WEX(WEX) - 2025 Q1 - Quarterly Results

Revenue Performance - Total revenue for Q1 2025 decreased by $16.1 million compared to Q1 2024, driven by an unfavorable impact of $8.5 million from fuel prices and spreads, and $2.5 million from foreign exchange rates[12] - For the twelve months ended December 31, 2024, total revenue was $2,628.1 million, reflecting an 8.4% year-over-year increase[11] - The company’s underlying revenue growth during Q1 2025 was down 0.8% when adjusted for fuel prices and foreign exchange impacts[12] - Mobility segment revenue for Q1 2025 decreased by 1.5% year-over-year, impacted by a 2.9% drag from lower fuel prices, with total revenue at $333.8 million[6] - Total revenues for the twelve months ended December 31, 2024, increased by 10.6% to $739.5 million compared to $668.4 million for the previous year[22] Income and Profitability - Adjusted net income per diluted share for Q1 2025 was $3.51, a 1.4% increase compared to the prior year[11] - The company’s GAAP income per diluted share for Q1 2025 was $1.81, reflecting a 16.8% year-over-year increase[11] - The adjusted operating income margin for the Mobility segment was 39.4% for Q1 2025, compared to 42.7% for the twelve months ended December 31, 2024[14] - GAAP operating income margin for the Mobility segment was 29.8%, up from 29.3% in the prior year, with non-GAAP adjusted operating income margin at 39.4%, an increase of 0.7%[6] - GAAP operating income margin for the Corporate Payments segment was 26.3%, down from 41.7% in the comparable prior year quarter[27] - Adjusted operating income margin for the Corporate Payments segment decreased to 39.1% from 52.7% in the same quarter last year[27] Segment Performance - The Mobility segment generated $333.8 million in revenue for Q1 2025, accounting for 52% of total revenue[14] - The company’s total segment adjusted operating income for the twelve months ended December 31, 2024, was $1,059.7 million[14] - Benefits revenue in Q1 2025 was $199.3 million, reflecting a 4.2% increase year-over-year, driven by strong growth in the HSA business[21] - Average SaaS accounts increased by 6.1% year-over-year to 21.5 million, with HSA account growth at 7% compared to a market growth of 5%[21] - Total purchase volume for the Corporate Payments segment decreased by 27.8% year-over-year to $17.285 million for the three months ended March 31, 2025[28] Cash Flow and Capital Expenditures - For Q1 2025, the company reported an adjusted free cash flow of $16.2 million, with trailing twelve months adjusted free cash flows totaling $587 million[33] - Capital expenditures for Q1 2025 were $32.6 million, while total capital deployed in the same quarter reached $913.8 million[35] - The adjusted free cash flow for the twelve months ended December 31, 2024, is projected to be $562.0 million[60] Financial Guidance and Market Outlook - The financial guidance for Q2 2025 projects net revenue between $640 million and $660 million, with a full-year revenue expectation of $2.568 billion to $2.628 billion[38] - The adjusted net income per diluted share guidance for Q2 2025 is between $3.60 and $3.80, with full-year guidance ranging from $14.72 to $15.32[38] - The company anticipates U.S. GDP growth of approximately 2% in 2025, without accounting for potential economic slowdowns[38] Liquidity and Debt Management - The company ended the quarter with $770 million of available liquidity, including corporate cash and borrowing capacity under its revolving credit agreement[29] - As of March 31, 2025, the leverage ratio increased to 3.5 times, remaining within the long-term target range of 2.5 to 3.5 times[29] - The company has maintained ample access to debt markets, with a three-year runway before the next debt maturity, allowing for opportunistic market positioning[31] Shareholder Returns - The company repurchased approximately 4.9 million shares at a price of $154 per share, totaling $750 million in cash for the tender offer completed on March 31, 2025[36] Non-GAAP Measures and Adjustments - The company's adjusted net income and adjusted operating income are non-GAAP measures and should not be considered superior to GAAP measures[56] - The company has begun utilizing a fixed annual projected long-term non-GAAP tax rate starting in fiscal year 2024 for better consistency across reporting periods[58] - Stock-based compensation is treated as a non-cash expense, differing from other forms of compensation[58] - Impairment charges represent non-cash asset write-offs and do not reflect recurring costs relevant to the company's continuing operations[58]