common stock (par value, $0.0001 per share), Authorized - 32,000,000 shares, Issued and Outstanding - 3,741,074 and 3,783,074 shares at December 31, 2022 and 2021, respectively — — Additional paid-in capital — — Accumulated deficit (928,187) (652,871) Accumulated other comprehensive loss (7,954) (9,154) Total deficit (936,136) (662,020) Total liabilities, redeemable preferred stock, and shareholders' deficit $ 236,292 $ 237,324 See accompanying notes to condensed financial statements . Year Ended December 31, 2022 2021 2020 Net revenue $ — $ — $ — Operating expenses: Selling, general, and administrative 4,268 4,160 6,473 Loss from operations (4,268) (4,160) (6,473) Other income: Income (loss) from investment in unconsolidated investee 4,558 128 (9,610) Dividend income 10,524 9,889 6,528 Other income (expense) 1,952 (177) 8,255 Total other income 17,034 9,840 5,173 Income (loss) before income taxes 12,766 5,680 (1,300) Income tax (expense) benefit (7,487) 2,973 (376) Net income (loss) 5,279 8,653 (1,676) Net income (loss) attributable to EVO Payments, Inc. $ 5,279 $ 8,653 $ (1,676) Comprehensive income (loss): Net income (loss) $ 5,279 $ 8,653 $ (1,676) Change in fair value of interest rate swap, net of tax (1) (590) 800 (197) Change in fair value of cross currency swap, net of tax (2) (24) — — Unrealized gain (loss) on foreign currency translation adjustment, net of tax (3) 1,814 (10,999) 3,190 Other comprehensive income (loss) 1,200 (10,199) 2,993 Comprehensive income (loss) 6,479 (1,546) 1,317 Comprehensive income (loss) attributable to EVO Payments, Inc. $ 6,479 $ (1,546) $ 1,317 (1) Net of tax benefit (expense) of $0.2 million, $(0.2) million, and $0.1 million for the years ended December 31, 2022, 2021, and 2020, respectively. (2) Net of tax benefit of less than $0.1 million for the year ended December 31, 2022. (3) Net of tax benefit (expense) of $ 5.6 million, $4.1 million, and $(2.5) million for the years ended December 31, 2022, 2021, and 2020, respectively. See accompanying notes to condensed financial statements. Year Ended December 31, 2022 2021 2020 Cash flows from operating activities: Net cash provided by operating activities $ — $ — $ — Cash flows from investing activities: Investment in unconsolidated investee (5,891) (3,289) (152,390) Net cash used in investing activities (5,891) (3,289) (152,390) Cash flows from financing activities: Secondary offering proceeds — — 115,538 Purchase of LLC Interests, Class B and Class D common stock in connection with the secondary offerings — — (115,538) Proceeds from exercise of common stock options 9,566 7,866 6,145 Proceeds from issuance of redeemable preferred stock — — 149,250 Redeemable preferred stock issuance costs — — (1,660) Repurchases of shares to satisfy minimum tax withholding (3,675) (4,577) (1,345) Net cash provided by financing activities 5,891 3,289 152,390 Effect of exchange rate changes on cash and cash equivalents — — — Net increase in cash and cash equivalents — — — Cash and cash equivalents, beginning of year — — — Cash and cash equivalents, end of year $ — $ — $ — See accompanying notes to condensed financial statements. (1) Basis of Presentation EVO Payments, Inc. (“EVO, Inc.”) is a Delaware corporation whose value is driven by its ownership of approximately 57.4% of the membership interests of EVO, LLC as of December 31, 2022. EVO, Inc. was incorporated on April 20, 2017 for the purpose of completing the Reorganization Transactions, in order to consummate the IPO, and to carry on the business of EVO, LLC. The accompanying condensed parent company-only financial statements are required in accordance with Rule 5-04 of Regulation S-X. These condensed financial statements have been presented on a standalone basis for EVO Payments, Inc. The condensed financial statements of EVO, Inc. reflect the historical results of operations and the financial position of EVO, Inc., commencing on May 23, 2018. Prior to May 23, 2018, the condensed financial statements included herein represent the financial statements of EVO, LLC on a standalone basis. EVO, Inc. is a holding company that does not conduct any business operations of its own and therefore its assets consist primarily of investments in subsidiaries. In the ordinary course of business, EVO, Inc. will incur certain expenses which are paid on behalf of EVO, Inc. by EVO, LLC and recognized as guaranteed payments in other income. Additionally, EVO, Inc. anticipates the settlement of certain future tax liabilities will require future distributions from EVO, LLC. EVO, Inc. may not be able to access cash generated by its subsidiaries in order to fulfill cash commitments or to pay cash dividends on its common stock. The amounts available to EVO, Inc. to fulfill cash commitments or to pay cash dividends are also subject to the covenants and distribution restrictions in our Senior Secured Credit Facilities. For a discussion on the tax receivable agreements, see Note 5, “Tax Receivable Agreement,” in the notes to the accompanying consolidated financial statements. Net income (loss) attributable to EVO Payments, Inc. and comprehensive income (loss) attributable to EVO Payments, Inc. represent the amount of income (loss) and comprehensive income (loss) attributable to EVO, Inc. exclusive of losses incurred prior to the Reorganization Transactions, which is allocable to EVO, LLC and, therefore, the members of EVO, LLC. This loss has been excluded from net loss attributable to EVO Payments, Inc. as EVO, Inc. was not a member of EVO, LLC prior to the Reorganization Transactions. For the purposes of this condensed financial information, EVO, Inc.’s investment in its consolidated subsidiary is presented under the equity method of accounting. Under the equity method, investment in its subsidiary is stated at cost plus contributions and equity in undistributed income (loss) of subsidiary less distributions received. As of December 31, 2022 and 2021, EVO, Inc.’s investment in EVO, LLC was in a net deficit due to the accumulation of net losses to date, therefore it is presented as a liability on the condensed balance sheet. EVO, Inc.’s financial statements should be read in conjunction with the Company's consolidated financial statements appearing in this Annual Report on Form 10-K. (2) Distributions There were no distributions made to EVO, Inc. from EVO, LLC or its subsidiaries, for the years ended December 31, 2022, 2021, and 2020. (3) Long-term debt and credit facilities As of December 31, 2022 and 2021, EVO, Inc. held no debt. Certain subsidiaries of the Company are subject to debt agreements. The subsidiaries’ long-term debt, including accrued interest, consists of the following: 2022 2021 (In thousands) Subsidiary debt: Term loan $ 573,300 $ 588,000 Revolver 68,200 — Deferred financing costs (4,212) (5,310) Total subsidiary debt $ 637,288 $ 582,690 Settlement lines of credit $ 5,033 $ 7,887 For further discussion on the nature and terms of these agreements and details regarding restricted net assets, refer to Note 13, “Long-Term Debt and Lines of Credit,” to the Company’s consolidated financial statements. (4) Redeemable Preferred Stock For further discussion on the issuance of preferred stock, refer to Note 16, “Redeemable Preferred Stock,” to the Company’s consolidated financial statements. (5) Commitments and Contingencies For a discussion of commitments and contingencies, see Note 19, “Commitments and Contingencies,” to the Company’s consolidated financial statements. |
Schedule II Valuation and Quali
Schedule II Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2022 | |
SCHEDULE II Valuation and Qualifying Accounts | |
SCHEDULE II Valuation and Qualifying Accounts | Valuation and Qualifying Accounts (In thousands) Balance at Additions: Balance at Beginning of Charged to Costs End of Description Period and Expenses Deductions (1) Period Allowance for doubtful accounts Year ended December 31, 2022 $ 7,150 $ 1,987 $ (346) $ 8,791 Year ended December 31, 2021 4,440 3,309 (599) 7,150 Year ended December 31, 2020 3,736 935 (231) 4,440 Deferred income tax asset valuation allowance Year ended December 31, 2022 $ 11,634 $ 4,832 $ (1,579) $ 14,887 Year ended December 31, 2021 5,090 8,389 (1,845) 11,634 Year ended December 31, 2020 8,152 1,097 (4,159) 5,090 (1) Includes accounts receivable written off, the write-off or write-down of valuation allowances, and translation adjustments. |
Description of Business and S_2
Description of Business and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Description of Business and Summary of Significant Accounting Policies | |
Merger with Global Payments Inc. | (b) Merger with Global Payments Inc. On August 1, 2022, EVO, Inc. entered into the Merger Agreement with Global Payments and Merger Sub. Subject to the terms and conditions of the Merger Agreement, Global Payments has agreed to acquire EVO, Inc. in an all-cash transaction for $34.00 per share of Class A common stock. The Merger Agreement contains representations, warranties, covenants, closing conditions, and termination rights customary for transactions of this type. Until the earlier of the termination of the Merger Agreement and the effective time of the Merger, the Company has agreed to operate in the ordinary course of business and has agreed to certain other operating covenants, as set forth in the Merger Agreement. The Merger is expected to close in the first quarter of 2023, subject to customary closing conditions. |
Basis of Presentation and Use of Estimates | (c) Basis of Presentation and Use of Estimates Certain prior period amounts have been reclassified to conform to the current year presentation where applicable. The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported assets and liabilities, as of the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the period. Actual results could differ from those estimates. Estimates used for accounting purposes include, but are not limited to, valuation of RNCI, evaluation of realizability of deferred tax assets, determination of liabilities under the tax receivable agreement, determination of liabilities and corresponding right-of-use assets arising from lease agreements, determination of assets or liabilities arising from derivative transactions, determination of fair value of share-based compensation, establishment of severance liabilities, establishment of allowance for doubtful accounts, and assessment of impairment of goodwill and intangible assets. |
Principles of Consolidation | (d) Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company. As the sole managing member of EVO, LLC, the Company exerts control over the Group. In accordance with ASC 810, Consolidation |
Cash and Cash Equivalents, Restricted Cash, Settlement Related Cash and Merchant Reserves | (e) Cash and Cash Equivalents, Restricted Cash, Settlement Related Cash and Merchant Reserves Cash and cash equivalents include all cash balances and highly liquid securities with original maturities of three months or less. Cash balances often exceed federally insured limits; however, concentration of credit risk is limited due to the payment of funds on the same day or the day following receipt in satisfaction of the settlement process. Included in cash and cash equivalents are settlement-related cash and merchant reserves. Settlement-related cash represents funds that the Company holds when the incoming amount from the card networks precedes the funding obligation to the merchant. Settlement-related cash balances are not restricted, however these funds are generally paid out in satisfaction of settlement processing obligations and therefore are not available for general purposes. As of December 31, 2022 and 2021, settlement-related cash balances were $157.1 million and $133.3 million, respectively. Merchant reserves represent funds collected from the Company’s merchants that serve as collateral to minimize contingent liabilities associated with any losses that may occur under the respective merchant agreements. While this cash is not restricted in its use, the Company believes that maintaining merchant reserves to collateralize merchant losses strengthens its fiduciary standings with its card network sponsors and is in accordance with the guidelines set by the card networks. As of December 31, 2022 and 2021, merchant reserves were $96.4 million and $101.6 Restricted cash represents funds held as a liquidity reserve at our Chilean and Greek subsidiaries, as required by local regulations. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported in the consolidated balance sheets to the total amount shown in the consolidated statements of cash flows: December 31, December 31, 2022 2021 (In thousands) Cash and cash equivalents $ 356,459 $ 410,368 Restricted cash included in other assets 757 247 Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows $ 357,216 $ 410,615 |
Accounts Receivable and Other Receivables | (f) Accounts Receivable and Other Receivables Accounts receivable include amounts due from ISOs and merchants related to the transaction processing services and sale of POS equipment and peripherals. Other receivables include advances to merchants, amounts of foreign value-added taxes to be recovered through regular business operations, and other amounts due to the Company. Receivable balances are stated net of allowance for doubtful accounts. The Company regularly evaluates its receivables for collectability. The Company analyzes historical losses, the financial position of its customers and known or expected trends when estimating the allowance for doubtful accounts. As of December 31, 2022 $8.8 |
Inventory | (g) Inventory Inventory consists primarily of electronic POS terminals and prepaid mobile phone cards and is stated at the lower of cost or net realizable value. Cost is determined based on the first-in, first-out (“FIFO”) method. |
Earnings Per Share | (h) Earnings Per Share Basic earnings per share of Class A common stock is calculated pursuant to the two-class method as a result of the issuance of 152,250 shares of Series A Convertible Preferred Stock (the “Preferred Stock”) on April 21, 2020. The Preferred Stock is considered a participating security because the holders of Preferred Stock are entitled, on an as-converted basis, to participate in and receive any dividends declared or paid on the Class A common stock, and no dividends may be paid to holders of Class A common stock unless full participating dividends are concurrently paid to holders of Preferred Stock. The two-class method is an earnings allocation formula that determines earnings per share for common stock and participating securities according to dividend and participation rights in undistributed earnings. Under this method, all earnings, distributed and undistributed, are allocated to common stock and participating securities based on their respective rights to receive dividends. The Preferred Stock is not included in the computation of basic earnings per share in periods in which the Company reports a net loss, as the Preferred Stock holders are not contractually obligated to share in the net losses. However, the cumulative dividends that accrete on the Preferred Stock for the period reduce the net income or increase the net loss allocated to common stockholders. Earnings per share is not separately presented for Class B common stock, Blueapple LLC Interests, Class C common stock, and Class D common stock since they have no economic rights to the earnings of the Company. Diluted earnings per share of Class A common stock is calculated using the more dilutive of the (a) treasury stock method and as-converted method or (b) the two-class method. Class B common stock, which was automatically cancelled on May 25, 2021, and Blueapple LLC Interests are not considered when calculating diluted earnings per share as this class of common stock and LLC Interests may not convert to Class A common stock. Class C common stock, which was automatically converted into one share of Class D common stock on May 25, 2021, and Class D common stock are considered in the calculation of diluted earnings per share on an if-converted basis as these classes, together with the paired LLC Interests, have exchange rights that could result in additional shares of Class A common stock being issued. Potentially dilutive shares issuable upon conversion of the Preferred Stock are considered in the calculation of diluted earnings per share on an if-converted basis. All other potentially dilutive securities are determined based on the treasury stock method. Refer to Note 4, “Earnings Per Share,” and Note 21, “Shareholders’ Equity,” for further information. |
Settlement Processing Assets and Obligations | (i) Settlement Processing Assets and Obligations Settlement processing assets and obligations represent intermediary balances arising in our settlement process. Refer to Note 3, “Settlement Processing Assets and Obligations, ” |
Equipment and Improvements | (j) Equipment and Improvements Equipment and improvements are stated at cost less accumulated depreciation. Card processing equipment, office equipment, computer software, and furniture and fixtures are depreciated over their respective estimated useful lives on a straight-line basis. Leasehold improvements are depreciated over the lesser of the estimated useful life of the asset or the lease term. Maintenance and repairs, which do not extend the useful life of the respective assets, are recognized as expense when incurred. Refer to Note 8, “Equipment and Improvements,” for further information. |
Deferred Financing Costs | (k) Deferred Financing Costs The costs associated with obtaining debt financing are capitalized and amortized over the term of the related debt. Such costs are presented as a reduction of the long-term debt. |
Goodwill and Intangible Assets | (l) Goodwill and Intangible Assets The Company regularly evaluates whether events and circumstances have occurred that indicate the carrying amounts of goodwill and other intangible assets may not be recoverable. Goodwill represents the excess of the consideration transferred over the fair value of identifiable net assets acquired through business combinations. The Company evaluates its goodwill for impairment annually as of October 1, or more frequently, if an event occurs or circumstances change that indicate the fair value of a reporting unit might be below its carrying amount. Our reporting units are consistent with our segments: the Americas and Europe. ASC 350, Intangibles - Goodwill and Other, allows the Company to conduct a qualitative assessment to determine whether it is necessary to perform a quantitative goodwill impairment test. As of October 1, 2022 and 2021, the Company performed a qualitative assessment to evaluate the goodwill for indicators of impairment. A qualitative assessment includes consideration of macroeconomic conditions, industry and market considerations, changes in certain costs, overall financial performance of each reporting unit, and other relevant entity-specific events. In performing its qualitative assessment, the Company considered the results of its quantitative impairment test performed in 2020 and the financial performance of the reporting units during 2022 and 2021. Based upon such assessment, the Company determined that it was more likely than not that the fair values of these reporting units exceeded their carrying amounts as of the date of the impairment test. There were no significant events or changes in the circumstances since the date of the Company’s annual impairment test that would have required a reassessment of the results as of December 31, 2022 and 2021. As of December 31, 2022, there are no indefinite-lived intangible assets other than goodwill. Finite-lived assets include merchant contract portfolios and customer relationships, marketing alliance agreements, trademarks, internally developed and acquired software, and non-competition agreements, and are stated net of accumulated amortization and impairment charges and foreign currency translation adjustments. Merchant contract portfolios and customer relationships consist of merchant or customer contracts acquired from third parties that will generate revenue for the Company. The useful lives of these assets are determined using forecasted cash flows, which are based on, among other factors, the estimates of revenue, expenses, and attrition associated with the underlying portfolio of merchant or customer accounts. The useful lives are determined based upon the period of time over which a significant portion of the economic value of such assets is expected to be realized. The useful life of merchant contract portfolios and customer relationships ranges from 5 to 19 years . Amortization of these assets is recognized under an accelerated method, which approximates the expected distribution of the portfolios’ forecasted cash flows. Marketing alliance agreements are amortized on a straight-line basis over the term of the agreements, which range from 5 to 21 years . Trademarks are amortized on a straight-line basis over the period of time during which a significant portion of the economic value of such assets is expected to be realized, which ranges from 2 to 20 years . Internally developed and acquired software is amortized on a straight-line basis over the estimated useful lives, which range from 3 to 10 years . The estimated useful lives of the software are based on various factors, including obsolescence, technology, competition, and other economic factors. The costs related to the internally developed software are capitalized during the developmental phase of a project, and amortization commences when the software is placed into use by the Company. The costs incurred during the preliminary project stage are expensed as incurred. Non-competition agreements are amortized on a straight-line basis over the term of the agreement, which is 3 years. When factors indicate that a long-lived asset should be assessed for impairment, the Company evaluates whether the carrying value of the asset will be recovered through the future undiscounted cash flows from the ongoing use of the asset, and if applicable, its eventual disposition. When the carrying value exceeds its fair value, an impairment loss is recognized in an amount equal to the difference. Refer to Note 9, “Goodwill and Intangible Assets,” for further information. |
Derivatives | (m) Derivatives The Company recognizes derivatives on the consolidated balance sheets at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of a particular derivative, whether the Company has elected to designate or not designate such derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a cash flow hedge. Investments in foreign operations with functional currencies other than the reporting currency are subject to foreign currency risk as foreign instruments are remeasured each period resulting in fluctuations in the cumulative translation adjustment (CTA) section within other comprehensive (loss) income. Net investment hedge accounting offers protection from remeasurement risk as changes in fair value of the derivative are also recorded in CTA. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting. The Company uses a forward contract, foreign currency swap, and window forward contracts to mitigate its exposure to fluctuations in foreign currency exchange rates. The Company elected not to designate the instruments as a hedge and they are not subject to hedge accounting. The Company entered into a cross currency swap to hedge the risk of fluctuations in the exchange rate related to a net investment in a foreign subsidiary. The Company designated the cross currency swap as a net investment hedge. Changes in the fair value of a net investment hedge are recorded in accumulated other comprehensive loss and reclassified into earnings when the hedged net investment is sold or substantially liquidated. Components excluded from the assessment of effectiveness will be recognized in earnings using a systematic and rational method over the life of the hedging instrument. Changes in the fair value of a derivative that is designated as, and meets all the required criteria for, a cash flow hedge are recorded in accumulated other comprehensive loss and reclassified into earnings as the underlying hedged item affects earnings. Changes in the fair value of a derivative that is not designated as a cash flow hedge are recorded as a component of other (expense) income. Refer to Note 14, “Derivatives,” and Note 18, “Fair Value,” for further information on the derivative instruments. |
Revenue Recognition | (n) Revenue Recognition The Company adopted Accounting Standards Update (“ASU”) 2014-09, Revenue From Contracts With Customers The Company primarily earns revenue from payment processing services. The payment processing services involve capturing, routing, and clearing transactions through the applicable payment network. The Company obtains authorization for each transaction and requests funds settlement from the card issuing financial institution through the payment network. In addition, the Company also earns revenue from the sale and rental of electronic POS equipment. The Company’s revenue consists primarily of transaction-based fees that are made up of a significant volume of low-dollar transactions, sourced from multiple systems, platforms, and applications. The payment processing is highly automated, and is based on contractual terms with merchants. Because of the nature of payment processing services, the Company relies on automated systems to process and record the revenue transactions. Netting against the revenue is certain commissions for referral partners and third party processing and assessment costs The Company’s core performance obligation is to provide continuous access to the Company’s processing services in order to be able to process as many transactions as its customers require on a daily basis over the contract term, as the timing and quantity of transactions to be processed is not determinable. Under a stand-ready obligation, the Company’s performance is defined by each time increment rather than by the underlying activities satisfied over time based on days elapsed. Because the service of standing ready is substantially the same each day, and has the same pattern of transfer to the customer, the Company has determined that its stand-ready performance obligation comprises a series of distinct days of service. The Company’s contractual agreements outline the pricing related to payment processing services including fixed fees and pricing related to the sale or rental of POS equipment. Given the nature of the promise to stand ready to provide payment processing services and the fees which are based on unknown quantities of services to be performed over the contract term, the consideration related to the payment processing services is determined to be variable consideration. The variable consideration is usage-based and the variability is satisfied each day the services are provided to the customer. The Company allocates variable fees to the distinct day of service to which it relates, considering the services performed each day in order to allocate the appropriate amount of total fees to that day. Therefore, the Company recognizes revenue for payment processing services over time on a daily basis based on the services performed on that day. Revenue from the sale of POS equipment is recognized at a point in time when the POS equipment is shipped and title passes to the customer. Revenue recognized at a point in time is not material. Revenue from the rental of electronic POS equipment is recognized over time. ASC 606 requires disclosure of the aggregate amount of the transaction price allocated to unsatisfied performance obligations; however, as permitted by the standard, the Company has elected to exclude from this disclosure any contracts with an original duration of one year or less and any variable consideration that meets specified criteria. As discussed above, the Company’s core performance obligation is a stand-ready obligation comprised of a series of distinct days of service, and revenue related to this performance obligation is generally billed and recognized as the services are performed. The variable consideration allocated to this performance obligation meets the specified criteria for disclosure exclusion. The aggregate fixed consideration portion of customer contracts with an initial contract duration greater than one year is not material. The Company follows the requirements of ASC 606-10, Principal Agent Considerations For payment processing services, the determination of gross versus net recognition for interchange, card network fees, and commissions depends on whether the Company controls the good or service before it is transferred to the merchant or whether the Company is acting as an agent of a third party. The Company frequently enters into agreements with third parties under which the third party engages the Company to provide payment processing services to all of their customers. Under these agreements the third party acts as supplier of products or services by achieving most of the shared risks and rewards of customer contracts and the Company passes the third party’s share of merchant receipts to them as commissions. The Company incurs interchange and card network fees from the card issuers and payment networks respectively, and does not have the ability to direct the use of or receive the benefits from the services provided by the card issuers or the payment networks. The Company has no discretion over which card issuing bank will be used to process a transaction and is unable to direct the activity of the merchant to another card issuing bank. Interchange and card network rates are pre-established by the card networks, and the Company has no latitude in determining these fees. Therefore, the Company is acting as an agent with respect to these services. Revenue generated from payment processing is presented net of interchange, card network fees, and certain commissions. Commissions payable to referral and reseller partners are recognized as incurred. |
Share-Based Compensation | (o) Share-Based Compensation The Company follows ASC 718, Compensation: Stock Compensation |
Income Taxes | (p) Income Taxes Subsequent to consummation of the Reorganization Transactions and the IPO, the Company is subject to United States federal, state and local income taxes. The Company's subsidiaries are subject to income taxes in the respective jurisdictions in which they operate. Prior to the consummation of the Reorganization Transactions and the IPO, provision for United States federal, state, and local income tax was not material, as EVO, LLC is a limited liability company and is treated as a pass-through entity for United States federal, state, and local income tax purposes. Deferred Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the consolidated financial statements and tax basis of assets and liabilities using enacted jurisdictional tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates is recognized in the consolidated statements of operations and comprehensive income (loss) in the period that includes the enactment date. The Company recognizes deferred tax assets to the extent that it is expected that these assets are more likely than not to be realized. The Company evaluates the realizability of the deferred tax assets, and to the extent that the Company estimates that it is more likely than not that a benefit will not be realized, the carrying amount of the deferred tax assets is reduced with a valuation allowance. As a part of this evaluation, the Company assesses all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations, to determine whether sufficient future taxable income will be generated to realize existing deferred tax assets. The Company has identified objective and verifiable negative evidence in the form of cumulative losses on an unadjusted basis in certain jurisdictions over the preceding twelve quarters ended December 31, 2022. The Company also evaluated its historical core earnings by jurisdiction, after adjusting for certain nonrecurring items. On the basis of this assessment, and after considering future reversals of existing taxable temporary differences, the Company established valuation allowances in the current and prior periods to reduce the carrying amount of deferred tax assets to an amount that is more likely than not to be realized in certain European jurisdictions. In the United States, with the exception of the interest expense limitation and a stand alone domestic subsidiary, the Company concluded that its indefinite lived deferred tax assets will be realizable and recorded no valuation allowance. In arriving at this determination, the Company considered both (i) historical core earnings, after adjusting for certain nonrecurring items, and (ii) the projected future profitability of its core operations and the impact of enacted changes in the application of the interest expense limitation rules beginning in 2022. As of December 31, 2022 and 2021, a valuation allowance of $14.9 $11.6 Uncertain Tax Positions The Company records uncertain tax positions in accordance with ASC 740, Income Taxes The Company is subject to tax audits in various jurisdictions and regularly assesses the likely outcome of such audits in order to determine the need for liabilities for uncertain tax benefits. The Company continually evaluates the appropriateness of liabilities for uncertain tax positions, considering factors such as statutes of limitations, audits, proposed settlements, and changes in tax law. Refer to Note 12, “Income Taxes,” for further information. |
Nonredeemable Non-controlling Interests and Redeemable Non-controlling Interests | (q) Nonredeemable Non-controlling Interests and Redeemable Non-controlling Interests Non-controlling interests relate to the portion of equity in a consolidated subsidiary not attributable, directly or indirectly, to the Company. Where redemption of such non-controlling interests is solely within the control of the Company, such interests are reflected in the consolidated balance sheets as “Nonredeemable non-controlling interests.” RNCI refers to non-controlling interests that are redeemable upon the occurrence of an event that is not solely within the Company’s control and is reported in the mezzanine section between total liabilities and shareholders’ deficit, as temporary equity in the Company’s consolidated balance sheets. The Company adjusts RNCI balance to reflect its estimate of the maximum redemption amount each reporting period. Refer to Note 17, “Redeemable Non-controlling Interests,” for further information. |
Foreign-Currency Translation | (r) Foreign-Currency Translation The Company has operations in foreign countries whose functional currency is the local currency. Gains and losses on transactions and monetary assets and liabilities, denominated in currencies other than the functional currency, are included in the net income or loss for the period. The assets and liabilities of subsidiaries whose functional currency is a foreign currency are translated at the period-end exchange rates. Income statement items are translated at the average monthly rates for the year. The resulting translation adjustment is recorded as a component of other comprehensive (loss) income and is included in shareholders’ deficit. |
Fair-Value Measurements | (s) Fair-Value Measurements The Company follows ASC 820, Fair Value Measurements The Company uses the hierarchy prescribed in ASC 820 for fair value measurements, based on the available inputs to the valuation and the degree to which they are observable or not observable in the market. The three levels of the hierarchy are as follows: Level 1 Inputs — Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date; Level 2 Inputs — · quoted prices for similar assets or liabilities in active markets; · quoted prices for identical or similar assets or liabilities in markets that are not active; · inputs other than quoted prices that are observable for the asset or liability; or · inputs that are derived principally from or corroborated by observable market data by correlation or other means; Level 3 Inputs — Unobservable inputs for the asset or liability used to measure fair value allowing for inputs reflecting the Company’s assumptions about what other market participants would use in pricing the asset or liability, including assumptions about risk. |
Investment in equity securities | (t) Investment in equity securities The Company’s accounting treatment for investments in equity securities differs for those with and without readily determinable fair values. Investments in equity securities with readily determinable fair values are recorded at fair value on the consolidated balance sheets with changes in fair value at each reporting period recognized on the consolidated statements of operations and comprehensive income (loss). Investments in equity securities without readily determinable fair value are recorded at cost, less impairment, if any, plus or minus observable price changes in orderly transactions of an identical or similar investment of the same issuer. |
Segment Reporting | (u) Segment Reporting The Company has two operating segments: the Americas and Europe. The Company’s reportable segments are the same as its operating segments. The alignment of the Company’s segments is designed to establish lines of business that support the geographical markets in which the Company operates and allows the Company to further globalize its solutions while working seamlessly with teams across these markets. The America’s segment comprises the geographical markets of the United States, Canada, Mexico, and Chile. The Europe segment comprises the geographical markets of Western Europe (Spain, United Kingdom, Ireland, Germany, Gibraltar, Malta, and Greece) and Eastern Europe (Poland and Czech Republic). The Company also provides general corporate services to its segments through corporate functions, the cost of which is not allocated to segments. Such costs are reported as “Corporate.” Refer to Note 20, “Segment Information,” for further information on segment reporting. |
Leases | (v) Leases The Company adopted ASU 2016-02, Leases, on January 1, 2019, using the optional modified retrospective method under which the prior period financial statements were not restated for the new guidance. At contract inception the Company determines whether an arrangement is, or contains a lease, and for each identified lease, evaluates the classification as operating or financing. Leased assets and obligations are recognized at the lease commencement date based on the present value of fixed lease payments to be made over the term of the lease. Renewal and termination options are factored into determination of the lease term only if the option is reasonably certain to be exercised. The Company’s leases do not provide a readily determinable implicit interest rate and the Company uses its incremental borrowing rate to measure the lease liability and corresponding right-of-use asset. The incremental borrowing rate is a fully collateralized rate that considers the Company’s credit rating, market conditions, and the term of the lease. The Company accounts for all components in a lease arrangement as a single combined lease component. Operating lease cost is recognized on a straight-line basis over the lease term. Total lease costs include variable lease costs, which are primarily comprised of costs of maintenance and utilities. Variable payments are expensed in the period incurred and not included in the measurement of lease assets and obligations. Refer to Note 7, “Leases,” for further information. |
Preferred Stock | (w) Preferred Stock On April 21, 2020, we issued 152,250 shares of Preferred Stock for approximately $149.3 million in total net proceeds. Holders of shares of Preferred Stock are entitled to cumulative, paid-in-kind dividends, and generally have the right, at their option, to convert the Preferred Stock, in whole or in part, into fully paid and non-assessable shares of Class A Common Stock at any time. If the Company undergoes a change of control (as defined in the certificate of designations for the Preferred Stock), the holders of Preferred Stock may require us to repurchase all or a portion of its then-outstanding shares of Preferred Stock for cash consideration. In connection with the execution of the Merger Agreement, the holders of the Preferred Stock agreed to convert the Preferred Stock into Class A Common Stock effective immediately prior to the closing of the Merger. Because the occurrence of a change of control may be outside of our control, we have classified the Preferred Stock as mezzanine equity on the consolidated balance sheets. Refer to Note 16, “Redeemable Preferred Stock,” for further discussion. |
Recent Accounting Pronouncements | (x) Recent Accounting Pronouncements New accounting pronouncements issued by the Financial Accounting Standards Board (the “FASB”) or other standards setting bodies are adopted as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s consolidated financial statements upon adoption. Recently Adopted Accounting Pronouncement Convertible Instruments and Contracts in an Entity’s Own Equity In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity Recently Issued Accounting Pronouncements Not Yet Adopted Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 Acquired Contract Assets and Liabilities in Business Combinations In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers Revenue from Contracts with Customers (Topic 606) |
Termination of marketing alliance agreement | (y) Termination of marketing alliance agreement The Company recognized income from liquidated damages of €7.0 million ($6.9 million, based on the foreign exchange rate as of the date presented) in other operating income in the consolidated statements of operations and comprehensive income (loss) for the year ended December 31, 2022, as a result of the termination of the marketing alliance agreement with Liberbank in the third quarter of 2022. The net book value of the marketing alliance agreement intangible asset was zero as of December 31, 2022. Refer to Note 9, “Goodwill and Intangible Assets,” for further information. |
Description of Business and S_3
Description of Business and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Description of Business and Summary of Significant Accounting Policies | |
Schedule of cash, cash equivalents and restricted cash | December 31, December 31, 2022 2021 (In thousands) Cash and cash equivalents $ 356,459 $ 410,368 Restricted cash included in other assets 757 247 Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows $ 357,216 $ 410,615 |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue | |
Summary of revenue | Year Ended December 31, 2022 Americas Europe Total (In thousands) Divisions: Direct $ 143,116 $ 170,324 $ 313,440 Tech-enabled 138,741 51,833 190,574 Traditional 39,068 — 39,068 Totals $ 320,925 $ 222,157 $ 543,082 Year Ended December 31, 2021 Americas Europe Total (In thousands) Divisions: Direct $ 130,752 $ 148,538 $ 279,290 Tech-enabled 134,360 40,924 175,284 Traditional 42,071 — 42,071 Totals $ 307,183 $ 189,462 $ 496,645 Year Ended December 31, 2020 Americas Europe Total (In thousands) Divisions: Direct $ 113,442 $ 128,458 $ 241,900 Tech-enabled 117,882 35,410 153,292 Traditional 43,909 — 43,909 Totals $ 275,233 $ 163,868 $ 439,101 |
Settlement Processing Assets _2
Settlement Processing Assets and Obligations (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Settlement Processing Assets and Obligations | |
Summary of settlement processing assets and obligations | December 31, December 31, 2022 2021 (In thousands) Settlement processing assets: Receivable from card networks $ 629,500 $ 209,734 Receivable from merchants 102,784 101,947 Totals $ 732,284 $ 311,681 Settlement processing obligations: Settlement liabilities due to merchants $ (764,664) $ (320,537) Merchant reserves (96,416) (101,572) Totals $ (861,080) $ (422,109) |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share | |
Schedule of computation of basic and diluted net loss per share | The following table sets forth the computation of the Company's basic and diluted earnings per share of Class A common stock, as well as the anti-dilutive shares excluded (in thousands, except share and per share data): Year Ended December 31, Year Ended December 31, Year Ended December 31, 2022 2021 2020 Numerator: Net income (loss) attributable to EVO Payments, Inc. $ 5,279 $ 8,653 $ (1,676) Less: Accrual of redeemable preferred stock paid-in-kind dividends 10,524 9,889 6,528 Undistributed loss attributable to shares of Class A common stock $ (5,245) $ (1,236) $ (8,204) Denominator: Weighted-average Class A common stock outstanding 47,979,393 47,092,937 41,980,163 Effect of dilutive securities — — — Total dilutive securities 47,979,393 47,092,937 41,980,163 Earnings per share: Basic $ (0.11) $ (0.03) $ (0.20) Diluted $ (0.11) $ (0.03) $ (0.20) Weighted-average anti-dilutive securities: Redeemable preferred stock 152,250 152,250 106,076 Stock options 5,517,739 5,828,309 5,040,423 RSUs 1,672,902 1,364,534 1,166,526 RSAs 72 418 4,256 PSUs 257,639 — — Class C common stock — 658,847 2,132,497 Class D common stock 3,765,469 3,227,836 4,245,743 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
NBG Pay | |
Acquisitions | |
Schedule of assets acquired and liabilities assumed | As of the Estimated acquisition date Useful Life Definite-lived intangible assets (In thousands ) Customer relationships $ 46,070 7 years Marketing alliance agreement 156,730 20 years Other liabilities, net (111) Goodwill 123,400 Total purchase price 326,089 Less: fair value of redeemable non-controlling interest (159,784) Total consideration, net of cash acquired $ 166,305 |
EDPS | |
Acquisitions | |
Schedule of assets acquired and liabilities assumed | As of the Estimated acquisition date Useful Life Definite-lived intangible assets (In thousands ) Acquired software $ 1,160 5 years Customer relationships 6,530 7 years Deferred tax liabilities (1,692) Other assets, net 2,046 Goodwill 19,355 Total purchase price $ 27,399 |
Pago Facil | |
Acquisitions | |
Schedule of assets acquired and liabilities assumed | As of the Estimated acquisition date Useful Life Definite-lived intangible assets (In thousands ) Acquired software $ 9,400 5 years Customer relationships 3,000 7 years Trademarks 440 2 years Non-compete agreement 150 3 years Deferred tax liabilities (3,507) Other assets, net 855 Goodwill 10,562 Total purchase price $ 20,900 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases | |
Schedule of maturities of lease liabilities | As of December 31, 2022, maturities of lease liabilities are as follows: (In thousands) Years ending: 2023 $ 10,169 2024 9,765 2025 8,823 2026 8,207 2027 6,770 2028 and thereafter 7,040 Total future minimum lease payments (undiscounted) 50,774 Less: present value discount (7,987) Present value of lease liability $ 42,787 |
Equipment and Improvements (Tab
Equipment and Improvements (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equipment and Improvements | |
Schedule of equipment and improvements | Estimated Useful Lives in December 31, December 31, Years 2022 2021 (In thousands) Card processing equipment 3-5 $ 170,390 $ 155,843 Office equipment 3-5 47,225 44,393 Computer software 3-5 58,398 60,226 Leasehold improvements various 19,919 17,883 Furniture and fixtures 5-7 5,193 4,433 Totals 301,125 282,778 Less accumulated depreciation (228,419) (213,761) Foreign currency translation adjustment (2,749) (511) Totals $ 69,957 $ 68,506 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets | |
Schedule of intangible assets, net | December 31, 2022 Gross carrying value Accumulated amortization Accumulated impairment charges Translation and other adjustments Net (In thousands) Merchant contract portfolios and customer relationships $ 350,320 $ (211,032) $ (5,685) $ (30,230) $ 103,373 Marketing alliance agreements 354,145 (100,261) (7,557) (19,407) 226,920 Internally developed and acquired software 136,382 (68,627) (9,324) (4,647) 53,784 Trademarks, definite-lived 20,851 (14,536) - (3,765) 2,550 Non-compete agreements 150 (66) - (23) 61 Total $ 861,848 $ (394,522) $ (22,566) $ (58,072) $ 386,688 December 31, 2021 Gross carrying value Accumulated amortization Accumulated impairment charges Translation and other adjustments Net (In thousands) Merchant contract portfolios and customer relationships $ 297,056 $ (197,187) $ (5,685) $ (30,713) $ 63,471 Marketing alliance agreements 197,412 (79,811) (7,557) (20,896) 89,148 Internally developed and acquired software 110,396 (53,110) (10,191) (3,236) 43,859 Trademarks, definite-lived 22,068 (13,427) (901) (3,596) 4,144 Non-compete agreements 6,612 (6,487) - (21) 104 Total $ 633,544 $ (350,022) $ (24,334) $ (58,462) $ 200,726 |
Schedule of estimated amortization expense | (In thousands) Years ending: 2023 $ 64,233 2024 52,222 2025 42,661 2026 31,970 2027 26,842 2028 and thereafter 168,760 Total $ 386,688 |
Schedule of intangible assets, net by segment | December 31, December 31, 2022 2021 (In thousands) Intangible assets, net: Americas Merchant contract portfolios and customer relationships $ 41,466 $ 49,435 Marketing alliance agreements 51,438 56,996 Internally developed and acquired software 40,229 28,812 Trademarks, definite-lived 1,269 1,497 Non-compete agreements 61 104 Total 134,463 136,844 Europe Merchant contract portfolios and customer relationships 61,907 14,036 Marketing alliance agreements 175,482 32,152 Internally developed and acquired software 13,555 15,047 Trademarks, definite-lived 1,281 2,647 Total 252,225 63,882 Total intangible assets, net $ 386,688 $ 200,726 |
Schedule of goodwill activity | Reportable Segment Americas Europe Total (In thousands) Goodwill, gross, as of December 31, 2020 $ 266,848 $ 140,551 $ 407,399 Accumulated impairment losses — (24,291) (24,291) Goodwill, net, as of December 31, 2020 266,848 116,260 383,108 Business combinations 10,562 3,921 14,483 Foreign currency translation adjustment (2,480) (9,460) (11,940) Goodwill, net, as of December 31, 2021 $ 274,930 $ 110,721 $ 385,651 Goodwill, gross, as of December 31, 2021 $ 274,930 $ 135,012 $ 409,942 Accumulated impairment losses — (24,291) (24,291) Goodwill, net, as of December 31, 2021 274,930 110,721 385,651 Business combinations 6,790 142,755 149,545 Foreign currency translation adjustment (948) (5,693) (6,641) Goodwill, net, as of December 31, 2022 $ 280,772 $ 247,783 $ 528,555 |
Accounts Payable, Accrued Exp_2
Accounts Payable, Accrued Expenses, and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounts Payable, Accrued Expenses, and Other Current Liabilities | |
Schedule of accounts payable, accrued expenses, and other current liabilities | December 31, December 31, 2022 2021 (In thousands) Compensation and related benefits $ 19,558 $ 23,205 Third-party processing and payment network fees 46,257 43,529 Trade payables 7,177 6,089 Taxes payable 37,723 20,399 Commissions payable to third parties 15,750 16,025 Unearned revenue 4,327 4,723 Other 33,864 19,979 Total accounts payable, accrued expenses, and other current liabilities $ 164,656 $ 133,949 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions | |
Schedule of related party balances | December 31, December 31, 2022 2021 (In thousands) Due from related parties, current $ 697 $ 782 Due to related parties, current (4,638) (4,207) Due to related parties, long-term (185) (185) |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Taxes | |
Schedule of domestic and foreign (loss) income before income taxes | 2022 2021 2020 (In thousands) Domestic $ (28,541) $ (21,242) $ (37,043) Foreign 85,092 60,968 45,999 Income (loss) before income taxes $ 56,551 $ 39,726 $ 8,956 |
Schedule of income tax expense | 2022 2021 2020 (In thousands) Current: Foreign $ 30,929 $ 13,978 $ 10,594 Federal 392 (226) 61 State 449 (43) (15) Total current income tax expense 31,770 13,709 10,640 Deferred: Foreign (1,810) 11,399 2,637 Federal 5,467 (2,769) (96) State 818 (302) (59) Total deferred income tax expense (benefit) 4,475 8,328 2,482 Totals $ 36,245 $ 22,037 $ 13,122 |
Schedule of effective tax rate | 2022 2021 2020 Federal statutory rate 21.0% 21.0% 21.0% State taxes, net of federal benefit (2.4) (12.5) 26.3 Foreign tax rate differential (0.3) (0.2) (0.4) Decrease in U.S. valuation allowance — — (28.6) Non-controlling interest (11.0) (9.9) 1.2 Other miscellaneous permanent differences 2.9 (2.4) (21.0) Remeasurement of deferred tax assets (0.6) (6.1) (4.4) Undistributed earnings of foreign subsidiaries — 0.1 4.2 U.S. federal tax related to foreign effectively connected income — 0.1 2.7 Mexico income tax provision 26.5 20.0 85.8 Poland income tax provision 15.6 18.0 75.7 German income tax provision 6.7 8.9 — Spain income tax provision — — (29.1) Other foreign tax provisions 3.0 4.0 13.1 Increase in U.S. valuation allowance 1.8 — — Increase in Foreign valuation allowance 0.9 14.5 — Effective tax rate 64.1% 55.5% 146.5% |
Schedule of components of deferred tax items | 2022 2021 (In thousands) Deferred tax assets: U.S. net operating losses (1) $ 30,777 $ 29,569 U.S. interest limitation (1) 614 — Partnership basis adjustment (1) 175,358 184,119 Other partnership basis items (1) 31,218 24,235 Foreign net operating losses 13,338 12,014 Foreign intangibles 1,573 1,345 Foreign accrued expenses and other temporary differences 8,007 5,653 260,885 256,935 Valuation allowance (14,887) (11,634) Deferred tax asset 245,998 245,301 Deferred tax liabilities: Acquisition related intangibles (27,122) (23,656) Foreign equipment and improvements (1,130) (2,070) Foreign accrued expenses and other temporary differences (1,424) (3,521) Deferred tax liability (29,676) (29,247) Net $ 216,322 $ 216,054 (1) |
Schedule of valuation allowance associated with the deferred tax assets | Valuation Allowance (In thousands) Beginning balance, January 1, 2020 $ 8,152 Additions to deferred tax assets in foreign jurisdictions 1,097 Reduction of U.S. interest limitation (2,558) Reductions to deferred tax assets in foreign jurisdictions (1,601) December 31, 2020 $ 5,090 Additions to deferred tax assets in foreign jurisdictions 8,389 Reductions to deferred tax assets in foreign jurisdictions (1,845) December 31, 2021 $ 11,634 Additions to deferred tax assets in U.S. jurisdictions 999 Additions to deferred tax assets in foreign jurisdictions 3,833 Reductions to deferred tax assets in foreign jurisdictions (1,579) December 31, 2022 $ 14,887 |
Schedule of net operating losses carryforwards by country and years | Net Operating Available Losses Years (In thousands) United States $ 133,617 Indefinite Spain 26,041 Indefinite Gibraltar 21,456 Indefinite Mexico 5,457 2023-2032 Chile 4,584 Indefinite Ireland 3,069 Indefinite Czech Republic 2,784 2023-2027 UK 670 Indefinite Canada 550 2023-2042 Greece 383 2023-2027 |
Schedule of rollforward of gross unrecognized tax benefits | 2022 (In thousands) Beginning Balance at January 1, 2022 $ 1,027 Lapses of statues of limitations — Increases in balances related to tax positions taken during prior periods (including those related to acquisitions made during the year) 10,888 Decreases in balances related to tax positions taken during prior periods — Increases in balances related to tax positions taken during current period — Decreases in balances related to settlements with taxing authorities (5,651) Ending Balance at December 31, 2022 $ 6,264 |
Summary of open tax years by major taxing jurisdictions | Jurisdiction Years United States 2019-2022 Mexico 2017-2022 Poland 2017-2022 Germany 2017-2022 |
Long-Term Debt and Lines of C_2
Long-Term Debt and Lines of Credit (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Long-Term Debt and Lines of Credit | |
Summary of long-term debt | December 31, December 31, 2022 2021 (In thousands) Term loan $ 573,300 $ 588,000 Revolver 68,200 — Less debt issuance costs (4,212) (5,310) Total long-term debt 637,288 582,690 Less current portion of long-term debt, net of current portion of debt issuance costs (14,092) (14,058) Total long-term debt, net of current portion $ 623,196 $ 568,632 |
Schedule of principal payment requirements | Years ending: (In thousands) 2023 $ 14,700 2024 29,400 2025 44,100 2026 553,300 Total $ 641,500 |
Derivatives (Tables)
Derivatives (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Derivatives | |
Summary of fair value of the interest rate swap | December 31, 2021 Balance Sheet Fair Value Location (In thousands) Interest Rate Swap - current portion Other current assets $ 1,297 |
Schedule of effect of hedge accounting on accumulated other comprehensive loss | Year Ended Year Ended Year Ended December 31, 2022 December 31, 2021 December 31, 2020 (In thousands) Beginning accumulated derivative gain (loss) in accumulated other comprehensive loss $ 1,297 $ (533) $ — Derivative gain (loss) recognized in the current period in accumulated other comprehensive loss 6,257 1,354 (653) Less: Derivative gain (loss) reclassified from accumulated other comprehensive loss to interest expense 7,554 (476) (120) Ending accumulated derivative gain (loss) in accumulated other comprehensive loss $ — $ 1,297 $ (533) Year Ended Year Ended Year Ended December 31, 2022 December 31, 2021 December 31, 2020 (In thousands) Total interest expense including the effects of cash flow hedges $ (17,641) $ (23,161) $ (30,160) Derivative gain (loss) reclassified from accumulated other comprehensive loss into interest expense $ 7,554 $ (476) $ (120) |
Schedule of net investment hedge on accumulated other comprehensive loss | Amount of Gain (Loss) Recognized in OCI Location of Gain (Loss) Reclassified from AOCI into Income Amount of Gain (Loss) Reclassified from AOCI into Income Year Ended December 31, 2022 (In thousands) Cross Currency Swap $ (51) Interest expense $ 141 |
Summary of fair value of the foreign currency swap | December 31, 2022 Settlement Balance Sheet Fair Value Date Location (In thousands) Forward Contract April 13, 2023 Other current assets $ 6,530 |
Schedule of effect of foreign currency contract on accumulated other comprehensive loss | Location of Year Ended Unrealized Gain December 31, 2022 Forward Contract Other income $ 6,530 |
Cross Currency Swap | |
Derivatives | |
Schedule of fair value of the cross currency swap | December 31, 2022 Balance Sheet Fair Value Location (In thousands) Cross Currency Swap - current portion Other current assets $ 451 Cross Currency Swap - long-term portion Other long-term liabilities $ (610) |
Supplemental Cash Flows Infor_2
Supplemental Cash Flows Information (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Supplemental Cash Flows Information | |
Schedule of supplemental cash flow disclosures and non-cash investing and financing activities | Years Ended December 31, 2022 2021 2020 (In thousands) Supplemental disclosure of cash flow data: Interest paid $ 16,226 $ 20,917 $ 30,962 Income taxes paid 17,901 10,259 13,429 Supplemental disclosure of non-cash investing and financing activities: Operating lease liabilities arising from obtaining new or modified right-of-use assets $ 14,908 $ 9,845 $ 3,347 Decrease in operating lease liabilities and corresponding right-of-use assets resulting from lease modifications — (3,158) (6,801) Software and equipment assets acquired by assuming directly related liabilities — — 11,603 Deferred consideration payable 11,616 3,439 — Contingent consideration payable — 472 — Accrual of redeemable preferred stock paid-in-kind-dividends 10,524 9,889 6,528 Exchanges of Class C and Class D common stock for Class A common stock 1,895 15,038 16,658 Secondary offering — — 43,484 |
Redeemable Non-controlling In_2
Redeemable Non-controlling Interests (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Redeemable Non-controlling Interests | |
Schedule of components of redeemable non-controlling interest | Blueapple eService BCI Pagos NBG Pay Total (In thousands) Beginning balance, January 1, 2022 $ 823,386 $ 198,531 $ 7,173 $ — $ 1,029,090 Contributions — — 3,201 — 3,201 Distributions — (11,703) — — (11,703) Acquired RNCI — — — 159,784 159,784 Net income (loss) attributable to RNCI 3,070 12,578 (1,365) (306) 13,977 Unrealized (loss) gain on foreign currency translation adjustment (2,671) (3,978) 203 2,231 (4,215) Unrealized loss on change in fair value of interest rate swap (481) — — — (481) Unrealized loss on change in fair value of cross currency swap (18) — — — (18) Increase (decrease) in the maximum redemption amount of RNCI 288,301 46,334 (5,643) 19,996 348,988 Allocation of eService fair value RNCI adjustment to Blueapple (17,699) — — — (17,699) Allocation of BCI Pagos fair value RNCI adjustment to Blueapple 2,153 — — — 2,153 Allocation of NBG Pay fair value RNCI adjustment to Blueapple (7,627) — — — (7,627) Ending balance, December 31, 2022 $ 1,088,414 $ 241,762 $ 3,569 $ 181,705 $ 1,515,450 Blueapple eService BCI Pagos Total (In thousands) Beginning balance, January 1, 2021 $ 868,738 $ 186,436 $ 459 $ 1,055,633 Contributions — — 1,487 1,487 Distributions — (13,655) — (13,655) Net income (loss) attributable to RNCI 47 10,329 (1,595) 8,781 Unrealized loss on foreign currency translation adjustment (10,313) (5,045) (721) (16,079) Unrealized gain on change in fair value of interest rate swap 707 — — 707 (Decrease) increase in the maximum redemption amount of RNCI (25,009) 20,466 7,543 3,000 Allocation of eService fair value RNCI adjustment to Blueapple (7,869) — — (7,869) Allocation of BCI Pagos fair value RNCI adjustment to Blueapple (2,915) — — (2,915) Ending balance, December 31, 2021 $ 823,386 $ 198,531 $ 7,173 $ 1,029,090 |
Fair Value (Tables)
Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value | |
Schedule of information about items which are carried at fair value on a recurring basis | December 31, 2022 (In thousands) Level 1 Level 2 Level 3 Total Cash equivalents $ 40,443 $ — $ — $ 40,443 Contingent consideration — — (625) (625) Blueapple RNCI (1,088,414) — — (1,088,414) eService RNCI — — (241,762) (241,762) NBG Pay RNCI — — (181,705) (181,705) BCI Pagos RNCI — — (3,569) (3,569) Cross currency swap — (159) — (159) Forward contract — 6,530 — 6,530 Investment in equity securities — 35,818 — 35,818 Total $ (1,047,971) $ 42,189 $ (427,661) $ (1,433,443) December 31, 2021 (In thousands) Level 1 Level 2 Level 3 Total Cash equivalents $ 95,919 $ — $ — $ 95,919 Contingent consideration — — (611) (611) Blueapple RNCI (823,386) — — (823,386) eService RNCI — — (198,531) (198,531) BCI Pagos RNCI — — (7,173) (7,173) Interest rate swap — 1,297 — 1,297 Investment in equity securities — 25,398 — 25,398 Total $ (727,467) $ 26,695 $ (206,315) $ (907,087) |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Information | |
Summary of segment information | Year Ended December 31, 2022 2021 2020 (In thousands) Segment revenue: Americas $ 320,925 $ 307,183 $ 275,233 Europe 222,157 189,462 163,868 Revenue $ 543,082 $ 496,645 $ 439,101 Segment profit: Americas $ 143,297 $ 135,081 $ 106,052 Europe 80,992 63,588 65,448 Total segment profit 224,289 198,669 171,500 Corporate (51,463) (35,628) (34,157) Depreciation and amortization (84,143) (83,389) (85,924) Net interest expense (14,505) (21,510) (28,988) Provision for income tax expense (36,245) (22,037) (13,122) Share-based compensation expense (29,223) (27,419) (20,664) Less: Net income (loss) attributable to non-controlling interests of EVO Investco, LLC 3,431 33 (9,679) Net income (loss) attributable to EVO Payments, Inc. $ 5,279 $ 8,653 $ (1,676) Capital expenditures: Americas $ 15,148 $ 14,080 $ 9,716 Europe 21,084 19,315 10,765 Consolidated total capital expenditures $ 36,232 $ 33,395 $ 20,481 |
Schedule of long lived assets by geographic location | December 31, December 31, 2022 2021 (In thousands) Long-lived assets: Poland $ 32,517 $ 31,534 United States 27,285 30,228 Mexico 17,264 18,554 Other 33,871 22,894 Totals $ 110,937 $ 103,210 |
Shareholder's Equity (Tables)
Shareholder's Equity (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Shareholders' Equity | |
Schedule of voting and economic rights of common stockholders | Class of Common Stock Holders Voting rights Economic rights Class A common stock Public, MDP, Executive Officers, and Current and Former Employees One vote per share Yes Class D common stock MDP and Current and Former Employees, and Executive Officers One vote per share No Series A Preferred Stock MDP On an as-converted basis Yes |
Stock Compensation Plans and _2
Stock Compensation Plans and Share-Based Compensation Awards (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Stock Compensation Plans and Share-Based Compensation Awards | |
Summary of share based compensation expense and related income tax benefit recognized for share-based compensation awards | Year Ended December 31, 2022 2021 2020 Share-based compensation expense $ 29,223 $ 27,419 $ 20,664 Income tax benefit $ (4,871) $ (4,053) $ (3,406) |
Summary of stock option activity | A summary of service-based stock option activity is as follows (in thousands, except per share and term data): Number of Options Weighted-average grant date fair value Weighted-average exercise price Weighted-average remaining contractual term Total intrinsic value Balance at December 31, 2020 5,084 $ 7.60 $ 21.06 8.36 $ 30,405 Granted 1,115 9.76 25.73 — — Exercised (450) 6.27 17.48 — 4,886 Forfeited (258) 8.42 23.45 — — Balance at December 31, 2021 5,491 $ 8.11 $ 22.19 7.67 $ 19,802 Granted — — — — — Exercised (481) 7.31 19.87 — 5,112 Forfeited (138) 9.15 25.32 — — Balance at December 31, 2022 4,872 $ 8.15 22.32 6.66 $ 56,136 Exercisable at December 31, 2022 3,337 $ 7.74 $ 20.80 6.29 $ 43,522 |
Summary of assumptions used in estimating the grant date fair values | Expected life (in years) 7.00 Weighted-average risk-free interest rate 1.15% Expected volatility 34.65% Dividend yield 0.00% Exercise price $ 25.46 |
Service-Based Restricted Stock Units | |
Stock Compensation Plans and Share-Based Compensation Awards | |
Summary of stock activity | A summary of RSUs activity is as follows (in thousands, except per share data): Number of RSUs Weighted-average grant date fair value Balance at December 31, 2020 1,149 $ 22.92 Granted 711 25.74 Vested (428) 23.25 Forfeited (93) 22.36 Balance at December 31, 2021 1,339 $ 24.35 Granted 1,000 23.85 Vested (604) 22.78 Forfeited (91) 24.29 Balance at December 31, 2022 1,644 $ 24.62 |
Market and Service-Based Stock Options | |
Stock Compensation Plans and Share-Based Compensation Awards | |
Summary of assumptions used in estimating the grant date fair values | Expected life (in years) 3.10 Weighted-average risk-free interest rate 1.74% Expected volatility 47.62% Dividend yield 0.00% Estimated grant date fair value (per share) $ 23.69 |
Description of Business and S_4
Description of Business and Summary of Significant Accounting Policies - Other (Details) $ / shares in Units, € in Millions | 12 Months Ended | |||||||
Aug. 01, 2022 $ / shares | May 25, 2021 shares | Apr. 21, 2020 USD ($) shares | Dec. 31, 2022 USD ($) segment item | Dec. 31, 2022 EUR (€) segment | Dec. 31, 2020 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2019 USD ($) | |
Minimum number of merchants | item | 700,000 | |||||||
Number of reportable segments | segment | 2 | 2 | ||||||
Cash and Cash Equivalents, Restricted Cash, Settlement Related Cash and Merchant Reserves | ||||||||
Settlement related cash balances | $ 157,100,000 | $ 133,300,000 | ||||||
Merchant reserve cash balances | 96,400,000 | 101,600,000 | ||||||
Reconciliation of cash, cash equivalents and restricted cash | ||||||||
Cash and cash equivalents | 356,459,000 | 410,368,000 | ||||||
Restricted cash included in other assets | 757,000 | 247,000 | ||||||
Total cash, cash equivalents, and restricted cash shown in the unaudited condensed consolidated statements of cash flows | 357,216,000 | $ 418,539,000 | 410,615,000 | $ 304,089,000 | ||||
Accounts Receivable and Other Receivables | ||||||||
Allowance for doubtful accounts | 8,800,000 | 7,200,000 | ||||||
Goodwill and Intangible Assets | ||||||||
Indefinite-lived Intangible Assets (Excluding Goodwill) | 0 | |||||||
Deferred tax assets | ||||||||
Uncertain tax positions | 6,264,000 | 1,027,000 | ||||||
Deferred tax asset valuation allowance | $ 14,887,000 | 5,090,000 | 11,634,000 | $ 8,152,000 | ||||
Segment Reporting | ||||||||
Number of strategic operating segments | segment | 2 | 2 | ||||||
Preferred Stock | ||||||||
Preferred Stock issued | shares | 152,250 | |||||||
Proceeds from Issuance of Preferred Stock and Preference Stock | $ 149,300,000 | $ 149,250,000 | ||||||
Termination of marketing alliance agreement | ||||||||
Income from liquidated damages recorded in other operating income as a result of the termination of the marketing alliance agreement with Liberbank | $ 6,900,000 | € 7 | ||||||
Net book value | 386,688,000 | 200,726,000 | ||||||
Liberbank marketing alliance agreement | ||||||||
Termination of marketing alliance agreement | ||||||||
Net book value | 0 | |||||||
Marketing alliance agreements | ||||||||
Termination of marketing alliance agreement | ||||||||
Net book value | 226,920,000 | 89,148,000 | ||||||
Merchant contract portfolios and customer relationships | ||||||||
Termination of marketing alliance agreement | ||||||||
Net book value | 103,373,000 | 63,471,000 | ||||||
Internally developed and acquired software | ||||||||
Termination of marketing alliance agreement | ||||||||
Net book value | 53,784,000 | 43,859,000 | ||||||
Trademarks, definite-lived | ||||||||
Termination of marketing alliance agreement | ||||||||
Net book value | $ 2,550,000 | 4,144,000 | ||||||
Non-compete agreements | ||||||||
Goodwill and Intangible Assets | ||||||||
Useful life of intangible assets | 3 years | 3 years | ||||||
Termination of marketing alliance agreement | ||||||||
Net book value | $ 61,000 | $ 104,000 | ||||||
EVO LLC | ||||||||
Ownership interest (as a percent) | 57.40% | 57.40% | ||||||
Merger Agreement | ||||||||
Merger, cash consideration (in dollars per share) | $ / shares | $ 34 | |||||||
Series A Convertible preferred stock | Purchaser | ||||||||
Number of shares issued | shares | 152,250 | |||||||
Class D Common Stock | ||||||||
Exchange basis for newly issued shares | shares | 1 | |||||||
Minimum | ||||||||
Number of markets | item | 50 | |||||||
Minimum | Marketing alliance agreements | ||||||||
Goodwill and Intangible Assets | ||||||||
Useful life of intangible assets | 5 years | 5 years | ||||||
Minimum | Merchant contract portfolios and customer relationships | ||||||||
Goodwill and Intangible Assets | ||||||||
Useful life of intangible assets | 5 years | 5 years | ||||||
Minimum | Internally developed and acquired software | ||||||||
Goodwill and Intangible Assets | ||||||||
Useful life of intangible assets | 3 years | 3 years | ||||||
Minimum | Trademarks, definite-lived | ||||||||
Goodwill and Intangible Assets | ||||||||
Useful life of intangible assets | 2 years | 2 years | ||||||
Maximum | Marketing alliance agreements | ||||||||
Goodwill and Intangible Assets | ||||||||
Useful life of intangible assets | 21 years | 21 years | ||||||
Maximum | Merchant contract portfolios and customer relationships | ||||||||
Goodwill and Intangible Assets | ||||||||
Useful life of intangible assets | 19 years | 19 years | ||||||
Maximum | Internally developed and acquired software | ||||||||
Goodwill and Intangible Assets | ||||||||
Useful life of intangible assets | 10 years | 10 years | ||||||
Maximum | Trademarks, definite-lived | ||||||||
Goodwill and Intangible Assets | ||||||||
Useful life of intangible assets | 20 years | 20 years |
Revenue - Other (Details)
Revenue - Other (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue | |||
Revenue | $ 543,082 | $ 496,645 | $ 439,101 |
Sale and Rental of POS Equipment | |||
Revenue | |||
Revenue | $ 36,200 | $ 38,900 | $ 39,300 |
Revenue - Summary (Details)
Revenue - Summary (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue | |||
Revenue | $ 543,082 | $ 496,645 | $ 439,101 |
Direct | |||
Revenue | |||
Revenue | 313,440 | 279,290 | 241,900 |
Tech-enabled | |||
Revenue | |||
Revenue | 190,574 | 175,284 | 153,292 |
Traditional | |||
Revenue | |||
Revenue | 39,068 | 42,071 | 43,909 |
Americas | |||
Revenue | |||
Revenue | 320,925 | 307,183 | 275,233 |
Americas | Direct | |||
Revenue | |||
Revenue | 143,116 | 130,752 | 113,442 |
Americas | Tech-enabled | |||
Revenue | |||
Revenue | 138,741 | 134,360 | 117,882 |
Americas | Traditional | |||
Revenue | |||
Revenue | 39,068 | 42,071 | 43,909 |
Europe | |||
Revenue | |||
Revenue | 222,157 | 189,462 | 163,868 |
Europe | Direct | |||
Revenue | |||
Revenue | 170,324 | 148,538 | 128,458 |
Europe | Tech-enabled | |||
Revenue | |||
Revenue | $ 51,833 | $ 40,924 | $ 35,410 |
Settlement Processing Assets _3
Settlement Processing Assets and Obligations (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Settlement processing assets: | ||
Receivable from card networks | $ 629,500 | $ 209,734 |
Receivable from merchants | 102,784 | 101,947 |
Totals | 732,284 | 311,681 |
Settlement processing obligations: | ||
Settlement liabilities due to merchants | (764,664) | (320,537) |
Merchant reserves | (96,416) | (101,572) |
Totals | $ (861,080) | $ (422,109) |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator: | |||
Net income attributable to EVO Payments, Inc. | $ 5,279 | $ 8,653 | $ (1,676) |
Less: Accrual of redeemable preferred stock paid-in-kind dividends | 10,524 | 9,889 | 6,528 |
Undistributed loss attributable to shares of Class A common stock | $ (5,245) | $ (1,236) | $ (8,204) |
Denominator: | |||
Weighted-average Class A common stock outstanding | 47,979,393 | 47,092,937 | 41,980,163 |
Total dilutive securities | 47,979,393 | 47,092,937 | 41,980,163 |
Earnings per share: | |||
Basic | $ (0.11) | $ (0.03) | $ (0.20) |
Diluted | $ (0.11) | $ (0.03) | $ (0.20) |
Redeemable preferred stock | |||
Earnings per share: | |||
Weighted-average anti-dilutive securities | 152,250 | 152,250 | 106,076 |
Stock options | |||
Earnings per share: | |||
Weighted-average anti-dilutive securities | 5,517,739 | 5,828,309 | 5,040,423 |
RSUs | |||
Earnings per share: | |||
Weighted-average anti-dilutive securities | 1,672,902 | 1,364,534 | 1,166,526 |
RSAs | |||
Earnings per share: | |||
Weighted-average anti-dilutive securities | 72 | 418 | 4,256 |
Performance Stock Units | |||
Earnings per share: | |||
Weighted-average anti-dilutive securities | 257,639 | ||
Class C Common Stock | |||
Earnings per share: | |||
Weighted-average anti-dilutive securities | 658,847 | 2,132,497 | |
Class D Common Stock | |||
Earnings per share: | |||
Weighted-average anti-dilutive securities | 3,765,469 | 3,227,836 | 4,245,743 |
Tax Receivable Agreement (Detai
Tax Receivable Agreement (Details) - USD ($) $ in Millions | 12 Months Ended | ||
May 25, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Tax Receivable Agreement | |||
Payment on applicable cash tax savings (as a percent) | 85% | ||
Payments to TRA obligation | $ 0 | ||
Deferred tax asset pursuant to TRA | 215 | $ 211.9 | |
Deferred tax asset pursuant to TRA, net of amortization | 175.4 | 184.1 | |
Deferred tax liability pursuant to TRA | $ 182.7 | $ 180.1 | |
Class D Common Stock | |||
Tax Receivable Agreement | |||
Exchange basis for newly issued shares | 1 |
Acquisitions (Details)
Acquisitions (Details) $ in Thousands, € in Millions | 1 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2022 USD ($) | Dec. 31, 2022 EUR (€) | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Jun. 30, 2021 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2022 EUR (€) | Dec. 31, 2022 EUR (€) | May 31, 2022 | Dec. 31, 2021 USD ($) | Jul. 31, 2021 | Dec. 31, 2020 USD ($) | |
Allocation of purchase price | ||||||||||||
Goodwill | $ 528,555 | $ 528,555 | $ 385,651 | $ 383,108 | ||||||||
Non-compete agreements | ||||||||||||
Allocation of purchase price | ||||||||||||
Useful life of intangible assets | 3 years | 3 years | ||||||||||
NBG Pay | ||||||||||||
Acquisitions | ||||||||||||
Percentage of interest acquired | 51% | 51% | 51% | |||||||||
Total consideration transferred | $ 166,300 | € 158.1 | ||||||||||
Allocation of purchase price | ||||||||||||
Other assets (liabilities), net | (111) | $ (111) | ||||||||||
Goodwill | 123,400 | 123,400 | ||||||||||
Total purchase price | 326,089 | 326,089 | ||||||||||
Less: fair value of redeemable non-controlling interest | (159,784) | (159,784) | ||||||||||
Total consideration, net of cash acquired | 166,305 | 166,305 | ||||||||||
NBG Pay | Customer relationships | ||||||||||||
Allocation of purchase price | ||||||||||||
Finite-lived intangible assets | $ 46,070 | 46,070 | ||||||||||
Useful life of intangible assets | 7 years | 7 years | ||||||||||
NBG Pay | Marketing alliance agreement | ||||||||||||
Allocation of purchase price | ||||||||||||
Finite-lived intangible assets | $ 156,730 | $ 156,730 | ||||||||||
Useful life of intangible assets | 20 years | 20 years | ||||||||||
EDPS | ||||||||||||
Acquisitions | ||||||||||||
Percentage of interest acquired | 100% | 100% | 100% | |||||||||
Total consideration transferred | $ 27,400 | € 26 | ||||||||||
Upfront payment | € | € 20 | |||||||||||
Deferred consideration, payable 18 months after closing | € | € 6 | |||||||||||
Repayment period 18 months | 18 months | 18 months | ||||||||||
Allocation of purchase price | ||||||||||||
Deferred tax liabilities | $ (1,692) | $ (1,692) | ||||||||||
Other assets (liabilities), net | 2,046 | 2,046 | ||||||||||
Goodwill | 19,355 | 19,355 | ||||||||||
Total purchase price | 27,399 | 27,399 | ||||||||||
EDPS | Acquired software | ||||||||||||
Allocation of purchase price | ||||||||||||
Finite-lived intangible assets | 1,160 | $ 1,160 | ||||||||||
Useful life of intangible assets | 5 years | 5 years | ||||||||||
EDPS | Customer relationships | ||||||||||||
Allocation of purchase price | ||||||||||||
Finite-lived intangible assets | $ 6,530 | $ 6,530 | ||||||||||
Useful life of intangible assets | 7 years | 7 years | ||||||||||
North49 Business Solutions, Inc. | ||||||||||||
Acquisitions | ||||||||||||
Percentage of interest acquired | 100% | |||||||||||
Anderson Zaks Ltd | ||||||||||||
Acquisitions | ||||||||||||
Percentage of interest acquired | 100% | |||||||||||
Pago Facil | ||||||||||||
Acquisitions | ||||||||||||
Percentage of interest acquired | 100% | |||||||||||
Total consideration transferred | $ 20,900 | |||||||||||
Upfront payment | 18,000 | |||||||||||
Deferred consideration, payable 9 months after closing | 900 | |||||||||||
Deferred consideration, payable 18 months after closing | $ 2,000 | |||||||||||
Repayment period 9 months | 9 months | |||||||||||
Repayment period 18 months | 18 months | |||||||||||
Deferred consideration, amount paid | $ 900 | $ 2,000 | ||||||||||
Allocation of purchase price | ||||||||||||
Deferred tax liabilities | $ (3,507) | |||||||||||
Other assets (liabilities), net | 855 | |||||||||||
Goodwill | 10,562 | |||||||||||
Total purchase price | 20,900 | |||||||||||
Pago Facil | Acquired software | ||||||||||||
Allocation of purchase price | ||||||||||||
Finite-lived intangible assets | $ 9,400 | |||||||||||
Useful life of intangible assets | 5 years | |||||||||||
Pago Facil | Customer relationships | ||||||||||||
Allocation of purchase price | ||||||||||||
Finite-lived intangible assets | $ 3,000 | |||||||||||
Useful life of intangible assets | 7 years | |||||||||||
Pago Facil | Trademarks, definite-lived | ||||||||||||
Allocation of purchase price | ||||||||||||
Finite-lived intangible assets | $ 440 | |||||||||||
Useful life of intangible assets | 2 years | |||||||||||
Pago Facil | Non-compete agreements | ||||||||||||
Allocation of purchase price | ||||||||||||
Finite-lived intangible assets | $ 150 | |||||||||||
Useful life of intangible assets | 3 years |
Leases - Other (Details)
Leases - Other (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Operating Leases: | ||
Finance lease amount | $ 0 | $ 0 |
Weighted-average remaining lease term | 5 years 6 months 14 days | 6 years 4 months 9 days |
Weighted-average discount rate used in the measurement of our lease liabilities | 6.03% | 5.81% |
Operating lease costs | $ 12,700 | $ 10,800 |
Variable lease costs | 2,800 | 2,100 |
Cash paid for amounts included in the measurement of operating lease liabilities | $ 9,400 | $ 9,400 |
Leases - Maturities of lease li
Leases - Maturities of lease liabilities (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Maturities of lease liabilities | |
2023 | $ 10,169 |
2024 | 9,765 |
2025 | 8,823 |
2026 | 8,207 |
2027 | 6,770 |
2028 and thereafter | 7,040 |
Total future minimum lease payments (undiscounted) | 50,774 |
Less: present value discount | (7,987) |
Present value of lease liability | $ 42,787 |
Equipment and Improvements (Det
Equipment and Improvements (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Equipment and Improvements | |||
Equipment and improvements, Gross Totals | $ 301,125 | $ 282,778 | |
Less accumulated depreciation | (228,419) | (213,761) | |
Foreign currency translation adjustment | (2,749) | (511) | |
Totals | 69,957 | 68,506 | |
Depreciation | |||
Depreciation expense | 31,400 | 37,800 | $ 40,600 |
Decrease in equipment and improvements | 17,500 | 12,200 | |
Decrease in accumulated depreciation | 16,800 | 10,900 | |
Card processing equipment | |||
Equipment and Improvements | |||
Equipment and improvements, Gross Totals | 170,390 | 155,843 | |
Office equipment | |||
Equipment and Improvements | |||
Equipment and improvements, Gross Totals | 47,225 | 44,393 | |
Computer software | |||
Equipment and Improvements | |||
Equipment and improvements, Gross Totals | 58,398 | 60,226 | |
Leasehold improvements | |||
Equipment and Improvements | |||
Equipment and improvements, Gross Totals | 19,919 | 17,883 | |
Furniture and fixtures | |||
Equipment and Improvements | |||
Equipment and improvements, Gross Totals | $ 5,193 | $ 4,433 | |
Minimum | Card processing equipment | |||
Equipment and Improvements | |||
Estimated useful lives | 3 years | ||
Minimum | Office equipment | |||
Equipment and Improvements | |||
Estimated useful lives | 3 years | ||
Minimum | Computer software | |||
Equipment and Improvements | |||
Estimated useful lives | 3 years | ||
Minimum | Furniture and fixtures | |||
Equipment and Improvements | |||
Estimated useful lives | 5 years | ||
Maximum | Card processing equipment | |||
Equipment and Improvements | |||
Estimated useful lives | 5 years | ||
Maximum | Office equipment | |||
Equipment and Improvements | |||
Estimated useful lives | 5 years | ||
Maximum | Computer software | |||
Equipment and Improvements | |||
Estimated useful lives | 5 years | ||
Maximum | Furniture and fixtures | |||
Equipment and Improvements | |||
Estimated useful lives | 7 years |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Intangible assets, net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Intangible assets with finite lives: | |||
Gross carrying value | $ 861,848 | $ 633,544 | |
Accumulated amortization | (394,522) | (350,022) | |
Accumulated impairment charges | (22,566) | (24,334) | |
Translation and other adjustments | (58,072) | (58,462) | |
Net | 386,688 | 200,726 | |
Other disclosures | |||
Reduction in gross carrying value | 2,300 | ||
Amortization expense related to intangible assets | 52,700 | 45,600 | $ 45,300 |
Impairment of intangible assets | $ 0 | 0 | $ 802 |
Estimated amortization expense period | 5 years | ||
Merchant contract portfolios and customer relationships | |||
Intangible assets with finite lives: | |||
Gross carrying value | $ 350,320 | 297,056 | |
Accumulated amortization | (211,032) | (197,187) | |
Accumulated impairment charges | (5,685) | (5,685) | |
Translation and other adjustments | (30,230) | (30,713) | |
Net | 103,373 | 63,471 | |
Marketing alliance agreements | |||
Intangible assets with finite lives: | |||
Gross carrying value | 354,145 | 197,412 | |
Accumulated amortization | (100,261) | (79,811) | |
Accumulated impairment charges | (7,557) | (7,557) | |
Translation and other adjustments | (19,407) | (20,896) | |
Net | 226,920 | 89,148 | |
Liberbank marketing alliance agreement | |||
Intangible assets with finite lives: | |||
Net | 0 | ||
Other disclosures | |||
Amortization expense related to intangible assets | 5,700 | ||
Internally developed and acquired software | |||
Intangible assets with finite lives: | |||
Gross carrying value | 136,382 | 110,396 | |
Accumulated amortization | (68,627) | (53,110) | |
Accumulated impairment charges | (9,324) | (10,191) | |
Translation and other adjustments | (4,647) | (3,236) | |
Net | 53,784 | 43,859 | |
Other disclosures | |||
Reduction in gross carrying value | 2,200 | ||
Trademarks, definite-lived | |||
Intangible assets with finite lives: | |||
Gross carrying value | 20,851 | 22,068 | |
Accumulated amortization | (14,536) | (13,427) | |
Accumulated impairment charges | (901) | ||
Translation and other adjustments | (3,765) | (3,596) | |
Net | 2,550 | 4,144 | |
Other disclosures | |||
Reduction in gross carrying value | 1,200 | ||
Non-compete agreements | |||
Intangible assets with finite lives: | |||
Gross carrying value | 150 | 6,612 | |
Accumulated amortization | (66) | (6,487) | |
Translation and other adjustments | (23) | (21) | |
Net | 61 | $ 104 | |
Other disclosures | |||
Reduction in gross carrying value | $ 6,500 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Estimated amortization expense (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Estimated amortization expense | ||
2023 | $ 64,233 | |
2024 | 52,222 | |
2025 | 42,661 | |
2026 | 31,970 | |
2027 | 26,842 | |
2028 and thereafter | 168,760 | |
Total | $ 386,688 | $ 200,726 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Intangible assets, net by segment (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Intangible assets, net | ||
Total intangible assets, net | $ 386,688 | $ 200,726 |
Americas | ||
Intangible assets, net | ||
Total intangible assets, net | 134,463 | 136,844 |
Americas | Merchant contract portfolios and customer relationships | ||
Intangible assets, net | ||
Total intangible assets, net | 41,466 | 49,435 |
Americas | Marketing alliance agreements | ||
Intangible assets, net | ||
Total intangible assets, net | 51,438 | 56,996 |
Americas | Internally developed and acquired software | ||
Intangible assets, net | ||
Total intangible assets, net | 1,269 | 1,497 |
Americas | Trademarks, definite-lived | ||
Intangible assets, net | ||
Total intangible assets, net | 40,229 | 28,812 |
Americas | Non-compete agreements | ||
Intangible assets, net | ||
Total intangible assets, net | 61 | 104 |
Europe | ||
Intangible assets, net | ||
Total intangible assets, net | 252,225 | 63,882 |
Europe | Merchant contract portfolios and customer relationships | ||
Intangible assets, net | ||
Total intangible assets, net | 61,907 | 14,036 |
Europe | Marketing alliance agreements | ||
Intangible assets, net | ||
Total intangible assets, net | 175,482 | 32,152 |
Europe | Internally developed and acquired software | ||
Intangible assets, net | ||
Total intangible assets, net | 1,281 | 2,647 |
Europe | Trademarks, definite-lived | ||
Intangible assets, net | ||
Total intangible assets, net | $ 13,555 | $ 15,047 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Goodwill activity (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill, Roll forward | |||
Goodwill, gross, at the beginning of the year | $ 409,942 | $ 407,399 | |
Accumulated impairment losses | (24,291) | (24,291) | |
Goodwill, net, at the beginning of the year | $ 385,651 | 383,108 | |
Business combinations | 149,545 | 14,483 | |
Foreign currency translation adjustment | (6,641) | (11,940) | |
Goodwill, net, at the end of the year | 528,555 | 385,651 | |
Americas | |||
Goodwill, Roll forward | |||
Goodwill, gross, at the beginning of the year | 274,930 | 266,848 | |
Goodwill, net, at the beginning of the year | 274,930 | 266,848 | |
Business combinations | 6,790 | 10,562 | |
Foreign currency translation adjustment | (948) | (2,480) | |
Goodwill, net, at the end of the year | 280,772 | 274,930 | |
Europe | |||
Goodwill, Roll forward | |||
Goodwill, gross, at the beginning of the year | 135,012 | 140,551 | |
Accumulated impairment losses | (24,291) | $ (24,291) | |
Goodwill, net, at the beginning of the year | 110,721 | 116,260 | |
Business combinations | 142,755 | 3,921 | |
Foreign currency translation adjustment | (5,693) | (9,460) | |
Goodwill, net, at the end of the year | $ 247,783 | $ 110,721 |
Accounts Payable, Accrued Exp_3
Accounts Payable, Accrued Expenses, and Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Accounts Payable, Accrued Expenses, and Other Current Liabilities | ||
Compensation and related benefits | $ 19,558 | $ 23,205 |
Third-party processing and payment network fees | 46,257 | 43,529 |
Trade payables | 7,177 | 6,089 |
Taxes payable | 37,723 | 20,399 |
Commissions payable to third parties | 15,750 | 16,025 |
Unearned revenue | 4,327 | 4,723 |
Other | 33,864 | 19,979 |
Total accounts payable, accrued expenses, and other current liabilities | $ 164,656 | $ 133,949 |
Related Party Transactions - Re
Related Party Transactions - Related party balances (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Related party balances: | ||
Due from related parties, current | $ 697 | $ 782 |
Due to related parties, current | (4,638) | (4,207) |
Due to related parties, long-term | $ (185) | $ (185) |
Related Party Transactions - Tr
Related Party Transactions - Transactions (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) item subsidiary | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Related Party Transactions | |||
Lease liabilities | $ 42,787 | ||
515 Broadhollow, LLC | |||
Related Party Transactions | |||
Lease liabilities | 500 | $ 1,900 | |
Commission Expense | |||
Related Party Transactions | |||
Expenses with related parties | 11,700 | 13,100 | $ 15,300 |
Non-controlling interest | |||
Related Party Transactions | |||
Due to related parties, current - non-controlling interest holder of a consolidated subsidiary | 3,600 | 3,000 | |
Lease liabilities | 200 | 400 | |
Unconsolidated investees | |||
Related Party Transactions | |||
Due to related parties, current - commissions payable to unconsolidated investees of the Company | 1,000 | 1,200 | |
Blueapple | Treasury, payroll, tax preparation and other services | |||
Related Party Transactions | |||
Expenses with related parties | $ 200 | 200 | 200 |
Relative of Chairman | |||
Related Party Transactions | |||
Number of owned subsidiaries | subsidiary | 2 | ||
Number of unconsolidated investee | item | 1 | ||
Relative of Chairman | Commission Expense | Maximum | |||
Related Party Transactions | |||
Expenses with related parties | $ 100 | 100 | 600 |
NFP | |||
Related Party Transactions | |||
Expenses with related parties | $ 1,100 | $ 1,200 | $ 700 |
NFP | MDP | |||
Related Party Transactions | |||
Number of executive officers | item | 1 |
Income taxes - Schedule of Dome
Income taxes - Schedule of Domestic and Foreign (loss) Income Before Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Taxes | |||
Domestic | $ (28,541) | $ (21,242) | $ (37,043) |
Foreign | 85,092 | 60,968 | 45,999 |
Income before income taxes | $ 56,551 | $ 39,726 | $ 8,956 |
Income taxes - Schedule of Inco
Income taxes - Schedule of Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current: | |||
Foreign | $ 30,929 | $ 13,978 | $ 10,594 |
Federal | 392 | (226) | 61 |
State | 449 | (43) | (15) |
Total current income tax expense | 31,770 | 13,709 | 10,640 |
Deferred: | |||
Foreign | (1,810) | 11,399 | 2,637 |
Federal | 5,467 | (2,769) | (96) |
State | 818 | (302) | (59) |
Total deferred income tax expense (benefit) | 4,475 | 8,328 | 2,482 |
Totals | $ 36,245 | $ 22,037 | $ 13,122 |
Income taxes - Schedule of Effe
Income taxes - Schedule of Effective Income Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Effective income tax rate reconciliation | |||
Federal statutory rate (as a percent) | 21% | 21% | 21% |
State taxes, net of federal benefit (as a percent) | (2.40%) | (12.50%) | 26.30% |
Foreign tax rate differential (as a percent) | (0.30%) | (0.20%) | (0.40%) |
Increase (decrease) in U.S. valuation allowance (as a percent) | 1.80% | (28.60%) | |
Non-controlling Interest (as a percent) | (11.00%) | (9.90%) | 1.20% |
Other miscellaneous permanent differences (as a percent) | 2.90% | (2.40%) | (21.00%) |
Remeasurement of deferred tax assets (as a percent) | (0.60%) | (6.10%) | (4.40%) |
Undistributed earnings of foreign subsidiaries (as a percent) | 0.10% | 4.20% | |
U.S. federal tax related to foreign effectively connected income (as a percent) | 0.10% | 2.70% | |
Increase in Foreign valuation allowance (as a percent) | 0.90% | 14.50% | |
Effective tax rate (as a percent) | 64.10% | 55.50% | 146.50% |
Mexico | |||
Effective income tax rate reconciliation | |||
Income tax provision (as a percent) | 26.50% | 20% | 85.80% |
Poland | |||
Effective income tax rate reconciliation | |||
Income tax provision (as a percent) | 15.60% | 18% | 75.70% |
Germany | |||
Effective income tax rate reconciliation | |||
Income tax provision (as a percent) | 6.70% | 8.90% | |
Spain | |||
Effective income tax rate reconciliation | |||
Income tax provision (as a percent) | (29.10%) | ||
Other Foreign | |||
Effective income tax rate reconciliation | |||
Income tax provision (as a percent) | 3% | 4% | 13.10% |
Income taxes - Components of De
Income taxes - Components of Deferred Tax Items (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets | ||||
U.S. net operating losses | $ 30,777 | $ 29,569 | ||
U.S. interest limitation | 614 | |||
Partnership basis adjustment | 175,358 | 184,119 | ||
Other partnership basis items | 31,218 | 24,235 | ||
Foreign net operating losses | 13,338 | 12,014 | ||
Foreign intangibles | 1,573 | 1,345 | ||
Foreign accrued expenses and other temporary differences | 8,007 | 5,653 | ||
Deferred tax assets, gross | 260,885 | 256,935 | ||
Valuation allowance | (14,887) | (11,634) | $ (5,090) | $ (8,152) |
Deferred tax asset | 245,998 | 245,301 | ||
Deferred tax liabilities: | ||||
Acquisition related intangibles | (27,122) | (23,656) | ||
Foreign equipment and improvements | (1,130) | (2,070) | ||
Foreign accrued expenses and other temporary differences | (1,424) | (3,521) | ||
Deferred tax liability | (29,676) | (29,247) | ||
Deferred tax asset, Net | $ 216,322 | $ 216,054 |
Income taxes - Schedule of Valu
Income taxes - Schedule of Valuation Allowance Associated with the Deferred Tax Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Valuation Allowance | |||
Beginning balance | $ 11,634 | $ 5,090 | $ 8,152 |
Ending balance | 14,887 | 11,634 | 5,090 |
U.S. interest limitation | |||
Income Tax Valuation Allowance | |||
Additions | 999 | ||
Reductions | (2,558) | ||
Deferred tax assets in foreign jurisdictions | |||
Income Tax Valuation Allowance | |||
Additions | 3,833 | 8,389 | 1,097 |
Reductions | $ (1,579) | $ (1,845) | |
Reassessments of available foreign net operating loss carryover | |||
Income Tax Valuation Allowance | |||
Reductions | $ (1,601) |
Income taxes - Schedule of Net
Income taxes - Schedule of Net Operating Losses Carryforwards by Country and Years (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
United States | |
Income taxes | |
Operating loss carryforwards | $ 133,617 |
Spain | |
Income taxes | |
Operating loss carryforwards | 26,041 |
Gibraltar | |
Income taxes | |
Operating loss carryforwards | 21,456 |
Mexico | |
Income taxes | |
Operating loss carryforwards | 5,457 |
Chile | |
Income taxes | |
Operating loss carryforwards | 4,584 |
Ireland | |
Income taxes | |
Operating loss carryforwards | 3,069 |
Czech Republic | |
Income taxes | |
Operating loss carryforwards | 2,784 |
UK | |
Income taxes | |
Operating loss carryforwards | 670 |
Canada | |
Income taxes | |
Operating loss carryforwards | 550 |
Greece | |
Income taxes | |
Operating loss carryforwards | $ 383 |
Income taxes - Schedule of Roll
Income taxes - Schedule of Roll Forward of Gross Unrecognized Tax Benefits (Details) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Income Taxes | |
Increase in gross unrecognized tax benefits | $ 5,200,000 |
Unrecognized tax benefits and accrued interest and penalties would affect our effective tax rate | 6,300,000 |
Possible change in unrecognized tax benefits | 6,300,000 |
Roll Forward of Gross Unrecognized Tax Benefits | |
Beginning Balance | 1,027,000 |
Increases in balances related to tax positions taken during prior periods (including those related to acquisitions made during the year) | 10,888,000 |
Decreases in balances related to settlements with taxing authorities | (5,651,000) |
Ending Balance | $ 6,264,000 |
Long-Term Debt and Lines of C_3
Long-Term Debt and Lines of Credit - Credit Facility (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Nov. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2022 | |
Long-term debt | |||
Loss on extinguishment of debt | $ 2,196 | ||
Revolving Credit Facility | Prime rate | |||
Long-term debt | |||
Interest rate (as a percent) | 8.25% | ||
Revolving Credit Facility | Three-month LIBOR | |||
Long-term debt | |||
Interest rate (as a percent) | 6.40% | ||
Revolving Credit Facility | One-month LIBOR | |||
Long-term debt | |||
Interest rate (as a percent) | 6.14% | ||
Senior Secured Credit Facilities | |||
Long-term debt | |||
Loss on refinance of debt | (5,700) | ||
Loss on extinguishment of debt | 2,200 | ||
Unamortized deferred financing costs | $ 3,500 | ||
First priority lien on capital stock, limited, in the case of capital stock of foreign subsidiaries, specified percentage of voting stock | 65% | ||
First priority lien on capital stock, limited, in the case of capital stock of first tier foreign subsidiaries, specified percentage of non-voting stock | 100% | ||
Senior Secured Credit Facilities | Minimum | |||
Long-term debt | |||
Commitment fee (as a percent) | 0.25% | ||
Increase in the maximum consolidated leverage ratio the borrower may elect, upon the consummation of a material acquisition | 0.5 | ||
Senior Secured Credit Facilities | Maximum | |||
Long-term debt | |||
Commitment fee (as a percent) | 0.375% | ||
Increase in the maximum consolidated leverage ratio the borrower may elect, upon the consummation of a material acquisition | 2 | ||
Senior Secured Credit Facilities | Base Rate Borrowings | Minimum | |||
Long-term debt | |||
Applicable margin (as a percent) | 0.75% | ||
Senior Secured Credit Facilities | Base Rate Borrowings | Maximum | |||
Long-term debt | |||
Applicable margin (as a percent) | 1.75% | ||
Senior Secured Credit Facilities | LIBOR Rate Borrowings | Minimum | |||
Long-term debt | |||
Applicable margin (as a percent) | 1.75% | ||
Senior Secured Credit Facilities | LIBOR Rate Borrowings | Maximum | |||
Long-term debt | |||
Applicable margin (as a percent) | 2.75% | ||
Senior Secured Credit Facilities | Revolving Credit Facility | |||
Long-term debt | |||
Commitments | $ 200,000 | ||
Senior Secured Credit Facilities | Term loan | |||
Long-term debt | |||
Face amount of debt | $ 588,000 | ||
Interest rate (as a percent) | 6.14% |
Long-Term Debt and Lines of C_4
Long-Term Debt and Lines of Credit - Summary (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Long-term debt | ||
Long term debt gross | $ 641,500 | |
Less debt issuance costs | (4,212) | $ (5,310) |
Total long-term debt | 637,288 | 582,690 |
Less current portion of long-term debt, net of current portion of debt issuance costs | (14,092) | (14,058) |
Total long-term debt, long-term portion | 623,196 | 568,632 |
Revolver | ||
Long-term debt | ||
Long term debt gross | 68,200 | |
First lien senior secured credit facility | Term loan | ||
Long-term debt | ||
Long term debt gross | $ 573,300 | $ 588,000 |
Long-Term Debt and Lines of C_5
Long-Term Debt and Lines of Credit - Principal payment requirements (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Principal payment requirements: | |
2023 | $ 14,700 |
2024 | 29,400 |
2025 | 44,100 |
2026 | 553,300 |
Total | $ 641,500 |
Long-Term Debt and Lines of C_6
Long-Term Debt and Lines of Credit - Settlement Lines of Credit (Details) - Settlement facilities - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Settlement obligations | ||
Amount outstanding | $ 5 | $ 8 |
Additional capacity | $ 296.5 | $ 142.6 |
Weighted-average interest rate | 8.70% | 5.20% |
Derivatives - Narrative (Detail
Derivatives - Narrative (Details) - Interest Rate Swap - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Derivatives | ||
Notional amount | $ 500,000 | |
Interest rate | 0.2025% | |
Other current assets | Designated as Hedging Instrument | ||
Derivatives | ||
Fair value of interest rate swap assets | $ 1,297 |
Derivatives - AOCI (Details)
Derivatives - AOCI (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Effect of hedge accounting on accumulated other comprehensive loss | |||
Beginning balance | $ (832,658) | ||
Less: Derivative gain (loss) reclassified from accumulated other comprehensive loss to interest expense | 7,554 | $ (476) | $ (120) |
Ending balance | (1,130,753) | (832,658) | |
Accumulated Gain (Loss), Cash Flow Hedge | |||
Effect of hedge accounting on accumulated other comprehensive loss | |||
Beginning balance | 1,297 | (533) | |
Derivative gain (loss) recognized in the current period in accumulated other comprehensive loss | 6,257 | 1,354 | (653) |
Less: Derivative gain (loss) reclassified from accumulated other comprehensive loss to interest expense | $ 7,554 | (476) | (120) |
Ending balance | $ 1,297 | $ (533) |
Derivatives - Income Statement
Derivatives - Income Statement (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Effect of hedge accounting on the unaudited condensed consolidated statements of operations and comprehensive income (loss) | |||
Total interest expense including the effects of cash flow hedges | $ (17,641) | $ (23,161) | $ (30,160) |
Derivative gain (loss) reclassified from accumulated other comprehensive loss into interest expense | 7,554 | (476) | (120) |
Interest Rate Swap | |||
Effect of hedge accounting on the unaudited condensed consolidated statements of operations and comprehensive income (loss) | |||
Total interest expense including the effects of cash flow hedges | $ (17,641) | $ (23,161) | $ (30,160) |
Derivatives - Cross Currency Sw
Derivatives - Cross Currency Swap (Details) - Cross Currency Swap $ in Thousands, € in Millions | 12 Months Ended | ||||
Dec. 31, 2022 USD ($) | Nov. 15, 2027 USD ($) | Nov. 15, 2027 EUR (€) | Nov. 15, 2022 USD ($) | Nov. 15, 2022 EUR (€) | |
Derivatives | |||||
Notional liability amount | $ 26,200 | ||||
Notional asset amount | € | € 25 | ||||
Amount of Gain (Loss) Recognized in OCI | $ (51) | ||||
Amount of Gain (Loss) Reclassified from AOCI into Income | 141 | ||||
Forecast | |||||
Derivatives | |||||
Notional liability amount | € | € 25 | ||||
Notional asset amount | $ 26,200 | ||||
Other current assets | |||||
Derivatives | |||||
Fair value of cross currency swap, current portion | 451 | ||||
Other long-term liabilities | |||||
Derivatives | |||||
Fair value of cross currency swap, long term portion | $ (610) |
Derivatives - Non-designated De
Derivatives - Non-designated Derivatives (Details) - Non-designated Derivatives - Forward swap $ in Thousands, £ in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 USD ($) | Apr. 30, 2022 GBP (£) | Apr. 30, 2022 MXN ($) | |
Derivatives | |||
Notional asset amount | £ 34.5 | $ 960.1 | |
Other income (expense) | |||
Derivatives | |||
Realized/Unrealized gain (loss) | $ 6,530 | ||
Other current assets | |||
Derivatives | |||
Foreign currency derivative asset, Fair value | $ 6,530 |
Supplemental Cash Flows Infor_3
Supplemental Cash Flows Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Supplemental disclosure of cash flow data: | |||
Interest paid | $ 16,226 | $ 20,917 | $ 30,962 |
Income taxes paid | 17,901 | 10,259 | 13,429 |
Supplemental disclosure of non-cash investing and financing activities: | |||
Operating lease liabilities arising from obtaining new or modified right-of-use assets | 14,908 | 9,845 | 3,347 |
Decrease in operating lease liabilities and corresponding right-of-use assets resulting from lease modifications | (3,158) | (6,801) | |
Software and equipment assets acquired by assuming directly related liabilities | 11,603 | ||
Deferred consideration payable | 11,616 | 3,439 | |
Contingent consideration payable | 472 | ||
Accrual of redeemable preferred stock paid-in-kind-dividends | 10,524 | 9,889 | 6,528 |
Exchanges of Class C and Class D common stock for Class A common stock | $ 1,895 | $ 15,038 | 16,658 |
Secondary offering | $ 43,484 |
Redeemable Preferred Stock (Det
Redeemable Preferred Stock (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Apr. 21, 2020 USD ($) D $ / shares shares | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Redeemable Preferred Stock | ||||
Redeemable preferred stock issuance costs | $ 1,660 | |||
Redeemable preferred stock | ||||
Redeemable Preferred Stock | ||||
Number of shares issued | shares | 152,250 | |||
Proceeds from issuance of preferred stock | $ 149,300 | |||
Redeemable preferred stock issuance costs | $ 1,700 | |||
Liquidation preference per share (in dollars per share) | $ / shares | $ 1,000 | |||
Amortization period of discount | 10 years | |||
Carrying value of the preferred stock increased for accretion of the PIK dividend | $ 10,500 | $ 9,900 | $ 6,500 | |
PIK dividend rate | 6.22% | |||
Threshold percentage of Class A Common Stock ownership of the aggregate voting power as required by Nasdaq, in the event of conversion, used to determine the elimination of the limitation on the conversion of the Preferred Stock | 19.99% | |||
Threshold trading days | D | 20 | |||
Threshold consecutive trading days | D | 30 | |||
Percentage of then current liquidation preference per share plus accumulated and unpaid dividends as cash consideration | 150% | |||
Convertible preferred stock redemption period | 10 years | |||
Estimated amount for repurchase of redeemable preferred stock | $ 267,800 | |||
Redeemable preferred stock | Convertible Preferred Stock, Dividend Rate For First Ten Years | ||||
Redeemable Preferred Stock | ||||
PIK dividend rate | 6% | |||
Redeemable preferred stock | Convertible Preferred Stock, Dividend Rate Thereafter | ||||
Redeemable Preferred Stock | ||||
PIK dividend rate | 8% | |||
Redeemable preferred stock | Prior to the fourth semi-annual PIK dividend payment date | ||||
Redeemable Preferred Stock | ||||
Threshold stock price trigger percentage | 180% | |||
Redeemable preferred stock | After fourth and prior to the sixth semi-annual PIK dividend payment date | ||||
Redeemable Preferred Stock | ||||
Threshold stock price trigger percentage | 170% | |||
Redeemable preferred stock | On or after the sixth and prior to the eighth semi-annual PIK dividend payment date | ||||
Redeemable Preferred Stock | ||||
Threshold stock price trigger percentage | 160% | |||
Redeemable preferred stock | On or after the eighth semi-annual PIK dividend payment date | ||||
Redeemable Preferred Stock | ||||
Threshold stock price trigger percentage | 150% | |||
Redeemable preferred stock | Change of Control is on or after the sixth semi-annual PIK dividend payment date | ||||
Redeemable Preferred Stock | ||||
Percentage of then current liquidation preference per share plus accumulated and unpaid dividends as cash consideration | 100% | |||
Class A Common Stock | ||||
Redeemable Preferred Stock | ||||
Conversion rate | shares | 63.2911 | |||
Conversion price | $ / shares | $ 15.80 |
Redeemable Non-controlling In_3
Redeemable Non-controlling Interests (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Oct. 31, 2020 | |
Redeemable Non-controlling Interests | ||||
Beginning balance | $ 1,029,090 | $ 1,055,633 | $ 1,052,448 | |
Contributions | 3,201 | 1,487 | ||
Distributions | (11,703) | (13,655) | (4,537) | |
Acquired RNCI | 159,784 | |||
Net income (loss) attributable to RNCI | 13,977 | 8,781 | (1,149) | |
Unrealized loss on foreign currency translation adjustment | (4,215) | (16,079) | ||
Unrealized gain on change in fair value of interest rate swap | 707 | |||
(Decrease) increase in the maximum redemption amount of RNCI | 348,988 | 3,000 | ||
Allocation of eService fair value RNCI adjustment to Blueapple | (17,699) | (7,869) | ||
Allocation of BCI Pagos fair value RNCI adjustment to Blueapple | 2,153 | (2,915) | ||
Allocation of NBG Pay fair value RNCI adjustment to Blueapple | (7,627) | |||
Ending balance | 1,515,450 | 1,029,090 | 1,055,633 | |
Interest Rate Swap | ||||
Redeemable Non-controlling Interests | ||||
Unrealized gain on change in fair value of interest rate swap | (481) | |||
Cross Currency Swap | ||||
Redeemable Non-controlling Interests | ||||
Unrealized gain on change in fair value of interest rate swap | (18) | |||
Blueapple | ||||
Redeemable Non-controlling Interests | ||||
Beginning balance | 823,386 | 868,738 | ||
Net income (loss) attributable to RNCI | 3,070 | 47 | ||
Unrealized loss on foreign currency translation adjustment | (2,671) | (10,313) | ||
Unrealized gain on change in fair value of interest rate swap | 707 | |||
(Decrease) increase in the maximum redemption amount of RNCI | 288,301 | (25,009) | ||
Allocation of eService fair value RNCI adjustment to Blueapple | (17,699) | (7,869) | ||
Allocation of BCI Pagos fair value RNCI adjustment to Blueapple | 2,153 | (2,915) | ||
Allocation of NBG Pay fair value RNCI adjustment to Blueapple | (7,627) | |||
Ending balance | 1,088,414 | 823,386 | 868,738 | |
Blueapple | Interest Rate Swap | ||||
Redeemable Non-controlling Interests | ||||
Unrealized gain on change in fair value of interest rate swap | (481) | |||
Blueapple | Cross Currency Swap | ||||
Redeemable Non-controlling Interests | ||||
Unrealized gain on change in fair value of interest rate swap | $ (18) | |||
eService | ||||
Redeemable Non-controlling Interests | ||||
Ownership interest (as a percent) | 66% | |||
Beginning balance | $ 198,531 | 186,436 | ||
Distributions | (11,703) | (13,655) | ||
Net income (loss) attributable to RNCI | 12,578 | 10,329 | ||
Unrealized loss on foreign currency translation adjustment | (3,978) | (5,045) | ||
(Decrease) increase in the maximum redemption amount of RNCI | 46,334 | 20,466 | ||
Ending balance | $ 241,762 | 198,531 | 186,436 | |
eService | PKO Bank Polski | ||||
Redeemable Non-controlling Interests | ||||
Ownership interest of noncontrolling owners (as a percent) | 34% | |||
EVO LLC | ||||
Redeemable Non-controlling Interests | ||||
Ownership interest (as a percent) | 57.40% | |||
BCI Pagos | ||||
Redeemable Non-controlling Interests | ||||
Joint venture ownership interest (as a percent) | 50.10% | |||
Beginning balance | $ 7,173 | 459 | ||
Contributions | 3,201 | 1,487 | ||
Net income (loss) attributable to RNCI | (1,365) | (1,595) | ||
Unrealized loss on foreign currency translation adjustment | 203 | (721) | ||
(Decrease) increase in the maximum redemption amount of RNCI | (5,643) | 7,543 | ||
Ending balance | $ 3,569 | $ 7,173 | $ 459 | |
BCI Pagos | BCI | ||||
Redeemable Non-controlling Interests | ||||
Joint venture ownership interest (as a percent) | 49.90% | |||
NBG Pay | ||||
Redeemable Non-controlling Interests | ||||
Joint venture ownership interest (as a percent) | 51% | |||
Acquired RNCI | $ 159,784 | |||
Net income (loss) attributable to RNCI | (306) | |||
Unrealized loss on foreign currency translation adjustment | 2,231 | |||
(Decrease) increase in the maximum redemption amount of RNCI | 19,996 | |||
Ending balance | $ 181,705 | |||
NBG Pay | Shareholders Agreement | ||||
Redeemable Non-controlling Interests | ||||
Joint venture ownership interest (as a percent) | 49% |
Fair Value - Summary (Details)
Fair Value - Summary (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Fair Value | ||
Investment in equity securities | $ 35,818 | $ 25,398 |
Interest Rate Swap | ||
Fair Value | ||
Derivative asset | 1,300 | |
Cross Currency Swap | ||
Fair Value | ||
Derivative liability | (200) | |
Forward swap | ||
Fair Value | ||
Derivative asset | 6,500 | |
Recurring | ||
Fair Value | ||
Cash equivalents | 40,443 | 95,919 |
Contingent consideration | (625) | (611) |
Investment in equity securities | 35,818 | 25,398 |
Total | (1,433,443) | (907,087) |
Recurring | Interest Rate Swap | ||
Fair Value | ||
Derivative asset | 1,297 | |
Recurring | Cross Currency Swap | ||
Fair Value | ||
Derivative liability | (159) | |
Recurring | Forward swap | ||
Fair Value | ||
Derivative asset | 6,530 | |
Recurring | Blueapple | ||
Fair Value | ||
Redeemable non-controlling interest | (1,088,414) | (823,386) |
Recurring | eService | ||
Fair Value | ||
Redeemable non-controlling interest | (241,762) | (198,531) |
Recurring | BCI Pagos | ||
Fair Value | ||
Redeemable non-controlling interest | (3,569) | (7,173) |
Recurring | NBG Pay | ||
Fair Value | ||
Redeemable non-controlling interest | (181,705) | |
Level 1 | Recurring | ||
Fair Value | ||
Cash equivalents | 40,443 | 95,919 |
Total | (1,047,971) | (727,467) |
Level 1 | Recurring | Blueapple | ||
Fair Value | ||
Redeemable non-controlling interest | (1,088,414) | (823,386) |
Level 2 | Recurring | ||
Fair Value | ||
Investment in equity securities | 35,818 | 25,398 |
Total | 42,189 | 26,695 |
Level 2 | Recurring | Interest Rate Swap | ||
Fair Value | ||
Derivative asset | 1,297 | |
Level 2 | Recurring | Cross Currency Swap | ||
Fair Value | ||
Derivative liability | (159) | |
Level 2 | Recurring | Forward swap | ||
Fair Value | ||
Derivative asset | 6,530 | |
Level 3 | Recurring | ||
Fair Value | ||
Contingent consideration | (625) | (611) |
Total | (427,661) | (206,315) |
Level 3 | Recurring | eService | ||
Fair Value | ||
Redeemable non-controlling interest | (241,762) | (198,531) |
Level 3 | Recurring | BCI Pagos | ||
Fair Value | ||
Redeemable non-controlling interest | (3,569) | $ (7,173) |
Level 3 | Recurring | NBG Pay | ||
Fair Value | ||
Redeemable non-controlling interest | $ (181,705) |
Fair Value - Other (Details)
Fair Value - Other (Details) € in Millions | 12 Months Ended | ||||
Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2022 EUR (€) | Dec. 31, 2021 EUR (€) | |
Fair Value | |||||
Long-term debt, fair value | $ 641,500,000 | $ 588,000,000 | |||
(Loss) gain on investment in equity securities | 7,313,000 | 237,000 | $ 17,574,000 | ||
Assets, transfers into Level 3 | 0 | 0 | |||
Assets, transfers out of Level 3 | 0 | 0 | |||
Liability, transfers into Level 3 | 0 | 0 | |||
Liability, transfers out of Level 3 | 0 | 0 | |||
Visa Series A preferred stock | |||||
Fair Value | |||||
(Loss) gain on investment in equity securities | 7,300,000 | 200,000 | $ 17,600,000 | ||
Visa Series C preferred stock | |||||
Fair Value | |||||
Carrying amount of Visa preferred shares | 4,000,000 | 7,400,000 | € 3.5 | € 6.5 | |
Estimated fair value of Visa preferred shares | $ 10,400,000 | 20,300,000 | |||
Series C preferred stock | |||||
Fair Value | |||||
Convertible preferred stock, conversion period (in years) | 12 years | ||||
Interest Rate Swap | |||||
Fair Value | |||||
Derivative asset | $ 1,300,000 | ||||
Cross Currency Swap | |||||
Fair Value | |||||
Derivative liability | $ 200,000 | ||||
Forward swap | |||||
Fair Value | |||||
Derivative asset | $ 6,500,000 | ||||
Minimum | Market Approach | |||||
Fair Value | |||||
Valuation multiples for revenue | 5.25 | 4.75 | |||
Valuation multiples for EBITDA | 9.25 | 9.25 | |||
Maximum | Market Approach | |||||
Fair Value | |||||
Valuation multiples for revenue | 5.75 | 5.25 | |||
Valuation multiples for EBITDA | 10.75 | 10.75 | |||
eService | Income Approach | |||||
Fair Value | |||||
Redeemable non-controlling interest, measurement input (as a percent) | 50% | ||||
eService | Market Approach | |||||
Fair Value | |||||
Redeemable non-controlling interest, measurement input (as a percent) | 50% | ||||
eService | Weighted Average Cost of Capital | |||||
Fair Value | |||||
Redeemable non-controlling interest, measurement input (as a percent) | 14.50% | 12% | |||
eService | Maximum | Growth Rate | |||||
Fair Value | |||||
Redeemable non-controlling interest, measurement input (as a percent) | 12.90% | 12.30% | |||
BCI Pagos | Income Approach | |||||
Fair Value | |||||
Redeemable non-controlling interest, measurement input (as a percent) | 50% | ||||
BCI Pagos | Market Approach | |||||
Fair Value | |||||
Redeemable non-controlling interest, measurement input (as a percent) | 50% | ||||
Valuation multiples for revenue | 1.75 | ||||
Valuation multiples for EBITDA | 9.50 | 6 | |||
BCI Pagos | Weighted Average Cost of Capital | |||||
Fair Value | |||||
Redeemable non-controlling interest, measurement input (as a percent) | 19% | 17% | |||
BCI Pagos | Minimum | Market Approach | |||||
Fair Value | |||||
Valuation multiples for revenue | 1.25 | ||||
BCI Pagos | Maximum | Market Approach | |||||
Fair Value | |||||
Valuation multiples for revenue | 2.25 | ||||
BCI Pagos | Maximum | Growth Rate | |||||
Fair Value | |||||
Redeemable non-controlling interest, measurement input (as a percent) | 30% | 17.90% |
Segment Information - Informati
Segment Information - Information on segments & reconciliations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Information | |||
Revenue | $ 543,082 | $ 496,645 | $ 439,101 |
Segment profit | 56,551 | 39,726 | 8,956 |
Depreciation and amortization | (84,143) | (83,389) | (85,924) |
Net interest expense | (14,505) | (21,510) | (28,988) |
Provision for income tax expense | (36,245) | (22,037) | (13,122) |
Share-based compensation expense | (29,223) | (27,419) | (20,664) |
Less: Net income (loss) attributable to non-controlling interests of EVO Investco, LLC | 3,431 | 33 | (9,679) |
Net income (loss) attributable to EVO Payments, Inc. | 5,279 | 8,653 | (1,676) |
Capital expenditures | 36,232 | 33,395 | 20,481 |
Operating | |||
Segment Information | |||
Segment profit | 224,289 | 198,669 | 171,500 |
Corporate | |||
Segment Information | |||
Segment profit | (51,463) | (35,628) | (34,157) |
Americas | |||
Segment Information | |||
Revenue | 320,925 | 307,183 | 275,233 |
Segment profit | 143,297 | 135,081 | 106,052 |
Capital expenditures | 15,148 | 14,080 | 9,716 |
Europe | |||
Segment Information | |||
Revenue | 222,157 | 189,462 | 163,868 |
Segment profit | 80,992 | 63,588 | 65,448 |
Capital expenditures | $ 21,084 | $ 19,315 | $ 10,765 |
Segment Information - Long live
Segment Information - Long lived assets by geographic location (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Segment Information | ||
Long-lived assets | $ 110,937 | $ 103,210 |
United States | ||
Segment Information | ||
Long-lived assets | 27,285 | 30,228 |
Poland | ||
Segment Information | ||
Long-lived assets | 32,517 | 31,534 |
Mexico | ||
Segment Information | ||
Long-lived assets | 17,264 | 18,554 |
Other | ||
Segment Information | ||
Long-lived assets | $ 33,871 | $ 22,894 |
Segment Information - Revenue f
Segment Information - Revenue from external customers (Details) - Revenue from external customers - Geographic Concentration Risk | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
United States | |||
Revenue from external customers | |||
Revenue from external customers as a percentage of total revenue | 34.60% | 38% | 41.20% |
Mexico | |||
Revenue from external customers | |||
Revenue from external customers as a percentage of total revenue | 20.90% | 20.50% | 18% |
Poland | |||
Revenue from external customers | |||
Revenue from external customers as a percentage of total revenue | 17.80% | 17.60% | 18.50% |
Shareholder's Equity - Organiza
Shareholder's Equity - Organization structure (Details) | 12 Months Ended | |
May 25, 2021 shares | Dec. 31, 2022 Vote shares | |
Class A Common Stock | ||
Shareholders' Equity | ||
Number of votes per share | Vote | 1 | |
Exchange basis for newly issued shares | 1 | |
Class B Common Stock | ||
Shareholders' Equity | ||
Cancellation of Class B common stock (in shares) | 32,163,538 | |
Class D Common Stock | ||
Shareholders' Equity | ||
Number of votes per share | Vote | 1 | |
Exchange basis for newly issued shares | 1 | |
Blueapple | ||
Shareholders' Equity | ||
Number of LLC interests received in connection with the reclassification of units outstanding in EVO, LLC as a result of the reorganization | 32,163,538 | |
Blueapple and MDP | ||
Shareholders' Equity | ||
Number of LLC interests received in connection with the reclassification of units outstanding in EVO, LLC as a result of the reorganization | 32,163,538 |
Stock Compensation Plans and _3
Stock Compensation Plans and Share-Based Compensation Awards - Share based compensation expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Feb. 25, 2020 | May 22, 2018 | |
Stock Compensation Plans and Share-Based Compensation Awards | |||||
Share-based compensation expense | $ 29,223 | $ 27,419 | $ 20,664 | ||
Income tax benefit | $ (4,871) | $ (4,053) | $ (3,406) | ||
2018 Plan | Class A Common Stock | |||||
Stock Compensation Plans and Share-Based Compensation Awards | |||||
Shares reserved for issuance | 7,792,162 | ||||
Amended and Restated 2018 Plan | Class A Common Stock | |||||
Stock Compensation Plans and Share-Based Compensation Awards | |||||
Shares reserved for issuance | 15,142,162 |
Stock Compensation Plans and _4
Stock Compensation Plans and Share-Based Compensation Awards - RSUs (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Stock Compensation Plans and Share-Based Compensation Awards | |||
Share-based compensation expense | $ 29,223 | $ 27,419 | $ 20,664 |
Service-Based Restricted Stock Units | |||
Stock Compensation Plans and Share-Based Compensation Awards | |||
Share-based compensation expense | 17,300 | 13,400 | $ 8,500 |
Unrecognized compensation expense | $ 26,800 | $ 22,500 | |
Weighted average period outstanding for unvested RSUs | 1 year 9 months 18 days | 2 years | |
Fair value of share based awards vested | $ 13,700 | $ 10,000 | |
Number outstanding | |||
Balance at beginning of period (in shares) | 1,339 | 1,149 | |
Granted (in shares) | 1,000 | 711 | |
Vested (in shares) | (604) | (428) | |
Forfeited (in shares) | (91) | (93) | |
Balance at end of period (in shares) | 1,644 | 1,339 | 1,149 |
Weighted average grant date fair value | |||
Balance at beginning of period (in dollars per share) | $ 24.35 | $ 22.92 | |
Granted (in dollars per share) | 23.85 | 25.74 | |
Vested (in dollars per share) | 22.78 | 23.25 | |
Forfeited (in dollars per share) | 24.29 | 22.36 | |
Balance at end of period (in dollars per share) | $ 24.62 | $ 24.35 | $ 22.92 |
Service-Based Restricted Stock Units | Executive Officers | |||
Stock Compensation Plans and Share-Based Compensation Awards | |||
Vesting period | 3 years | ||
Service-Based Restricted Stock Units | Maximum | |||
Stock Compensation Plans and Share-Based Compensation Awards | |||
Vesting period | 4 years | ||
Service-Based Restricted Stock Units | Minimum | |||
Stock Compensation Plans and Share-Based Compensation Awards | |||
Vesting period | 3 years |
Stock Compensation Plans and _5
Stock Compensation Plans and Share-Based Compensation Awards - Stock Options (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Stock Compensation Plans and Share-Based Compensation Awards | |||
Share-based compensation expense | $ 29,223 | $ 27,419 | $ 20,664 |
Service-Based Stock Options | |||
Stock Compensation Plans and Share-Based Compensation Awards | |||
Share-based compensation expense | $ 8,600 | $ 12,500 | $ 12,100 |
Number outstanding | |||
Balance at beginning of period (in shares) | 5,491 | 5,084 | |
Granted (in shares) | 1,115 | ||
Exercised (in shares) | (481) | (450) | |
Forfeited (in shares) | (138) | (258) | |
Balance at end of period (in shares) | 4,872 | 5,491 | 5,084 |
Exercisable at end of period (in shares) | 3,337 | ||
Weighted average grant date fair value | |||
Balance at beginning of period (in dollars per share) | $ 8.11 | $ 7.60 | |
Granted (in dollars per share) | 9.76 | ||
Exercised (in dollars per share) | 7.31 | 6.27 | |
Forfeited (in dollars per share) | 9.15 | 8.42 | |
Balance at end of period (in dollars per share) | 8.15 | 8.11 | $ 7.60 |
Exercisable at end of period (in dollars per share) | 7.74 | ||
Weighted average exercise price | |||
Balance at beginning of period (in dollars per share) | 22.19 | 21.06 | |
Granted (in dollars per share) | 25.73 | ||
Exercised (in dollars per share) | 19.87 | 17.48 | |
Forfeited (in dollars per share) | 25.32 | 23.45 | |
Balance at end of period (in dollars per share) | 22.32 | $ 22.19 | $ 21.06 |
Exercisable at end of period (in dollars per share) | $ 20.80 | ||
Weighted average remaining contractual term | |||
Weighted average remaining contractual term (in years) | 6 years 7 months 28 days | 7 years 8 months 1 day | 8 years 4 months 9 days |
Exercisable at Weighted average remaining contractual term (in years) | 6 years 3 months 14 days | ||
Total Intrinsic Value | |||
Aggregate Intrinsic Value at beginning of period | $ 19,802 | $ 30,405 | |
Aggregate Intrinsic Value, Exercised | 5,112 | 4,886 | |
Aggregate Intrinsic Value at end of period | 56,136 | $ 19,802 | $ 30,405 |
Aggregate Intrinsic Value, Exercisable Options | $ 43,522 | ||
Other disclosures | |||
Weighted average period outstanding for unvested stock options | 1 year 3 months 18 days | 2 years | |
Unrecognized compensation expense | $ 8,000 | $ 17,700 | |
Vesting period | 4 years | ||
Expiration period | 10 years | ||
Service-Based Stock Options | Executive Officers | |||
Other disclosures | |||
Vesting period | 3 years |
Stock Compensation Plans and _6
Stock Compensation Plans and Share-Based Compensation Awards - Market and Service-Based Stock Options (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 D | Mar. 31, 2021 USD ($) installment shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Other disclosures | |||||
Share-based compensation expense | $ 29,223 | $ 27,419 | $ 20,664 | ||
Market and Service-Based Stock Options | Chief Executive Officer | |||||
Stock Compensation Plans and Share-Based Compensation Awards | |||||
Options Granted (in shares) | shares | 287,395 | ||||
Fair value of options granted | $ 2,900 | ||||
Trailing period | D | 20 | ||||
Percentage of closing price | 110% | ||||
Trading days | D | 20 | ||||
Number of installments | installment | 3 | ||||
Exercisable at end of period (in shares) | shares | 95,798 | ||||
Assumptions used in estimating grant date fair values | |||||
Expected life (in years) | 7 years | ||||
Weighted-average risk-free interest rate (as a percent) | 1.15% | ||||
Expected volatility (as a percent) | 34.65% | ||||
Dividend yield (as a percent) | 0% | ||||
Exercise price | $ / shares | $ 25.46 | ||||
Other disclosures | |||||
Vesting period | 3 years | ||||
Share-based compensation expense | $ 1,000 | $ 1,500 | |||
Unrecognized compensation expense | $ 400 | ||||
Weighted average period for unrecognized compensation expense (in years) | 1 year | 1 year 6 months | |||
Market and Service-Based Stock Options | Chief Executive Officer | Share-based Payment Arrangement, Nonemployee | |||||
Other disclosures | |||||
Unrecognized compensation expense | $ 1,400 |
Stock Compensation Plans and _7
Stock Compensation Plans and Share-Based Compensation Awards - Performance Stock Units (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2022 USD ($) D shares | Dec. 31, 2022 USD ($) $ / shares | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Stock Compensation Plans and Share-Based Compensation Awards | ||||
Share-based compensation expense | $ 29,223 | $ 27,419 | $ 20,664 | |
Performance Stock Units | ||||
Stock Compensation Plans and Share-Based Compensation Awards | ||||
Granted (in shares) | shares | 151,187 | |||
Fair value of units granted | $ 3,600 | |||
Vesting period | 3 years | |||
Share-based compensation expense | 1,200 | |||
Unrecognized compensation expense | $ 3,200 | |||
Weighted average period for unrecognized compensation expense (in years) | 2 years 2 months 12 days | |||
Performance Stock Units | Maximum | ||||
Stock Compensation Plans and Share-Based Compensation Awards | ||||
Percentage of units vested | 200% | |||
Performance Stock Units | Minimum | ||||
Stock Compensation Plans and Share-Based Compensation Awards | ||||
Percentage of units vested | 0% | |||
Market and service-based performance stock units | ||||
Stock Compensation Plans and Share-Based Compensation Awards | ||||
Granted (in shares) | shares | 151,187 | |||
Fair value of units granted | $ 3,900 | |||
Trailing period | D | 20 | |||
Trading days | D | 20 | |||
Share-based compensation expense | $ 1,100 | |||
Unrecognized compensation expense | $ 2,800 | |||
Weighted average period for unrecognized compensation expense (in years) | 2 years 2 months 12 days | |||
Assumptions used in estimating grant date fair values | ||||
Expected life (in years) | 3 years 1 month 6 days | |||
Weighted-average risk-free interest rate (as a percent) | 1.74% | |||
Expected volatility (as a percent) | 47.62% | |||
Dividend yield (as a percent) | 0% | |||
Weighted-average fair value at grant date | $ / shares | 23.69 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Employee Benefit Plans | |||
Contribution amount | $ 2.1 | $ 2 | $ 1.4 |
Schedule I - Condensed Statemen
Schedule I - Condensed Statements of Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Assets | ||
Due from related parties | $ 697 | $ 782 |
Other current assets | 26,875 | 20,514 |
Total current assets | 1,167,462 | 780,925 |
Deferred tax asset, net | 241,652 | 238,261 |
Total assets | 2,490,815 | 1,753,385 |
Liabilities and Shareholders' Deficit | ||
Accrued expenses | 157,347 | 127,060 |
Total current liabilities | 1,053,144 | 585,125 |
Tax receivable agreement obligations, inclusive of related party liability of $171.9 million and $169.4 million at December 31, 2022 and 2021, respectively | 182,726 | 180,143 |
Total liabilities | 1,931,587 | 1,392,946 |
Redeemable preferred stock (par value, $0.0001 per share), Authorized, Issued and Outstanding - 152,250 shares at December 31, 2022 and December 31, 2021. Liquidation preference: $178,559 and $168,309 at December 31, 2022 and December 31, 2021, respectively | 174,531 | 164,007 |
Shareholders' deficit: | ||
Additional paid-in capital | ||
Accumulated deficit | (928,187) | (652,871) |
Accumulated other comprehensive loss | (7,954) | (9,154) |
Total deficit | (936,136) | (662,020) |
Total liabilities, redeemable non-controlling interests, redeemable preferred stock, and shareholders' deficit | 2,490,815 | 1,753,385 |
Class A Common Stock | ||
Shareholders' deficit: | ||
Common stock | 5 | 5 |
Class D Common Stock | ||
Shareholders' deficit: | ||
Common stock | ||
Reportable Legal Entities | Parent Company | ||
Assets | ||
Due from related parties | 323 | 223 |
Other current assets | 68 | 59 |
Total current assets | 391 | 282 |
Deferred tax asset, net | 235,901 | 237,042 |
Total assets | 236,292 | 237,324 |
Liabilities and Shareholders' Deficit | ||
Accrued expenses | 391 | 282 |
Total current liabilities | 391 | 282 |
Tax receivable agreement obligations, inclusive of related party liability of $171.9 million and $169.4 million at December 31, 2022 and 2021, respectively | 182,726 | 180,143 |
Net deficit in investment in a subsidiary | 814,780 | 554,912 |
Total liabilities | 997,897 | 735,337 |
Redeemable preferred stock (par value, $0.0001 per share), Authorized, Issued and Outstanding - 152,250 shares at December 31, 2022 and December 31, 2021. Liquidation preference: $178,559 and $168,309 at December 31, 2022 and December 31, 2021, respectively | 174,531 | 164,007 |
Shareholders' deficit: | ||
Additional paid-in capital | ||
Accumulated deficit | (928,187) | (652,871) |
Accumulated other comprehensive loss | (7,954) | (9,154) |
Total deficit | (936,136) | (662,020) |
Total liabilities, redeemable non-controlling interests, redeemable preferred stock, and shareholders' deficit | 236,292 | 237,324 |
Reportable Legal Entities | Parent Company | Class A Common Stock | ||
Shareholders' deficit: | ||
Common stock | 5 | 5 |
Reportable Legal Entities | Parent Company | Class D Common Stock | ||
Shareholders' deficit: | ||
Common stock |
Schedule I - Condensed Statem_2
Schedule I - Condensed Statements of Balance Sheets - Other (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Condensed Financial Information | ||
Tax receivable agreement, related party | $ 171,900 | $ 169,400 |
Redeemable preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Redeemable preferred stock shares authorized (in shares) | 152,250 | 152,250 |
Redeemable preferred stock shares issued (in shares) | 152,250 | 152,250 |
Redeemable preferred stock shares outstanding (in shares) | 152,250 | 152,250 |
Redeemable preferred stock liquidation preference | $ 178,559 | $ 168,309 |
Class A Common Stock | ||
Shareholders' deficit: | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock shares issued (in shares) | 48,423,077 | 47,446,061 |
Common stock shares outstanding (in shares) | 48,423,077 | 47,446,061 |
Class D Common Stock | ||
Shareholders' deficit: | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock shares authorized (in shares) | 32,000,000 | 32,000,000 |
Common stock shares issued (in shares) | 3,741,074 | 3,783,074 |
Common stock shares outstanding (in shares) | 3,741,074 | 3,783,074 |
Reportable Legal Entities | Parent Company | ||
Condensed Financial Information | ||
Tax receivable agreement, related party | $ 171,900 | $ 169,400 |
Redeemable preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Redeemable preferred stock shares authorized (in shares) | 152,250 | 152,250 |
Redeemable preferred stock shares issued (in shares) | 152,250 | 152,250 |
Redeemable preferred stock shares outstanding (in shares) | 152,250 | 152,250 |
Redeemable preferred stock liquidation preference | $ 178,559 | $ 168,309 |
Reportable Legal Entities | Parent Company | Class A Common Stock | ||
Shareholders' deficit: | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock shares issued (in shares) | 48,423,077 | 47,446,061 |
Common stock shares outstanding (in shares) | 48,423,077 | 47,446,061 |
Reportable Legal Entities | Parent Company | Class D Common Stock | ||
Shareholders' deficit: | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock shares authorized (in shares) | 32,000,000 | 32,000,000 |
Common stock shares issued (in shares) | 3,741,074 | 3,783,074 |
Common stock shares outstanding (in shares) | 3,741,074 | 3,783,074 |
Schedule I - Condensed Statem_3
Schedule I - Condensed Statements of Operations and Comprehensive (Loss) Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Condensed Financial Information | |||
Net revenue | $ 543,082 | $ 496,645 | $ 439,101 |
Operating expenses: | |||
Selling, general, and administrative | 309,539 | 266,117 | 250,676 |
Total operating expenses | 483,052 | 425,271 | 421,738 |
Income from operations | 66,969 | 71,374 | 17,363 |
Other income: | |||
Other income (expense) | (3,226) | (10,375) | 3,007 |
Total other expense | (10,418) | (31,648) | (8,407) |
Income before income taxes | 56,551 | 39,726 | 8,956 |
Income tax (expense) benefit | (36,245) | (22,037) | (13,122) |
Net income (loss) | 20,306 | 17,689 | (4,166) |
Net income (loss) attributable to EVO Payments, Inc. | 5,279 | 8,653 | (1,676) |
Comprehensive income (loss): | |||
Net income (loss) | 20,306 | 17,689 | (4,166) |
Change in fair value of cross currency swap, net of tax | (44) | ||
Other comprehensive (loss) income | (3,896) | (26,745) | 8,309 |
Comprehensive income (loss) | 16,410 | (9,056) | 4,143 |
Comprehensive income (loss) attributable to EVO Payments, Inc. | 6,479 | (1,546) | 1,317 |
Reportable Legal Entities | Parent Company | |||
Operating expenses: | |||
Selling, general, and administrative | 4,268 | 4,160 | 6,473 |
Income from operations | (4,268) | (4,160) | (6,473) |
Other income: | |||
Income (loss) from investment in unconsolidated investee | 4,558 | 128 | (9,610) |
Dividend income | 10,524 | 9,889 | 6,528 |
Other income (expense) | 1,952 | (177) | 8,255 |
Total other expense | 17,034 | 9,840 | 5,173 |
Income before income taxes | 12,766 | 5,680 | (1,300) |
Income tax (expense) benefit | (7,487) | 2,973 | (376) |
Net income (loss) | 5,279 | 8,653 | (1,676) |
Net income (loss) attributable to EVO Payments, Inc. | 5,279 | 8,653 | (1,676) |
Comprehensive income (loss): | |||
Net income (loss) | 5,279 | 8,653 | (1,676) |
Change in fair value of interest rate swap, net of tax | (590) | 800 | (197) |
Change in fair value of cross currency swap, net of tax | (24) | ||
Unrealized gain (loss) on foreign currency translation adjustment, net of tax | 1,814 | (10,999) | 3,190 |
Other comprehensive (loss) income | 1,200 | (10,199) | 2,993 |
Comprehensive income (loss) | 6,479 | (1,546) | 1,317 |
Comprehensive income (loss) attributable to EVO Payments, Inc. | $ 6,479 | $ (1,546) | $ 1,317 |
Schedule I - Condensed Statem_4
Schedule I - Condensed Statements of Operations and Comprehensive (Loss) Income - Other (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Comprehensive income (loss): | |||
Change in fair value of cross currency swap, tax benefit | $ 0.1 | ||
Unrealized (loss) gain on foreign currency translation adjustment, tax benefit (expense) | 5.6 | $ 4.1 | $ (2.5) |
Reportable Legal Entities | Parent Company | |||
Comprehensive income (loss): | |||
Change in fair value of interest rate swap, tax (expense) benefit | 0.2 | (0.2) | 0.1 |
Unrealized (loss) gain on foreign currency translation adjustment, tax benefit (expense) | 5.6 | $ 4.1 | $ (2.5) |
Reportable Legal Entities | Parent Company | Maximum | |||
Comprehensive income (loss): | |||
Change in fair value of cross currency swap, tax benefit | $ 0.1 |
Schedule I - Condensed Statem_5
Schedule I - Condensed Statements of Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Apr. 21, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | ||||
Net cash provided by operating activities | $ 163,068 | $ 103,597 | $ 116,020 | |
Cash flows from investing activities: | ||||
Net cash used in investing activities | (252,142) | (74,704) | (25,967) | |
Cash flows from financing activities: | ||||
Secondary offering proceeds | 115,538 | |||
Purchase of LLC Interests, Class B and Class D common stock in connection with the secondary offerings | (115,538) | |||
Proceeds from exercise of common stock options | 9,566 | 7,866 | 6,145 | |
Proceeds from issuance of redeemable preferred stock | $ 149,300 | 149,250 | ||
Redeemable preferred stock issuance costs | (1,660) | |||
Repurchases of shares to satisfy minimum tax withholding | (3,675) | (4,577) | (1,345) | |
Net cash provided by (used in) financing activities | 43,837 | (24,382) | 9,763 | |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (8,162) | (12,435) | 14,634 | |
Net (decrease) increase in cash, cash equivalents, and restricted cash | (53,399) | (7,924) | 114,450 | |
Cash, cash equivalents, and restricted cash, beginning of year | 410,615 | 418,539 | 304,089 | |
Cash, cash equivalents, and restricted cash, end of year | 357,216 | 410,615 | 418,539 | |
Reportable Legal Entities | Parent Company | ||||
Cash flows from investing activities: | ||||
Investment in unconsolidated investee | (5,891) | (3,289) | (152,390) | |
Net cash used in investing activities | (5,891) | (3,289) | (152,390) | |
Cash flows from financing activities: | ||||
Secondary offering proceeds | 115,538 | |||
Purchase of LLC Interests, Class B and Class D common stock in connection with the secondary offerings | (115,538) | |||
Proceeds from exercise of common stock options | 9,566 | 7,866 | 6,145 | |
Proceeds from issuance of redeemable preferred stock | 149,250 | |||
Redeemable preferred stock issuance costs | (1,660) | |||
Repurchases of shares to satisfy minimum tax withholding | (3,675) | (4,577) | (1,345) | |
Net cash provided by (used in) financing activities | $ 5,891 | $ 3,289 | $ 152,390 |
Schedule I - Basis of Presentat
Schedule I - Basis of Presentation and Distributions (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
EVO LLC | |||
Ownership interest (as a percent) | 57.40% | ||
Parent Company | |||
Distributions | $ 0 | $ 0 | $ 0 |
Parent Company | EVO LLC | |||
Ownership interest (as a percent) | 57.40% |
Schedule I - Long-term debt and
Schedule I - Long-term debt and credit facilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Long-term debt and credit facilities | ||
Long term debt gross | $ 641,500 | |
Deferred financing costs | (4,212) | $ (5,310) |
Total long-term debt | 637,288 | 582,690 |
Settlement lines of credit | 5,033 | 7,887 |
Revolver | ||
Long-term debt and credit facilities | ||
Long term debt gross | 68,200 | |
First lien senior secured credit facility | Term loan | ||
Long-term debt and credit facilities | ||
Long term debt gross | 573,300 | 588,000 |
Reportable Legal Entities | Parent Company | ||
Long-term debt and credit facilities | ||
Debt held by company | 0 | 0 |
Reportable Legal Entities | Subsidiaries | ||
Long-term debt and credit facilities | ||
Deferred financing costs | (4,212) | (5,310) |
Total long-term debt | 637,288 | 582,690 |
Settlement lines of credit | 5,033 | 7,887 |
Reportable Legal Entities | Subsidiaries | Term loan | ||
Long-term debt and credit facilities | ||
Long term debt gross | 573,300 | $ 588,000 |
Reportable Legal Entities | Subsidiaries | Revolver | ||
Long-term debt and credit facilities | ||
Long term debt gross | $ 68,200 |
Schedule II Valuation and Qua_2
Schedule II Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Allowance for doubtful accounts | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | $ 7,150 | $ 4,440 | $ 3,736 |
Additions: Charged to Costs and Expenses | 1,987 | 3,309 | 935 |
Deductions | (346) | (599) | (231) |
Balance at End of Period | 8,791 | 7,150 | 4,440 |
Deferred income tax asset valuation allowance | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | 11,634 | 5,090 | 8,152 |
Additions: Charged to Costs and Expenses | 4,832 | 8,389 | 1,097 |
Deductions | (1,579) | (1,845) | (4,159) |
Balance at End of Period | $ 14,887 | $ 11,634 | $ 5,090 |