FLT - Earnings call transcript Q1 2018

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Operator

Thank you for standing by. This is the conference operator. Welcome to FLEETCOR First Quarter Earnings Conference Call.

As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. time, one that up. question of limit ask interest to yourself and the we you ask – In one follow would turn Eglseder. to now over I Jim to, the conference like Please go ahead.

James P. Eglseder

to presenting information is section. have GAAP net we information most for everyone, in afternoon, today. be non-GAAP providing financial you may net the first other described. non-GAAP directly presentation, and and today's under This and appears companies' press guidance on you are which and and will found we press previously Relations calculated access updated Good website with information non-GAAP not joining both information. and as Quantitative with can at our income, XXXX to adjusted www.fleetcor.com, historical income our Throughout be on reconciliations. thank including the By GAAP call, differently diluted basis, revenues, us GAAP now release along Also, be of website share. than per accordance this supplemental comparable conference quarter should calculated reconciliations information, on release Investor in our adjusted adjusted financial a non-GAAP

the and from These results undue which investigation and them. formal regarding part business our expect. actual forward-looking development and will expectations results begin to you access need we are guarantees performance, and everyone not our to the upon we I unauthorized the therefore, XXXX regarding numerous that subject cause to differ about including statements before to could Finally, forward-looking statements. They remind and assumptions put products of initiatives, fee to today discussion not company's includes of our respect remarks, of include materially risks This guidance, are the systems, to-date. statements what new the acquisitions, uncertainties incident with should future reliance

as filed like on Form Annual Some mentioned on Report Form With of CEO. would and release XX-K www.sec.gov. to Clarke, and in Chairman to are with at and the available of over These discussed Exchange out the Ron? are call turn our press Commission. the our X-K and our documents those previously website risks Ron I that way, Securities on today's on

Ronald F. Clarke

Thanks. to the this afternoon. thanks everyone And as Jim. Okay, always joining call for

So upfront on here, just subjects. cover I'll two plan to

QX First, I'll of bit share provide a second, our with development guidance an on my business And update view for along our XXXX. our results initiatives of and initiatives. growth I'll

Okay.

accounting that's quarter, quite revenue XX%. reported the under onto previous We which XXX, $X.XX. of so reported $XXX it be can reported was We good. standard QX XX% up up of cash So That's ASC and the million, EPS QX apples-to-apples.

finished XX% bottom-line. QX on basically impact than board top-line, Revenue, XX% So really, numbers guidance. better macro across real expected, the to expected. so relative we our in as The no

at growth revenue for overall quarter. XX% organic Our the finished

bit the Our those growth. And Chevron impacted was remainder significantly the to XX% acceleration grew the by X% do range. fuel of the components, exclude business you two a business and probably of card line we portfolio more And That if reported portfolio. Fuel organically. X% expect X% GFN Card organic in

Also, but in small Lodging, our XX% in Construction up the of portion Our up grew up XX% primarily three into pretty growth very in sales room XX% QX. card significantly. our third volume we quarter the business flow-through of Corporate quarter. XX% segment. Pay revenue quarter, And XX% spend, FEMA as business vertical. non-fuel Corporate of massive the that second is the so for continuing a Pay up by lines in enjoyed core shrinks, excess About the of of payroll about now consecutive our in XX%, driven healthcare that business construction healthy. the business business. in nights,

and in Brazil in tuck-in by there, some flow-through channels. of sales pricing sales actions, we the new XX% lifting hotel the make third-party digital the to business the in and our from some We did of in of also quarter. and a bit room our synergies XX% economy, did some a we've capture quarter represented tool revenue new continue new that new then from volume. overall the enjoyed introduced Brazil Tolls we that's up card Fuel incremental digital stronger revenue about last We QX. booking So And our finally, fall.

quarter, In strong. terms the of business quite trends in

quarters And grew XX% XX% sales consecutive and X%, improved Corporate or Brazil prior versus by driven That's XX%-plus businesses. in to same-store Pay overall. sales retention, retention. the period. new strength Lodging, Our Russia Customer of XX our bookings and new

So look, and our revenue than expenses, than Tax because pretty – Act the expected story we lighter bit under-spent strong, better investment. a the of planned QX

good good So numbers and fundamentals.

Okay.

over me Let transition to guidance. rest-of-year

We full-year EPS the our So at be do macro to aggregate QX rest-of-year to reflects $XX.XX with initial midpoint. will the $X.XX today from our we're around. in $XX.XX individual raising expectations. move expectations, beat to XXXX cash outlook line guidance in although a initial That components

Act in IT, increase better. a rest-of-year assumed or be unfavorable. expect in now exceeded a start And So balance bit again, we do revenue continuing QX and our aggregate, the in already against But to fuel Interest our of plan rates XXXX. be of more incremental significant price bit FX expectations, bit a really really expectations. in now a QX profit will QX starting pretty Tax the and expensing though be worse. Even revenue our sales through kind had and investments a will push guidance sequential QX. and will

will about rest-of-year call X% terms The exclude zero GFN Chevron. the boost free business range, Russia And programs, an XX% tune introduced to volume thinking which the impact of card drivers in trial into acceptance, growth. of to some new go are In volume fraud and to again in fuel there accelerate if emissions we revenue over networks. revenue and the some seeing to you expect protection, programs. acceleration of were will couple some our third-party going we growth roll and expectations, of the to proprietary they as our that card XX% pay revenue with live we're We're

should add to in business we year high-teens of We things pencil of because in lines fuel lap expect some implemented in cards. the acceleration to non-fuel rest they'll the those the the initiatives mostly the a of out bit half. So second pricing of do

Okay.

over the to me on our development transition business initiatives start Let some side. growth and of product and

new So over-the-road first, card a universal some to clients. largest of We initiative. fleet beyond trucking our fuel launched

diem product of class virtually at drivers So to their or allows merchant. new personal payroll, think any per monies, this use

as So they don't cash. have to withdraw monies their

use card at variety have is and of it. drivers monthly of drivers as in doubling now importantly, the So interchange for that adopted merchants, a our resulting generates revenue the clients this we're the among do seeing the it. us, And love almost card

the Second, announced an or program. our Brazil refueling to BR of agreement program, acceptance fuel today stations, signing first, Petrobras we our cardless that

that us Shell, locations. So in we'll BR beyond allows to now and expand have Shell brands

booked provide all so our last from get we the really the great up did those program. it'll to first think And finally of small starting And that booking. digital account In lift a locations in booking one-third were Lodging as digitally, offered We zero fuel small users to rolled, segments satisfied lodging I mention group rooms year. in the business nights digital quarter room the a XX% more clients. of nights we into prior has resulted U.S. and smartphone think our U.K. obviously lastly, that service. card the of and user usage – kind year. new in from incremental users, are Then, And began that simple about lift implementing with room interface, a interface, segments,

Expect that XXX,XXX So about we put clients far. to so about get on year. end of XX,XXX by clients to

So do allows more of way interact with self-service. really program to to new a a to terrific reaction and the us obviously administrators simpler

here, So increase to new some the deliver enhancements we are point advances, product new product clients. to utility our continuing that

Okay.

partner some and update briefly progress. me acquisition on let you Lastly, our of

is connect did sign begun Shell to a So to on partner extend new Uber where of trying term drivers with them, a that's program to being program with amendment the And which European news. good front; the loads. piloted we've truck new our with XX-market is program Uber, an shipper Freight we

really partner a of kind So opportunity. interesting

We are relatively partner are of couple getting deals that, also close. new working small a I'd say,

bit petroleum in company mobile to PXX. we a a to called Their is front, acquisition a industry. bring investment earlier, the the On small payments minority charter announced

pump solution So the retailers in-store, equipment point-of-sale enables working the PXX – the big no equipment gas little with and which through deal. station existing register at really retrofit, payments, systems mobile is a to to cash both accept and

commercial in card we PXX, investment a for signed technology to also U.S. to fuel our use in own their agreement So programs. addition an

which there (sic) deal. our CLS Also XXXX from we [XXXX] businesses newest client QX four: usage on to STP, our Those those So among So accelerate four that's a acquisitions, Russia look took XXXX, Gazprom the XX% hope commercial and and XXXX. QX of XXXX combined a had the EBITDA own at base. versus acquisition up front, we Cambridge, are mobile

So point, we and assets. at within pretty improvement profit implementing to good continue the designing be our acquired initiatives

late couple say, small I'd acquisition, working of We also into on getting tuck-ins a stages. are also the

start. in look, we're very good summary, a So off to

EPS We've Our revenues same-store would we're XXXX new an profit and products. recent macro which to raising enjoying growth the in advances four retention got had most sales $XX.XX, We're strong We and acquisitions growth a profits are outlook for our trends. cash our XX%-plus in solid some ahead of We're making cooperating reflect of environment. expectations. and year. guidance

let with quarter. So some to detail call over Eric on additional the Eric? the turn me that, to provide

Eric Richard Dey

Thank you, Ron.

want the via revenue adoption are adopted method, on ways. to XXX revenue will X, the XXXX. started this results get I Under January Before XXXX numbers, new I restated. modified about that in retrospective my follow, the talk two everyone company In not ASC remind method has recognition of Topic revenue discussion standard effective the to I

prior First, new GAAP XXXX, convention, using new compares standard using the using the ASC standard. to which the XXXX XXX

way adopted revenue the will XXXX. I ASC see discuss was the we in can rest I plan so of as discuss for using XXXX XXXX, it. and you XXX historically both revenue if to conventions never Secondly, presented for revenue have XXXX

the Now onto quarter.

of XX.X% segment million versus will to ASC million standard, income. American net XXXX. $XXX.X in segment first first impact the XXX in first $XXX.X XXXX. in revenue from in basis from million North our quarter For first standard material a certain revenue the have $XXX.X new international our in $XXX.X on The new and on up commissions XXXX. XXX resulted million, revenue standard, XX.X% ASC ASC the third-party new in reported of Using the of revenue. reduction standard, a first $XXX.X processing XXX XXXX the revenue approximately $XX against are quarter of million $XXX.X GAAP compared to the no increased the merchant the from of from netted prior Revenue of recognition expenses quarter and XX.X% million million we quarter This to using XXXX quarter increased of

first For press net $XXX.X share income in comparable impact million our release. Non-GAAP up million the adjusted first provided compared diluted our or per net from quarter ASC share ASC income million sometimes between be of Adjusted adjusted in million, amounts $X.XX were of cash income in quarter compared to is increased of quarter $X.XX ASC XXXX, of And of quarter Exhibit convention impact the net net XXXX, in periods the revenue quarter of to or new to new numbers provide quarter of revenues press of refer $XXX.X net GAAP excluding share XX.X% the the XXX, of first of the XXX the increased $XXX.X is first X financial $XXX.X for net provided XX.X%, revenue XX.X% the first revenue standard XX% EPS. diluted and are to as reconciliation which in of release million $XXX.X $X.XX XXXX. Exhibit in XXXX. XXXX. to also in first to share A the GAAP $XXX income, income the we compared Revenues the in the of XXX per per adjusted diluted cash adjusted standard and per prior XXXX. million to to to XXXX net that quarter GAAP using discussing excluding income metrics income we will first $X.XX to diluted or increased X

quarter. of and primarily rates precisely a finally, positively cannot the were the believe compared believe by impact quarter mostly about although, First impact impacted first these changes, million. the results during also had by of $X favorable quarter. positive we the And Fuel calculate approximately fuel during exchange of the reflect $X XXXX. Changes foreign prices environment with $X favorable approximately quarter macroeconomic in we impacted were spreads in revenues million positive revenue million. we impact quarter the And

adjusting XXXX. been January in that categories to after for implemented first even has and Organic of $XX positive was growth revenues by share Most by total, macro consistent net performed approximately our $X.XX of million first approximately the XXXX. per So the of approximately quarter XXXX quarter. diluted growth, revenue quarter product adjusted versus income a of out Also, macro impacted in those in both little the with prior line unfavorable, our spreads in guidance. revenue was prior during environment, exchange of calculate using well prices guidance. in assuming so impact XX% quarter Fuel calculated mostly standard from order organic our the ASC favorable were foreign first was growth a Organic no the meaningful our rates were and and little a impact XXX revenue periods. changes major the

was by which portfolio organic lower in the of card the MasterCard this growth investment quarter negatively in in of in fuel impacted volumes, and conversion Chevron portfolio, business impacted XXXX category first sales Our resulting the has X%.

Excluding Chevron, fuel approximately impact we X%. the believe conversion have from and year organic would MasterCard card growth been the prior of portfolio

of organic growth in issue conversion transition to be quarter MasterCard will we impacted until XXXX we We expect portfolio. Chevron of the the at category the lap until end and that the second

businesses, mid driven Comdata well we The Payments Payments grew quarter. items, and toward to both to quarter. Cambridge during our rates in trend and in the organically the up grow believe XX% digits. Corporate over the growth which, these both The Excluding was category was XX% will Corporate by growth upper-single continues

due Our throughout primarily of initiatives organically, a Toll XX% was implemented to business growth at STP. up number XXXX

nights contributed of rooms due continued growth. the Lodging XX%, room Our primarily XX% and business driven impact up about an FEMA in was to FEMA from hurricanes. by impact increase the The

another all, non-fuel very for in businesses. all quarter So our good

quarter expenses the in moving merchant million processing which XXX, and Included quarter the $XXX.X of quarter the first the revenue. the in first compared down $XX of Now approximately operating Total impact income were ASC commission of million against first netted to expenses $XXX.X for same statement. million the was certain XXXX XXXX. of

XXX, increase completed approximately expenses was impact acquisitions The been would due the Excluding ASC of XXXX. have X.X%. primarily up in operating to

percentage in a revenues, XXXX. As total XX.X% were first expenses approximately XX.X%, compared of of the operating to quarter

of from Depreciation compared The in in XXXX basis quarter million to points debt controls the the expense was due would $XX Toll first in revenue of as XXXX. of expense Credit operating in in increased $XX.X credit have quarter our implemented percentage was primarily of were to in primarily first XX.X% $XX a in to or in first operating decrease of total compensation million executed the exit of quarter equity-to-cost change loss quarter the changed as X $X.X the million quarter an primarily quarter XX.X% business in of expense our plan as million amortization bad XXXX. XXXX. XXXX. XXXX first $XX.X equity Brazil. quarter in and first completed to in $XX.X investment method the the new acquisition, due Excluding first buybacks of million compared XX.X% space. There million a or points, third compared borrowing gain a due million. of ASC or we been the revenue telematics XXXX. the increases no The end quarter X of the $XX was XXX, interest The stock-based resulting for increased loss percentage the decrease decrease approximately agreement XXXX. of losses in impact the basis first in on Cambridge for to from additional share in Masternaut, The XXXX, quarter million investment to to LIBOR. in in of we to primarily was of was increase acquisitions expense the in a $XX.X accounting our expense the first increase with and to Interest At due

this P&L. minority gains our record losses no or in As we a longer on result, investment

primarily for XXXX. the the impact to XX.X%, on U.S. XXXX effect due the in rate XX.X% effective X, Reform, which first of was January XXXX. The of quarter Tax Our compared went into for to tax rate reduction tax was of first quarter the

statutory federal state was U.S. tax reduction U.S. rate primarily federal As rate our income both of Tax new by a being reduced, to tax due in Reform. to federal reduced Tax to income statutory XX%. from partially U.S. resulting offset result tax higher The effective Reform, from rate, higher and XX% taxes, the the taxes related GILTI was a the

first compensation the Our rate also of compared benefits of quarter tax XXXX the XXXX. share-based was first lower tax to quarter by impacted excess on as in

quarter to total $XXX consists turning cash. the primarily the balance and is in Now, Approximately deposits. restricted ended billion million customer $X.XXX sheet. We with of

of $XXX XXXX had As we billion revolver, availability. XX, loans and March approximately our term of and undrawn million on $X.XXX outstanding

also capacity We quarter. the XXX,XXX and We $XXX our in at of common borrowed remaining $XXX under first repurchase in quarter facility million approximately have of million in had purchased securitization authorization. current the shares stock our approximately the end

March for XX, below and intend revolving use We times credit X.XX is securitization future purposes. of level X of cash ratio acquisitions to our the down as leverage flow As facility, covenant our well EBITDA, on and our was facility other temporarily XXXX agreement. which balance calculated to times pay and under corporate our credit maintain excess liquidity EBITDA our

$XX capital not Finally, business, the million spending CapEx a on quarter XXXX. first we approximately during intensive are of

outlook XXXX. our for Now onto

to prices market level fuel for of year. news ahead is for the it at would our where be balance about current total I and be quarter. year. in the the to be The thought first guidance the spreads in to in trend prior macro latest is came the slightly macroeconomic the good you balance update the mostly we that thinking environment First, our The for want on of

rates We to trend also expect interest continue and foreign compared unfavorably prior to be exchange a to our to worse. rates little guidance

the of over balance assumptions the year line to be used our in in we total, So with in guidance. the prior are macro expecting mostly

we guidance refer guidance. Please first additional information. earnings result, our to for full-year supplement beat prior by quarter a have first our As our versus increased quarter our call

between including billion income our to million; that ASC Total and follows: be and net guidance is million; be the income the million adjusted income $X.XXX income billion $XXX diluted net per between $XX.XX. $XXX the as to ASC impact net $X.XXX share with million $XXX revenues way, be $X.XX; be of billion; billion; and $X.XX of $X.XXX net share and between revenues of to adoption XXX out and between be per $X.XXX XXX to excluding to So and between diluted be $XXX $XX.XX full-year between and to adjusted

movement April disclosed; have unauthorized equal approximately diluted assumptions of made in related impact fully the to X-day partnership guidance interest the the to already million rate XX.X shares material to businesses of company between those $XXX Some XX%; the a no of and XX% the related of no outstanding or of not equal of portion the exchange the to the impact of tax average average million; to access to Weighted for systems. $X.XX balance XXXX; acquisitions the agreement of include retail market to as X, sensitive expense the new fuel shares; equal rate to foreign gallon a average; the prices in XXXX per we the U.S. year; for fuel price in following. preparing spread

adjusted first is diluted company the XXXX, of per the net quarter same share as second the income be the approximately quarter. to expecting For

offset on and new The operating funded the Act. from performance quarter and versus savings be sales IT assumes to improving first initiative revenue the Tax quarter by second

in technology initiatives in should year throughout and and per Social properly and the to company a contacted The asset forensics company And affected. indicates throughout accessed gain through systems immediate as law also early known earnings the but affected the significant press information, year months and volumes and April XX, fourth third does license share the revenue of investigation personnel consumer in stages, company Additionally, in and data resulting Security action numbers, Solutions higher engaged personal Stored number company activity, counsel older our stop finally, limit of be our driver's XXXX accessed. its card in momentum primarily assist in today's business. other data. information. numbers, release, activity identifiable not external on numbers company's were The took to information PIN reported should to primarily and is on primarily the such enforcement investigation. that the quarters. merchants identified build six improper federal new personally The experts include sensitive or suspicious as Value The the use involving we The names,

whether of customers continues company to it's payment Following been involving other systems company's ongoing or and not the full or the its other unauthorized have deliver been is of to until fleet accessed systems and and information customers the as and payment and the continue access accessed with nature will solutions. whether cards been proprietary working discovery, has impacted. information information and scope see This investigation the have other The up its operator, file we'll impact for XXXX. used questions. will investigate of on determined. company limit With the determine networks merchant said, XX, that the any third-party payment froze other open it card which to certain access. systems in expects its upcoming did the incident it to by company products, to to to any The The evidence systems update May an provide XX-Q, company

Operator

with from go Togut David ISI. comes Evercore Our question Please ahead. first

David Mark Togut

Thank you. afternoon. Good

Ronald F. Clarke

Hey, David.

Eric Richard Dey

David. Hey,

David Mark Togut

of you timing recovery sort kind impacts and (sic) parsing organic portfolio the and growth next Chevron the revenue [GFN] over of of walk card GPN the few Could us through fuel the quarters? out of

Ronald F. Clarke

It's David. Ron. Sure,

Let try me this.

repeat before Chevron. and today excluding fuel XXXX, XX% full-year said range in for that for we the we're to cards think outlooking So X% I and GFN

and were numbers QX, in So X%, X% respectively. those

it's full the to keep it year, just probably use let me simple, something and like And X%. so the midpoint X%

full me year. let just So midpoint kind X% the kind use so of – of of

of the we some, in to If accelerate split that QX, organic expect of the year at we'd it'll quarter. X% X% you say There GFN basically today, there'd a forecast. obviously GFN have in think fuel including of so And bigger that without in from Chevron. be in out do much kind QX by year. our a that you will, if and whole cards is ton for finish we because was Chevron then, impact And exiting ask impact we obviously, us, obviously what varies QX as last

David Mark Togut

Got XX% to follow-up. it. balance you of then is Payments the acceleration in in from walk quick growth And disruption-related growth with just a XX% as could The the words, you the XQ, Corporate sustainability In that growth for other us higher rate? year? through payments of the

Ronald F. Clarke

Yeah. comments, penciling that Again, think about we I in think high-teens. in thing said the out my

volume took we been and that that's the say fundamentally card sits incremental in Corporate and mentioned, business, in QX. But as obviously, direct it's actions incremental I'd some finally the all our I both implemented. business, in growth, pricing Pay which added business, that growth construction QX payroll in So some in

high-teens So think have again year. QX QX through this that I our thing numbers

David Mark Togut

Thank Understood. you very much.

Operator

Our El Ramsey Jefferies. next comes ahead. Assal from Please question go from

Ramsey El-Assal

will cycle also the Can guys. run like about market you pricing the sort some for sort RFID before. of fuel you for think room of just taking of I thing the lot in a of scale types of business my you're talking – of And look a to scaling the some business? runway there through? is of revenue Is tag and paying tag what of with mentioned once there? Hi, in Brazil what fuel for of Thanks in addressable you these terms synergies the private also through there just there terms question. the finding the garages lot that same took there Is actions growth that

Ronald F. Clarke

it's hey, Ron. Ramsey, Yeah.

guess a I to two-part answer that. So

So yeah, QX. the XX% was

reposition about will we year last later company. think idea a in place repeatedly put the year. pricing into again, to of high-teens. RFID it kind But dominant some lapse think, the as I get big question, fall being and I the is think said toll kind we think part second on being decelerate we that of said of we it STP in that an kind from to thing payment company there the toll the We

XX%-ish it's toll call then parking it and So revenue and then some today, fuel. some

footprint plan have fueling, from So dramatically in and interestingly today the agreement, a is in food fast to the goal We've also be Brazil Petrobras the couple XXX fuel the first X,XXX. who the new BR in technology the we're to this a with We've of to year through the in would plan largest the to retailer to conversations pilot parking. the double number people drive-throughs. parking obviously same increase in Brazil a got of installations put announced

fuel So the think a get parking fast goal in lot food year company to and and forward growth next that is as you those kind into incremental segments. of of from

Ramsey El-Assal

the to sort market are more wanted up And kind still can stream your appetite much about or that, how here? of a whether maybe that's to intend Thanks. or do of I bolt delever just anything potentially smaller conditions on of kind deals, Okay. you That's I to transformative? very contemplating and of And more M&A. you helpful. A follow here for me is steady ask dictating on

Ronald F. Clarke

opportunistic. tuck-in that innings whether ratio we're today. – things of what a certainly larger I'd reporting targets got we've large it, got Eric? is activity to of say our I'd leverage look, I smaller is are We've obviously we're But, the mean, late that was kind a it's in today report on couple Yeah, buyers. they're with contact that ones, whether And of we're say the sellers to set see or

Eric Richard Dey

X.XX times.

Ronald F. Clarke

And up. obviously refinancing the liquidity X.X last times. is our summer for

XX% I and earlier a at So I'd also grew profits say feel management-wise. in that four in balance reported that good sheet-wise, Ramsey, deals newest place we the QX. obviously

we've done. So it's recently obviously working what

immediate it. but So if on I'd we're Nothing big say to take the comes a opportunity say we'll positioned for in look place that the both. front,

Ramsey El-Assal

questions. it. my taking for Appreciate Thanks Great.

Operator

JPMorgan. next Our go Tien-Tsin question Please Huang from ahead. from comes

Tien-Tsin Huang

Hi. Good afternoon.

growth think I fleet were partner potentially your you organic your you much that were might how Ron, to to close of to you, mentioned a book if couple have fuel, I'm those. impact curious deals.

Ronald F. Clarke

– not I'd both working of they're Yeah, of call hey, them things on. the smallish we're Yeah, Tien-Tsin. kind

So of to material, maybe not range a I two or wouldn't kind point were if a – we them. say close

Tien-Tsin Huang

on new that fuel sales, Okay. XX% then versus much good was know. to That's of how bookings And your or non-fuel?

Ronald F. Clarke

I don't have it.

have in You of that Eric you? front

Eric Richard Dey

second. Hold on one

Tien-Tsin Huang

activity Just had the lot activity side, because curious a idea fuel how an is on. trying just the to non-fuel get going of on you

Ronald F. Clarke

in Australia by Russia reports to us The few of I XX%; Yeah. you sorted but XXX%; an just XXX%; was U.K. Brazil XXX%. The eyeball of front not sitting was XXX%; give can idea. them up a is Europe just Western product,

a bunch was of So fuel great. our international

is Our still kind of flat. U.S. mostly

was Our XX%. trucking business XXX, up

And softness from the still U.S. taken kind to GFN thing It's so time recover sales last fundamentally. year. to get our of is the

average one direct business say, lot All business, a of I I'd those, and ones the of first the but and the So growth. international not really partner trucking don't the know quarter. all U.S. super

Tien-Tsin Huang

Thank to Okay. hear. good That's you.

Operator

comes question Turner next Please from Oscar with go SunTrust. Our ahead.

Oscar Turner

my guys. Good Thanks Hi, taking for questions. afternoon.

and demand is just it on past seems decelerated even impact another is question conversion if like And exclude few MasterCard that the portfolio growing. First like Chevron. fuel, quarters you trucking the seems segment has

that's constant anything do Is kind affecting trend? two you outside your of what macro So that think there of drivers growth? is driving those

Ronald F. Clarke

Ron. It's Oscar. Yeah,

say just things. me let a So of couple

those think the three reported for number I'll X% reported, out we again our again, you years, for carve it's XXXX. is X%. our and X% these two fuel many quarter remind if however was about that last the full-year you for headwinds one, been years So for I forecast

the QX, thinking So we're year X%. That maybe first but kind X%, point. X%, for the of in would be decelerated

there's has from thing. in moved around and I'd X%, to The below first kind in of products in the then have GFN people Ron, that sales would waiting the second recovery two other it people X% so were we built second, quarter? into is segments, Why the when the for we a it elevated. recovering why are sitting resources forecast we And We a the other I'd one say into areas. attrition reallocated here service (XX:XX) the stayed then the been to X% roles. GFN again are thing tail fundamentally rate hey, that longer reason, things say those we working at bit the the are: that One, accelerate? be, why running sales

We expected come normalized towards levels. that down curve steeply more to

of would And those the so be kind holding a of that couple things thing I'd back bit. the say

Oscar Turner

growth and then some just the contribution to helpful. recently Brazil, for of to see beyond time you initiatives? fuel follow-up about And talked Thanks ramp? material that revenue color. the from or in expect the you when in U.S. those initiatives do do we we do think It's when about Okay. how on first And fuel

Ronald F. Clarke

don't we're we to question kind That's forecast million of out magnitude. too. would what I working. is, for also it's comments doing and hard It's bit the us try say I'd is the say to on tease What working know. dollar a my

our look same? hands later future as behaviors to answering year the thing have much thing is I we like following one. the phase we've both that I'd build start BuilderPro of still example and clients' fundamentally the roll changed So the days better it's say the and card segment, XXX and into a fact probably the the plans out has turned you, And before cardholders that cardholders But say in get clients be, a growing forward year. we'll called of that which So the wow, on revenue trucking can handle for and that the now the I'd trucking what's will a weed that, or here the those reception in say there's card probably construction the get of as doubling of XX that adopted? is we that monthly into behavior dramatically would the to I'd something

can as we So better can we're evidence size we hopefully for work it the fuel year. and report this that work can idea you is through beyond we getting that what

Oscar Turner

Great. Okay. you. Thank

Operator

Our next question comes Goldman go Schneider from ahead. with Please James Sachs.

James Schneider

Good so provide a can directionality of the you were of afternoon. bit touch a sales bit quarter you helpful. might on saw if better? terms any you Thanks quarter. taking verticals can same-store a trends ones for I go same-store in in question. Which And little the was would wondering in where Which kind my next the maybe bit little little weaker? were be or trends the sales

Ronald F. Clarke

four that pockets were again of was I opening the kind in Ron. Lodging the it's kind mentioned positive healthy. James, that Hey so quite of

year healthy. from a ago the plus think I account had the recovered there WALE is that small we'd mentioned and quite business

Pay No that because is getting positive. healthier portion quite the healthcare there. shrinking. Corporate pun So was is intended

And thing higher ago balance Russia, got the case have number. it's two year so share that economies way is the of of just almost dramatically of Russia product customer. so a everywhere, wallet works a and Brazil the and So a we're more year those of gotten soft introduced healthier we've And two particularly ago, markets then grabbing the were a better. that in quite or

So it's growing.

X% It's would the one two the I'd would call. four you And think forward, or say of stay those a who be to thing kind X%. in I'd call would made us knows? hope from the So macro range. if we I say that it X% plus rise going to guess, the caused

James Schneider

about Cambridge, a Thanks. talk Pay and helpful. then you're activity know terms Corporate Cambridge, going I merchants. undertaking the about kind you've But larger with specific little sales them of undertaking. what tethering the about of there maybe there in of And talked on complexion how Very of upmarket initiatives you talk that the about maybe to please. sales what's bit kind and moving some could initiatives of more Comdata that and is talk you're

Ronald F. Clarke

Yes.

is the work say there core (sic) scale. Payments Payments] Comdata I'd [Corporate the So in business, primary Corporates

that all them got a we've selling ton. We're So works.

close year. I grew reported prior sales Eric I think the we think to XX% we in

think in XX% to I same, And grow territory to more again the people. James of scale, XX% key more for plan that our sales more So grow coverage, us is to the year. just business this again that really thing, another has been

cross-sell number early. In terms deals. of the signed still of We've some it's

got XXX-ish of from them, of number half call pipeline. of accounts in about those XX. more I I so XX, probably targeted or the we had quarter think and appointments know don't it with some Cambridge. think And I And a deals we've I've

it's I think I what we're And call create So obviously to still agree Cambridge and we a early then clients to We're getting but Cambridge side, the meet the to XX% step positive. taking analyzed reaction group. account. to don't on kind the some enterprise of position an business size, of is whole whole got, significant size percent enterprise an what that of of their business. call XX% know pitch. We've a hear the is And it we've

in from of going to smaller, senior old-fashioned model And again people, dealer here this company away had. we're that enterprise kind the pour so move the into particularly that segment and U.S. more

to I'd QX accounts. Eric see Their significantly sales So continue sales. you'd onboarding only that XX% up continue not growing say were in that in you QX, up James seeing larger us

James Schneider

Thanks color. very helpful much. That's

Operator

from Sanjay next Sakhrani go ahead. comes Our KBW. Please with question

Sanjay Sakhrani

Thank like of get way to why Is you're maybe wondering, where scope specifics talking then six it we or determine about majority? guess you. I is minority on a the When a cards greater, and would guess, months on the this question the what any about liability the what I it? given be I compromised was that there And I had think or access. potential unauthorized were happened? were just more

Eric Richard Dey

Hey, Sanjay, this Eric. is

was in label ago. discover unauthorized to clients. our so it did processing few or ongoing. ago. next be little there that and its indicates obviously indicates consists learn FLEETCOR's evidence about was. as investigation a more, through where were found obtained detect and of a of the at the systems. week And again no so, very pore And this the defined was found week our limited IT identifiable week also systems – some kind that we theft more color gift of We've to about place SVS there's issue that about weakness things And you our and And again, no intrusion was We investigation to is access. involved any And into going primarily investigation lot give also our the PINs, any We date forensic to have to me or these of personal hopefully, information identify card bankcards on. around some we've what's people a we and private that again card employed practices appears Let out was a no we'll released of over all. data of numbers financial a kind to been

Ronald F. Clarke

Hey, Sanjay, it's Ron.

add that say me super I that we Sunday of what days. a the thing. wanted disclose early aware it's Let just to that on became call We got we on is would

the there's was to on we've only question days actually that's planet why that the short And how, that clients technical portals. it's is people the So to I'd you seen any the few be say the appears question half But been on first headline taken if a is good it's compromised, and will. really news magnitude it your early. studying, five answer data customer there, in the

more up we opportunity our As open into on all there get UIs. systems planet, to the is

on to so if detect And do the that's why people things to look with don't normal, able monitoring that get start is clients it. our it servers the

get it shut down. how able that's was So to

days, we get as more early to So smarter. say

Sanjay Sakhrani

one would pilot. liability would fuel. about that determine for product? that Thanks. to on how the And few my be be damages mean I'm we goes some occur with partners that that would other able base broad there's significant? on unauthorized that customers be Ron, majority guys how the beyond Okay. would did you is question think be customers of How that would clear just your applied it of manifest use of a on who against to you your that And then what customer understand just when follow-up sort and that into where I Is your it extent mentioned might be could of itself transactions how would the are pilot? those happen. And be? I'm or so on trying you. it fraudulent would

Ronald F. Clarke

Yeah.

Let me the on try finish cyber thing so to just liability. the

would information, if liability used digital would be redemptions. yes, So, cyber short that make is to the takes fraudulently card some criminal the that obviously be answer

kind so And someone's stealing at there SVS and XX% and such card the a least with an something is good ones kind thing of physical large plastic stores. it's circa of the redemptions are gift made at of if old is business percentages fashioned news

cards. the to didn't counterfeit there's mag way stripe, because the And no involve compromise so

most stores that balance it business of digital Legitimate electronically. be info And the going normal. try client obviously – the would was we us shut on effectively, we've card down goes usual. as the with that can redeem for like as cards people compromised the So prints the to to

So that the we're in to appears in an update but provide a what is scope. to going it's early limited thing – week... again, Q it days, try our it's And with

Eric Richard Dey

from today. Week

Ronald F. Clarke

bit know obviously in more We'll so more. a we'll provide week, a

Sanjay Sakhrani

you. Thank

Operator

Our from go with Napoli Please question next comes ahead. Bob Blair. William

Robert Paul Napoli

Thank you.

bit. X% The week doing card in, a on following Just your I know – obviously business? Are are business are different considering you gift divesting a – business guidance like expect revenue in you usual it's but you that little a that do only you up I – mean, expect it's or business and a of in your as been anything you've for while?

Eric Richard Dey

as Yeah. Hey, much any at this business guidance Eric. pretty It's from to perspective. We anticipate itself usual material is this business don't the Bob, a point. impact

Robert Paul Napoli

customer think base I asked that possibly of had And think what product, beyond Okay. Sanjay talk fuel, your can use I you the percentage could -?

Ronald F. Clarke

Bob. Hey, Yeah, Ron. it's

So depends the the on answer application. it is

So a examples. couple give of let me

cards and is base, construction, applicable a UK small, of or like like things kinds as more quarter construction supplies would the which entire an about fuel from for the concepts our were this could creditworthy. U.S. concept pay opening of clients XX%, of or AP So other balance, the traditional client card kinds assuming to they of then be card all to the of case general cards a at most looked are T&E. they in And owner of adding up sufficiently bit our admin things we've buy on a

construction instead the the of three fuel into working two a for trucking debit work supplies converting we beyond But we're money the construction would cash. seeing and of this applications in use like of or that personal are know So card ones for thing the which using sure two we resonate. segment business kinds different through and

those So two for sure are working. applications

Robert Paul Napoli

Great. - And Thanks. just

Ronald F. Clarke

thing talked the of on to reiterate. of not time the long-term. that base revenue stickiness of I pretty client very big ton want this (XX:XX) terms that important a think revenue a only in adding it's a reports. capability We the have added we when still last is we idea don't of but kind

Robert Paul Napoli

M&A your Corporate there of of we mean, expect in segments Payments activity but should Lodging a Corporate maybe is to more think, and there to see I Corporate or kind front, are On add business your Tolls? the and Payments? niche opportunities grow the more Payments business which I

Ronald F. Clarke

Yeah.

are We've in have of obviously that And that We primary in have we in – in I've we've me. a some targets categories. got of every we're page but one that obviously front targets got the couple four then studied. the of not spend categories

would categories be not people that acquisitions of think in each the in. that fools I so And we're ongoing to think make we will

Robert Paul Napoli

Are we there like would...? opportunities large so game-changing

Ronald F. Clarke

super The As are call, place things me couple if wise those I'd I of larger in, that, the the pull some But it, We're obviously none finally liquidity are in close mix. tuck-in said in that's leveraging are we'll who trigger. targets. say a a front per but earlier kind of of like are knows? smallish. we there are that closest

Robert Paul Napoli

you. Thank

Operator

next comes Please from Our Pete ahead. question with Citi. go Christiansen

Peter Christiansen

recent guess as the thoughts potentially Thanks market hedging your question. interest volatility I afternoon. quite change for floating current here guess Does that bit of up a has developments. on your exposure? kind and Good perked rate I debt your

Eric Richard Dey

Yeah, Yeah, we're hey, Eric. at that. Pete. looking This is

that. to us we But ideally it. would it in with acquisition. conjunction effectively at would That think hedge for I are looking we make a easier large do

Peter Christiansen

the Okay. the Can PXX what's monetization just there run there. business the And through model us interested in model? you or I'm then business

Ronald F. Clarke

For for us? or them

Peter Christiansen

for No, I'm sorry. them.

Ronald F. Clarke

Yeah.

to basically the the merchants. model by get For is paid them,

paid brands transaction. case and this oil the per to station the brands, get gas in So

would tran might of We mobile fund in fund as proprietary the you the in PXX, for card user, we for some something our mobile. to products, hey a out might to take some a take They we role And transaction. fuel client and example the enable of we as to our merchants would per issuer So example, merchant. that. our that enable can then pay of one say, go guys

click gets enabling They are those they ways two get as merchant app. money. kind the through of PXX then the So transactions and get it it from the

Peter Christiansen

be products? mechanism payment enable your like a And to like FLEETCOR this specific for a app almost would wallet a

Ronald F. Clarke

that or way basically mean, about to come the register then a and connect the me stations, the way the least, host the simple I they systems a through in has cloud at to sitting it sitting Yeah. to app. Pete, gas cash retrofitting. the layman's with to for the point-of-sale do think with up talk or is it in PXX go a there systems literally not an and They in sit talk physically go

app, number to pump The the the host So turn gas comes the station, obviously, and on driver station the eight. connects tells to XX in. host

turn app a and talking And PXX on. so station's the phone, then to host, the fundamentally it's like between the loop the to pumps existing gas the equipment on

be pretty private a it's app. label can It used So cool. as

We the app we places. way be gadgets the all easiest – enough signed a could app the what's like Citibank take got sit Fuelman company, with or We with a the with Citibank them these card a Comdata were mobile had Someone thought have these card, up. and we EMV thought BP it in their networks that seen BP. BP. and into really credit create when long, pain merchant make app it's could make would BP because legacy a directly bought enabled. contract it those – BP they mobile app the stations could anyone it enable that's a XXX,XXX timeline card you and you've or because for come into We if it do of that to making a happened if

lot. And so we like the approach here a

And card this. to we're so deal fuel a bit kind after to exclusive with an chase of space and got the we them in going

Peter Christiansen

stuff. Thank you. Interesting Great.

Ronald F. Clarke

Thanks.

Operator

with comes question next Our Please Ashish Deutsche ahead. go from Sabadra Bank.

Ashish Sabadra

question. on wanted in just to the GFN. taking my for hone further Thanks I

if now? set provide any going color? sales the bookings effort Thanks. think think sales team Do – MasterCard there forward? flat, Just for think how platform is wondering about expectations were the you So mentioned that could bookings but sales that the you on and you've for wondering, you that do worked I how just the some about effort. was bookings you you reorganization do

Ronald F. Clarke

Yeah, Ashish. It's Ron.

couple So things. a of

because XX% had are we green. the some working card still about well; sales product our MasterCard sales we last on is old again, it of people one, off Two, the year. in Three, our platform, mainframe it's move platform. to quarter fuel GFN making So on of went that

I'd to there's problem more six So that from we are bit getting the we performance If re-staff of months, look a last mix. distance thing. improving. say We're the Sales the had. at increasing. a that started is we

again. And so sell the we're growth. the set historical XX% back roll levels, to to stepped the kind expectation more that right we'll at thing but, We're we XX% fuel get is, through obviously, quarters up to trying as next that of of

So as growth. much amount prior when you the sell you year, the same don't generate

that few high it's So thing the priority and quarters. next a productive get staffed to over

Ashish Sabadra

the all bookings Has good that been that or drive incremental for as about then to like rolled can in talked that in maybe uplift. Thanks And the front? out on customer mobile existing customers to product can driving color the some booking the looks Lodging it addition you and product any pretty in lift side, customers, you having your that color. well base, that on digital a there, provide that's

Ronald F. Clarke

great another That's Yeah. question.

ago boots us, around. a himself us, people is we CLC So a button first called all, had of order pretty to the common. showed of I mean, of year idea traveler zero. for kind driving or up phone of But, they're most because again, Every a on the some hotel hitting

book. the those launched the and hey, idea used And a all were us first way that great. that him point. nights year, it so we let's when this XX% that reserved that fact for one-third of the accounts to it give room was grew normal last same digital on app That's The those customers, were and of

and growing Second month. point is, over is we've rolled the it small of accounts out all the to adoption month

our know obviously, rooms, but through you XX% it'll lift. QX could easier again explain pretty run XX% still we and to sales I'd roll XX% we up and And through QX the then, year say, maybe sales and report new maybe the that it's booked don't to then, this as in digitally, now. the review I significantly of being what if in corresponding approach So thing is were an all yes, getting people third, be, QX

just control call phone. it's companies network; network; can your when call themselves pitch So or a on hey, the up guys we they can your new you thing, book and have this

I think present understandable it's to marketplace. more a product to the

on as side So it new help us should yes, the account well.

Ashish Sabadra

Thanks. Thanks Thanks, that color. for Ron.

Operator

ahead. question comes Morgan Govil Stanley. Vasu go next with Please Our from

Vasundhara Govil

Hi. Thanks taking for my question.

toll the to the company revenue reposition to you Just part thought the RFID transaction down? business model to of more it business, and users that the quickly on company, more a move Tolls there use of driven model? attrition guys took Or is go as will an revenue as is payments also a the that to from a people of for plan kind more

Ronald F. Clarke

systems. great a toll a Brazil MDR in a thing ways payment is the the This the free set product, they zero bit that up That's operators, again. Ron a in It's strange as toll concessionaires, little some Yeah. owned because STP, question.

unusual value pretty That's and model because the of the So of who face owned tolls, users payment wouldn't merchants get the could the go to merchants, a company get XXX% it. and anything. could the

working a normal over is, which get like we're parking, on in, repositioning be may change news that and categories we MDR the is car. already time. FYI, that fuel, do So the the good But to to we try other

get at the same obviously And I fueling pilot stations thing. obviously, at mentioned, we So in MDR parking. food fast the the this

right you're so And on.

in the three merchant way grow will the versus the non-toll revenue from we those areas, volume customer. As come more from

Vasundhara Govil

on you Brazil helpful. already we think do those? toll Or had previously Have for coming about timing to mentioned be roads Understood. kicked in? very what three new in And That's year. the would this those I know four

Ronald F. Clarke

They haven't.

supposed was They're redoing gotten there I bit and but they've still. all election. they're or I think been in come a to approved got that you another stalled QX – online the they've two with were election. whatever think They've call supposedly

Eric Richard Dey

Presidential Election.

Ronald F. Clarke

fall. in it's the think I

Eric Richard Dey

It's in October.

Eric Richard Dey

And so I has that slowed. think

They're using if taking right those that them it's about of think tax, were to roads. and it bit you proceeds pay of developers If privatizing a roads toll a effectively. the will you free

don't it's popular. think I super so politically And

So know into is guess the kind but walking don't they bit slow this I just as head it they're a of election. my

bit on waiting effectively little off. have the a built may later, So turn it all start roads. things to have the again, The They're be collecting been tolls. signed people already just but them and

Vasundhara Govil

that Chevron stated Thanks. of Or quarter? still And the one. Any is for the beginning the of quick deconversion? just one if last change the I in squeeze timing can third

Eric Richard Dey

looks see. projected. bit anticipating But we But we'll a a we Yeah. a slower it's the I It – wait than little going by like been delayed guess little It's bit. it's quarter. off fourth the and are just originally transition by

Vasundhara Govil

Got you very it. Thank much.

Operator

comes question from ahead. Matt Research. go Please next with Our O'Neill Autonomous

Matthew O'Neill

my for quickly Yeah, follow on the M&A was hi, up just going I to question. taking thanks discussion.

a line at about points to handful of in deals roughly million I think last the quarter various range. referring that today? $XXX you $XXX you're million talked to Is "smaller in with the deals"

Ronald F. Clarke

Yes.

Matthew O'Neill

typically I see revenues in rest quick abate of going through I a presumably corresponds fuel we this significant were year? spread And down that think Does then materially, forward when which follow as should know the up, a phenomenon increase just kind is Great. prices. of that pretty

Ronald F. Clarke

you counterbalance. Yes, are it exactly right. got things Those

that fuel current assuming so retail week, days. the catch levels a the stabilize, will call it XX a price And wholesale the week in to

Matthew O'Neill

Thank much. very you Great.

Operator

the conference well concludes call. This question-and-answer as session as the

you may pleasant day. lines. and Thank disconnect participating You for a have your

James P. Eglseder	FleetCor Technologies, Inc.
Ronald F. Clarke	FleetCor Technologies, Inc.
Eric Richard Dey	FleetCor Technologies, Inc.
David Mark Togut	Evercore ISI
Ramsey El-Assal	Jefferies LLC
Tien-Tsin Huang	JPMorgan Securities LLC
Oscar Turner	SunTrust Robinson Humphrey, Inc.
James Schneider	Goldman Sachs & Co. LLC
Sanjay Sakhrani	Keefe, Bruyette & Woods, Inc.
Robert Paul Napoli	William Blair & Co. LLC
Peter Christiansen	Citigroup Global Markets, Inc.
Ashish Sabadra	Deutsche Bank Securities, Inc.
Vasundhara Govil	Morgan Stanley & Co. LLC
Matthew O'Neill	Autonomous Research LLP

Corpay (CPAY) 4 May 182018 Q1 Earnings call transcript