EVOP is a global merchant acquirer and payment processor servicing approximately 525,000 merchants in North America and Europe and processing more than 900 mln transactions in North America and 1.7 bln transactions in Europe annually. It operates at the center of global electronic commerce with local operations in 10 countries, with the ability to serve 50 markets around the world through its three proprietary, in-market processing platforms that are connected by a single point of integration.
The company is one of only four global merchant acquirers and are well positioned in some of the most attractive markets worldwide, including the United States, Canada, Mexico, and Europe. It believes its global footprint differentiates it from many of its competitors who have a limited international presence.
EVOP's payment and commerce solutions consist of internally owned products, as well as other services that it enables through technical integrations with third-party providers. Its internally owned, value-added solutions include gateway solutions, online fraud prevention and management reporting, online hosted payments page capabilities, security tokenization and encryption solutions at the point-of-sale, and online, dynamic currency conversion, loyalty offers, and other ancillary solutions.
Operating as an intermediary between merchants and card networks, it collects a series of fees primarily driven by the number and value of transactions processed. In addition, it generates fees for the value-added services and more advanced technology solutions that it increasingly provides to its merchants.
Taking a look at the financials, revenue increased 20% in FY17 to $504.8 mln. The increase was driven primarily by the inclusion of revenue from the Sterling acquisition and organic growth in its Mexico market and European segment. Despite the jump in revenue, EVOP suffered a net loss of ($32.3) mln for the year. This was also a swing in the wrong direction as the company generated $57.5 mln in net profit in 2016.
However, some of the decrease was related to a one-time gain on the sale of the company's membership interest in Visa Europe in the prior year period. Also, the company generated $8.2 mln in cash flow from operations in FY17, lessening the concerns about the net loss.
EVOP does not intend to pay dividends on its common stock in the foreseeable future, which some investors may be disappointed about given that it does generate positive cash flow.