Core Insights - Corpay, Inc. (CPAY) reported mixed first-quarter 2025 results with earnings surpassing estimates while revenues fell short [1] - Earnings per share reached $4.51, a 10% increase year over year, while total revenues were $1 billion, reflecting a 7.5% year-over-year growth but missing estimates slightly [1] Financial Performance - Vehicle payments revenues were $487.1 million, a slight decline from the previous year and missing estimates of $506.7 million, although growth was noted in Brazil due to increased toll tags and electric vehicle offerings in the U.K. and Europe [3] - Corporate payments revenues amounted to $352.7 million, a 33% year-over-year increase, exceeding estimates of $335.7 million, driven by strong sales and cross-border transactions influenced by FX rate volatility [4] - Lodging payments generated $110.2 million, a slight decline from the previous year, missing estimates of $115.8 million due to low airline revenues [5] - EBITDA increased by 7.6% year over year to $519.3 million, surpassing estimates of $508 million, with an EBITDA margin of 55.2%, consistent with the previous year [6] Balance Sheet & Cash Flow - At the end of Q1 2025, Corpay had cash and cash equivalents of $1.6 billion, unchanged from Q4 2024, while long-term debt rose to $5.9 billion from $5.2 billion [7] - The company generated $74.2 million in cash from operating activities, with capital expenditures totaling $44.8 million [7] 2025 Outlook - Corpay raised its revenue guidance for 2025 to a range of $4.38-$4.46 billion, aligning with the Zacks Consensus Estimate [8] - The adjusted net income per diluted share guidance was updated to $20.80-$21.20, slightly lower than the Zacks Consensus Estimate for earnings per share [8]

Q1 2025 Earnings Release Supplement Refer to earnings release dated May 6, 2025 for further information ^ - dark blue-teal #00B5E2 ^ - light raspberry #981239 ^ - dark raspberry #981239 ^ - light blue-teal #59CBE8 ^ - cool gray 1 #E6E8E7 ^ - maroon #3D1628 Q1 Safe Harbor Provision 2025 ^ This presentation contains forward-looking statements within the meaning of the federal securities laws. Statements that are not historical facts, including statements about Corpay's (formerly known as Fleetcor Technologies ...

Core Insights - Corpay (CPAY) reported revenue of $1.01 billion for the quarter ended March 2025, reflecting a year-over-year increase of 7.5% [1] - Earnings per share (EPS) for the quarter was $4.51, up from $4.10 in the same quarter last year, with an EPS surprise of +0.45% compared to the consensus estimate of $4.49 [1] - The reported revenue matched the Zacks Consensus Estimate, resulting in a slight revenue surprise of -0.43% [1] Financial Performance Metrics - Corpay's shares have returned +13.8% over the past month, outperforming the Zacks S&P 500 composite's +11.5% change [3] - The company holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market [3] Key Revenue Metrics - Lodging Payments recorded 9.8 million room nights, exceeding the average estimate of 9.2 million [4] - Corporate Payments generated revenues of $352.66 million, surpassing the average estimate of $346.20 million, with a year-over-year increase of +32.9% [4] - Vehicle Payments revenues were $487.11 million, slightly below the average estimate of $492.03 million, representing a year-over-year decline of -1.4% [4] - Lodging Payments revenues were $110.22 million, also below the average estimate of $113.03 million, reflecting a -1% year-over-year change [4] - Other Payments revenues were $55.67 million, slightly above the average estimate of $55.59 million, but showed a significant year-over-year decline of -13.7% [4]

Core Insights - Corpay (CPAY) reported quarterly earnings of $4.51 per share, exceeding the Zacks Consensus Estimate of $4.49 per share, and up from $4.10 per share a year ago, representing an earnings surprise of 0.45% [1] - The company posted revenues of $1.01 billion for the quarter ended March 2025, which was below the Zacks Consensus Estimate by 0.43%, compared to $935.25 million in the same quarter last year [2] - Corpay has surpassed consensus EPS estimates in all four of the last quarters and has topped consensus revenue estimates twice during the same period [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $5.12 on revenues of $1.09 billion, while for the current fiscal year, the estimate is $21.11 on revenues of $4.42 billion [7] - The estimate revisions trend for Corpay is mixed, leading to a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Financial Transaction Services industry, to which Corpay belongs, is currently ranked in the top 35% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - The company reported Q1 2025 revenue of $1.6 billion, an increase of 8%, and cash EPS of $4.51, up 10% [8][24] - Organic revenue growth for the quarter was 9%, with vehicle payments growing 8% and corporate payments growing 19% [9][25] - Retention rate remained steady at 92%, with new bookings up 35% year-over-year [10][24] Business Line Data and Key Metrics Changes - Corporate Payments revenue increased 19% organically, driven by solid spend volumes [25] - Cross border sales grew 51% year-over-year, with revenue increasing 18% organically [25] - Vehicle payments revenue grew 8% organically, with significant growth in Brazil [29] Market Data and Key Metrics Changes - The company expects tariff impacts to be modest, with an estimated unfavorable impact of $10 million to $15 million on cross border revenue [28] - U.S. vehicle payments revenue growth was down 3% organically, but improvements in customer application approvals were noted [30] Company Strategy and Development Direction - The company is focused on expanding its corporate payments business through recent acquisitions, including a partnership with Mastercard and a minority investment in Avid [15][16][18] - The company aims to enhance its position in the corporate payments space and is exploring additional acquisition targets [18][19] - A major push into the institutional client segment for cross border payments is underway [21] Management's Comments on Operating Environment and Future Outlook - Management maintains a full-year 2025 guidance of $4.42 billion in revenue and $21 in cash EPS, reflecting confidence in the business despite macro uncertainties [12][40] - The company is not seeing any meaningful change in customer behavior due to economic uncertainties as of April [40] - Management expressed optimism about the performance of the hedging business, benefiting from market volatility [94] Other Important Information - The company completed the acquisition of Gringo in March, which had an immaterial impact on revenue and adjusted EPS [24] - Operating expenses increased 8% year-over-year, influenced by recent acquisitions [33] - The company has over $2.5 billion in cash and revolver availability, providing ample capacity for acquisitions [35] Q&A Session Summary Question: Confidence in Mastercard partnership for incremental revenue growth - Management expressed confidence that the partnership with Mastercard will create significant opportunities, especially with Tier two and Tier three banks [44][46] Question: Nature of the Avid investment - The investment in Avid is strategic, aimed at enhancing corporate payments and payables, with a focus on profit acceleration [48][49] Question: Update on enterprise sales pipeline - Management confirmed that the enterprise sales initiative is live and progressing well, with potential for significant growth [57][59] Question: Impact of tariffs on vehicle payments - Management noted that while tariffs do not directly impact the company, clients with goods-based businesses may experience indirect effects [65][67] Question: Performance of U.S. vehicle payments - Management reported improved retention rates and anticipated mid-single-digit growth in the second half of the year [72][74] Question: Avid's supplier network access - Management indicated that there is a pre-existing commercial agreement to enhance supplier network monetization, which will be further developed [112][113] Question: Potential noncore divestitures - Management mentioned that divesting three noncore businesses could provide upwards of $2 billion in liquidity [17][115]

Financial Performance - Corpay reported first quarter 2025 revenues of $1,005.7 million, an increase of 8% compared to $935.3 million in the first quarter of 2024[5]. - Net income attributable to Corpay rose 6% to $243.2 million in the first quarter of 2025, up from $229.8 million in the same period last year[5]. - Organic revenue growth for the first quarter of 2025 was 9%, with the Corporate Payments segment growing by 19%[2]. - Adjusted EBITDA increased 8% to $555.4 million in the first quarter of 2025, compared to $516.5 million in the first quarter of 2024[5]. - Basic earnings per share increased by 8% to $3.46 in Q1 2025, up from $3.20 in Q1 2024[20]. - Adjusted net income attributable to Corpay for Q1 2025 was $322,926, up from $301,320 in Q1 2024, indicating a growth of 7%[26]. - The company reported an operating income of $427.1 million, up 7% from $397.3 million in Q1 2024[32]. - Adjusted EBITDA for Q1 2025 was $555.4 million, reflecting a margin of 55.2%, consistent with the previous year[35]. Revenue Guidance - For fiscal year 2025, Corpay expects total revenues between $4,380 million and $4,460 million[6]. - Net income guidance for fiscal year 2025 is projected to be between $1,167 million and $1,207 million[6]. - Adjusted net income per diluted share is expected to be between $20.80 and $21.20 for fiscal year 2025[6]. - Q2 2025 net income guidance is set between $272 million and $282 million[38]. - Q2 2025 adjusted net income is anticipated to be between $359 million and $369 million[38]. - Q2 2025 adjusted net income per diluted share is projected to range from $5.05 to $5.15[38]. - Adjusted net income for 2025 is expected to be between $1,485 million and $1,525 million[38]. Asset and Liability Changes - Total current assets rose to $9,077,561 as of March 31, 2025, compared to $8,675,869 at the end of 2024, marking a 5% increase[22]. - Total assets increased to $18,547,780 as of March 31, 2025, up from $17,957,031 at the end of 2024, representing a growth of 3%[22]. - Total liabilities increased to $15,053,698 as of March 31, 2025, compared to $14,811,042 at the end of 2024, reflecting a rise of 2%[22]. - Cash and cash equivalents and restricted cash at the end of Q1 2025 totaled $4,383,423, compared to $3,202,676 at the end of Q1 2024[24]. - The company reported a net cash used in operating activities of $(74,151) for Q1 2025, a significant decrease from $350,184 in Q1 2024[24]. Segment Performance - Vehicle Payments segment generated revenues of $487.1 million, down 1% from $494.1 million in the same period last year[32]. - Corporate Payments segment saw a significant revenue increase of 33%, reaching $352.7 million compared to $265.4 million in Q1 2024[32]. - Lodging Payments segment reported revenues of $110.2 million, a slight decrease of 1% from $111.3 million in Q1 2024[32]. - Revenues from Other segment decreased by 14% to $55.7 million, down from $64.5 million in Q1 2024[32]. - The average monthly tag subscriptions for Q1 2025 were 7.6 million, with total tag transactions reaching 22.9 million, an 8% increase year-over-year[32]. - The US market contributed $507 million, accounting for 50% of total revenues, while Brazil and the UK contributed $163 million (16%) and $146 million (15%) respectively[30]. Investment and Acquisitions - The company plans to invest $500 million to acquire AvidXchange, alongside TPG[2]. - The company maintains its original 2025 outlook while incorporating the recent Gringo acquisition[4]. Operating Expenses - Total operating expenses for Q1 2025 were $578,543, an increase of 8% from $537,913 in Q1 2024[20]. - Capital expenditures increased by 9% to $44.8 million, compared to $41.2 million in Q1 2024[32]. Pre-Tax Adjustments - Total pre-tax adjustments for 2025 are estimated at $428 million[38]. - Total pre-tax adjustments for Q2 2025 are expected to be $118 million[38]. Stock-Based Compensation - Stock-based compensation for both 2025 and Q2 2025 is maintained at $108 million and $33 million respectively[38]. Share Information - Diluted shares for both 2025 and Q2 2025 are consistent at 72 million[38].

Financial Data and Key Metrics Changes - The company reported Q1 2025 revenue of $1.6 billion, an increase of 8% year-over-year, and cash EPS of $4.51, up 10% [6][24] - Organic revenue growth for the quarter was 9%, with cash EPS expected to increase by 18% on a constant macro basis [6][24] - Retention rate remained steady at 92%, with new bookings up 35% compared to Q1 last year [7][24] Business Line Data and Key Metrics Changes - Corporate Payments revenue grew 19% organically, driven by solid spend volumes [25] - Vehicle Payments revenue increased 8% organically, with significant growth in Brazil [28] - Cross border sales grew 51% year-over-year, with revenue up 18% organically [25][26] Market Data and Key Metrics Changes - The company expects tariff impacts to be modest, with an estimated unfavorable impact of $10 million to $15 million on cross border revenue [28] - U.S. Vehicle Payments revenue growth was down 3% organically, but improvements in customer application approvals and retention were noted [30][31] Company Strategy and Development Direction - The company is focused on expanding its corporate payments business through strategic acquisitions, including a partnership with Mastercard and an investment in Avid [14][15][17] - Plans to divest three non-core businesses to create liquidity for further investments in corporate payments [16][114] - The company aims to enhance its product offerings and market presence, particularly in the U.S. and U.K. [19][90] Management's Comments on Operating Environment and Future Outlook - Management maintains a cautious outlook due to macroeconomic uncertainties but sees no immediate need to revise forecasts [9][39] - The company expects to maintain its full-year 2025 guidance, projecting organic revenue growth of 11% at the midpoint [11][39] - Management expressed confidence in the performance of the corporate payments segment and the potential for growth in the vehicle payments business [72][102] Other Important Information - The company completed the acquisition of Gringo in March, which had an immaterial impact on revenue and adjusted EPS [24] - Operating expenses increased by 8% year-over-year, influenced by recent acquisitions and higher transaction volumes [33][34] - The company ended the quarter with a leverage ratio of 2.69 times and over $2.5 billion in cash and revolver availability [35] Q&A Session Summary Question: Confidence in Mastercard partnership for incremental revenue growth - Management expressed optimism about the partnership with Mastercard, highlighting the potential for significant revenue growth through their extensive client base [42][44] Question: Nature of the Avid investment - The investment in Avid is strategic, aimed at enhancing corporate payments capabilities, with a focus on profit acceleration [45][46] Question: Update on enterprise sales pipeline - Management confirmed that the enterprise sales initiative is live and progressing well, with potential for significant growth [54][55] Question: Impact of tariffs on vehicle payments - Management clarified that while tariffs do not directly impact their business, clients with goods-based operations may experience indirect effects [61][62] Question: Performance of the hedging business - The cross border business showed strong performance in Q1, benefiting from market volatility, with expectations for continued growth [94][95] Question: Organic revenue guidance for the year - Management remains confident in achieving the full-year organic revenue growth target of 11%, with expectations for a strong Q2 [98][102]

Financial Data and Key Metrics Changes - The company reported Q1 2025 revenue of $1.6 billion, an increase of 8%, and cash EPS of $4.51, up 10% [8][24] - Organic revenue growth for the quarter was 9%, with vehicle payments growing 8% and corporate payments growing 19% [9][25] - Retention rate remained steady at 92%, with new bookings up 35% year-over-year [10][24] Business Line Data and Key Metrics Changes - Corporate Payments revenue increased 19% organically, driven by solid spend volumes [25] - Cross border sales grew 51% year-over-year, with revenue increasing 18% organically [25] - Vehicle payments revenue grew 8% organically, with significant growth in Brazil [29] Market Data and Key Metrics Changes - The company expects tariff impacts to be modest, with an estimated unfavorable impact of $10 million to $15 million on cross border revenue [28] - U.S. Vehicle payments revenue growth was down 3% organically, but improvements in customer application approvals and retention were noted [30][72] Company Strategy and Development Direction - The company is focused on expanding its corporate payments business through recent acquisitions, including a partnership with Mastercard and a minority investment in Avid [15][16] - The company aims to enhance its position in the corporate payments space and is exploring additional acquisition targets [18][19] - A major push into the institutional client segment for cross border services is underway [21] Management's Comments on Operating Environment and Future Outlook - The management maintains a full-year 2025 guidance of $4.42 billion in revenue and $21 in cash EPS, reflecting confidence in the business despite macro uncertainties [12][40] - The company is not seeing any meaningful change in customer behavior due to economic uncertainties as of April [40] - Management expressed optimism about the performance of the hedging business, benefiting from market volatility [95] Other Important Information - The company completed the acquisition of Gringo in March, which had an immaterial impact on revenue and adjusted EPS [24] - Operating expenses increased by 8% year-over-year, influenced by recent acquisitions and higher transaction volumes [33] Q&A Session Summary Question: Confidence in Mastercard partnership for incremental revenue growth - Management expressed confidence that the partnership with Mastercard will create significant opportunities, especially with Tier two and Tier three banks [44][46] Question: Nature of the Avid investment - The investment in Avid is strategic, aimed at enhancing corporate payments and payables, with a focus on profit acceleration [48][49] Question: Update on enterprise sales pipeline - Management confirmed that the enterprise sales initiative is live and progressing well, with potential for significant growth [57][58] Question: Impact of tariffs on vehicle payments - Management indicated that while tariffs do not directly impact the company, clients with goods-based businesses may experience indirect effects [63][66] Question: Performance of U.S. Vehicle payments - Management reported improved retention rates and anticipated a pivot in organic revenue growth for the U.S. Vehicle payments business [71][72] Question: Access to Avid's supplier network - Management confirmed that a prior commercial agreement with Avid has already begun to enhance supplier monetization, and further synergies are expected [113][114] Question: Potential noncore divestitures - Management mentioned plans to divest three noncore businesses, which could provide up to $2 billion in liquidity [17][116]

Core Viewpoint - AvidXchange Holdings, Inc. is set to be acquired by TPG and Corpay for $10.00 per share, valuing the company at $2.2 billion, which represents a significant premium over its recent stock prices [1][2]. Acquisition Details - The acquisition price of $10.00 per share reflects a 22% premium over AvidXchange's closing price of $8.20 on May 6, 2025, a 16% premium over the 90-day volume weighted average price, and a 45% premium over the closing price of $6.89 on March 12, 2025 [2]. - Upon completion, AvidXchange will transition to a private company, allowing for greater flexibility in investing in growth and enhancing integrated payment solutions [2]. Company Background - AvidXchange is a leading provider of accounts payable automation software and payment solutions, serving over 8,500 middle market businesses and facilitating payments to more than 1,350,000 suppliers in the past five years [9]. - The company has established itself as a leader in AP automation and payment software, with a differentiated platform aimed at growth [3]. Strategic Insights - TPG and Corpay view AvidXchange as a leader in AP automation, with significant opportunities to enhance its solutions and improve efficiency in payment processes [3]. - The partnership aims to leverage TPG's technology expertise and Corpay's corporate payments capabilities to accelerate AvidXchange's growth [3]. Transaction Approval and Timeline - The transaction has been unanimously approved by AvidXchange's Board of Directors, and certain senior management members will rollover a significant portion of their equity [4]. - The deal is subject to customary closing conditions, including stockholder approval and regulatory approvals, and is expected to close in the fourth quarter of 2025 [5]. Financial Advisory - Financial Technology Partners and Barclays are acting as financial advisors to AvidXchange, while TPG is advised by J.P. Morgan Securities LLC, Moelis & Company, and RBC Capital Markets [7][8].

Core Insights - Zacks Premium provides various tools for investors to enhance their stock market strategies and confidence [1] - The Zacks Style Scores are designed to help investors select stocks with the highest potential to outperform the market in the short term [2] Zacks Style Scores Overview - The Style Scores categorize stocks into four types: Value Score, Growth Score, Momentum Score, and VGM Score, each focusing on different investment strategies [3][4][5][6] - Value Score identifies undervalued stocks using financial ratios [3] - Growth Score assesses a company's financial health and future growth potential [4] - Momentum Score capitalizes on price trends and earnings outlook changes [5] - VGM Score combines the strengths of all three Style Scores to identify the most attractive investment opportunities [6] Zacks Rank and Style Scores Interaction - The Zacks Rank is a proprietary model that uses earnings estimate revisions to guide investors in stock selection [7] - Stocks rated 1 (Strong Buy) have historically outperformed the S&P 500, with an average annual return of +25.41% since 1988 [8] - Investors are encouraged to select stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B for optimal performance [9][10] Company Spotlight: Corpay, Inc. - Corpay, Inc. is a global provider of commercial payment solutions, serving various regions including North America, Latin America, Europe, and Asia Pacific [11] - Currently rated 3 (Hold) by Zacks, Corpay has a VGM Score of A and a Momentum Style Score of A, with shares increasing by 13.8% over the past month [11][12] - Recent upward revisions in earnings estimates for fiscal 2025 indicate positive momentum, with the Zacks Consensus Estimate rising by $0.04 to $21.11 per share [12]