WEX(WEX) - 2023 Q3 - Quarterly Report

Financial Performance - Total revenues for Q3 2023 were $651.4 million, an increase of 5.7% from $616.1 million in Q3 2022[155] - Net income attributable to shareholders for Q3 2023 was $18.4 million, compared to a loss of $44.1 million in Q3 2022, representing a significant turnaround[155] - Adjusted net income attributable to shareholders for Q3 2023 was $176.8 million, up from $157.8 million in Q3 2022, reflecting a 12.7% increase[155] - Total revenues increased by $42.0 million (34%) for Q3 2023 and $126.4 million (35%) for the nine months ended September 30, 2023, compared to the same periods in the prior year[178] - For the nine months ended September 30, 2023, the net income attributable to shareholders was $181.7 million ($4.18 per diluted share), up from $112.7 million ($2.51 per diluted share) in the same period of 2022[199] Segment Performance - Mobility segment revenues decreased by $28.0 million in Q3 2023, primarily due to lower average fuel prices impacting payment processing transactions[157] - Payment processing revenue in the Mobility segment fell to $176.9 million in Q3 2023, down 6% from $188.6 million in Q3 2022[157] - Payment processing revenue for Corporate Payments rose by $14.3 million (14%) to $115.8 million for the three months ended September 30, 2023[171] - Total Corporate Payments revenue increased by $21.2 million (19%) for the third quarter of 2023, driven by strong global consumer travel demand[171] - Total segment adjusted operating income for the three months ended September 30, 2023 was $301.3 million, compared to $265.1 million in the same period of 2022[200] Cash Flow and Investments - Adjusted free cash flow for the nine months ended September 30, 2023, was $391.6 million, a decrease of $15.2 million compared to $406.8 million in the same period of 2022[218] - Cash flows from operating activities increased by $39.4 million year-over-year, reaching $146.0 million for the nine months ended September 30, 2023, compared to $106.6 million in 2022[211] - Cash used for investing activities rose to $1,571.4 million in the nine months ended September 30, 2023, up from $663.9 million in the prior year, primarily due to the Ascensus Acquisition[213] - Cash provided by financing activities increased by $601.8 million, totaling $1,705.3 million for the nine months ended September 30, 2023, driven by net borrowings under the BTFP and the Revolving Credit Facility[215] Expenses and Costs - General and administrative expenses rose by $12.7 million (47%) for the three months ended September 30, 2023, due to costs associated with an abandoned IT project[169] - Processing costs increased by $9.5 million (16%) for Q3 and $18.0 million (11%) for the nine months, driven by higher professional services and card issuance costs[181] - General and administrative expenses rose by $3.8 million (40%) for Q3 and $9.0 million (30%) for the nine months, primarily due to increased professional services expenses[182] - Financing interest expense increased by $7.2 million (21%) for Q3 and $26.5 million (28%) for the nine months, attributed to higher net variable interest rates on term loans[187] Debt and Capital Management - The company incurred a loss on extinguishment of Convertible Notes amounting to $70.1 million in August 2023[189] - The company accessed $500.0 million of temporary capital under the BTFP, pledging securities with a par value of $800.3 million as collateral[206] - The company had outstanding term loan principal borrowings of $2,262.1 million and borrowings of $471.6 million on the Revolving Credit Facility as of September 30, 2023[205] - The company is in compliance with the remaining covenants of its Amended and Restated Credit Agreement as of September 30, 2023[219] Market and Risk Management - WEX Bank is required to make improvements as per the 2023 Order, including compliance management enhancements, but these are not expected to materially affect operations or financial results[222] - There are no material changes to critical accounting estimates since the Annual Report for the year ended December 31, 2022[223] - As of September 30, 2023, there are no material changes to market risk disclosures compared to the Annual Report for the year ended December 31, 2022[225]