WEX (WEX) FY Conference June 04, 2025 04:20 PM ET Speaker0 I'm required to inform you that a complete list of research disclosures or potential conflicts of interest can be found on our website, williamblair.com. So with that, pleasure to introduce Melissa Smith, chairman and CEO of WEX as well as Steve Elder who runs the company's IR. And Melissa will walk us through a presentation. I expect we'll have time for a little bit of Q and A in this room and then there'll be a breakout session after. Speaker1 Tha ...

A month has gone by since the last earnings report for Wex (WEX) . Shares have added about 10.7% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Wex due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.How Have Estimates Been Moving Since Then?It turns out, estimates revi ...

Summary of WEX FY Conference Call (May 20, 2025) Company Overview - **Company**: WEX Inc. - **Industry**: Mobility and Corporate Payments Key Points Mobility Segment - **Tariff Impact**: The Over the Road (OTR) segment, which constitutes about one-third of the Mobility business, experienced strong volumes initially in Q1, but saw a softening towards the end of April due to tariff discussions and Easter-related disruptions [2][3] - **Domestic vs. Import Freight**: Approximately 90% of trucking in the U.S. involves domestically produced goods, with only 10% related to imports. This indicates a limited impact from import-related freight on overall volumes [4][5] - **Volume Increase**: A 50 basis point increase in volumes was estimated from Q4 to Q1 due to demand pull forward [4][5] - **Freight Pricing Correlation**: There is a loose correlation between freight prices and WEX's performance, particularly with spot rates reflecting real-time shipment needs [6][9] Credit Management - **Dynamic Credit Box**: WEX has invested in data analytics and machine learning to manage its credit box dynamically, allowing for adjustments based on customer spending patterns and delinquencies [10][11] - **Credit Losses**: Credit losses improved to 12 basis points in Q1, down from 15 basis points in the previous year, indicating effective credit management [12][13] - **Recession Preparedness**: The company has conducted scenario modeling for potential recession impacts and feels well-prepared to manage credit losses [17][18] Electric Vehicle (EV) Transition - **Market Readiness**: WEX has developed solutions for the EV transition, including on-route charging and home charging solutions, but adoption in commercial fleets is slow due to complexity and varied use cases [21][24] International Opportunities - **Global Expansion**: WEX sees potential for international growth, particularly in Europe and Australia, but prioritizes investments based on the highest return opportunities [26][28] Corporate Payments Segment - **Travel and Non-Travel Business**: The travel segment is undergoing a contract migration, which has temporarily affected revenue, but volumes remain strong. The non-travel segment is slower growing, but investments in embedded and direct business are yielding positive results [29][31] - **Volume Growth**: The direct business saw a 25% volume growth in both Q1 and Q4, reflecting successful investments [33] Competitive Landscape - **Infrastructure Advantage**: WEX's established infrastructure for servicing complex travel needs provides a competitive edge over new entrants who lack similar capabilities [40][41] - **Market Position**: WEX has captured market share due to its scale and ability to meet sophisticated client needs across multiple geographies [48] Financial Sensitivity to Interest Rates - **Revenue Impact**: A 100 basis point change in interest rates could impact revenue by approximately $40 million, primarily affecting the mobility and HSA segments [54][55] - **EPS Sensitivity**: Higher interest rates could negatively impact EPS due to corporate debt, despite benefiting revenue [56] Capital Allocation Strategy - **Leverage Management**: WEX is focused on reducing leverage to historical levels and is not currently pursuing M&A opportunities [63][64] Additional Insights - **SaaS Accounts Growth**: A 6% increase in SaaS accounts was noted, driven by a successful open enrollment season [49][50] - **HSA Market Trends**: The HSA market continues to grow, supported by regulatory advocacy and employer interest, despite a slowdown in account growth rates [51][52] This summary encapsulates the key insights and data points from the WEX FY Conference Call, highlighting the company's performance, strategic initiatives, and market dynamics.

WEX Inc. (WEX) reported impressive first-quarter 2024 results, wherein earnings and revenues beat the Zacks Consensus Estimate.Quarterly adjusted earnings of $3.51 per share surpassed the Zacks Consensus Estimate by 3.2% and increased 1.5% from the year-ago quarter. Revenues of $636.6 million beat the consensus estimate by 1% but declined 2.5% on a year-over-year basis.The stock has fallen 5.1% since the release of results on April 30, as the guidance for 2025 was weak.For 2025, revenues are expected betwee ...

Plans to Vote Against Jack VanWoerkom, Melissa Smith, and James Neary Confident Company can Deliver Value to All Stakeholders with the Right Leadership and Strategy NEW YORK, May 02, 2025 (GLOBE NEWSWIRE) -- Impactive Capital, LP, together with its affiliates, one of the largest shareholders of WEX Inc. (NYSE:WEX) (the “Company”) with an ownership interest of approximately 7.0% today issued an open letter to the Company’s shareholders. The full text of the letter is set forth below: Dear Fellow Shareholders ...

Financial Performance - Total revenues for the three months ended March 31, 2025, were $636.6 million, a decrease of 2% compared to $652.7 million in the same period of 2024[141]. - Net income for the same period increased to $71.5 million, up 8.7% from $65.8 million in 2024, resulting in a net income per diluted share of $1.81, compared to $1.55 in the prior year[141]. - Adjusted net income was $138.4 million, down from $146.7 million year-over-year, with adjusted net income per diluted share at $3.51, slightly up from $3.46[141]. - Operating income for the three months ended March 31, 2025, increased by $9.8 million, or 21%, to $56.5 million compared to $46.7 million in the same period of 2024[153]. - Segment adjusted operating income rose by $7.5 million, or 9%, to $86.9 million for the three months ended March 31, 2025, compared to $79.4 million in 2024[153]. - Total segment adjusted operating income was $258.7 million for the three months ended March 31, 2025, down from $274.9 million in 2024[174]. Revenue Breakdown - In the Mobility segment, total revenues decreased by $5.2 million to $333.8 million, primarily due to lower average domestic fuel prices, which decreased revenue by $8.5 million[143]. - Total revenues in the Benefits segment increased by $8.1 million to $199.3 million, driven by a rise in average HSA custodial cash assets, which increased by 9% to $4,608.9 million[151]. - Total revenues in the Corporate Payments segment decreased by $19.0 million, or 16%, to $103.5 million for the three months ended March 31, 2025, compared to $122.5 million in 2024[155]. - Payment processing revenue declined by $17.5 million, or 17%, to $85.7 million for the three months ended March 31, 2025[155]. Expenses and Margins - General and administrative expenses decreased by $4.2 million, or 41%, to $6.2 million for the three months ended March 31, 2025, due to reduced integration costs and changes in performance-based compensation estimates[154]. - Segment adjusted operating income margin for Mobility improved to 39.4%, up from 38.6% in the prior year, primarily due to a reduction in credit loss provision[148]. - Segment adjusted operating income margin for Corporate Payments decreased by 13.6 percentage points to 39.1% for the three months ended March 31, 2025, compared to 52.7% in 2024[159]. Cash Flow and Liquidity - Operating cash flow for the three months ended March 31, 2025, was reported at $(481.6) million, compared to $(153.3) million in 2024[177]. - Adjusted free cash flow for the three months ended March 31, 2025, was $16.2 million, an improvement from $(9.2) million in 2024[177]. - The company reported a net cash used for operating activities of $481.6 million for the three months ended March 31, 2025, an increase of $328.3 million compared to the same period in 2024[191][193]. - Cash used for investing activities decreased by $294.3 million to $23.5 million for the three months ended March 31, 2025, primarily due to the absence of HSA deposit transfers to WEX Bank during this period[195]. - Financing activities generated $318.4 million in cash during the three months ended March 31, 2025, a decrease of $35.7 million compared to the prior year, influenced by a reduction in restricted cash payable[197]. Debt and Compliance - The company completed a private offering of $550.0 million in senior unsecured notes due in March 2033 during the three months ended March 31, 2025[179]. - The company had outstanding term loan principal borrowings of $2,689.9 million and borrowings of $954.3 million on the Revolving Credit Facility as of March 31, 2025[181]. - The company believes its current cash and cash equivalents, along with cash generating capabilities, will be adequate to fund its cash needs for the next 12 months[181]. - As of March 31, 2025, the company maintained compliance with financial covenants, including a consolidated interest coverage ratio of no less than 3.00 to 1.00 and a consolidated leverage ratio of no more than 4.75 to 1.00[189]. - WEX Bank is subject to a consent order from the FDIC requiring compliance improvements, with a civil money penalty of $650 thousand assessed and paid in full[201]. Stock and Shareholder Information - As of March 31, 2025, there was $173.9 million worth of WEX common stock available for repurchase under the authorized plan[198]. - The company has the ability to redeem up to 40% of the Senior Notes at a redemption price of 106.500% of the principal amount, provided at least 50% of the original amount remains outstanding[188]. - The company had $144.8 million available to borrow from the Federal Reserve Bank Discount Window as of March 31, 2025, with no outstanding borrowings on this line of credit[190].

WEX (WEX) Q1 2025 Earnings Call May 01, 2025 10:00 AM ET Company Participants Steve Elder - Senior Vice President-Global Investor RelationsMelissa Smith - Chairman of the Board, President & CEOJagtar Narula - Chief Financial OfficerSanjay Sakhrani - Managing DirectorRamsey El-Assal - Managing DirectorDarrin Peller - Managing DirectorAndrew Bauch - Director - Equity Research Conference Call Participants Nik Cremo - Executive Director, Lead Equity Research Analyst - Payments & FinTechDavid Koning - Senior Res ...

WEX (WEX) Q1 2025 Earnings Call May 01, 2025 10:00 AM ET Speaker0 Thank you for standing by. My name is Kayla, and I will be your conference operator today. At this time, I would like to welcome everyone to the WEX First Quarter twenty twenty five Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. I would now like to turn the call over to Steve Elder. You may begin. Speaker1 Thank you, operator, and goo ...

Core Insights - Wex reported revenue of $636.6 million for the quarter ended March 2025, a decrease of 2.5% year-over-year, while EPS increased to $3.51 from $3.46 in the previous year [1] - The revenue exceeded the Zacks Consensus Estimate of $630.4 million, resulting in a surprise of +0.98%, and the EPS also surpassed the consensus estimate of $3.40 by +3.24% [1] Financial Performance Metrics - Purchase volume in the Benefits segment was $2.33 billion, exceeding the average estimate of $2.19 billion [4] - Payment processing transactions in the Mobility segment totaled 134.5 million, slightly below the average estimate of 136.53 million [4] - Corporate Payments segment reported a purchase volume of $17.29 billion, lower than the estimated $18.78 billion [4] - Average US fuel price in the Mobility segment was $3.32 per gallon, above the average estimate of $3.29 per gallon [4] - Mobility revenues were $333.80 million, slightly above the estimate of $331.20 million, representing a year-over-year decline of -1.5% [4] - Benefits revenues reached $199.30 million, surpassing the estimate of $197.88 million, with a year-over-year increase of +4.2% [4] - Corporate Payments revenues were $103.50 million, below the estimate of $104.85 million, reflecting a year-over-year decline of -15.5% [4] - Payment processing revenues were $271.80 million, under the estimate of $274.30 million, showing a year-over-year decrease of -10% [4] - Account servicing revenues were $179.10 million, exceeding the estimate of $177.13 million, with a year-over-year increase of +3.4% [4] - Finance fees revenues were $75.70 million, above the estimate of $67.74 million, indicating a year-over-year increase of +7.7% [4] - Other revenues were reported at $110 million, slightly below the estimate of $112.18 million, with a year-over-year increase of +2.7% [4] - Benefits-Other revenues were $53.60 million, below the estimate of $54.77 million, reflecting a year-over-year increase of +16.5% [4] Stock Performance - Wex shares have returned -18.1% over the past month, compared to a -0.2% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 2 (Buy), suggesting potential outperformance against the broader market in the near term [3]

Core Viewpoint - Wex reported quarterly earnings of $3.51 per share, exceeding the Zacks Consensus Estimate of $3.40 per share, and showing a slight increase from $3.46 per share a year ago, indicating a positive earnings surprise of 3.24% [1] Financial Performance - Wex's revenues for the quarter ended March 2025 were $636.6 million, surpassing the Zacks Consensus Estimate by 0.98%, although this represents a decline from $652.7 million in the same quarter last year [2] - Over the last four quarters, Wex has exceeded consensus EPS estimates three times and topped consensus revenue estimates two times [2] Stock Performance - Wex shares have declined approximately 24.9% since the beginning of the year, contrasting with the S&P 500's decline of 5.5% [3] - The company's future stock performance will largely depend on management's commentary during the earnings call and the sustainability of the recent earnings numbers [3][4] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $3.58, with expected revenues of $653.3 million, and for the current fiscal year, the estimate is $15.22 on $2.61 billion in revenues [7] - The estimate revisions trend for Wex is currently favorable, leading to a Zacks Rank 2 (Buy), suggesting that the shares are expected to outperform the market in the near future [6] Industry Context - The Financial Transaction Services industry, to which Wex belongs, is currently ranked in the top 29% of over 250 Zacks industries, indicating a favorable outlook for stocks within this sector [8]