Core Viewpoint - Wex has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][2]. Earnings Estimates and Stock Price Impact - Changes in a company's future earnings potential, as reflected in earnings estimate revisions, are strongly correlated with near-term stock price movements [3]. - Institutional investors utilize earnings estimates to calculate the fair value of a company's shares, leading to significant stock price movements based on their buying or selling activities [3]. Wex's Earnings Outlook - The rising earnings estimates for Wex suggest an improvement in the company's underlying business, which is expected to positively influence its stock price [4]. - The Zacks Consensus Estimate for Wex has increased by 3.7% over the past three months, with expected earnings of $15.57 per share for the fiscal year ending December 2025, indicating no year-over-year change [7]. Zacks Rank System - The Zacks Rank stock-rating system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [6]. - The upgrade of Wex to a Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting a strong potential for market-beating returns in the near term [9].

Group 1 - Zacks Premium offers various tools for investors to enhance their stock market engagement and confidence, including daily updates, research reports, and stock screens [1] - The Zacks Style Scores provide a unique rating system for stocks based on value, growth, and momentum, helping investors identify securities with high potential for market outperformance [2][3] Group 2 - The Value Score identifies attractive and discounted stocks using financial ratios such as P/E and Price/Sales, appealing to value investors [3] - The Growth Score focuses on a company's future prospects by analyzing projected earnings and sales, targeting growth investors [4] - The Momentum Score leverages price trends and earnings estimate changes to assist momentum traders in timing their investments [5] Group 3 - The VGM Score combines all three Style Scores, offering a comprehensive indicator for investors who utilize multiple investing strategies [6] - The Zacks Rank, a proprietary stock-rating model, uses earnings estimate revisions to simplify portfolio building, with 1 (Strong Buy) stocks achieving an average annual return of +23.75% since 1988 [7][9] Group 4 - WEX Inc., a leading provider of payment processing solutions, holds a 2 (Buy) Zacks Rank and a VGM Score of B, indicating strong investment potential [11] - WEX's Value Style Score is A, supported by a forward P/E ratio of 10.95, making it attractive to value investors [11] - Recent upward revisions in earnings estimates by analysts have increased WEX's consensus estimate to $15.57 per share, with an average earnings surprise of +2.4% [12]

Core Viewpoint - Wex (WEX) shares have recently experienced a decline of 5.3% over the past week, but the formation of a hammer chart pattern suggests potential support and a possible trend reversal in the future [1][2]. Technical Analysis - The hammer chart pattern indicates a potential bottoming out, with selling pressure likely subsiding, which supports a bullish outlook for the stock [2][5]. - A hammer pattern typically forms during a downtrend, where the stock opens lower, makes a new low, but then closes near or above the opening price, indicating buying interest [4][5]. - The effectiveness of the hammer pattern is enhanced when used alongside other bullish indicators, as its strength is dependent on its placement on the chart [6]. Fundamental Analysis - Recent upward revisions in earnings estimates for WEX are a positive fundamental indicator, as trends in earnings estimate revisions correlate strongly with near-term stock price movements [7]. - Over the last 30 days, the consensus EPS estimate for WEX has increased by 3.4%, indicating that analysts expect better earnings than previously predicted [8]. - WEX holds a Zacks Rank of 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks, which typically outperform the market [9][10].

Core Insights - WEX Inc. reported strong second-quarter 2025 results, with both earnings and revenues exceeding the Zacks Consensus Estimate, leading to a 6.5% increase in share price since the earnings release on July 23 [1][2] Financial Performance - Adjusted earnings per share were $3.95, surpassing the Zacks Consensus Estimate by 7.1% and showing a year-over-year increase of 1.02% [2][6] - Revenues totaled $659.6 million, beating the consensus estimate by 0.9% but reflecting a decline of 2.06% year-over-year [2][6] Segment Performance - The Mobility segment's revenues decreased by 3.7% year-over-year to $346.2 million, missing the estimate of $354.4 million [4] - The Corporate Payments segment's revenues fell 34.2% year-over-year to $118.3 million, also missing the estimate of $119 million [4] - The Benefits segment's revenues increased by 45.5% year-over-year to $195.1 million, exceeding the estimate of $185.5 million [4] Operating Results - Adjusted operating income declined by 11.3% to $243 million from the year-ago quarter but exceeded the estimate of $223.2 million [5] - The adjusted operating income margin was 36.8%, surpassing the estimate of 33.9% but down 390 basis points year-over-year [5] Guidance - For Q3 2025, revenues are expected to be between $669 million and $689 million, with adjusted net income projected between $4.30 and $4.50 per share [8] - For the full year 2025, revenues are anticipated to be between $2.61 billion and $2.65 billion, with adjusted net income expected between $15.37 and $15.77 per share [9] Balance Sheet and Cash Flow - WEX ended the quarter with cash and cash equivalents of $772.6 million, up from $595.8 million at the end of December 2024 [7] - Long-term debt stood at $3.9 billion, significantly higher than $595.8 million at the end of December 2024 [7] - The company reported a cash outflow of $264.6 million from operating activities, with adjusted free cash flow of $194.3 million [7]

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today. While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strateg ...

Core Viewpoint - WEX is transitioning from a traditional fuel card provider to a diversified FinTech infrastructure company, focusing on AP automation and expanding into new verticals despite a temporary revenue dip due to client restructuring [1][3]. Group 1: Company Transformation - WEX now operates in three segments: Mobility, Benefits, and Corporate Payments, marking its evolution from a payments utility to a multiplatform financial infrastructure company [4][5]. - The Mobility segment accounts for approximately 50% of total revenue, facing challenges such as decreased same-store sales due to efficiency gains and cautious spending by fleet operators [6]. Group 2: Strategic Partnerships and Growth - WEX secured a significant contract with BP, allowing the issuance of BP-branded fleet cards linked to its loyalty program, which is expected to enhance WEX's leadership in fleet payments [7][8]. - The Benefits segment showed stable growth with a revenue increase of 8.5% year-over-year to $195.1 million, driven by growth in SaaS accounts and custodial investment income [9][10]. Group 3: Corporate Payments Segment - The Corporate Payments segment experienced an 11.8% revenue decline to $118.3 million, primarily due to a major online travel agency restructuring its spending model [11][12]. - WEX is expanding its AP automation capabilities, increasing its dedicated sales force by over 50% and signing over 140 new customers year-to-date, indicating strong demand for digitizing payment workflows [12][13].

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) 1 Hancock St., Portland, ME 04101 (Address of principal executive offices) (Zip Code) For the transition period from to Commission file number: 001-32426 WEX Inc. (Exact na ...

Financial Data and Key Metrics Changes - The company reported revenue of $659.6 million for Q2 2025, a decrease of 2.1% year over year, with adjusted net income per diluted share at $3.95, an increase of 1% compared to the same quarter last year [8][33] - Excluding the impact of fuel price fluctuations and foreign exchange rates, revenue was flat compared to the prior year, while adjusted EPS grew by 8% [8][33] - The leverage ratio ended the quarter at 3.4 times, at the high end of the long-term range of 2.5 to 3.5 times, primarily due to share repurchase activity [37] Business Line Data and Key Metrics Changes Mobility Segment - Revenue in the mobility segment declined by 3.7% during Q2 compared to last year, with a drag of 4.2% due to lower fuel prices and foreign exchange rates [33] - Transaction levels were down slightly from the prior year, with same store sales growth for local fleets in the U.S. declining in line with Q1 results [12][33] Benefits Segment - Total revenue for the benefits segment rose by 8.5% year over year, with SaaS account growth of 6% and HSA accounts growing by 7% [20][34] - Custodial investment revenue increased by 11.4%, reaching $57.8 million [34] Corporate Payments Segment - Revenues decreased by 11.8% year over year, primarily due to a large customer transition [34] - Direct accounts payable volume grew more than 25% compared to last year, marking the third consecutive quarter of such growth [27][34] Market Data and Key Metrics Changes - The company operates in three large markets: mobility, benefits, and corporate payments, each offering significant long-term growth opportunities [10] - The mobility segment accounts for approximately 50% of total revenue, while benefits represent about 30% and corporate payments about 20% [10][18] Company Strategy and Development Direction - The company remains optimistic about growth potential in each segment and emphasizes disciplined investment in opportunities to generate attractive returns for investors [7][30] - Investments in sales and marketing are expected to drive new customer acquisition and enhance product offerings across all segments [29][30] Management's Comments on Operating Environment and Future Outlook - Management noted that the operating environment remains challenging, particularly in the mobility segment, but expressed confidence in the ability to close new sales and renewals [14][45] - The company anticipates a return to revenue growth in the corporate payments segment in the second half of 2025, driven by a strengthening pipeline and new customer signings [26][34] Other Important Information - The company is finalizing a purchase agreement for an existing customer base, expecting to convert this book of business in 2026, which could add between 0.5% to 1% to company revenue in the first full year after conversion [18][39] - Recent legislation is expected to increase the total addressable market for health savings accounts by more than 7 million people, presenting a significant growth opportunity [22] Q&A Session Summary Question: Corporate payments initiatives and trends - Management discussed investments in product capabilities and early traction in the DirectAP business, highlighting a focus on increasing mobile capabilities and seamless user experiences [41][42] Question: Mobility segment reacceleration timeline - Management indicated that same store sales weakness is expected to continue, but noted that the negative trends from the previous year will begin to lap in Q3 [44][45] Question: Corporate payments outlook and KPIs - Management provided insights on expected purchase volume growth, indicating low to mid-single digits in Q3 and accelerating to around 20% in Q4, driven by various factors including customer transitions [62][65] Question: HSA account growth strategies - Management attributed HSA account growth to the implementation of new customers and the scale of the platform, with expectations for continued outpacing of market growth [66][68] Question: Revenue growth potential into 2026 - Management refrained from providing specific guidance for 2026 but expressed confidence in the growth trajectory based on current trends and customer pipeline [72][74]

Financial Data and Key Metrics Changes - The company reported revenue of $659.6 million for Q2 2025, a decrease of 2.1% year over year, with revenue flat when excluding fuel price and foreign exchange fluctuations [8][34] - Adjusted net income per diluted share was $3.95, an increase of 1% compared to the same quarter last year, with an 8% growth when excluding fuel price and foreign exchange impacts [8][34] - The leverage ratio ended the quarter at 3.4 times, at the high end of the long-term range of 2.5 to 3.5 times, primarily due to share repurchase activity [39] Business Line Data and Key Metrics Changes Mobility Segment - Revenue declined 3.7% year over year, impacted by a 4.2% drag from lower fuel prices and foreign exchange rates [35] - Transaction levels were down slightly from the prior year, with same store sales growth for local fleets in the U.S. declining in line with Q1 results [13][14] - The segment represents approximately 50% of total revenue, with a focus on fleet payment solutions and data-driven insights [11] Benefits Segment - Total revenue rose 8.5% year over year to $195.1 million, with SaaS account growth of 6% [36][20] - Custodial investment revenue increased by 11.4% to $57.8 million, benefiting from stable interest rates [36][23] - The segment represents approximately 30% of total company revenue, serving nearly 60% of the Fortune 1,000 [19] Corporate Payments Segment - Revenues decreased 11.8% year over year to $118.3 million, primarily due to a large customer transition [36] - Direct accounts payable volume grew more than 25% compared to last year, marking the third consecutive quarter of such growth [28] - The segment accounts for approximately 20% of total revenue, with embedded payments being the majority offering [24] Market Data and Key Metrics Changes - The company operates in three large markets: mobility, benefits, and corporate payments, each with significant long-term growth opportunities [11] - The benefits segment is expected to see increased market potential due to recent legislation expanding HSA eligibility [22] Company Strategy and Development Direction - The company remains optimistic about growth potential across all segments, driven by disciplined investments and a strong pipeline of new business [7][30] - Focus on enhancing product offerings and expanding customer base, particularly in the mobility and corporate payments segments [31][32] - The company is prioritizing cash flow to pay down debt and reduce leverage, with no additional share repurchases or material M&A expected in the near term [39] Management's Comments on Operating Environment and Future Outlook - Management noted that the macroeconomic environment remains uncertain, but they are focused on factors within their control [41] - The company expects revenue growth to return in the second half of 2025, particularly in the corporate payments segment [38][41] - Management expressed confidence in the ability to close new sales and the positive impact of recent customer wins [15][32] Other Important Information - The company signed a long-term agreement with BP, which is expected to add between 0.5% to 1% to company revenue in the first full year after conversion [18][80] - The company is investing in AI-powered solutions to enhance customer experience and operational efficiency [23] Q&A Session Summary Question: Corporate payments initiatives and trends - Management discussed investments in product capabilities and early traction in the DirectAP business, highlighting a focus on mobile capabilities and end-to-end processing [45][46] Question: Mobility segment reacceleration timeline - Management indicated that same store sales weakness is expected to continue, but they are seeing good momentum in small business investments [48][49] Question: Corporate payments growth expectations - Management expects a return to growth in the corporate payments segment in Q3, driven by lapping negative comparisons and a strong pipeline of new customers [66][68] Question: HSA account growth strategies - Management attributed HSA account growth to the implementation of new customers and the scale of their platform, with expectations for continued market outperformance [69][70] Question: Corporate payments travel trends - Management noted stable travel trends with growth in volume, despite shifts in travel corridors and ticket rates [87][88]

Financial Performance - Q2 2025 total revenue decreased by $139 million compared to Q2 2024, influenced by a $159 million unfavorable impact from fuel prices and spreads, and a $19 million favorable impact from foreign exchange rates[14] - Q2 2025 adjusted net income per share was $395 per diluted share, a 1% increase compared to the prior year[14] - The company's leverage ratio as of June 30, 2025, was 34 times, within the long-term target range of 25 to 35 times[33] - Q2 2025 non-GAAP adjusted free cash flow was $194 million, and over the trailing twelve months ended June 30, 2025, the company generated $570 million[39] Segment Results - Mobility segment revenue for Q2 2025 declined 37% compared to the same period a year ago, including a 42% drag due to lower fuel prices and foreign exchange rates[20] - Benefits revenue in Q2 2025 was $1951 million, an increase of 85% over the prior year, driven by strong HSA revenue growth[23] - Average custodial cash assets in the Benefits segment totaled $47 billion, an increase of 112% compared to the prior year, generating $578 million in revenue[23] - Corporate Payments segment revenue for Q2 2025 decreased 118% to $1183 million, primarily due to a change in revenue model for a major online travel agency customer[30] - Direct Accounts Payable purchase volume for WEX increased by approximately 25%[30] Financial Guidance - The company's net revenue guidance for the full year 2025 is between $2605 billion and $2645 billion[44] - The company's adjusted net income per diluted share guidance for the full year 2025 is between $1537 and $1577[44]