Commitments and Contingencies
As previously disclosed in the Company's Current Report on Form 8-K, dated September 2, 2025, on August 29, 2025, Sinqia, a Brazilian subsidiary of EVERTEC, identified unauthorized activity in its environment of the Brazilian Central Bank (“BCB”) real-time payment system known as Pix. In response, Sinqia promptly halted transaction processing, engaged external cybersecurity forensic experts, and notified relevant authorities and affected customers. The incident was limited to business-to-business financial transactions involving two financial institution customers. On September 15, 2025 Sinqia received authorization from the BCB to resume Pix operations. Sinqia's Pix environment is currently operational and all customers are able to use the system.
The Company has recognized estimated liabilities related to potential contractual claims associated with client losses, as well as costs incurred for legal counsel, forensic reviews, and other professional services. A substantial portion of these matters has been settled, and the Company believes that any remaining exposure is limited.
EVERTEC is a defendant in a number of legal proceedings arising in the ordinary course of business. Based on the opinion of legal counsel and other factors, management believes that the final disposition of these matters will not have a material adverse effect on the business, results of operations, financial condition, or cash flows of the Company. The Company has also identified other claims in which a loss may be incurred, but in the aggregate the loss would be inconsequential. For other
claims, where the proceedings are in an initial phase, the Company is unable to estimate the range of possible loss, if any, at this time, but management believes that any loss related to such claims will not be material.
Leases
The Company has operating leases for certain office facilities, buildings, telecommunications and other equipment; and finance leases for certain equipment. The Company’s lease contracts have remaining terms ranging from 1 year to 5 years, some of which may include options to extend the leases for up to 5 years, and some which may include the option to terminate the lease within 1 year.
Total lease cost consisted of the following: | | | | | | | | | | | | | |
| | | Years ended December 31, |
| (in thousands) | | | 2025 | | 2024 |
| Operating lease cost | | | $ | 8,104 | | | $ | 7,821 | |
| | | | | |
| | | | | |
| | | | | |
| Variable lease cost | | | 3,070 | | | 2,943 | |
| | | | | |
| Total lease costs | | | $ | 11,174 | | | $ | 10,764 | |
Other Balance Sheet information related to operating leases was as follows: | | | | | | | | | | | | |
| December 31, | |
| (In thousands) | 2025 | | 2024 | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| Right-of-use assets obtained in exchange for operating lease obligations | $ | 34,369 | | $ | 3,920 | |
| Weighted average remaining lease term, in years | 7 | | 3 | |
| Weighted average discount rate | 5.5% | | 3.8% | |
The following table presents the balance of operating lease obligations: | | | | | | | | | | | |
| December 31, |
| (In thousands) | 2025 | | 2024 |
| Operating lease liability - current | $ | 5,878 | | | $ | 6,229 | |
| Operating lease liability - long-term | 33,305 | | | 4,924 | |
| Total operating lease liabilities | $ | 39,183 | | | $ | 11,153 | |
Future minimum operating lease payments at December 31, 2025 were as follows: | | | | | |
| (In thousands) | |
| 2026 | 7,762 | |
| 2027 | 6,675 | |
| 2028 | 5,263 | |
| 2029 | 4,329 | |
| 2030 | 4,259 | |
| Thereafter | 13,273 | |
| Total future minimum lease payments | 41,561 | |
| Less: imputed interest | (2,378) | |
| Total | $ | 39,183 | |