Corpay, Inc.(CPAY) - 2025 Q2 - Quarterly Results

Q2 2025 Financial Performance Overview Corpay's Q2 2025 performance highlights strong organic revenue growth and strategic acquisitions, positioning the company confidently for its full-year outlook Executive Summary & Highlights Corpay reported strong Q2 2025 results, slightly exceeding expectations with 11% organic revenue growth, driven by an 18% increase in the Corporate Payments segment. The company announced the acquisition of Alpha Group and partnerships in the stablecoin market, signaling strategic expansion. Management expressed confidence in achieving its 2025 outlook due to strong sales, cost discipline, and improving retention - Q2 2025 organic revenue growth was 11%, with the Corporate Payments segment growing 18%[2] - The company announced the acquisition of Alpha Group and is pursuing opportunities in the stablecoin and digital currency markets[1][2] - Total company organic growth improved by 500 basis points year-over-year, driven by improvements in the U.S. Vehicle Payments business and strong performance in Corporate Payments[4] Financial Results For the second quarter of 2025, Corpay delivered a 13% year-over-year increase in both revenue and adjusted EPS, with revenue reaching $1,102.0 million and adjusted net income per diluted share at $5.13, alongside strong 11% organic revenue growth Q2 2025 Financial Highlights (YoY) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | GAAP Results | | | | | Revenues | $1,102.0 M | $975.7 M | +13% | | Net Income | $284.2 M | $251.6 M | +13% | | Net Income per Diluted Share | $3.98 | $3.52 | +13% | | Non-GAAP Results | | | | | Organic Revenue Growth | 11% | N/A | N/A | | Adjusted EBITDA | $620.6 M | $554.4 M | +12% | | Adjusted Net Income | $366.4 M | $325.0 M | +13% | | Adjusted Net Income per Diluted Share | $5.13 | $4.55 | +13% | Updated Fiscal Year 2025 Outlook Corpay raised its full-year 2025 guidance, citing strong second-quarter performance and favorable foreign currency rates, now expecting revenues between $4,405 million and $4,485 million and adjusted EPS between $20.86 and $21.26 Updated FY 2025 Guidance | Metric | Low End | High End | | :--- | :--- | :--- | | Total Revenues | $4,405 M | $4,485 M | | Net Income | $1,171 M | $1,211 M | | Net Income per Diluted Share | $16.41 | $16.81 | | Adjusted Net Income | $1,488 M | $1,528 M | | Adjusted Net Income per Diluted Share | $20.86 | $21.26 | - The updated guidance is based on several assumptions, including average U.S. fuel prices of $3.16 per gallon, an effective tax rate of 25.5% to 26.5%, and approximately 72 million fully diluted shares outstanding[5][11] Segment Performance The Corporate Payments segment was the standout performer in Q2 2025, with reported revenue surging 36% year-over-year to $391.9 million, while Vehicle Payments revenue grew a modest 3% and Lodging Payments revenue declined by 2%, with pro forma and macro-adjusted Corporate Payments revenue growing 18% and Vehicle Payments 9% Q2 2025 Revenue by Segment (YoY) | Segment | Q2 2025 Revenue | Q2 2024 Revenue | % Change | | :--- | :--- | :--- | :--- | | Vehicle Payments | $525.5 M | $510.3 M | +3% | | Corporate Payments | $391.9 M | $288.5 M | +36% | | Lodging Payments | $119.8 M | $122.4 M | -2% | | Other | $64.8 M | $54.6 M | +19% | Q2 2025 Operating Income by Segment (YoY) | Segment | Q2 2025 Op. Income | Q2 2024 Op. Income | % Change | | :--- | :--- | :--- | :--- | | Vehicle Payments | $250.1 M | $242.0 M | +3% | | Corporate Payments | $161.2 M | $120.6 M | +34% | | Lodging Payments | $49.6 M | $56.4 M | -12% | | Other | $18.5 M | $14.4 M | +29% | Geographic Performance In Q2 2025, the United States remained the largest market, accounting for 49% of total revenue, though its share decreased from 52% in the prior year, indicating faster growth in international markets, with 'Other' international regions seeing their collective revenue share increase from 19% to 22% year-over-year Q2 2025 Revenue by Geography | Geography | Q2 2025 Revenue | % of Total | Q2 2024 Revenue | % of Total | | :--- | :--- | :--- | :--- | :--- | | US | $541 M | 49% | $507 M | 52% | | Brazil | $170 M | 15% | $150 M | 15% | | UK | $148 M | 13% | $133 M | 14% | | Other | $242 M | 22% | $186 M | 19% | Consolidated Financial Statements Corpay's consolidated financial statements for Q2 2025 reflect robust revenue and net income growth, alongside increased assets and equity, demonstrating a strong financial position Consolidated Statements of Income For the second quarter of 2025, revenues increased 13% year-over-year to $1.1 billion, with operating expenses growing 15%, leading to an 11% increase in operating income to $479.4 million, and net income attributable to Corpay rising 13% to $284.2 million, resulting in a diluted EPS of $3.98 Q2 2025 Consolidated Statement of Income Highlights (YoY) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | % Change | | :--- | :--- | :--- | :--- | | Revenues, net | $1,102,030 | $975,710 | 13% | | Total operating expense | $622,640 | $542,371 | 15% | | Operating income | $479,390 | $433,339 | 11% | | Net income attributable to Corpay | $284,168 | $251,625 | 13% | | Diluted earnings per share | $3.98 | $3.52 | 13% | Consolidated Balance Sheets As of June 30, 2025, Corpay's total assets stood at $20.4 billion, up from $18.0 billion at the end of 2024, driven by growth in cash, receivables, and customer deposits, while total equity increased significantly to $4.0 billion from $3.1 billion over the same period Balance Sheet Highlights | Metric | June 30, 2025 (in thousands) | Dec 31, 2024 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $2,192,849 | $1,553,642 | | Total current assets | $10,759,243 | $8,675,869 | | Total assets | $20,435,226 | $17,957,031 | | Total current liabilities | $9,639,769 | $8,707,881 | | Total liabilities | $16,468,047 | $14,811,042 | | Total equity | $3,967,179 | $3,145,989 | Consolidated Statements of Cash Flows For the first six months of 2025, net cash from operating activities increased to $1.07 billion from $891 million in the prior-year period, with the company using $222.6 million in investing activities, primarily for acquisitions and property purchases, and generating $78.4 million from financing activities, which included stock repurchases of $90.9 million offset by net borrowings Six Months Ended June 30 Cash Flow Summary | Metric | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,066,096 | $891,105 | | Net cash used in investing activities | ($222,640) | ($146,613) | | Net cash provided by (used in) financing activities | $78,355 | ($239,238) | | Net increase in cash | $1,075,013 | $405,761 | Non-GAAP Reconciliations & Supplemental Data This section provides detailed reconciliations of GAAP to non-GAAP financial measures and other disclosures, offering a comprehensive view of Corpay's adjusted performance and underlying assumptions Reconciliation of Net Income to Adjusted Net Income (Exhibit 1) For Q2 2025, Corpay's GAAP Net Income of $284.2 million was adjusted for several items to arrive at an Adjusted Net Income of $366.4 million, with the most significant adjustments being for amortization ($64.1 million) and stock-based compensation ($28.9 million) Q2 2025 Reconciliation of Net Income to Adjusted Net Income (in thousands) | Description | Amount | | :--- | :--- | | Net income attributable to Corpay | $284,168 | | Stock-based compensation | $28,868 | | Amortization | $64,137 | | Integration and deal related costs | $14,452 | | Other adjustments | ($3,295) | | Income tax impact of adjustments | ($27,840) | | Discrete tax items | $5,931 | | Adjusted net income attributable to Corpay | $366,421 | Reconciliation of Segment Revenue and KPIs (Exhibit 5) This reconciliation details adjustments for macroeconomic factors and acquisitions to provide a pro forma view of performance, showing that for Q2 2025, consolidated reported revenue of $1,102.0 million was negatively impacted by fuel prices/spreads (-$12.6 million) and foreign exchange rates (-$6.7 million), resulting in a pro forma and macro-adjusted revenue of $1,121.4 million Q2 2025 Consolidated Revenue Reconciliation (in millions) | Description | Amount | | :--- | :--- | | Pro forma and macro adjusted revenue | $1,121.4 | | Impact of acquisitions/dispositions | $0.0 | | Impact of fuel prices/spread | ($12.6) | | Impact of foreign exchange rates | ($6.7) | | As reported revenue | $1,102.0 | Reconciliation of EBITDA and Adjusted EBITDA (Exhibit 6) In Q2 2025, Net Income from operations of $284.1 million was reconciled to an Adjusted EBITDA of $620.6 million, with key add-backs including depreciation & amortization ($91.4 million), interest expense ($96.9 million), income taxes ($109.0 million), and stock-based compensation ($28.9 million), resulting in an Adjusted EBITDA margin of 56.3%, slightly down from 56.8% in the prior year Q2 2025 Reconciliation to Adjusted EBITDA (in millions) | Description | Amount | | :--- | :--- | | Net income from operations | $284.1 | | Provision for income taxes | $109.0 | | Interest expense, net | $96.9 | | Depreciation and amortization | $91.4 | | Other adjustments | ($10.6) | | EBITDA | $570.7 | | Stock-based compensation | $28.9 | | Other addbacks (legal, restructuring, etc.) | $21.0 | | Adjusted EBITDA | $620.6 | Reconciliation of Non-GAAP Guidance (Exhibit 7) The company provides a reconciliation for its full-year 2025 guidance, where the low-end GAAP Net Income guidance of $1,171 million is adjusted by $424 million in pre-tax items, primarily amortization ($256 million) and stock-based compensation ($97 million), to reach the low-end Adjusted Net Income guidance of $1,488 million FY 2025 Guidance Reconciliation (Low End, in millions) | Description | Amount | | :--- | :--- | | Net income (GAAP) | $1,171 | | Stock-based compensation | $97 | | Amortization | $256 | | Other | $71 | | Income taxes on adjustments | ($107) | | Adjusted net income (Non-GAAP) | $1,488 | Other Disclosures This section contains standard legal disclaimers, including forward-looking statements that outline various risks and uncertainties the company faces, such as macroeconomic conditions and acquisition integration, and provides detailed definitions for the non-GAAP financial measures used throughout the report to enhance investor understanding of the company's core operating performance - The report contains forward-looking statements subject to numerous risks and uncertainties, including macroeconomic conditions, acquisition integration, regulatory changes, and cybersecurity incidents[9][10][12] - The company uses non-GAAP measures like adjusted net income, organic revenue growth, and adjusted EBITDA to evaluate operating performance, excluding items it does not consider indicative of core performance, such as stock-based compensation, amortization, and integration costs[13][14][15]