WEX(US:WEX)2025-10-30 16:41Financial Performance - Total revenues for Q3 2025 were $691.8 million, a 3.4% increase from $665.5 million in Q3 2024[148]. - Net income for Q3 2025 was $80.3 million, down 22% from $102.9 million in Q3 2024[148]. - Adjusted net income for Q3 2025 was $159.7 million, compared to $177.5 million in Q3 2024, reflecting a decrease of 10%[148]. - For the three months ended September 30, 2025, operating income decreased by $25.0 million, or 18%, compared to the same period in 2024, with segment adjusted operating income margin declining to 40.7% from 46.8%[157][158]. - Total segment adjusted operating income for the three months ended September 30, 2025, was $297.2 million, down from $317.1 million in 2024, indicating a decline of approximately 6%[189]. - The effective tax rates for the three months ended September 30, 2025, were 31.1%, compared to 27.1% for the same period in 2024, showing an increase of 4 percentage points[180]. Revenue Breakdown - Total volume across the company increased to $66,231 million in Q3 2025 from $62,322 million in Q3 2024, marking a 14.5% increase[148]. - Payment processing revenue in the Mobility segment decreased by 8% to $168.2 million in Q3 2025 from $183.2 million in Q3 2024[150]. - Account servicing revenue increased by 10% to $53.7 million in Q3 2025, up from $49.0 million in Q3 2024[150]. - Finance fee revenue rose by 18% to $82.9 million in Q3 2025, compared to $70.2 million in Q3 2024[150]. - Total revenues for the Benefits segment increased by $16.7 million, or 9%, for the three months ended September 30, 2025, driven by higher other revenue and SaaS account growth[163][164]. - Payment processing revenue increased by $1.9 million, or 9%, for the three months ended September 30, 2025, compared to the same period in 2024[163]. - Corporate Payments total revenues increased by $5.9 million (5%) for the three months ended September 30, 2025, but decreased by $29.0 million (8%) for the nine months ended September 30, 2025, compared to the prior year[168]. Expenses and Cash Flow - Adjusted free cash flow for Q3 2025 was $376.7 million, down from $392.5 million in Q3 2024[148]. - The company reported a net cash used for operating activities of $159.6 million in Q3 2025, compared to a net cash used of $(157.0) million in Q3 2024[148]. - Sales and marketing expenses increased by $10.4 million, or 20%, for the three months ended September 30, 2025, primarily due to targeted investments for growth acceleration initiatives[162]. - General and administrative expenses increased by $8.7 million, or 33%, for the three months ended September 30, 2025, primarily due to strategic decisions related to an international subsidiary[161]. - Depreciation and amortization increased by $2.6 million, or 18%, for the three months ended September 30, 2025, due to increased capital expenditures for new product development[160]. - Cash provided by operating activities for the nine months ended September 30, 2025, increased by $316.6 million compared to the same period in the prior year, primarily due to a seasonal increase in merchant payables[208]. Credit and Financing - Provision for credit losses increased by $7.3 million, or 93%, for the three months ended September 30, 2025, compared to the same period in the prior year, reflecting higher estimated credit and fraud losses[159]. - Provision for credit losses rose by $3.1 million (182%) for the three months and $8.9 million (168%) for the nine months ended September 30, 2025, due to higher collection risk[172]. - Financing interest expense increased by $5.4 million for the three months and $3.3 million for the nine months ended September 30, 2025, due to increased borrowings[177]. - As of September 30, 2025, the company had outstanding term loan principal borrowings of $2.7 billion, borrowings of $601.8 million on the Revolving Credit Facility, and $550.0 million of outstanding Senior Notes[197]. Cash and Investments - As of September 30, 2025, the company had cash and cash equivalents of $812.9 million and remaining borrowing availability of $953.6 million under the Revolving Credit Facility[195]. - Total deposits as of September 30, 2025, amounted to $5.2 billion, with $102.4 million of securitized debt under financing arrangements[202]. - Cash used for investing activities for the nine months ended September 30, 2025, decreased by $329.7 million compared to the prior year, primarily due to lower transfers of HSA deposits[210]. - Net cash from financing activities during 2025 increased by $257.9 million, primarily due to a larger decrease in restricted cash payable compared to the prior year[212]. Stock and Acquisitions - Stock-based compensation for the three months ended September 30, 2025, was $34.7 million, up from $29.8 million in 2024, reflecting an increase of about 16%[187]. - The company completed a private offering of $550.0 million in senior unsecured notes due in March 2033 on March 6, 2025[195]. - The company expects to close on the acquisition of a Mobility card program portfolio for $58.6 million during the first quarter of 2026[217]. - As of September 30, 2025, the company had $173.9 million worth of common stock available for repurchase under its plan[214]. - The company was in compliance with all financial covenants under its Credit Agreement as of September 30, 2025[198].