Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	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 - 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 (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 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 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 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 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 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. Upon the consummation of the Merger, EVO, Inc. will cease to be a publicly traded company.

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, EVO, Inc. consolidates the Group’s financial statements and records the interests in EVO, LLC that it does not own as non-controlling interests. All intercompany accounts and transactions have been eliminated in consolidation. The Company accounts for investments over which it has significant influence, but not a controlling financial interest using the equity method of accounting.

(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 million, respectively.

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 and 2021, allowance for doubtful accounts was $8.8 million and $7.2 million, respectively.

(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,” for further information.

(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 (“ASC 606”) on January 1, 2019, using the modified retrospective method and applying the standard to all contracts not completed on the date of adoption.

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 such as interchange fees and card network fees.

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, which states that the determination of whether a company should recognize revenue based on the gross amount billed to a customer or the net amount retained is a matter of judgment that depends on the facts and circumstances of the arrangement.

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 (“ASC 718”), which requires that all share-based payments to employees, including stock options and restricted stock units (“RSUs”), be recognized as compensation expense in the consolidated financial statements based on their fair values and over the requisite service period. The fair value of the stock option awards is determined through the application of the Black-Scholes model. The fair value of RSUs is determined based on the market price at the time of grant. The Company has elected to recognize forfeitures at the time they occur. Refer to Note 22, “Stock Compensation Plans and Share-Based Compensation Awards,” for further information on the share-based compensation awards.

(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 million and $11.6 million, respectively, has been established to reduce the carrying amount of the deferred tax asset to an amount that is more than likely than not to be realized. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased, or if objective negative evidence in the form of cumulative losses is no longer present, and additional weight may be given to subjective evidence such as the Company’s projections for growth.

Uncertain Tax Positions

The Company records uncertain tax positions in accordance with ASC 740, Income Taxes (“ASC 740”), on the basis of a two-step process: (1) determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position, and (2) for those tax positions that meet the more-likely-than-not recognition threshold, recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.

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 (“ASC 820”), which defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The determination of fair value is based on the principal or most advantageous market in which the Company could participate and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. Also, determination of fair value assumes that market participants will consider the highest and best use of the asset.

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 — Other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability, including:

· 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 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.

(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.

(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.

(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. This update simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The Company adopted this ASU on January 1, 2022. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

Reference Rate Reform

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform, with amendments in 2021. This update provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of LIBOR or by another reference rate expected to be discontinued. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur on a prospective basis no later than December 31, 2022. On December 21, 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022 to December 31, 2024. The Company will continue to evaluate the effect of the discontinuance of LIBOR on our outstanding debt and hedging instrument and the related effect of ASU 2020-04 on our consolidated financial statements, as applicable.

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. This update requires entities to recognize and measure contract assets and liabilities acquired in a business combination in accordance with ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This ASU is effective for fiscal periods beginning after December 15, 2022, including interim periods within those years, with early adoption permitted. The guidance will be applied prospectively to acquisitions occurring on or after the effective date. The Company will continue to evaluate the impact of this ASU, which will depend on the contract assets and liabilities acquired in future business combinations.

(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.

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

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI http://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

+ Details

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

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

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

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

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 million and $10.8 million, for the years ended December 31, 2022 and 2021, respectively. These costs are included in selling, general, and administrative expenses in the consolidated statements of operations and comprehensive income (loss).Total lease costs include variable costs of approximately $2.8 million and $2.1 million for the years ended December 31, 2022 and 2021, respectively, which in each case are primarily comprised of costs of maintenance and utilities, and are determined based on the actual costs incurred during the period. Variable payments are expensed in the period incurred and not included in the measurement of lease assets and liabilities.

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 million, which is included as a component of cash provided by operating activities in the consolidated statements of cash flows.

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

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 million for the years ended December 31, 2022, 2021, and 2020, respectively.

In the year ended December 31, 2022, gross equipment and improvements, and accumulated depreciation were each reduced by $17.5 million and $16.8 million, respectively, and in the year ended December 31, 2021 by $12.2 million and $10.9 million, respectively, primarily related to asset retirements.

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 million, $45.6 million, and $45.3 million for the years ended December 31, 2022, 2021, and 2020, respectively.

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 and 2021, in total and by reportable segment, is as follows:


	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 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

12 Months Ended

Dec. 31, 2022

Related Party Transactions

Related Party Transactions

(11) Related Party Transactions

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 million and $3.0 million as of December 31, 2022 and 2021, respectively, primarily due to a non-controlling interest holder of a consolidated subsidiary, and $1.0 million and $1.2 million as of December 31, 2022 and 2021, respectively, representing commissions payable to unconsolidated investees of the Company. The liability is included as a component of accrued expenses and other current liabilities on the consolidated balance sheets.

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 million, $13.1 million, and $15.3 million for the years ended December 31, 2022, 2021, and 2020, respectively, and is netted against revenue in the consolidated statements of operations and comprehensive income (loss).

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 million, and $0.6 million related to this activity, respectively.

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

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)U.S. jurisdiction deferred tax assets

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 million during the year ended December 31, 2022.

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 million. It is possible that our existing unrecognized tax benefits may change up to $6.3 million as a result of audit examinations expected to be completed within the next 12 months.

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

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
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-Subparagraph (b)
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI http://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

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

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 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

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 unstated dividend cost that must be amortized over the period preceding commencement of the perpetual dividend using the effective interest method, by charging the imputed dividend cost against retained earnings and increasing the carrying amount of the preferred stock by a corresponding amount. The discount is therefore being amortized over ten years using a 6.22% effective interest rate. The total PIK dividends and accretion of the discount combined represents a period’s total preferred stock dividend cost, which is subtracted from net income or added to net loss to arrive at net loss attributable to Class A common stockholders on the consolidated statements of operations and comprehensive income (loss). For the years ended December 31, 2022, 2021, and 2020, the initial

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 dividends, if any). Because the occurrence of a change of control may be outside of the Company’s control, the Company has classified the Preferred Stock as mezzanine equity on the consolidated balance sheets. If a change of control were to occur as of December 31, 2022, the Company might have been required to repurchase the Preferred Stock for $267.8 million. As of December 31, 2022, the Company believed that the occurrence of a change of control outside of the Company’s control that would trigger the right of the holder of Preferred Stock to require the Company to repurchase all or a portion of the Preferred Stock for cash was not probable, as the occurrence of a business combination as defined under generally accepted accounting principles would not be considered probable until it has been consummated. Therefore, the Preferred Stock is not accreted to the current redemption 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 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

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 for revenue and EBITDA, respectively. The valuation multiples as of December 31, 2021 were 1.75x and 6.00x for revenue and EBITDA, respectively.

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 million and $20.3 million as of December 31, 2022 and 2021, respectively, is based upon inputs classified as Level 3 of the fair value hierarchy. These inputs include the fair value of Visa Class A common stock as of December 31, 2022, the conversion factor of Visa Series C preferred stock to Visa Class A common stock, and a discount due to the lack of liquidity, which represents a measure of fair value that is unobservable or requires management’s judgment.

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.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

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

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.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8924-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8981-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9031-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (f)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 26
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8844-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

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.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

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+ Details

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 million, and $8.5 million, for the years ended December 31, 2022, 2021, and 2020, 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, total unrecognized share-based compensation expense related to outstanding RSUs was $26.8 million and $22.5 million, respectively. RSUs settle in Class A common stock. RSUs granted in connection with the Company’s annual long-term incentive plan and off-cycle grants vest in equal annual vesting installments over a period of three or four years from the grant date. RSUs granted to the Company’s executive officers as part of the annual 2021 and all participants as part of the annual 2022 grant, vest in equal annual vesting

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 years as of December 31, 2021. The total fair value of shares vested during the years ended December 31, 2022 and 2021 was $13.7 million and $10.0 million, respectively.

Stock options

Service-Based Stock Options

The Company recognized share-based compensation expense for the service-based stock options granted of $8.6 million, $12.5 million, and $12.1 million, for the years ended December 31, 2022, 2021, and 2020, 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 million, respectively. The weighted-average remaining vesting period over which expense will be recognized for unvested stock options is 1.3 years as of December 31, 2022 and 2.0 years as of December 31, 2021. Stock options granted in connection with the Company’s annual long-term incentive plan and off-cycle grants vest in equal annual installments over a period of four years from grant date. Stock options granted to the Company’s executive officers (excluding the Chief Executive Officer (“CEO”)) as part of the annual 2021 grant vest in equal annual vesting installments over a period of three years from the grant date. Stock options expire no later than 10 years from the date of grant.

Market and Service-Based Stock Options

During the quarter ended March 31, 2021, 287,395 stock options with a fair value of approximately $2.9 million were granted to the Company’s CEO. These options vest only upon the satisfaction of certain market-based and service-based vesting conditions. The market-based vesting condition, which was met in the second quarter of 2021, required that the twenty trading day trailing average price for the Company’s Class A common stock must equal or exceed 110% of the closing price of the Company’s Class A common stock on the grant date for a period of twenty consecutive trading days. In addition, the options are subject to a service-based vesting condition that is satisfied in three equal annual installments on the first, second and third anniversaries of the grant date. As of December 31, 2022, 95,798 stock options were exercisable.

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 million for the years ended December 31, 2022 and 2021, respectively. As of December 31, 2022 and 2021, total unrecognized share-based compensation expense related to these stock options was $0.4 million and $1.4 million, respectively. The weighted-average remaining vesting period over which expense will be recognized for these stock options is 1.0 years as of December 31, 2022 and 1.5 years as of December 31, 2021.

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. Compensation costs recognized on the performance and service based stock units are adjusted, as applicable, for performance above or below the target specified in the award.

The Company recognized share-based compensation expense for PSUs granted of $1.2 million for the year ended December 31, 2022. As of December 31, 2022, total unrecognized share-based compensation expense related to outstanding PSUs was $3.2 million. The weighted-average remaining vesting period over which expense will be recognized for unvested PSUs is 2.2 years as of 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 million to the Company’s executive officers under the Company’s long-term incentive plan. These MPSUs will cliff vest on March 31, 2025, the last day of the performance period, if the twenty trading day trailing average closing stock price for the Company’s Class A common stock meets or exceeds the threshold stock price for a twenty trading day period at any time during the performance period.

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

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 million, $2.0 million, and $1.4 million for the years ended December 31, 2022, 2021 and 2020, respectively.

- Definition

The entire disclosure for retirement benefits.

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+ Details

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 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 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. Upon the consummation of the Merger, EVO, Inc. will cease to be a publicly traded company.

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, EVO, Inc. consolidates the Group’s financial statements and records the interests in EVO, LLC that it does not own as non-controlling interests. All intercompany accounts and transactions have been eliminated in consolidation. The Company accounts for investments over which it has significant influence, but not a controlling financial interest using the equity method of accounting.

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 million, respectively.

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