Core Insights - WEX Inc. reported strong third-quarter 2025 results with earnings and revenues exceeding the Zacks Consensus Estimate, but weak fourth-quarter guidance led to a 3.6% decline in share price post-earnings release [1][3]. Financial Performance - Adjusted earnings per share for Q3 were $4.59, surpassing estimates by 3.2% and increasing 5.5% year-over-year [3][8]. - Total revenues for Q3 reached $692 million, beating consensus estimates by 1.4% but declining 4% compared to the previous year [3][8]. Segment Performance - The Mobility segment generated revenues of $360.8 million, a 1% increase year-over-year, exceeding estimates [4]. - The Corporate Payments segment reported revenues of $132.8 million, a 4.7% increase from Q3 2024, but fell short of estimates [4]. - The Benefits segment saw revenues rise by 9.2% year-over-year to $198.1 million, beating estimates [4]. Operating Results - Adjusted operating income decreased by 6.7% to $273.5 million year-over-year but exceeded estimates [5]. - The adjusted operating margin was 39.5%, surpassing estimates but down 450 basis points from the previous year [5]. Balance Sheet & Cash Flow - WEX ended the quarter with cash and cash equivalents of $812.9 million, up from $595.8 million at the end of December 2024 [6]. - Long-term debt increased to $3.72 billion from $3.08 billion in December 2024 [6]. - The company reported a cash outflow of $159.6 million from operating activities, with adjusted free cash flow at $166.2 million [6]. Guidance - For Q4 2025, WEX expects revenues between $646 million and $666 million, with the midpoint below the Zacks Consensus Estimate [2]. - For the full year 2025, revenues are projected between $2.63 billion and $2.65 billion, with the midpoint also below analyst estimates [7]. Adjusted net income per share guidance is set between $15.76 and $15.96, again below consensus [7].

PORTLAND, Maine--(BUSINESS WIRE)--WEX (NYSE: WEX), the global commerce platform that simplifies the business of running a business, today announced the appointment of Sandy Kuohn as its Chief People Officer (CPO). In this role, Kuohn will lead WEX's global people strategy, aligning talent, culture, and organizational capabilities to advance the company's strategy and focus on disciplined growth. Sara Trickett, who served as interim CPO, will continue in her role as Chief Legal Officer and Corpo. ...

Financial Performance - Total revenues for Q3 2025 were $691.8 million, a 3.4% increase from $665.5 million in Q3 2024[148]. - Net income for Q3 2025 was $80.3 million, down 22% from $102.9 million in Q3 2024[148]. - Adjusted net income for Q3 2025 was $159.7 million, compared to $177.5 million in Q3 2024, reflecting a decrease of 10%[148]. - For the three months ended September 30, 2025, operating income decreased by $25.0 million, or 18%, compared to the same period in 2024, with segment adjusted operating income margin declining to 40.7% from 46.8%[157][158]. - Total segment adjusted operating income for the three months ended September 30, 2025, was $297.2 million, down from $317.1 million in 2024, indicating a decline of approximately 6%[189]. - The effective tax rates for the three months ended September 30, 2025, were 31.1%, compared to 27.1% for the same period in 2024, showing an increase of 4 percentage points[180]. Revenue Breakdown - Total volume across the company increased to $66,231 million in Q3 2025 from $62,322 million in Q3 2024, marking a 14.5% increase[148]. - Payment processing revenue in the Mobility segment decreased by 8% to $168.2 million in Q3 2025 from $183.2 million in Q3 2024[150]. - Account servicing revenue increased by 10% to $53.7 million in Q3 2025, up from $49.0 million in Q3 2024[150]. - Finance fee revenue rose by 18% to $82.9 million in Q3 2025, compared to $70.2 million in Q3 2024[150]. - Total revenues for the Benefits segment increased by $16.7 million, or 9%, for the three months ended September 30, 2025, driven by higher other revenue and SaaS account growth[163][164]. - Payment processing revenue increased by $1.9 million, or 9%, for the three months ended September 30, 2025, compared to the same period in 2024[163]. - Corporate Payments total revenues increased by $5.9 million (5%) for the three months ended September 30, 2025, but decreased by $29.0 million (8%) for the nine months ended September 30, 2025, compared to the prior year[168]. Expenses and Cash Flow - Adjusted free cash flow for Q3 2025 was $376.7 million, down from $392.5 million in Q3 2024[148]. - The company reported a net cash used for operating activities of $159.6 million in Q3 2025, compared to a net cash used of $(157.0) million in Q3 2024[148]. - Sales and marketing expenses increased by $10.4 million, or 20%, for the three months ended September 30, 2025, primarily due to targeted investments for growth acceleration initiatives[162]. - General and administrative expenses increased by $8.7 million, or 33%, for the three months ended September 30, 2025, primarily due to strategic decisions related to an international subsidiary[161]. - Depreciation and amortization increased by $2.6 million, or 18%, for the three months ended September 30, 2025, due to increased capital expenditures for new product development[160]. - Cash provided by operating activities for the nine months ended September 30, 2025, increased by $316.6 million compared to the same period in the prior year, primarily due to a seasonal increase in merchant payables[208]. Credit and Financing - Provision for credit losses increased by $7.3 million, or 93%, for the three months ended September 30, 2025, compared to the same period in the prior year, reflecting higher estimated credit and fraud losses[159]. - Provision for credit losses rose by $3.1 million (182%) for the three months and $8.9 million (168%) for the nine months ended September 30, 2025, due to higher collection risk[172]. - Financing interest expense increased by $5.4 million for the three months and $3.3 million for the nine months ended September 30, 2025, due to increased borrowings[177]. - As of September 30, 2025, the company had outstanding term loan principal borrowings of $2.7 billion, borrowings of $601.8 million on the Revolving Credit Facility, and $550.0 million of outstanding Senior Notes[197]. Cash and Investments - As of September 30, 2025, the company had cash and cash equivalents of $812.9 million and remaining borrowing availability of $953.6 million under the Revolving Credit Facility[195]. - Total deposits as of September 30, 2025, amounted to $5.2 billion, with $102.4 million of securitized debt under financing arrangements[202]. - Cash used for investing activities for the nine months ended September 30, 2025, decreased by $329.7 million compared to the prior year, primarily due to lower transfers of HSA deposits[210]. - Net cash from financing activities during 2025 increased by $257.9 million, primarily due to a larger decrease in restricted cash payable compared to the prior year[212]. Stock and Acquisitions - Stock-based compensation for the three months ended September 30, 2025, was $34.7 million, up from $29.8 million in 2024, reflecting an increase of about 16%[187]. - The company completed a private offering of $550.0 million in senior unsecured notes due in March 2033 on March 6, 2025[195]. - The company expects to close on the acquisition of a Mobility card program portfolio for $58.6 million during the first quarter of 2026[217]. - As of September 30, 2025, the company had $173.9 million worth of common stock available for repurchase under its plan[214]. - The company was in compliance with all financial covenants under its Credit Agreement as of September 30, 2025[198].

Core Insights - WEX has accelerated its product innovation by 20% through the use of artificial intelligence [1][2] Group 1: AI Integration and Impact - WEX's CEO highlighted that AI is utilized in various areas including customer discovery, prototyping, coding, quality assurance, infrastructure management, and security [2] - AI has significantly reduced claims processing time in the benefits segment from days to minutes, and generative AI is enhancing productivity in customer service [3] - The integration of AI is expected to help WEX scale its business, accelerate innovation, and strengthen long-term competitive advantages [3] Group 2: Financial Performance - WEX reported revenue growth across all three business segments during the third quarter [4] - The mobility segment's revenue increased by 1% year over year to $360.8 million, while the benefits segment grew by 9.2% to $198.1 million, and the corporate payments segment rose by 4.7% to $132.8 million [5] - The mobility segment's growth was impacted by lower fuel prices, foreign exchange rates, and improved vehicle fuel efficiency [5] Group 3: Strategic Focus and Future Opportunities - WEX aims to strengthen its market position, extend its platform into adjacent workflows, and enhance productivity from its investments [4] - The benefits segment's growth was driven by a 7% increase in Health Savings Accounts (HSAs), with expectations of new legislation in 2026 potentially expanding the total addressable market by 3 to 4 million new accounts [6][7] - In the corporate payments segment, revenue growth was supported by greater yields on purchase volume and a 10.8% increase in total volume, with embedded payments gaining traction across various industries [8]

Financial Data and Key Metrics Changes - Revenue for Q3 was $691.8 million, an increase of 3.9% year over year, with adjusted net income per diluted share at $4.59, up 5.5% year over year [6][7][28] - Excluding fluctuations in fuel prices and foreign exchange rates, revenue growth was 4.4%, and adjusted EPS grew 7.2% [6][7] - The company aims for long-term revenue growth of 5% to 10% and double-digit long-term adjusted EPS growth [7][8] Business Line Data and Key Metrics Changes - **Mobility Segment**: Revenue increased by 1%, with transaction levels slightly down from the prior year, reflecting overall market trends [16][29] - **Benefits Segment**: Total revenue rose 9.2% to $198.1 million, with SaaS account growth of 6% and HSA accounts up 7% [20][29] - **Corporate Payments Segment**: Revenue increased 4.7% to $132.8 million, with purchase volume down 0.9% year over year, but offset by an increase in the net interchange rate [22][30] Market Data and Key Metrics Changes - The Mobility segment continues to face challenges in the over-the-road market, with same-store sales softening [17][18] - The Benefits segment is positioned to benefit from new legislation expanding HSA eligibility, potentially adding 3 million to 4 million new accounts [22] - Corporate Payments is seeing broad-based adoption across industries, with a focus on the underserved mid-market [23][30] Company Strategy and Development Direction - The company’s strategy focuses on amplifying its core, expanding its reach, and accelerating innovation [9][10] - AI is being leveraged to enhance productivity and customer service, with a 20% increase in product innovation velocity [9][10] - The company is committed to maintaining a strong balance sheet and strategically investing in core businesses while evaluating M&A opportunities [31][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company’s ability to deliver sustainable growth despite a dynamic macro backdrop [5][36] - The company is optimistic about moving past the OTA customer headwind and expects improvements in Corporate Payments [36][34] - Management remains cautious about macroeconomic uncertainties but is encouraged by the foundational work established in 2025 [34][35] Other Important Information - The company announced the appointment of Dave Foss to the Board of Directors, effective November 3rd, 2025 [24][25] - The company is focused on executing its strategy to deliver results that drive long-term shareholder value [26][36] Q&A Session Summary Question: What was the conclusion of the strategic review regarding the stock? - Management indicated that the board conducted a thorough strategic review with independent investment banks, focusing on executing the strategic plan and overcoming the OTA customer transition impact [38][39] Question: Can you elaborate on the trends in the Mobility segment? - Management noted a slight deterioration in the over-the-road business but emphasized strong sales efforts and customer retention strategies [40][42] Question: What are the expectations for Corporate Payments moving forward? - Management expressed excitement about returning to growth in Corporate Payments, with strong momentum and investments in product capabilities [47][50] Question: How is the company managing credit in the Mobility segment? - Management stated that credit standards have been tightened, and investments in risk models have improved credit decision-making [55][56] Question: What is the sensitivity of the business to fuel and interest rates? - Management provided details on the revenue and EPS sensitivity to fuel prices and interest rates, indicating a quick flow-through effect on both metrics [59][61]

Financial Data and Key Metrics Changes - Revenue for Q3 was $691.8 million, an increase of 3.9% year-over-year, exceeding the high end of guidance [4][24] - Adjusted net income per diluted share was $4.59, an increase of 5.5% year-over-year [5][24] - Adjusted EPS growth was 7.2% when excluding fuel price and foreign exchange impacts [5] - The company aims for long-term revenue growth of 5%-10% and double-digit long-term adjusted EPS growth [5][6] Business Line Data and Key Metrics Changes - **Mobility Segment**: Revenue increased by 1% despite a drag of 1.4% from lower fuel prices and foreign exchange rates [24][25] - **Benefits Segment**: Total revenue was $198.1 million, up 9.2%, with SaaS account growth of 6% [25][17] - **Corporate Payments Segment**: Revenue was $132.8 million, an increase of 4.7%, with purchase volume declining 0.9% year-over-year [26] Market Data and Key Metrics Changes - The Mobility segment remains the largest, representing roughly half of total revenue [13] - Same store sales in the over-the-road market softened during Q3, with a noted decline in transaction levels [14][15] - The Benefits segment continues to grow, with WEX retaining its position as the fifth largest HSA custodian in the market [17] Company Strategy and Development Direction - The company focuses on three strategic pillars: amplifying core business, expanding reach into adjacent workflows, and accelerating innovation [6][7] - AI is leveraged to enhance productivity and decision-making, driving a 20% increase in product innovation velocity [7][8] - A comprehensive portfolio assessment was conducted, confirming that the segments work better together, enhancing competitive advantages [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to growth, particularly in Corporate Payments, as they move past the OTA customer transition [5][30] - The macroeconomic environment remains dynamic, but the company is optimistic about future performance due to strategic investments [30][32] - The company anticipates continued growth in the Benefits segment, especially with new legislation expanding HSA eligibility [18][30] Other Important Information - The company announced the appointment of Dave Foss to the Board of Directors, effective November 3rd [20][21] - The leverage ratio at the end of Q3 was 3.25x, down from 3.5x at the end of Q1, indicating a focus on debt reduction [28] Q&A Session Summary Question: What was the conclusion of the strategic review regarding the stock? - Management indicated that the board conducted a thorough review with independent investment banks, focusing on executing the strategic plan and improving stock performance [34][35] Question: Can you elaborate on the trends in Mobility and the impact of over-the-road sales? - Management noted a slight worsening in over-the-road sales but emphasized a focus on sales and retention, viewing the situation as transient [36][40] Question: What are the expectations for Corporate Payments moving forward? - Management expressed optimism about returning to growth in Corporate Payments, with strong momentum and a robust pipeline of new customer opportunities [44][46] Question: How is the company managing credit in the Mobility segment? - Management stated that credit standards have been tightened, and they are making informed credit decisions, leveraging AI for better risk management [52][53] Question: What is the sensitivity of the business to fuel prices and interest rates? - Management provided specific figures indicating that a $0.10 change in fuel prices could impact revenue by $20 million and EPS by $0.35 [55][56] Question: What are the expectations for adjusted operating margin for the rest of the year? - Management did not provide specific guidance but indicated that margins are expected to expand next year assuming stable macro conditions [83]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $691.8 million, an increase of 3.9% year over year, exceeding the high end of guidance [5][27] - Adjusted net income per diluted share was $4.59, an increase of 5.5% year over year, also above the high end of guidance [6][27] - Excluding the impact of fuel prices and foreign exchange rates, revenue growth was 4.4% and adjusted EPS grew 7.2% [6][27] Business Line Data and Key Metrics Changes - **Mobility Segment**: Revenue increased 1% despite a drag of 1.4% from lower fuel prices and foreign exchange rates; transaction levels were down slightly from the prior year [16][28] - **Benefits Segment**: Total revenue was $198.1 million, up 9.2%; SaaS account growth was 6% and HSA accounts increased by 7% [20][28] - **Corporate Payments Segment**: Revenue was $132.8 million, an increase of 4.7%; purchase volume declined 0.9% year over year, but the net interchange rate increased, leading to revenue growth [22][30] Market Data and Key Metrics Changes - The Mobility segment continues to face challenges in the over-the-road market, with same-store sales softening during Q3 [17][41] - The Benefits segment is well-positioned for growth, especially with new legislation expected to expand HSA eligibility [21][50] - Corporate Payments is seeing broad-based adoption across industries, with a notable 20% year-over-year growth in direct accounts payable volumes [22][30] Company Strategy and Development Direction - The company aims to simplify business operations through a differentiated value proposition, focusing on sustainable growth, profitability, and strong free cash flow [8][12] - Three strategic pillars include amplifying core business, expanding reach into adjacent workflows, and accelerating innovation through AI [9][10] - The company is leveraging AI to enhance product innovation and operational efficiency, resulting in a 20% increase in product innovation velocity [10][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to growth, particularly in Corporate Payments, and emphasized the importance of maintaining high retention rates [6][34] - The macroeconomic environment remains dynamic, but the company is optimistic about its strategic investments yielding results [6][34] - Management anticipates continued growth in the Benefits segment and expects to navigate through the current challenges in Mobility [34][35] Other Important Information - The company appointed Dave Foss to the Board of Directors, bringing valuable experience in financial services and technology [25] - The leverage ratio at the end of Q3 was 3.25 times, down from 3.5 times at the end of Q1, indicating a focus on debt reduction [32] Q&A Session Summary Question: What was the conclusion of the strategic review regarding the stock? - Management indicated that the board conducted a thorough review with independent investment banks, focusing on executing the strategic plan and overcoming the OTA customer transition impact [38][39] Question: Can you elaborate on the trends in Mobility and the impact of over-the-road softness? - Management noted a slight worsening in over-the-road performance but emphasized strong sales efforts and customer retention strategies [41][42] Question: What are the expectations for Corporate Payments moving forward? - Management expressed excitement about returning to growth in Corporate Payments, highlighting strong momentum and product capability extensions [48][49] Question: How is the company managing credit risk in the Mobility segment? - Management stated that credit standards have been tightened, and investments in risk models have improved credit decision-making [55][56] Question: What is the fuel price sensitivity of the business? - A $0.10 change in fuel prices annually would impact revenue by $20 million and EPS by $0.35, with quick flow-through effects on both [58][59]

Financial Performance - Total revenue for Q3 2025 increased by $263 million, or 39%, compared to Q3 2024, which includes a net $60 million unfavorable impact from fuel prices and spreads and a $27 million favorable impact from foreign exchange rates[13] - Q3 2025 GAAP net income was $230 per diluted share, a decrease of 87% compared to the prior year, while adjusted net income was $459 per diluted share, an increase of 55%[13] - Mobility segment revenue for Q3 2025 increased 10% compared to the same period a year ago, including a 14% drag due to lower fuel prices and foreign exchange rates[19] - Benefits revenue in Q3 2025 was $1981 million, an increase of 92% over the prior year, driven by continued strong revenue growth in HSA accounts[23] - Corporate Payments segment revenue for Q3 2025 increased 47% to $1328 million, driven primarily by increased yields on purchase volume and a 108% increase in total volume[31] Segment Breakdown - Mobility segment revenue was $3608 million, representing 522% of total revenue, with a year-over-year change of 10%[14] - Benefits segment revenue was $1981 million, accounting for 286% of total revenue, with a year-over-year increase of 92%[14] - Corporate Payments segment revenue was $1328 million, making up 192% of total revenue, with a year-over-year growth of 47%[14] Balance Sheet and Cash Flow - The company ended Q3 2025 with $1082 million of available liquidity[39] - The company's leverage ratio as of September 30, 2025, was 325 times[39] - Q3 2025 non-GAAP adjusted free cash flow was $166 million, and over the trailing twelve months ended September 30, 2025, the company generated $546 million[46] Financial Guidance - The company's net revenue guidance for full year 2025 is between $2634 billion and $2654 billion[51] - The company's adjusted net income per diluted share guidance for full year 2025 is between $1576 and $1596[51]

Core Insights - Wex reported revenue of $691.8 million for the quarter ended September 2025, reflecting a 4% increase year-over-year and a surprise of +1.44% over the Zacks Consensus Estimate [1] - Earnings per share (EPS) for the quarter was $4.59, up from $4.35 in the same quarter last year, with an EPS surprise of +3.15% compared to the consensus estimate of $4.45 [1] Financial Performance Metrics - Average US fuel price was $3.38 per gallon, exceeding the average estimate of $3.26 per gallon [4] - Corporate Payments purchase volume was reported at $23.18 billion, slightly below the average estimate of $23.53 billion [4] - Benefits purchase volume reached $1.77 billion, compared to the average estimate of $1.85 billion [4] - Mobility payment processing transactions totaled 140 million, compared to the average estimate of 142.98 million [4] - Mobility revenues were $360.8 million, surpassing the average estimate of $350.31 million, marking a +1% year-over-year change [4] - Corporate Payments revenues were $132.8 million, below the average estimate of $144.49 million, with a +4.7% year-over-year change [4] - Benefits revenues were $198.1 million, exceeding the average estimate of $185.18 million, reflecting a +9.2% year-over-year change [4] - Corporate Payments payment processing revenues were $109.7 million, slightly above the average estimate of $109.02 million, with a +4.7% year-over-year change [4] - Benefits payment processing revenues were $23.8 million, below the average estimate of $25.06 million, with an +8.7% year-over-year change [4] - Benefits account servicing revenues were $113.3 million, close to the average estimate of $113.54 million, reflecting a +3% year-over-year change [4] - Benefits other revenues were $61 million, exceeding the average estimate of $57.99 million, with a +23.5% year-over-year change [4] - Mobility payment processing revenues were $168.2 million, below the average estimate of $172.04 million, reflecting an -8.2% year-over-year change [4] Stock Performance - Wex shares returned +0.8% over the past month, compared to the Zacks S&P 500 composite's +3.8% change [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Core Insights - Wex reported quarterly earnings of $4.59 per share, exceeding the Zacks Consensus Estimate of $4.45 per share, and showing an increase from $4.35 per share a year ago, resulting in an earnings surprise of +3.15% [1] - The company achieved revenues of $691.8 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 1.44% and up from $665.5 million year-over-year [2] - Wex has consistently outperformed consensus EPS and revenue estimates over the last four quarters [2] Earnings Performance - The earnings surprise for the previous quarter was +7.05%, with actual earnings of $3.95 per share compared to an expected $3.69 [1] - The current consensus EPS estimate for the upcoming quarter is $3.79, with projected revenues of $659.07 million, while the estimate for the current fiscal year is $15.67 on $2.64 billion in revenues [7] Market Position - Wex shares have declined approximately 9.4% since the beginning of the year, contrasting with the S&P 500's gain of 17.2% [3] - The Zacks Rank for Wex is currently 2 (Buy), indicating expectations for the stock 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 bottom 43% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Another company in the same industry, Fidelity National Information Services, is expected to report earnings soon, with a consensus EPS estimate of $1.48, reflecting a year-over-year increase of +5.7% [9]