EVO Payments, Inc. (NASDAQ:EVOP) Q2 2020 Earnings Conference Call - Final Transcript

Aug 05, 2020 • 08:00 am ET


EVO Payments, Inc. (NASDAQ:EVOP) Q2 2020 Earnings Conference Call - Final Transcript


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Ladies and gentlemen, thank you for standing by, and welcome to the EVO Payments Second Quarter 2020 Conference Call. [Operator Instructions]

I would now like to hand the conference over to your speaker today, Ed O'Hare. Please go ahead.

Ed O'Hare

Good morning, and welcome to EVO Payments second quarter earnings conference call. This call is being webcast today, and a replay will be available through the Investor Relations section of EVO's website shortly after the completion of this call. Please note that some of the information you will hear during our discussion today will consist of forward-looking statements. These forward-looking statements are based on currently available information, and actual results may differ materially from the views expressed in these statements, particularly due to the impact of COVID-19 on our business.

For additional information on factors that may cause our actual results to differ from the views expressed in any forward-looking statements made today, please refer to today's press release and the risk factors discussed in our periodic reports filed with the SEC, including our most recent 10-K available on our website. In an effort to provide additional information to investors, today's discussion also includes certain non-GAAP financial measures. An explanation and reconciliation of these non-GAAP financial measures to their nearest GAAP financial measures for the second quarter can be found in our earnings release available on our Investor Relations website.

We have also posted slides on our website detailing recent volume trends for the company to further assist with today's discussion. Today, we will discuss our second quarter performance and provide an update on the impact COVID-19 is having on our business. Joining me on the call today is Jim Kelly, Chief Executive Officer; Tom Panther, Chief Financial Officer; Darren Wilson, President of the International segment; and Brendan Tansill, President of the Americas segment.

I will now turn the call over to Jim.

Jim Kelly

Thank you, Ed, and good morning, everyone. As we discussed in May, our second quarter results were adversely impacted by COVID-19 when a significant number of European and North American merchants were forced to shut down due to widespread government restrictions on movement and commerce. Despite these challenges, we were able to generate $30 million in adjusted EBITDA, which is down only slightly compared to the first quarter. Compared to the second quarter of last year, constant-currency revenue declined 19%, driven by a 21% volume decline. Constant-currency adjusted EBITDA declined 17% in the quarter as we implemented the expense reductions announced in March.

These actions enabled us to expand our margins by 82 basis points to 32%. In addition, our focused cash management strategy allowed us to end the quarter with a leverage ratio of 3.1 times, unchanged since our last call. Our ability to withstand the severe impact of COVID in the second quarter would not have been possible without the hard work and contributions of our employees. They have all sacrificed by adapting to working from home and reallocating workloads while also focusing on their health and