Shares of Corpay, Inc. (NYSE: CPAY ) (previously known as Fleetcor Technologies) have delivered a total return of 3% since my initial Strong Buy recommendation, Fleetcor Technologies: 5 Reasons Why I Am Bullish , was published on January Analyst's Disclosure: I/we have a beneficial long position in the shares of CPAY either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alp ...

Group 1 - USAA Perks® and CarAdvise launched the CarAdvise Fuel program to help USAA members save on fuel at over 60,000 locations in the U.S. [1] - The program offers a discount of 5 cents per gallon for fuel purchases at participating gas stations within the network [1][4] - The initiative is part of USAA's commitment to provide valuable benefits to its members, particularly active-duty military members and their families [2][4] Group 2 - CarAdvise has been providing its core car maintenance savings program to USAA members since 2020, enhancing their vehicle upkeep experience [4] - Corpay, the technology partner behind the program, aims to deliver a seamless fueling experience to millions of USAA members [4][5] - USAA serves nearly 14 million members, including military personnel and their families, and has a strong commitment to supporting these communities [5]

Core Insights - Corpay's recent earnings report showed mixed results, with earnings per share of $5.36 beating estimates by a slight margin, while total revenues of $1 billion missed expectations by 1.5% [2] - The company's shares have declined approximately 12% since the last earnings report, underperforming the S&P 500 [1] Financial Performance - Earnings per share increased by 20.7% year over year, while total revenues grew by 10.4% compared to the same quarter last year [2] - Corporate payments revenue reached $346.2 million, a 38% year-over-year increase, exceeding estimates [3] - Vehicle payments revenue was $497.7 million, showing a slight decline from the previous year and missing estimates [4] - Lodging payments revenue increased by 1% year over year to $120.9 million, surpassing expectations [4] - EBITDA rose by 12.4% year over year to $571.2 million, but fell short of projections [5] Balance Sheet and Cash Flow - Corpay ended Q4 2024 with cash and cash equivalents of $1.6 billion, up from $1.3 billion in Q3 2024, while long-term debt decreased slightly [6] - The company generated $648.7 million in cash from operating activities during the quarter [6] Future Outlook - For 2025, Corpay raised its revenue guidance to $4.35-$4.45 billion, up from the previous estimate of $3.98-$4.01 billion [7] - Adjusted net income per diluted share guidance was also increased to $20.75-$21.25 from $18.90-$19.10 [7] - Recent estimates have trended downward, with a consensus estimate shift of -6.05% [8] Investment Scores - Corpay holds a Growth Score of A and a Momentum Score of A, with a Value Score of B, placing it in the top 40% for this investment strategy [9]

International Revenues and Currency Impact - International revenues accounted for 47.7% of total revenues in 2024, up from 45.6% in 2023[403]. - A hypothetical 10% change in foreign currency exchange rates could have impacted consolidated operating income by approximately $97.8 million in 2024, compared to $86.0 million in 2023[403]. Debt and Interest Rates - The company had $6.7 billion of variable rate debt outstanding as of December 31, 2024, an increase from $5.4 billion in 2023[405]. - A 100 basis point change in market interest rates would have changed interest expense by approximately $22 million in 2024 and $14 million in 2023[406]. - Total debt increased to $7.996 billion in 2024 from $6.723 billion in 2023, representing an 18.9% increase[579]. - Term Loan A interest rate decreased to 5.83% in 2024 from 6.83% in 2023, while Term Loan B interest rate decreased to 6.11% from 7.21%[582]. - The Company entered into a fifteenth amendment to the Credit Agreement, increasing Term Loan B commitments by $500 million[580]. Goodwill and Acquisitions - The company recognized a goodwill impairment loss of $90 million related to the Payroll Card reporting unit in 2024, with total goodwill at $6.0 billion[421]. - The acquisitions of Paymerang and GPS Capital Markets, LLC were completed for total estimated purchase consideration of $179.2 million and $576.2 million, respectively[424]. - Intangible assets from these acquisitions, including customer and vendor relationships, were recorded at $542.3 million[424]. - The Company acquired 70% of Zapay for approximately $59.5 million in March 2024, with goodwill of approximately $73.2 million recorded[553]. - The acquisition of Paymerang in July 2024 was for approximately $179.2 million, with goodwill of approximately $308.1 million recorded[554]. - The Company acquired GPS Capital Markets for approximately $576.2 million in December 2024, with goodwill of approximately $329.2 million recorded[555]. - The total consideration paid for the 2024 acquisitions was approximately $814.9 million, net of cash and cash equivalents of $509.0 million[556]. - Goodwill increased to $5.98 billion by December 31, 2024, reflecting acquisitions and adjustments, with $383.9 million attributed to the 2023 acquisitions[565][567]. Financial Performance - Net revenues for 2024 reached $3,974,589, representing a 5.79% increase from $3,757,719 in 2023[432]. - Operating income rose to $1,787,157, a 7.87% increase compared to $1,656,873 in 2023[432]. - Net income attributable to Corpay was $1,003,746, up 2.00% from $981,890 in 2023[432]. - Basic earnings per share increased to $14.27, reflecting a 6.34% rise from $13.42 in 2023[432]. - Comprehensive income attributable to Corpay was $578,849, down 52.06% from $1,202,441 in 2023[436]. - Net income for the year ended December 31, 2024, was $1,003,732, an increase of 2.9% from $981,890 in 2023[442]. Cash Flow and Investments - Net cash provided by operating activities decreased to $1,940,565 in 2024 from $2,101,132 in 2023, a decline of 7.7%[442]. - The company made acquisitions net of cash acquired totaling $821,924 in 2024, compared to $428,327 in 2023, indicating a significant increase of 92.0%[442]. - The Company reported a net cash used in investing activities of $807,477 in 2024, compared to $380,723 in 2023, an increase of 112.0%[442]. - Cash and cash equivalents at the end of 2024 were $4,456,345, up from $3,141,535 at the end of 2023, representing a growth of 42.0%[442]. Assets and Liabilities - Total assets increased to $17,957,031, up 16.06% from $15,476,252 in 2023[429]. - Total current liabilities increased to $8,707,881, a 27.56% rise from $6,825,753 in 2023[430]. - Goodwill increased to $5,984,667, up 6.02% from $5,644,958 in 2023[429]. - Total stockholders' equity decreased to $3,145,989, down 4.16% from $3,282,359 in 2023[430]. - The Company had deferred customer incentives of $5.5 million as of December 31, 2024, down from $10.0 million in 2023[525]. Taxation - The total provision for income taxes for 2024 was $381,381 thousand, representing an increase from $343,115 thousand in 2023 and $321,333 thousand in 2022[592]. - The computed "expected" tax expense for 2024 was $290,877 thousand, which is 21.0% of income before income taxes, consistent with the previous two years[592]. - The valuation allowance decreased by $52.8 million in 2024, primarily due to the release of a deferred tax asset related to foreign tax credits[595]. - The foreign income tax differential contributed $31,743 thousand (2.3%) to the provision for income taxes in 2024[592]. Stock and Compensation - Stock-based compensation expense for 2024 was $116.7 million, with tax benefits related to stock-based compensation of $60.7 million[545]. - The Company has a stock repurchase program authorized to repurchase up to $9.1 billion in common stock until February 4, 2026[540]. - The Company repurchased 33,090,680 shares for an aggregate purchase price of $7.8 billion since the beginning of the stock repurchase program, with $1.3 billion remaining for future repurchases[540].

Core Insights - Corpay (CPAY) reported mixed fourth-quarter 2024 results, with earnings exceeding estimates while revenues fell short [1][2] Financial Performance - Earnings per share were $5.36, beating the consensus estimate by a slight margin and reflecting a year-over-year increase of 20.7% [2] - Total revenues reached $1 billion, missing the consensus estimate by 1.5% but showing a growth of 10.4% from the previous year [2] - EBITDA increased by 12.4% year-over-year to $571.2 million, although it missed projections of $599 million [5] - The EBITDA margin was 55.2%, up 100 basis points from the fourth quarter of 2023 but below the estimate of 56.9% [5] Segment Performance - Corporate payments generated revenues of $346.2 million, a 38% increase year-over-year, surpassing estimates [3] - Vehicle payments revenues were $497.7 million, slightly declining from the previous year and missing estimates of $549.9 million [4] - Lodging payments revenues were $120.9 million, a 1% increase from the year-ago quarter, beating expectations [4] Balance Sheet & Cash Flow - Corpay ended the fourth quarter with cash and cash equivalents of $1.6 billion, up from $1.3 billion in the previous quarter [6] - Long-term debt decreased to $5.2 billion from $5.3 billion [6] - Cash generated from operating activities was $648.7 million, with capital expenditures of $44.1 million [6] 2025 Outlook - For 2025, revenue guidance was raised to $4.35-$4.45 billion from the previous estimate of $3.98-$4.01 billion, aligning with the Zacks Consensus Estimate [7] - Adjusted net income per diluted share guidance was increased to $20.75-$21.25 from $18.90-$19.10, though it remains below the Zacks Consensus Estimate of $21.86 [7]

Financial Data and Key Metrics Changes - The company reported Q4 revenue of $1,034 million, an increase of 10%, and cash EPS of $5.36, up 21% [9][31] - For the full year 2024, cash EPS was $19, up 16% excluding Russia, with overall sales growth exceeding 20% [13][32] - Organic revenue growth for Q4 was 12%, with corporate payments line achieving 26% organic revenue growth [10][35] Business Line Data and Key Metrics Changes - Corporate Payments revenue increased by 26% in Q4 and 20% for the full year [35] - Vehicle Payments organic revenue grew 8% in Q4 and 5% for the year, with significant growth in insurance revenue, which was up over 130% in Q4 [40][41] - Cross-Border revenue rose 20% for both the quarter and the year, driven by strong sales growth [38] Market Data and Key Metrics Changes - Same-store sales improved to a positive 1% in Q4 compared to a negative 3% in the previous year [11] - The company faced macroeconomic headwinds, with print revenue impacted by approximately $20 million due to unfavorable FX rates [30][17] Company Strategy and Development Direction - The company plans to focus on expanding its Corporate Payments business and simplifying its portfolio by shedding non-core assets [18][19] - Major initiatives include taking the Payables business upmarket to the Enterprise segment and expanding into Europe [20][21] - The Multi-Currency Account product is expected to enhance competitiveness in the Cross-Border market [22] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about a challenging macro environment, projecting print revenue to be compressed by over $100 million in 2025 [17][60] - Despite macro challenges, the company maintains confidence in its core business performance and expects organic revenue growth of 11% in 2025 [15][61] Other Important Information - The company completed two acquisitions in 2024, Paymerang and GPS, and is on track to deliver $0.50 of cash EPS accretion from these deals [23] - The acquisition of Gringo is expected to significantly increase the company's presence in the Brazilian payments market [24] Q&A Session Summary Question: What is driving the expected acceleration in Vehicle Payments? - Management indicated that strong performance in Brazil and improvements in the U.S. Vehicle Payments market are key drivers [69] Question: Is Gringo included in the 2025 guidance? - Management confirmed that Gringo is not included in the guidance as the acquisition has not yet closed [76] Question: What are the expectations for Corporate Payments and potential divestitures? - Management stated that pruning would involve small non-core assets, with a focus on enhancing the Corporate Payments segment [81] Question: How is the company benefiting from recent sales changes and rebranding? - Management noted that while it is still early days, the sales momentum is primarily driven by existing business rather than recent changes [88] Question: What is the current penetration of card usage in the full AP business? - The average penetration of card usage in the full AP business is around 10% to 11% [106] Question: What are the expectations for the Lodging business growth? - Management expects the Lodging business to recover and return to historical growth rates as same-store sales improve [144]

Core Insights - Corpay (CPAY) reported $1.03 billion in revenue for the quarter ended December 2024, marking a year-over-year increase of 10.4% and an EPS of $5.36 compared to $4.44 a year ago, with a revenue surprise of -1.50% and an EPS surprise of +0.56% [1] Financial Performance Metrics - Corpay's shares have returned +9.2% over the past month, outperforming the Zacks S&P 500 composite's +1.7% change, and currently holds a Zacks Rank 3 (Hold) [3] - Lodging Payments recorded 10.6 million room nights, exceeding the estimated 8.9 million [4] - Corporate Payments spend volume reached $47.94 million, surpassing the average estimate of $44.01 million [4] - Revenues per room night in Lodging Payments were $11.39, lower than the estimated $13.32 [4] - Vehicle Payments generated revenues of $497.66 million, below the average estimate of $523.21 million [4] - Corporate Payments revenues were $346.19 million, exceeding the average estimate of $337.94 million, representing a year-over-year change of +37.9% [4] - Revenues from Other Payments were $69.69 million, compared to the average estimate of $74.05 million, reflecting a year-over-year change of +4.8% [4] - Lodging Payments revenues were $120.89 million, slightly above the estimated $119.31 million, with a year-over-year change of +0.8% [4] - Operating income for Corporate Payments was $136.26 million, below the average estimate of $146.38 million [4]

Group 1: Earnings Performance - Corpay reported quarterly earnings of $5.36 per share, exceeding the Zacks Consensus Estimate of $5.33 per share, and up from $4.44 per share a year ago, representing an earnings surprise of 0.56% [1] - The company has surpassed consensus EPS estimates in all four of the last quarters [2] - Corpay's revenues for the quarter ended December 2024 were $1.03 billion, missing the Zacks Consensus Estimate by 1.50%, compared to $937.32 million in the same quarter last year [2] Group 2: Stock Performance and Outlook - Corpay shares have increased approximately 12.2% since the beginning of the year, outperforming the S&P 500's gain of 2.7% [3] - The future performance of Corpay's stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [4][6] - The current consensus EPS estimate for the upcoming quarter is $4.77 on revenues of $1.04 billion, and for the current fiscal year, it is $21.86 on revenues of $4.45 billion [7] Group 3: Industry Context - The Financial Transaction Services industry, to which Corpay belongs, is currently ranked in the bottom 45% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Corpay's stock performance [5]

Q4 2024 Earnings Release Supplement Refer to earnings release dated February 5, 2025 for further information ^ - dark blue-teal #00B5E2 ^ - light raspberry #981239 ^ - dark raspberry #981239 ^ - light blue-teal #59CBE8 ^ - cool gray 1 #E6E8E7 ^ - maroon #3D1628 Q4 Safe Harbor Provision 2024 ^ 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 Technol ...

Financial Performance - Corpay reported fourth quarter organic revenue growth of 12% and adjusted EPS growth of 21%, exceeding mid-term growth targets [2]. - Full year Corporate Payments growth was 20%, with total revenues increasing by 10% to $3,974.6 million in 2024 compared to $3,757.7 million in 2023 [6][7]. - Adjusted EBITDA for 2024 rose by 7% to $2,129.0 million, up from $1,994.2 million in 2023 [5]. - Fourth quarter adjusted net income increased by 18% to $383.2 million, compared to $326.1 million in the same quarter of 2023 [6]. - Adjusted net income per diluted share for 2024 increased by 12% to $19.01, compared to $16.92 in 2023 [11]. - Revenues for Q4 2024 reached $1,034,431, a 10% increase from $937,320 in Q4 2023 [24]. - Net income for the year ended December 31, 2024, was $1,003,732, reflecting a 2% increase from $981,890 in 2023 [28]. - Operating income for the year was $1,787,157, an 8% increase from $1,656,873 in 2023 [24]. - Basic earnings per share for the year increased to $14.27, up 6% from $13.42 in 2023 [24]. - Total net revenues for Q4 2024 were $1,034.4 million, a 10% increase from $937.3 million in Q4 2023 [38]. Future Projections - For fiscal year 2025, Corpay projects sales growth of approximately 20% and revenue growth of 10% to 12% [8]. - First quarter 2025 organic revenue growth is expected to be between 8% to 10%, with adjusted EPS growth projected at 9% to 11% [9]. - Corpay's updated financial guidance for 2025 includes total revenues projected between $4,350 million and $4,450 million [12]. - The company expects to generate approximately $1.5 billion in free cash flow in 2025, providing significant capital allocation flexibility [8]. - The company expects full-year 2025 net income guidance between $1,174 million and $1,224 million, with adjusted net income projected between $1,482 million and $1,532 million [44]. Segment Performance - Corporate Payments segment revenues surged by 38% to $346.2 million in Q4 2024 compared to $251.1 million in Q4 2023 [33]. - Vehicle Payments segment revenues decreased slightly to $497.7 million in Q4 2024, down 0.4% from $499.8 million in Q4 2023, but increased by 8% on a pro forma basis [33]. - The Lodging Payments segment reported a 1% increase in revenues to $120.9 million in Q4 2024, compared to $119.9 million in Q4 2023 [40]. - Total spend volume in the Corporate Payments segment increased by 43% to $47.94 billion in Q4 2024 from $33.58 billion in Q4 2023 [33]. - Operating income for Vehicle Payments segment rose by 50% to $364.8 million in Q4 2024, up from $242.5 million in Q4 2023 [38]. Cash Flow and Capital Management - Corpay deployed over $2.5 billion in capital for acquisitions and stock repurchases while maintaining a leverage ratio of 2.75x [8]. - The company reported a total operating expense of $2,187,432 for the year, a 4% increase from $2,100,846 in 2023 [24]. - The company’s cash provided by operating activities for the year was $1,940,565, down from $2,101,132 in 2023 [28]. - Cash and cash equivalents and restricted cash at the end of the period totaled $4,456,345, compared to $3,141,535 at the end of 2023 [28]. - Capital expenditures increased by 21% to $44.3 million in Q4 2024, compared to $36.7 million in Q4 2023 [38]. Asset and Liability Management - Total current assets increased to $8,670,675 as of December 31, 2024, up from $7,084,265 in 2023 [26]. - Total liabilities increased to $14,825,848 as of December 31, 2024, from $12,758,893 in 2023 [26]. - The company reported a goodwill impairment of $90 million in 2024, impacting net income [30]. - Goodwill impairment of $90,000 was recorded in Q4 2024, with no prior year comparison [24]. Market Impact - The US market accounted for 53% of total revenues in Q4 2024, with revenues of $547 million, compared to $500 million in Q4 2023 [35]. - The impact of foreign exchange rates negatively affected revenues by approximately $28 million in Q4 2024 [40]. - The company acquired Zapay in Q1 2024, with results included in the Vehicle Payments segment from the acquisition date [38].