FleetCor(US:FLT)2025-08-07 12:55PART I—FINANCIAL INFORMATION Item 1. Financial Statements This section presents Corpay, Inc.'s unaudited consolidated financial statements for the three and six-month periods ended June 30, 2025 Consolidated Balance Sheets As of June 30, 2025, total assets increased to $20.44 billion, total liabilities rose to $16.47 billion, and total equity grew to $3.97 billion Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $2,192,849 | $1,553,642 | | Accounts and other receivables, net | $2,601,292 | $2,090,500 | | Goodwill | $6,334,018 | $5,984,667 | | Total Assets | $20,435,226 | $17,957,031 | | Liabilities & Equity | | | | Customer deposits | $4,143,205 | $3,266,126 | | Total debt (Notes payable and Securitization) | $8,117,700 | $7,996,080 | | Total Liabilities | $16,468,047 | $14,811,042 | | Total Equity | $3,967,179 | $3,145,989 | Unaudited Consolidated Statements of Income For Q2 2025, revenues increased 12.9% to $1.10 billion and net income attributable to Corpay reached $284.2 million, with similar growth for the six-month period Statement of Income Summary (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenues, net | $1,102,030 | $975,710 | $2,107,697 | $1,910,961 | | Operating income | $479,390 | $433,339 | $906,514 | $830,677 | | Net income attributable to Corpay | $284,168 | $251,625 | $527,401 | $481,394 | | Diluted EPS attributable to Corpay | $3.98 | $3.52 | $7.38 | $6.64 | Unaudited Consolidated Statements of Cash Flows For the six months ended June 30, 2025, net cash from operating activities increased to $1.07 billion, while financing activities shifted to a net cash inflow of $78.4 million Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | 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 and cash equivalents and restricted cash | $1,075,013 | $405,761 | Notes to Unaudited Consolidated Financial Statements These notes provide detailed disclosures on accounting policies, acquisitions, debt, segment information, and legal contingencies, including recent strategic transactions and an ongoing FTC lawsuit - In February 2025, the Company acquired 100% of Gringo, a Brazil-based vehicle compliance payment company, for approximately $153.7 million, net of cash, financed through a capital infusion into its subsidiary, Zapay, increasing Corpay's controlling interest to 86%50 - In April 2025, Corpay expanded its partnership with Mastercard, which includes a $300 million investment by Mastercard for a 2.8% interest in Corpay's Cross-Border business, with reciprocal put/call options exercisable in 2027 and 202853 - Subsequent to the quarter end, in July 2025, the Company announced a firm intention to acquire 100% of Alpha Group International plc for an enterprise value of approximately $2.2 billion, expected to close in Q4 2025 and funded by cash, debt, and divestitures100101 - The company is involved in an ongoing lawsuit with the Federal Trade Commission (FTC) regarding advertising and marketing practices, with a court granting summary judgment against the company on liability but denying the FTC's claim for monetary relief, and the case is currently under appeal798081 Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management discusses the financial results for Q2 and H1 2025, highlighting a 13% revenue increase in Q2 driven by organic growth and acquisitions, alongside segment performance and liquidity Results of Operations Q2 2025 consolidated revenue increased 12.9% to $1.1 billion, driven by organic growth and acquisitions, with Corporate Payments showing significant growth while Lodging Payments declined Q2 2025 vs. Q2 2024 Revenue Growth by Segment (in millions) | Segment | Q2 2025 Revenue (M) | Q2 2024 Revenue (M) | % Change | | :--- | :--- | :--- | :--- | | Vehicle Payments | $525.5 | $510.3 | 3.0% | | Corporate Payments | $391.9 | $288.5 | 35.9% | | Lodging Payments | $119.8 | $122.4 | (2.1)% | | Other | $64.8 | $54.6 | 18.8% | | Total | $1,102.0 | $975.7 | 12.9% | - Q2 2025 consolidated revenue growth was driven by 11% organic growth and 5% from acquisitions, offset by a negative macroeconomic impact of approximately $19 million (unfavorable FX, fuel price spreads, and fuel prices)142143 - Corporate Payments revenue growth of 35.9% in Q2 2025 was fueled by 18% organic growth (driven by a 19% increase in spend volume) and a $42 million contribution from acquisitions155 - Vehicle Payments revenue grew 3.0% in Q2 2025, reflecting 9% organic growth and a $4 million contribution from acquisitions, but was negatively impacted by unfavorable FX ($10 million), the disposition of the merchant solutions business ($10 million), and unfavorable fuel prices/spreads ($13 million)153 Liquidity and Capital Resources As of June 30, 2025, Corpay maintained approximately $3.5 billion in total liquidity, with key capital activities including debt management and ongoing share repurchases - Total liquidity as of June 30, 2025, was approximately $3.5 billion, comprising $1.4 billion available under the Credit Facility and $2.2 billion in unrestricted cash184 - In February 2025, the company amended its Credit Agreement to increase Term Loan B commitments by $750 million, using the proceeds to pay down the revolving credit facility192 - The company utilizes interest rate swaps to hedge variable rate debt, with a cumulative notional value of $4.5 billion as of June 30, 2025, and also uses cross-currency swaps to hedge net investments in foreign operations133201204 - The stock repurchase program has $1.2 billion of remaining authorization available for future repurchases as of June 30, 2025206207 Management's Use of Non-GAAP Financial Measures Management utilizes non-GAAP measures like Adjusted Net Income and Adjusted EBITDA to assess core operating performance, with Q2 2025 Adjusted Net Income at $366.4 million and Adjusted EBITDA at $620.6 million Reconciliation of Net Income to Adjusted EBITDA (in millions) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income from operations | $284.1 | $251.7 | $528.0 | $481.5 | | EBITDA | $570.7 | $517.7 | $1,090.0 | $1,000.1 | | Adjusted EBITDA | $620.6 | $554.4 | $1,176.0 | $1,070.9 | | Adjusted EBITDA margin | 56.3% | 56.8% | 55.8% | 56.0% | Reconciliation of Net Income to Adjusted Net Income (in thousands) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income attributable to Corpay | $284,168 | $251,625 | $527,401 | $481,394 | | Adjusted net income attributable to Corpay | $366,421 | $324,983 | $689,347 | $626,303 | | Adjusted net income per diluted share | $5.13 | $4.55 | $9.64 | $8.64 | Quantitative and Qualitative Disclosures About Market Risk As of June 30, 2025, the company reports no material changes to its market risk disclosures compared to its prior Annual Report on Form 10-K - There have been no material changes in the company's market risk since the end of the previous fiscal year235 Controls and Procedures As of June 30, 2025, management concluded that disclosure controls and procedures were not effective due to a material weakness in IT general controls, with a remediation plan underway - The CEO and CFO concluded that disclosure controls and procedures were not effective as of June 30, 2025236 - The ineffectiveness is due to a material weakness in IT general controls (ITGCs) related to user access management over certain IT systems, first identified in the 2024 Form 10-K237 - A remediation plan is underway, focusing on enhancing IT compliance oversight, training, documentation, and system functionality, with remediation expected once new controls operate effectively for a sufficient period241242 PART II—OTHER INFORMATION Legal Proceedings This section details the company's legal matters, including the dismissal of shareholder derivative lawsuits and the ongoing Federal Trade Commission (FTC) litigation with an uncertain outcome - The consolidated shareholder derivative lawsuit against the company was dismissed by the court on April 1, 2025, and the plaintiffs did not appeal247 - The lawsuit filed by the FTC is ongoing, with the District Court granting summary judgment on liability but denying monetary relief, and the case is now under appeal in the Eleventh Circuit248249 - The company is currently unable to predict the ultimate outcome or estimate a range of possible losses resulting from the FTC litigation251 Risk Factors The company reports no material changes in its risk factors compared to those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024 - There have been no material changes in risk factors from those disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024252 Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities The company details its Q2 2025 stock repurchase activity, with $1.2 billion remaining authorization under its $9.1 billion program, primarily for employee tax withholding obligations - As of June 30, 2025, the company has up to $1.2 billion of remaining authorization under its stock repurchase program253 Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | April 1-30, 2025 | 22,983 | $313.50 | | May 1-31, 2025 | 69,125 | $354.75 | | June 1-30, 2025 | 221 | $326.79 | | Total Withheld for Taxes | 92,329 | $344.41 |