Table of Contents Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, $0.01 par value WEX New York Stock Exchange UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period fro ...

Core Insights - WEX Inc. reported a total revenue of $665.5 million for Q3 2024, reflecting a 2% increase from $651.4 million in Q3 2023, driven by strong customer retention and expansion despite macroeconomic challenges [2][3] - The company is focusing on long-term growth through investments in artificial intelligence (AI) and product development, aiming to enhance customer experiences and differentiate its offerings [2][4] - WEX's benefits business showed continued growth, with the average number of software-as-a-service (SaaS) accounts increasing by 2% to 20.3 million year-over-year, and health savings account (HSA) custodial cash assets growing to $4.3 billion, a 10% increase from Q3 2023 [3] Financial Performance - The Mobility segment faced challenges, with a guidance shortfall attributed to declining fuel prices and same-store sales, despite showing healthy underlying growth [3] - The corporate payments segment experienced a 16% decrease in purchase volume to $23.4 billion from $27.9 billion a year ago, while total volume processed increased by 6.2% to $39.1 billion, indicating mixed results [4] AI and Innovation - WEX is leveraging AI to enhance user experience and drive future product development, with a focus on addressing customer pain points [5] - The implementation of AI-driven fraud prevention systems resulted in a 41% reduction in fraud instances within three months, showcasing the effectiveness of AI in improving operational efficiency [5]

Wex (WEX) reported $665.5 million in revenue for the quarter ended September 2024, representing a year-over-year increase of 2.2%. EPS of $4.35 for the same period compares to $4.05 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $688.5 million, representing a surprise of -3.34%. The company delivered an EPS surprise of -1.58%, with the consensus EPS estimate being $4.42.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street e ...

Financial Performance - Revenue reached $665.5 million, a 2% increase compared to the prior year quarter[10, 14] - Adjusted net income per diluted share was $4.35, a 7% increase year-over-year[10, 14] - GAAP net income was $102.9 million, compared to $18.4 million in the same quarter last year[14] - Adjusted free cash flow year-to-date was $393 million, with Q3 standalone at $190 million[19] Segment Performance - Mobility segment revenue grew by 2% year-over-year, impacted by a 5.9% headwind from lower fuel prices[12, 16] - Corporate Payments segment total volume grew by 6%[12] - Benefits segment average HSA custodial cash assets increased by 10% year-over-year[12, 30] - Corporate Payments segment adjusted operating income margin decreased to 56.4% from 61.3% in the prior year[33] Capital Allocation - The company spent approximately $370 million on repurchasing WEX shares in Q3, including $300 million under its Accelerated Share Repurchase (ASR) program[10, 12] - Share repurchase authorization was increased by $1 billion[12, 22] - $544 million was spent repurchasing shares during the first nine months of 2024[10, 22] Outlook - The company expects revenue between $630 million and $640 million for Q4 2024, a decrease of 4% to 5% year-over-year[22] - Adjusted net income per diluted share is projected to be between $3.51 and $3.61 for Q4 2024, a decrease of 5% to 8% year-over-year[22] - The company estimates domestic fuel prices at $3.28 per gallon for Q4 2024[23, 25]

Wex (WEX) came out with quarterly earnings of $4.35 per share, missing the Zacks Consensus Estimate of $4.42 per share. This compares to earnings of $4.05 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -1.58%. A quarter ago, it was expected that this provider of fuel payment processing for fleet vehicles would post earnings of $3.80 per share when it actually produced earnings of $3.91, delivering a surprise of 2.89%.Over the ...

[I. Executive Summary](index=1&type=section&id=I.%20Executive%20Summary) WEX reported record Q3 revenue of **$665.5 million** with strong adjusted net income growth, despite macroeconomic headwinds in Mobility, and increased its share repurchase authorization to **$1 billion** [1.1 Q3 2024 Financial Highlights](index=1&type=section&id=1.1%20Q3%202024%20Financial%20Highlights) WEX achieved record Q3 revenue of **$665.5 million**, a 2% increase, with adjusted net income per share rising 7% to **$4.35**, alongside **$370 million** in share repurchases Q3 2024 Key Financial Metrics | Metric | Q3 2024 | Q3 2023 | Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | $665.5M | $651.4M | +2% | | **GAAP Net Income per Diluted Share** | $2.52 | $0.42 | +500% | | **Adjusted Net Income per Diluted Share** | $4.35 | $4.05 | +7% | | **GAAP Operating Income Margin** | 29.5% | 26.8% | +2.7 p.p. | | **Adjusted Operating Income Margin** | 44.0% | 41.8% | +2.2 p.p. | - The company spent **$370 million** on share repurchases in Q3, which included a **$300 million** accelerated share repurchase (ASR) agreement[1](index=1&type=chunk) - Revenue growth was negatively impacted by **$21.2 million** from fuel prices and spreads, but positively impacted by **$2.2 million** from foreign exchange rates[2](index=2&type=chunk) [1.2 Management Commentary](index=1&type=section&id=1.2%20Management%20Commentary) Management noted Q3 performance fell short of expectations due to macroeconomic challenges in Mobility, but expressed confidence in long-term initiatives and a **$1 billion** share repurchase authorization - CEO Melissa Smith stated that Q3 performance fell short of expectations despite growth, attributing challenges to the macro environment[2](index=2&type=chunk) - CFO Jagtar Narula identified the guidance shortfall as primarily within the Mobility business, affected by declining fuel prices, same-store sales softness, and an unplanned charge to finance fee revenue[6](index=6&type=chunk) - The Board of Directors increased the share repurchase program authorization by **$1 billion**. Since 2022, the company has reduced its outstanding shares by **12%**, reaching the lowest level in nearly a decade[6](index=6&type=chunk) [1.3 Q3 2024 Key Performance Metrics](index=1&type=section&id=1.3%20Q3%202024%20Key%20Performance%20Metrics) Total volume grew 1% to **$62.3 billion**, with Mobility transactions up 1% and Benefits SaaS accounts up 2%, while Corporate Payments purchase volume declined **16%** Q3 2024 Operational Metrics vs. Q3 2023 | Metric | Segment | Q3 2024 | Change (YoY) | | :--- | :--- | :--- | :--- | | **Total Volume** | All | $62.3B | +1% | | **Payment Processing Transactions** | Mobility | 146.5M | +1% | | **Average Vehicles Serviced** | Mobility | 19.7M | +3% | | **Average SaaS Accounts** | Benefits | 20.3M | +2% | | **Average HSA Custodial Cash Assets** | Benefits | $4.3B | +10% | | **Purchase Volume** | Corporate Payments | $23.4B | -16% | - Adjusted free cash flow for Q3 2024 was **$189.5 million**, while cash flow from operating activities was **$3.3 million**[5](index=5&type=chunk) [II. Financial Guidance and Assumptions](index=2&type=section&id=II.%20Financial%20Guidance%20and%20Assumptions) WEX revised its full-year 2024 financial outlook downwards, projecting revenue between **$2.62 billion** and **$2.63 billion**, based on specific fuel price and tax rate assumptions [2.1 Q4 and Full-Year 2024 Outlook](index=2&type=section&id=2.1%20Q4%20and%20Full-Year%202024%20Outlook) WEX reduced its full-year 2024 outlook, now projecting revenue between **$2.62 billion** and **$2.63 billion** and adjusted net income per share between **$15.21** and **$15.31** Financial Guidance for 2024 | Period | Metric | Guidance Range | | :--- | :--- | :--- | | **Q4 2024** | Revenue | $630M - $640M | | **Q4 2024** | Adjusted Net Income per Diluted Share | $3.51 - $3.61 | | **Full Year 2024** | Revenue | $2.62B - $2.63B | | **Full Year 2024** | Adjusted Net Income per Diluted Share | $15.21 - $15.31 | [2.2 Guidance Assumptions](index=2&type=section&id=2.2%20Guidance%20Assumptions) Guidance assumes average U.S. retail fuel prices of **$3.28/gallon** for Q4 and **$3.48/gallon** for the full year, with a **25.0%** adjusted net income effective tax rate - Guidance is based on assumed average U.S. retail fuel prices of **$3.28 per gallon** for Q4 and **$3.48** for the full year 2024[8](index=8&type=chunk) - An adjusted net income effective tax rate of **25.0%** is assumed[8](index=8&type=chunk) - Assumed fully diluted shares outstanding are approximately **40.5 million** for Q4 and **41.4 million** for the full year, excluding further share repurchases[8](index=8&type=chunk) [III. Segment Performance Analysis](index=13&type=section&id=III.%20Segment%20Performance%20Analysis) The Mobility segment saw revenue growth, Benefits showed strong performance, while Corporate Payments experienced a revenue decline, reflecting varied segment-level dynamics [3.1 Mobility Segment](index=15&type=section&id=3.1%20Mobility%20Segment) Mobility segment revenue grew 2% to **$357.2 million**, driven by a **15%** rise in account servicing, with adjusted operating income reaching **$167.1 million** and a **46.8%** margin Mobility Segment Revenue (Q3 2024 vs Q3 2023) | Revenue Line | Q3 2024 | Q3 2023 | Change | | :--- | :--- | :--- | :--- | | **Payment processing** | $183.2M | $176.9M | +4% | | **Account servicing** | $49.0M | $42.5M | +15% | | **Finance fee** | $70.2M | $76.8M | -9% | | **Other** | $54.7M | $53.9M | +2% | | **Total Revenues** | **$357.2M** | **$350.1M** | **+2%** | Mobility Segment Adjusted Operating Income | Metric | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | **Adjusted Operating Income** | $167.1M | $159.6M | | **Adjusted Operating Income Margin** | 46.8% | 45.6% | [3.2 Corporate Payments Segment](index=15&type=section&id=3.2%20Corporate%20Payments%20Segment) Corporate Payments revenue declined 6% to **$126.9 million**, mainly due to a **10%** drop in payment processing, with adjusted operating income at **$71.5 million** and a **56.4%** margin Corporate Payments Segment Revenue (Q3 2024 vs Q3 2023) | Revenue Line | Q3 2024 | Q3 2023 | Change | | :--- | :--- | :--- | :--- | | **Payment processing** | $104.8M | $115.8M | -10% | | **Account servicing** | $15.5M | $10.5M | +48% | | **Other** | $6.4M | $8.7M | -27% | | **Total Revenues** | **$126.9M** | **$135.2M** | **-6%** | Corporate Payments Segment Adjusted Operating Income | Metric | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | **Adjusted Operating Income** | $71.5M | $82.9M | | **Adjusted Operating Income Margin** | 56.4% | 61.3% | [3.3 Benefits Segment](index=15&type=section&id=3.3%20Benefits%20Segment) Benefits segment revenue grew 9% to **$181.5 million**, driven by a **34%** increase in 'Other revenue', with adjusted operating income rising to **$78.4 million** and a **43.2%** margin Benefits Segment Revenue (Q3 2024 vs Q3 2023) | Revenue Line | Q3 2024 | Q3 2023 | Change | | :--- | :--- | :--- | :--- | | **Payment processing** | $21.9M | $20.6M | +6% | | **Account servicing** | $110.0M | $108.5M | +1% | | **Other** | $49.4M | $36.9M | +34% | | **Total Revenues** | **$181.5M** | **$166.1M** | **+9%** | Benefits Segment Adjusted Operating Income | Metric | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | **Adjusted Operating Income** | $78.4M | $58.8M | | **Adjusted Operating Income Margin** | 43.2% | 35.4% | [IV. Consolidated Financial Statements](index=7&type=section&id=IV.%20Consolidated%20Financial%20Statements) Q3 2024 saw a 2% revenue increase to **$665.5 million** and a significant rise in GAAP net income, while cash flow from operations shifted to a net use of **$157.0 million** for the nine months [4.1 Condensed Consolidated Statements of Operations](index=7&type=section&id=4.1%20Condensed%20Consolidated%20Statements%20of%20Operations) Q3 2024 total revenues increased 2% to **$665.5 million**, with operating income growing to **$196.4 million** and GAAP net income significantly rising to **$102.9 million** Q3 2024 Statement of Operations Highlights (in millions) | Line Item | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | **Total Revenues** | $665.5 | $651.4 | | **Total Cost of Services** | $249.2 | $235.1 | | **Operating Income** | $196.4 | $174.9 | | **Income Before Income Taxes** | $141.1 | $44.4 | | **Net Income** | $102.9 | $18.4 | | **Diluted EPS** | $2.52 | $0.42 | [4.2 Condensed Consolidated Balance Sheets](index=8&type=section&id=4.2%20Condensed%20Consolidated%20Balance%20Sheets) As of September 30, 2024, total assets were **$13.96 billion**, total liabilities **$12.28 billion**, and stockholders' equity decreased to **$1.68 billion** due to share repurchases Balance Sheet Highlights (in millions) | Line Item | Sept 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | **Total Current Assets** | $9,109.4 | $8,935.3 | | **Total Assets** | $13,961.4 | $13,882.1 | | **Total Current Liabilities** | $8,718.1 | $8,519.2 | | **Total Liabilities** | $12,284.0 | $12,061.5 | | **Total Stockholders' Equity** | $1,677.5 | $1,820.6 | [4.3 Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=4.3%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended September 30, 2024, operating activities used **$157.0 million** cash, investing activities used **$724.0 million**, and financing activities used **$41.1 million**, including **$543.6 million** in share repurchases Nine Months Ended Sept 30 Cash Flow Highlights (in millions) | Line Item | 2024 | 2023 | | :--- | :--- | :--- | | **Cash flows from operating activities** | $(157.0) | $146.0 | | **Net cash used for investing activities** | $(724.0) | $(1,571.4) | | **Net cash (used for) provided by financing activities** | $(41.1) | $1,705.3 | | **Repurchases of common stock** | $(543.6) | $(152.6) | | **Net change in cash, cash equivalents and restricted cash** | $(918.2) | $257.1 | [V. Non-GAAP Financial Measures & Reconciliations](index=9&type=section&id=V.%20Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) WEX provided reconciliations from GAAP to Non-GAAP measures, including adjusted net income, adjusted operating income, and adjusted free cash flow, with a revised cash flow methodology [5.1 Reconciliation of Net Income to Adjusted Net Income](index=9&type=section&id=5.1%20Reconciliation%20of%20Net%20Income%20to%20Adjusted%20Net%20Income) WEX reconciled Q3 2024 GAAP Net Income of **$102.9 million** to Adjusted Net Income of **$177.5 million**, with key adjustments for intangible amortization and stock-based compensation Q3 2024 GAAP to Non-GAAP Net Income Reconciliation (in millions) | Description | Amount | | :--- | :--- | | **GAAP Net Income** | **$102.9** | | Acquisition-related intangible amortization | +$50.4 | | Stock-based compensation | +$29.8 | | Other costs | +$12.6 | | Tax related items | -$20.9 | | Other adjustments | +$3.9 | | **Adjusted Net Income** | **$177.5** | [5.2 Reconciliation of Operating Income to Adjusted Operating Income](index=10&type=section&id=5.2%20Reconciliation%20of%20Operating%20Income%20to%20Adjusted%20Operating%20Income) The company reconciled Q3 2024 GAAP Operating Income of **$196.4 million** to Adjusted Operating Income of **$293.0 million**, primarily adjusting for intangible amortization and stock-based compensation Q3 2024 GAAP to Non-GAAP Operating Income Reconciliation (in millions) | Description | Amount | | :--- | :--- | | **GAAP Operating Income** | **$196.4** | | Acquisition-related intangible amortization | +$50.4 | | Stock-based compensation | +$29.8 | | Other costs | +$14.8 | | Unallocated corporate expenses | +$24.1 | | Other acquisition and divestiture related items | +$1.6 | | **Total Segment Adjusted Operating Income** | **$317.1** | | Less: Unallocated corporate expenses | -$24.1 | | **Adjusted Operating Income** | **$293.0** | [5.3 Reconciliation of Operating Cash Flow to Adjusted Free Cash Flow](index=12&type=section&id=5.3%20Reconciliation%20of%20Operating%20Cash%20Flow%20to%20Adjusted%20Free%20Cash%20Flow) WEX reported Q3 2024 adjusted free cash flow of **$189.5 million**, reconciled from GAAP operating cash flow of **$3.3 million**, with a new methodology including WEX Bank cash balances - Beginning in Q3 2024, the definition of adjusted free cash flow was updated to include an adjustment for the change in WEX Bank cash balances[24](index=24&type=chunk) Q3 2024 Operating Cash Flow to Adjusted Free Cash Flow (in millions) | Description | Amount | | :--- | :--- | | **Operating cash flow** | **$3.3** | | Change in WEX Bank cash balances | +$125.3 | | Net Funding Activity | +$372.2 | | Less: Net purchases of current investment securities | -$276.3 | | Less: Capital expenditures | -$35.0 | | **Adjusted free cash flow** | **$189.5** | [VI. Supplemental Information](index=13&type=section&id=VI.%20Supplemental%20Information) Macroeconomic factors, particularly fuel prices, negatively impacted Q3 revenue and adjusted net income, while key operational metrics showed mixed trends across segments [6.1 Impact of Macroeconomic Factors](index=13&type=section&id=6.1%20Impact%20of%20Macroeconomic%20Factors) Macroeconomic factors had a mixed Q3 impact, with unfavorable fuel prices negatively affecting revenue by **$21.2 million** and adjusted net income by **$13.5 million**, while FX rates were favorable Q3 2024 Macro Factor Impact on Revenue (in millions) | Factor | Mobility | Corporate Payments | Total WEX Inc. | | :--- | :--- | :--- | :--- | | **FX Impact** | $(0.5) | $(1.7) | $(2.2) | | **PPG Impact** | $21.2 | $0.0 | $21.2 | Q3 2024 Macro Factor Impact on Adjusted Net Income (in millions) | Factor | Mobility | Corporate Payments | Benefits | | :--- | :--- | :--- | :--- | | **FX Impact** | $(0.6) | $(1.2) | $(0.1) | | **PPG Impact** | $13.5 | $0.0 | $0.0 | [6.2 Selected Quarterly Metrics](index=14&type=section&id=6.2%20Selected%20Quarterly%20Metrics) Q3 2024 Mobility payment processing transactions increased to **146.5 million**, while Corporate Payments purchase volume declined to **$23.4 billion**, and Benefits SaaS accounts remained stable at **20.3 million** Key Metrics Trend (Q3 2023 - Q3 2024) | Metric (in millions, except rates) | Q3 2024 | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Mobility: Payment processing transactions** | 146.5 | 144.9 | 136.9 | 138.1 | 144.6 | | **Corporate Payments: Purchase volume ($)** | 23,394.4 | 25,756.2 | 23,947.9 | 22,800.8 | 27,860.1 | | **Benefits: Average number of SaaS accounts** | 20.3 | 20.0 | 20.3 | 19.9 | 19.9 |

The upcoming report from Wex (WEX) is expected to reveal quarterly earnings of $4.43 per share, indicating an increase of 9.4% compared to the year-ago period. Analysts forecast revenues of $690.17 million, representing an increase of 6% year over year.Over the last 30 days, there has been a downward revision of 0.9% in the consensus EPS estimate for the quarter, leading to its current level. This signifies the covering analysts' collective reconsideration of their initial forecasts over the course of this ...

WEX Inc. (WEX) has had an impressive run over the past three months. The stock has gained 16.4% compared with the 6.2% growth of the industry it belongs to and the 2.6% uptick of the Zacks S&P 500 composite. WEX has an expected long-term (three to five years) EPS growth rate of 12.2%. The company's earnings for 2024 and 2025 are expected to grow 9.2% and 12.9%, respectively. Factors That Bode Well WEX is a leader in the fleet payments industry, providing payment solutions for fuel management, corporate trav ...

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WEX Inc. (NYSE: WEX ) is a global payments processor, which specializes in providing payment solutions for businesses, including fleet cards, employee benefits and payments to other businesses. The company has grown its revenue at a 14% CAGR over the past 10 An individual investor primarily focused on undercovered companies, with more than 50 companies on my watchlist. My areas include technology, software, electronics and the energy transition. I have been investing my personal capital for over 7 years in ...