WEX(US:WEX)2025-10-29 20:39Revenue and Income - Total revenue for Q3 2025 increased by $26.3 million, or 3.9%, compared to Q3 2024, with a net unfavorable impact from fuel prices of $6.0 million and a favorable impact from foreign exchange rates of $2.7 million[9] - Q3 GAAP net income was $2.30 per diluted share, a decrease of 8.7% compared to the prior year, while adjusted net income was $4.59 per diluted share, an increase of 5.5% year-over-year[9] - Revenue growth, when adjusted for fuel prices and foreign exchange, was up 4.4% during the quarter compared to the prior year, and adjusted earnings per share grew by 7.2% on the same basis[10] - The twelve-month total revenue for the year ended December 31, 2024, was $2,628.1 million, reflecting a year-over-year increase of 3.1%[12] - Total revenues for the quarter reached $132.8 million, a 4.7% increase driven by higher yields on purchase volume and a 10.8% increase in total volume[27] - Total revenues for the Corporate Payments segment for the twelve months ended December 31, 2023, were $496.9 million, compared to $487.8 million in the prior year[28] Segment Performance - Mobility segment revenue for Q3 2025 was $360.8 million, representing 52.2% of total revenue, with a year-over-year change of 1.0%[12] - Benefits segment revenue increased by 9.2% year-over-year to $198.1 million, accounting for 28.6% of total revenue[12] - Payments segment revenue was $132.8 million, with a year-over-year increase of 4.7% and representing 19.2% of total revenue[12] - Mobility segment revenue for Q3 2025 increased by 1.0% year-over-year, impacted by a 1.4% drag from lower fuel prices and foreign exchange rates[15] - Benefits segment revenue in Q3 2025 was $198.1 million, reflecting a 9.2% increase over the prior year, driven by strong growth in HSA accounts[18] - Total purchase volume for the Corporate Payments segment was $27.9 billion for the quarter, reflecting a year-over-year change of 34.9%[28] Operating Income and Margins - Total adjusted operating income for Q3 2025 was $273.5 million, with an adjusted operating income margin of 39.5%[12] - The company reported a total GAAP operating income margin of 26.5% for Q3 2025, with a total GAAP operating income of $183.6 million[12] - GAAP operating income margin for the Mobility segment was 30.9%, down from 38.2% in the prior-year period[15] - The adjusted operating income margin for the Benefits segment was 43.8%, compared to 43.2% in the prior year[18] - GAAP operating income margin for the Corporate Payments segment was 39.1%, down from 44.2% in the prior year[27] - Adjusted operating income margin for the segment was 48.0%, a decrease from 56.4% in the same quarter last year[27] Cash Flow and Capital Expenditures - For Q3 2025, the company generated non-GAAP adjusted free cash flow of $166 million, with a trailing twelve-month adjusted free cash flow of $546 million[36] - Capital expenditures for Q3 2025 were $35 million, while total capital deployed, including acquisitions and share repurchases, was $913.8 million[38] - Operating cash flow for the three months ended September 30, 2023, was $46.5 million, while for the twelve months ended December 31, 2023, it was $907.9 million[68] - Adjusted free cash flow for the three months ended September 30, 2023, was $164.9 million, and for the twelve months ended December 31, 2023, it was $510.6 million[68] - The company anticipates a significant increase in adjusted free cash flow to $562.0 million for the twelve months ended December 31, 2024[68] Guidance and Future Outlook - The financial guidance for Q4 2025 includes net revenue expectations between $646 million and $666 million, with adjusted net income per diluted share projected between $3.76 and $3.96[42] - Average U.S. retail fuel prices are expected to be $3.09 per gallon for Q4 2025, with mobility credit losses projected between 14 and 19 basis points[42] - The company plans no further share repurchases in 2025, and the adjusted net income guidance excludes various non-GAAP items[42] - The company maintains a runway of more than two years before its next debt maturity, allowing for strategic market opportunities[33] - The company plans to continue its customer-centric strategy supported by its core competencies to drive profitable growth[49] Share Repurchases and Debt Management - The company repurchased approximately 4.9 million shares at a price of $154 per share, totaling $750 million in cash during the tender offer completed on March 31, 2025[39] - The company has repurchased $310 million in convertible notes due July 15, 2027, with a 6.5% interest rate[55] Non-GAAP Measures and Adjustments - The company emphasizes that non-GAAP measures like adjusted net income and adjusted operating income are integral for assessing operating performance and capital allocation[62] - The adjusted net income excludes unrealized gains and losses on financial instruments, net foreign currency gains and losses, and certain non-operating items, providing a clearer view of operational performance[61] - Adjusted free cash flow is considered a useful measure for evaluating the company's operational results, excluding acquisition-related considerations and capital expenditures[67] Stock-Based Compensation and Amortization - Stock-based compensation expenses for the twelve months ended December 31, 2023, are projected to be $111.9 million[58] - Acquisition-related intangible amortization for the twelve months ended December 31, 2023, is expected to total $201.8 million[58] - Stock-based compensation for the twelve months ended December 31, 2024, is projected to be $111.9 million, down from $131.6 million in 2023, a decrease of 15.0%[60] - The company expects to incur acquisition-related intangible amortization of $201.8 million for the year ended December 31, 2024, compared to $184.0 million in 2023, an increase of 9.3%[60] Market Presence and Growth Strategy - The company is focused on expanding its market presence through new product development and strategic acquisitions[49] - The company achieved a 13.3% compound annual growth rate in revenue over the past 10 years[51]