FLT - Earnings call transcript Q3 2018

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Operator

Greetings, and welcome to FLEETCOR Technologies, Incorporated Third Quarter 2018 Earnings Conference Call.

As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Jim Eglseder, Head of Investor Relations for FLEETCOR Technologies. Thank you.

begin. may You

James P. Eglseder

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

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

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

Ronald F. Clarke

cover plan two and subjects. Upfront this good here be to everyone to afternoon. Okay. Jim, with it's thanks, I'll

first, our a of and the QX our progress second, So review bit view of of on I'll preview And a results, and XXXX, then for update a initiatives provide growth guidance XXXX. my M&A activities. provide provide I'll

Okay.

the So up We of revenue XX%. EPS and up $X.XX, million, of XX%, cash $XXX to on QX quarter. reported

So Toll EPS high Organic that the in up of finished guidance positive for column, Corporate Pay growth, finishing up cash X%. both categories Inside revenue of good. up the at and up Lodging our the growth, so Gift end nonfuel XX%, XX%, at very And revenue strong, quite X%. even range. again our quarter XX% XX%, Fuel

that the So the of of behind some drivers performance.

So in Fuel, a our Fuel quite card number doing of businesses well.

lots Russia, card, the Our sales, economy new businesses, card of these as was from strong new finally businesses the volume Comdata Australia our new the Chevron on declines lap. of double international network extended and the double digit this four digit of Unfortunately, the combo, Netherlands, of cardlock increases. high-growth digit our our fuel all double and business fleet-wide through card payroll some business Trucking and on lots rollout Mexico, back by Toll GFN we're client strengthened. added the channels. and were Brazil from which bit portfolios, accounts a and really strength of the in MasterCard about And base our up fuel revenue grew offset to of

that times three large-account the up rapidly. small-business In also accounts segment, usage-based at segment. Toll we're the Lodging, rate transaction per we growing do growth. very structure due over the Our mostly XX%, in pricing to that added the to

The Pay, or XX%. construction our quarter, existing channels, usage in new increased from pure hotel reseller direct up another good booking volume clients of over spend ease in We from part the XX%. also up because digital our of Corporate and use our benefited of tool. very growth

So simply put, just more business.

business card significantly, payroll pricing Corporate up Additionally, from was in our based that year. change the a on inside earlier of Pay,

really performances lines. look, our across all So of four product good

fundamentals the onto trends. or Now

same-store in X%. consistent very quarter, So sales the up

tick X% XX%, new QX. up a to sales than with New over XX,XXX better customer retention clients And is which signed. improved

solid environment. perspective, and good a despite a profit from steady So revenue not and continued very Also quarter, growth our QX, trends. fundamentals helpful

Okay.

Let me year over guidance. rest transition of to

year the profit full today the QX overperformance of midpoint. we EPS So $X.XX XX%. growth at reflects EPS in we're $XX.XX XXXX That raising achieve midpoint, from will year $XX.XX result our cash to cash at of the XXXX If full EPS in that quarter.

$X.XX. of full XXXX be would Additionally, full cash XX% year EPS than of $XX.XX cash XXXX EPS higher year

for QX X% Underlying to profit So our issue. expectation XX% revenue finally with to range, X% two the fuel up card growth X% to expected to an guidance we organic conversion as X% GFN is in lap QX accelerate profits years. growth the in

So revenue in here expecting we're X% growth in our X% consistent, pretty last three-year XXXX, X% organic looks and XXXX, calendar year XXXX. in

Okay.

early days do with Fuel in we X% outlook and but me would brief to organic confirm budgeting the our outlook. XXXX X% expectation XXXX be growth to excluding to Let year, our move to want range next that on our still again preview low lines a an an of mid-teens, It's X% in process, nonfuel the Gift. XX% of to revenue in

this Still our XX sort growth through. to of on you to days. XXXX We revenue when will lots for have talk single-digit assumptions macro flow-through expectation upon a high profit we in again view based

Okay.

our Let growth me to initiatives the transition an over company. in update major of

we the more are believe and paths, more As three business with to more customers, to grow growth have FLEETCOR's ample that spend discussed, provides which us opportunity continue geography, over we midterm. previously the

product of each to in more more and underway categories to initiatives got our spend. get attract customers four we've So

We're Visa card like Beyond fuel the U.S. our Fuel. open in the the our to general T&E in UK, in MasterCard which So this both or spend and initiative programs on maintenance, running rails. construction additional growth just us is run up enables to Fuel, card the categories That supplies, initiative and payables.

forms. three taken really has initiative Fuel Beyond our So

cardholders construction fuel. a card supplies for first, can which and construction both So, vertical, construction in the buy

payroll then a And like in one Trucking payroll segment, fuel account. prepaid in the which on the existing Second, then their card our lastly, for within same prepaid truck it a to card and AP companion general MasterCard our can clients card use network. the drivers which issue road to card, we receive while purchase on fuel and

So these three programs Beyond each traction incremental gaining and new of Fuel in to card contribute will are XXXX. live revenue

fuel, expand to or acceptance. rental existing acceptance sites, convenience is network. So Fuel attract Toll second, The even so expanding non-toll users into STP's car making the Beyond idea fast-food, real users there urban fold is enjoy toll of initiative the beyond idea Brazil, progress first in we're networks parking, on STP Toll, added to allow STP's some X new million acceptance the the and so to also the

operator with which recently XXX added Petrobras, signed parking their existing to parking been McDonald's with rental ran through Shell recently agreement locations Brazil to well, McDonald's to so in testing XXX, some adding XXX expand finally So, signed to fleet. largest companies to we signed and cars, recently of we've we I the which test now in XXX so installing we're airports, a tags new an malls, with rental and sites food, then Fuel, the operational Brazil, new Fast news two people the now. sporting the largest went drive-thrus car line; STP fueling events. terrific speed

way. locations. large long provides for we base customer acceptance toll believe we build a really to will a out mobility think broader expanded this pretty on fundamental to from payment an long, only turn our as We company new electronic we company STP these So, is transformation a which

So making next Lodging, good fronts. there a on couple progress of

business small in quarter, this digital of ago. QX, up room first zero So booking, two expect all just be electronically. lodging from years booked XX% to we virtually That's nights

it makes new spend existing clients. a more SMB increases among clients, only not obviously for attractive lift this So our or proposition

convenience as Second, proprietary to on network more to network give plan bolt expand stay. clients our we from hotel choice our in which to will locations locations we XX,XXX where a XX,XXX

So expansion out QX. room client further expect in our this once we rolled network to it's nights lift

pay full invoices, live call XXX% now or are in Corporate what irrespective ASAP Pay, we've client's paid. we the of pay with the automation really bills how we Lastly in solution gone of our which bill

who's live. this We're this Our partner to clients out growing solution, our field sales small own been building is some now and complete Avid, this up and time initiative on signing our rapidly. and is distribution. quite We're at for digital

our we will to be it So, business different and core incremental Pay Corporate a this customer. think targets because initiative smaller

generally is new spend. target existing we're So new or the each They and or working I our more clear more customers growth in initiatives a among of incremental users create hope so businesses. spend four users, chasing more lift, new and/or segments message of number

Okay. is Last up M&A.

are which We front also a most are within as quite product So new our existing number on of four card explore usually currently gift working do active M&A homes transactions, of business. we we the our for continue to report categories. on

time, a have As better hope next on I to every view we time speak. say that

So, from quarter XX% perspective look, in fundamentals over continued, QX, in the a profit and summary, growth trends. good and our consistent

the we'll we the growth high consistent over growth set a initiatives be We year year, than XX% growth to profit we're full which XXXX, XXXX expect XXXX. full increase a in be deliver greater finish a outlooking would good for EPS which XX% versus think organic on And M&A upside opportunities three new will present with some single-digit of that last progress that and years. organic revenue time. finally,

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

Eric Richard Dey

Thanks, Ron. Okay.

I method will January previously, via ASC in And adoption, quarters want in retrospective Before effective has results two topic get revenue on revenue Under the numbers both XXXX method ways. recognition I are company about adopted new to remind this the modified I've not standard, the restated. that the started I talk XXXX. as everyone done X, of XXX

compares as then presented which for ASC so to adopted, compare using it. XXX First XXXX we historically way using you and can will the XXXX GAAP of standard. the revenues I new new XXXX the standard prior XXXX never And was the XXX have using discuss convention ASC revenue

onto quarter. Now, the

or we included million, commissions revenue, ASC now third of that numbers up from And versus X% the and as compared of quarter third of XXXX. the third approximately which Included XXXX $X.XX against For the netted from XXXX. prior XXXX quarter the in third the decreased $XXX.X XXXX per diluted in share the quarter of to quarter sale million changes $XXX.X in our are the on GAAP resulted the diluted of was expenses certain third-party NexTraq offset approximately per reported $X.X investment cost quarter net sold gain processing charge $XXX.X that the of a of revenue reduction income Also million from on which revenue quarter $XXX.X of of XXX from of NexTraq approximately net the arrangement resulting quarter XX% $XX GAAP a reminder million XXXX, quarter third equity the million impairment a third in our from XXXX, to accounting was in $XX of change share GAAP method. revenue an in of in business third standard, basis the caused million merchant a In standard. in benefit a to our $X.XX the under million business XXXX. recall Masternaut of partially or in third a by in in

positively be provided per the to EPS. the press cash income is And convention $XXX.X standard $X.XX ASC the standard would net new quarter that exhibit in the also revenues XX% revenue XXX to the increased XX% as release. quarter net exhibit adjusted GAAP XXXX financial adjusted $X.XX compared refer these in mixed revenue and experienced to And primarily with XXXX. of million. third income of mostly share provided by of were impacted most quarter $XXX.X down reconciliation the excluding of quarter net ASC and share to of favorable amounts $XX income approximately to we we'll exchange excluding sometimes XX% our press in in net Brazilian the net million. environment We from our calculate in cannot a numbers quarter prices third also income precisely in XXXX during approximately although believe for the revenues income were XXX changes, finally seven the about exchange Movement $X.XX of the the macroeconomic of third per revenue rates approximately these third one million up diluted approximately of a to is the of XXXX, XX% year's share in cash roughly million. $X spreads is million, levels. impact up release. XXXX. Fuel which believe from compared impact ASC per the adjusted by last provide million of $XXX.X the to discussing million between XXXX. the We impact comparable quarter approximately Revenues quarter foreign of we Adjusted positive were third had rates the impact as of foreign of reais, XXX, third fuel been compared XX%. income $XXX.X prior of have Excluding GAAP items, the positive quarter. Non-GAAP And the increased or revenue negative, net diluted impact using $XX to to during compared impacted we periods impact metrics which A in are negatively currency quarter; new

unfavorable XXXX. quarter changes as about the So $XX our changes impact call in movements quarter. third impact offset foreign the resulting approximately last negative million. our million quarter's revenue in of rates of net Most the more macro this gave performed of quarter. total, third quarter revenue on slightly those guidance product earnings major XX% had well compared we net than during were exchange negative versus of on Organic $X improved revenue the impact The with a of price, to overall fuel categories macro negative higher in to a growth

the the The was both grew expect was of the our Fuel business well XXXX of and during Payments businesses, which by the and card XXXX Fuel exit quarter. Corporate organically you the the category excess this and the primarily quarter and impact if range. exclude driven we started up single-digit of would both was everyone, driven and to second negative impact our adding been expected, GFN spend. To was X% and in in have growth end The Comdata quarter. lapping X% of conversion As category Payments in in the to The card in in upper continued perform at of XX% Cambridge the XX% in Chevron the conversion accounts the Corporate at more remind portfolio growth year by more category quarter. growth approximately

quarter, category strengthening driven Our client-based in new this economy, existing sales, Toll the from due primarily of our new XX% structure. Brazilian by a business The more usage-based the another organically. and was great combination had stronger of growth up pricing growth to

the We and expect room FEMA did by have Our an increase Lodging material any room from business third benefit driven XX%, about hurricanes quarter in not currently the benefit was XXX,XXX primarily up still from nights. in do bookings quarter. during recent the next

quarter benefit. third of FEMA also XXXX had million The $X.X of approximately

the rate Excluding the in periods, have FEMA benefits both this would XX%. approximately quarter growth been

both category strengthening be from GFN issue be more approximately moderating we reminder, quarter last $X in million which would of nonfuel lap to some of in assumption digits expect organic the X% conversion rate at FEMA quarter we I of will as our lap we as Fuel the the fourth quarter last segment higher be categories in organic the that remind of quarter. be other to single you and the growth Lodging some growth calculate growth year. the for cause has periods. Included standard reported low organic in in our benefits will for range to January revenue the targeted ASC a was in macro and fourth been revenue order of a calculated, All-in, growth of the fourth in there XX%. in approximately to the assuming XXX using XXXX year, consistent fourth growth potentially growth implemented was in organic impacts As organic adjusted that

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

Excluding these of second expenses would last acquisitions increase X%. have been was due approximately year. half impacts in primarily quarters, the both to up The in completed operating

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

quarter losses XXX, Depreciation compared would basis or XXXX. approximately in the $XX expense Excluding had exchange the third XXXX. $XX.X percentage or favorable foreign increased a The XX% $X.X points, decrease rates, X XX% X% basis in to to third of XXXX the ASC to interest buy-backs. of have The primarily million million of Credit acquisition as total expense primarily decreased of operating revenue were due and in borrowing due compared XXXX was of in the third third expense share to $XX.X the on NexTraq and the quarter quarter amortization of third been which quarter, Cambridge Interest expenses. in increases XXXX. business to million $XX.X third sale a LIBOR of third was for quarter the million XXXX. increase and million, quarter X impact in $XX.X to points, quarter in and million in the of additional the from expense the for

expectations. The December which due reform XX, U.S. realized gain of of primarily nonrecurring in the is Masternaut was the and NexTraq the reduction quarter to tax on rate the line the Our Also rate was third tax third effective XXXX through U.S. business our the XXXX our million rate quarter transition of in reform. XXXX. quarter transitional into by tax tax in XXXX the $XX XXXX. adjustment, which we was quarter originally rate impairment effective the to at XX.X%, for the a in with XX.X% for exclude third conjunction sale went XX.X% XXXX the XXXX tax from was effect charge. impacted compared the tax the of of third the impact of end of provisional included quarter liability XXXX tax the The with If true-up recorded rate

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

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

in $XXX shares currently facility had borrowed securitization the repurchase have the common $XXX end quarter. million our and And third stock in available. of repurchase also in we We of any at we did the not total capacity quarter million

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

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

to the outlook update XXXX. on Now, for the for

We are results raising reflect outlook. compared our XXXX our to quarter prior guidance to third our

been exchange our continues last be improvement has especially since there Brazil. While some rates update, in volatile in it guidance to

in the We to share we The quarter, continue in exchange line second businesses, in which remind is full continued our we guidance impact lower foreign movements we some August favorable from believe and rates the news impact to be the more reflected believe third and that macro quarter updated count the will roughly our guidance. the earnings in than from did expect expected offset revenue currently the the million in as million, $XX good half. through is, unfavorable expenses call. macro $XX overperformance fuel approximately in year the impact lower by can of continued offset will that prices everyone, we To with fourth

The been be late an on agreed terms the second and to. update portfolio, quarter is looking transition those and quarter. in Chevron start the expectation that to selling for the early portfolio fourth we will the portfolio complete for transitioning in for the have Additionally,

the a that million We perspective in any receive as estimate from guidance And These be they're revenue follow. approximately proceeds about a and modeling million XXXX we for in proceeds from to of $XXX taxable result. XXXX gain of will result fuel a our $XX expect lower to from will excluded sale.

related be gain and is per $X.XX $XXX be $X.XX. to and and million ASC Revenues $X.XX Net So amounts the net between adoption billion. billion I as diluted between Chevron just and $XX.XX not $X.XXX ASC with including do and And share all and to $XXX the from Net billion following $X.XXX diluted and be between between income million. between million to $X.XX that portfolio as Adjusted out the $XXX billion. guidance of XXX of and revenues mentioned this $XX.XX. impact per the to our of Total the to $XXX way, include income excluding net share adjusted sale. million, income between XXX income to be be be follows:

up assumptions the as X, balance sensitive of tax year. in October the Interest we and following. shares. equal the XX% said, and in businesses for million, average to to agreements not the XX%, spread equal XX preparing acquisitions $XXX fuel rate million have gallon of new movement shares And to that for include the some the seven-day partnership the no in to exchange fuel Weighted diluted of it those fully made the of average operator, U.S. $X.XX Market XXXX. equal XXXX open prices expense retail questions. the already the per of average Adjusted material price approximately rate for of related outstanding foreign guidance of we'll or disclosed. between With impact the

Operator

be follow-up. main of question limit we asking yourself this one to and and please At question, be will a mindful one all question-and-answer session. participants, a conducting When time,

comes your proceed Keefe, & Bruyette from question with line Sakhrani first the Our with Woods. Sanjay of question. Please

Sanjay Sakhrani

just the Quick mentioned sustainability you about we question you results. Corporate know, of out we and about Payments should I growth but acceleration. on the new should those Good talk growth associated of that and and growth think of accounts could for, segment? Thanks. sort this look accounts, the rate rate Eric, how with spending what

Eric Richard Dey

accounts the Cambridge good spend, got we The Payments got and business two accounts, the new Comdata is Yeah, majority obviously have. the on hey, business the Sanjay. additional of business. the or Yeah, about vast thing basically the that to or growth, all incremental that of already existing there's Corporate pieces we've spend we've spend is

a most pretty very basis come easy the the very, given a to to new predict a business in guidance go-forward to time middle kind in strong we final on also really, we particular our healthy growth takes of year, sold, obviously category, as related that's And as any to the obviously a going business. it next I for actually rate are any as the to numbers process an would kind we're From it's kind been budget on-board expectation expect growth next has any really, mid-teens of so don't perspective way some of pretty account. lapping speak, business be we but of already new XXXX of in year, it's of revenue have that rates actually in So a period XXXX.

Ronald F. Clarke

it's around me – were the in called volume the of verticals spend Sanjay, remember the the Ron, let growth. I kind out growth just the XX%, add

couple other which again, tick way, probably the a in back the there little a goes bit will healthcare next So other year, less is and which price. us pieces bit

probably ends year, So our Eric XXXX. for say well number if up numbers this said, you into where the said XXs are I'd XX-ish the

Sanjay Sakhrani

that clarification impact, the in you amount impact? to XXXX. have revenues that on Chevron to ex mentioned in the Okay. you're you Great. because pipeline. And just you to the a my you're just deal sizing follow-up, maybe Thank a market capacity? you looking incorporate anecdotally was Could or And of you there's the gave outlook that that active for just you. preliminary seem of decent for deal speak organic like at, one Ron, Did and

Eric Richard Dey

guidance that of apples-to-apples – we're X% on the through we've of we to kind basis, pass growth that kind given rates middle are Chevron. within but gone X% budget range Sanjay, would or again, XX% in indications that all speak. of are as the of Yeah, that range, mostly We've of previously that the the kind so yes, our exclude into the was budget, obviously first

Ronald F. Clarke

on me. And, Sanjay, the front I've deal in got question, of

million. two to like I million three deals, it's and $XXX then it call plus, we four, call normally $XXX million a deals, handful, or We've decent-sized So got mix. or report, it of million $XXX tuck-in $XXX kind or three a think

basically the or looking as be the So those would six closest they're four things opening, are in inside the in. I'm five I at categories. of all the mentioned And

Sanjay Sakhrani

you. Thank

Operator

question of JPMorgan. Our Tien-Tsin next with from with question. your Huang line comes the proceed Please

Tien-Tsin Huang

to Thank a What's highest upside you. is. And what quarter. the I in Understanding Thank previewed. you. that fourth you in couple want seen of driving organic XX% I improve years. we've quite to or growth, you the the And XX% Hello. the back That's X% brings it's on growth ask called this didn't Fuel the the the above quarter. down fourth well the upside? what that catch quarter? as in should out

Ronald F. Clarke

Tien-Tsin. Hey, Ron. Yeah, it's

the way all again, nonfuel were up. The big things. couple three So

Lodging I think, XX%, Toll was XX%. XX%,

crummy the again, number were the is a comment our obviously, in those, positive X%. So Gift of high. And kind QX, the overall quarter." If "even got then organic my called brought plus And out that, then you X% down. of remember, in which at sequential Fuel thing Gift. column I into it had super bumpy

gets that mix the that's XX%. So the

the into non-fuels. obviously, sequential And the super-good change, being growth then is honestly, being three think a to continuing, the plus bit Gift column. the I low in

Tien-Tsin Huang

digits in Gift to get Fuel back Right. normalizing, high you nonfuel quarter, up, – piece And in the some the the fourth maybe single plus the just to that's to in normalization moving the quarter perhaps? with fourth

Ronald F. Clarke

exactly. Yeah,

So I'd of numbers this finally say we're it I of those X% lapping recovering, have speak never GFN in kind in don't because again. but call have all Fuel, again again, hope and mostly QX, front thing me, to to of we

mid said What into Sanjay about, some think and gone the So to teens. the out the some price. from, stuff moderation high about that'll then by coming And I XX-ish we've as number. of Pay of to down Corporate be kind of,

And kind the I prior some nonfuels. in come see we'll of those three of a year. So the we flattish numbers bit to back have think

QX. it's So in little other three because couple be same. as down bit the the more It ticks won't high a a quite of

Tien-Tsin Huang

Understood.

on my So larger just a Sanjay's maybe year. pipeline, you follow-up, on done over the haven't acquisition, question, the M&A just as follow-up to a deal in

buy back some You tied Don't say if not. materialize know fourth stock didn't you if But to in we third or those fourth don't if quarter you the can these deals here the shares in quarter? could of in repurchase are quarter. expect

Ronald F. Clarke

looking say my screen comment clearly at to can I I'm would hours opens. our that you. XX window the at, That in be

be here. will opening window our So soon

Tien-Tsin Huang

good. Very

Ronald F. Clarke

at this will Yeah, buy point you expect should stock. to be we back looking

Tien-Tsin Huang

Thanks, Ron. Thanks, Terrific. Eric.

Operator

Darrin comes your Please Our question. next proceed with line the of with from Research. Peller Wolfe question

Darrin Peller

All just the latest to your on if you of right. this the just us on just on, necessarily if exit MasterCard – rate X% timing the just I drive blocks But sustainable off quarter it to could some not start is remind to what timing that like remind it really Nice else call yet? just I include at to deconversion. to tough growth you're about sounds Thanks, talked deconversion. fourth for And X% the know all? guys. it anniversary-ing in the XXXX. want of including the the, of Or you rate Chevron's get organically that us what the going it is fuel to growth. us on be impact X% then Does didn't of new all job the first there. building else X%

Ronald F. Clarke

Ron. Yeah, Darrin, it's

XX% the obviously, our reached say finally landed forecast probably get agreement. an is story you into the year. as it the of we I'd And next keeping we majority or that that, plane then, quarter, and Chevron QX anticipate call XX% the have in off on So and rolling in

grow-over Sven which really of super-high businesses, double QX. in the what MasterCard kind positive called out. They're is digit. gone. getting the looking our of of is We've again then step-up And set the four I'm performing are page, international. all GFN one. NAT mostly business digit. the got The at the business, yes, I And point like some double that's two, the businesses, point So rest is

very finally organic So I'd of require pretty sequentially growing not I'd say two we're well in doesn't we're lot at doing. lap we what as that say delta things comfortable a because the but print, it really X%

Darrin Peller

That's Okay. All right. helpful.

mean, mean, good on and have some anniversary I in pricing that. terms quick corporate, are what we that contribution? Just deals area like and traction kind talked of Thanks. some lot I benefits, of just announced wonder but in you I if already, It to to good a follow-up. revenue going you McDonald's very the you're in growth seems Tolls. of quickly terms had RFID, you've others. of signed about going XXXX XXXX

Ronald F. Clarke

Yeah, would again, drivers sales And for so the outlook behind say the be mid-teens I'd again, probably that new again Toll XXXX. channels. the be would

again, that centric most number than kind revenue centric is it our of user of is tag so So transaction, is or – more active than growing.

things. to expect year fast Primarily more a incremental for we but of We a in Fuel, for said bit then we car. Toll it plan tiny And side revenue even have little the as food layered in Beyond rental bit this grow the bit of next even the year. a a bit next and

next call pace or of Beyond Toll be in it, plus Tolls XX% So this of the the think network. I minus, year function a will

we'd up see get So of sooner a bit And out a the bit we if we on slower maybe get get of upside. slower, and the open lift if up block down. it it faster it the open out tick blocks some we'll

the We've sign they're year. up. contract partners We've the think the the over to all thing, term. from the gotten this we drive-thru with test to go headline country you us the like McDonald's locations in call with signed the quarter I between today and XXX a to and have the done moon next the guys So prospect like testing, again, is, long for

Fuel, so, we've in Petrobras beating And same to the up. door and down the sign the had thing

ready and go a at think, timing question. more I stations new million fuel up I it's already than the get we will drive-thrus, the new juicy parking think that to a So, and that users of question show money lots new are X kind and

Darrin Peller

helpful. really Thanks, that's right, guys. All Okay.

Operator

proceed of comes Sabadra with line question Deutsche the Ashish your question. with Bank. Please next from Our

Ashish Sabadra

trend. My Thanks, on for solid congrats initiatives. and just growth Thanks the more go question, a update on the wanted level. to high

more XX% like, growth to on as think think we the out, organic X% initiatives, these XXXX, years should As about you and in these to contribution initiative about target? importantly that growth? growth we Does should your growth how from think how the the to progress three reinforce we but confidence, your make contributions

Ronald F. Clarke

I where XX and if existing that that that that look each the the this size the Avid Ashish. nonfuel in at so you is at market thing; two you Yeah, you the attacking. ASAP, the X:X look opens what Brazil partnership Toll Fuel, I customers Fuel the businesses, over times to about fuel it midsize of fact Tolls and of is in is we're spend, mean say market million-dollar up the size times question. that three It's the I'd is Ron. among right spend think think I is in opportunity guess our the

businesses we're main think way we're And of is that so open these to the up in. opportunity things inside four more the that I already reengineering main, headline

get I'm trying question. how a And think those targeting customers networks just, what but adding the to each I should spend we the be new pipes distribution to already that it's we segments it built. those get in up not we've can incremental and/or we're It's because so And hedge fast of got. how But more pretty onto it's cases. stuff can incremental conceptually it's fast doing pacing

you say roll we stay to we're them, I'd should lift clearer that but of a as the we running. give it So incremental view we'll crumbs, bread think be where tuned

Ashish Sabadra

That's great. question Chevron just the helpful. deconversion. Very on Maybe a

might offset line $XX on out will $XXX you're it the can as the take how that understand we As that to million an impact getting headwinds Obviously that? obviously have the to in well, revenue, able to earnings plan do of us help you XXXX. just from bottom be sale, how the you you offset million

Ronald F. Clarke

to did full our it's the for case the in think I said. so mean it the was done, I you hold there on some what year. consternation Yeah, really, call thing of mean, we I thing getting

$XXX deploy And is helpful. growth buy is rate and to so there second, or news, the the every good is can in pony the back any, think experience million replace I we buy stock either the to obviously it, earnings is, a if there's

Label some leave next this to So we lap ways different RFP is a grower, That growth. thing helpful as in a we even be that, Private not in so will as direction. go to and prior year actually it

try piece I'm paper, the a on side. we'll short to side spend growth the for lift So for if in bit new to even money invest. use sell more money to have the We'll we full Phoenix have capital example, maybe We gotten more telesales can on hiccup, the a Chevron's we'll in more place is declining a And just answer I at other so plans earnings. got to XXXX so of center, look replace a some to XXXX investments the digital in sales pour working we're year of the likely bit of our think year, looking into, we've XXXX. that this the we're We some other make. to the opened a on finally and that you

Ashish, more year. likely, to So it's that spend next more sell we'll

Ashish Sabadra

Thanks, that's great. once congrats Oh, and again.

Operator

the next line with Togut Our Please Evercore David question your comes proceed of question. from with ISI.

David Mark Togut

Good into And you. sustainable you the in Thank retention? in to see level highest about XXXX? step-up the be least you to think Can in of whether quarter, the retention talk the that's the two looks drivers that revenue client at higher years.

Ronald F. Clarke

MasterCard then sequentially, snafu, conversion are, MasterCard retention our it's Yeah, than of as because And retention say they're improvement have innately generally. the two they Pay again in higher tick larger would it the it's STP those growing leave business, David. file, in the businesses faster, say and main second, compares Hey. of they target Ron. the point so drivers again, getting so mix, are as one card I Corporate we and kind accounts I up I'd against the Fuel It's mean, numbers and a better. grow, levels

better the improved higher-retention MasterCard those to two businesses. be mix So It would and would retention drivers. be

David Mark Togut

was buy of new toll Appreciate Brazil electronic STP, growth as clearly long-term your roads we've Then long-term could How in my that about and a case on talk affect does the follow-up, president for that. expansion in got that you now. view case STP? part in Brazil,

Ronald F. Clarke

good a question. It's

in, and that news is finally that back next One bid going this toll approved, one's believe, two actually to, I I be were roads. or the ago think rolls I So and year. know, those and live good will think live live. there three one we're up, This I they're four going don't one quarter years are, is on and

toll the business, I to we'll revenue and piece. elected which think in knows. worth I'd guy seemed It pro our country, that's is And kind was maybe then say pro the who of X% that of X% incremental capture like privatization.

– attractive as be keep income more a an pushing to toll would to to do. certainly roads obviously way so generate thing is And down and taxes

say in tolls that of sitting they were So put bids I to know a on. were that were a bunch kind stuck of backlog, of to – roads were there's going

I that. the to know, would be I a So anything, plus don't think but election, if

David Mark Togut

Congrats Understood. on results. strong the

Ronald F. Clarke

you. Thank

Operator

of Schneider Our proceed question from Goldman with Please comes Sachs. the your next line Jim with question.

James Schneider

question. bit respect business accounts in my with processing, if to term Thanks could little to of plan Payments payable Corporate afternoon. terms with Good forward the was respect for you wondering longer provide that extent are taking I deals your maybe products sense of to the either outlook just a take you the are that or of what the types a in new and of kind give pipeline of to that invoice some area? such are in new verticals, us maybe in as product out market, the where

Ronald F. Clarke

obviously companies know, exact that that on businesses in but comment wouldn't – our product look our and our things, any around lines the deals we obviously we nest ecosystem I Jim, four in specifically pipeline, Yeah, are that are at. are

on care million I'd Plus The core spends business is out company if is at So kick million the which shrinking. we're thing's level, growing, the growing we're the high the look, of selling ripe, you XX%. to health $XXX say $XXX a size that kind ton.

next the year that a sense get it next And we've so to point for made plan year. sales to because in made have Eric's we just we already implemented

So we business sets the like core as it up.

on targets $XXX because for down-market and have we're do literally is totally revenue the working launched big or $XX in file this I what entire million AP modeling million $XXX to it mind million and is doing some million that to to where we've different incremental $XX things them. we take accounts think that been full the others just some and our thing opportunity demonstrated in big, finally AP that

acquire we're in way look bigger on the going find that are get we a build keep in we position thing, or the as a that would small either think, market. certainly to we're and to lifted thing going behind off, I betting that businesses But So the internally midsize deals we're that be would space. that to accounts through primary to

James Schneider

at there Thanks. and healthy color. or concern maybe have clearly seen, there from these a in transports that be of X% lot of level helpful market, sort exposed talk That's broad a with might or consistent the is seems some the then sectors fairly softening what perspective. macro a of kind to, same you just the growth industrials macro there can a And out but other kind you're the sales whether of you it's

areas what would would areas, the perspective, just terms I data that leaves curious anything softening market real-time there or be So so kind tea are you're the with and in and things are getting kind respect suggest if transaction of better? of not whether any to in what end of if an seeing

Ronald F. Clarke

of Jim, categories. provide businesses of tough and geographies lots again of Yeah, to of and a is lots the it's for because us metric, number we composite a forecast lots

think, reported, Eric, X% quarter. say I in that X%, prior the the I'd we So

Eric Richard Dey

Yeah.

Ronald F. Clarke

It's super loss in an which of Penney, J. really C. SVS, healthy. not account was a

is high, Russia like growers that we've accounts, business super So like Australia non-trucking the STP the got always Lodging was because high. SMB and way crazy of mix accounts digital was tool. high, a of were strong high-base actually up Pay. Corporate

of we structurally So see same really type don't in any vertical anything of indicate store the or down slow QX particular kind geography. would in any any that like

that business card thing one a account again, the it little in So only we gift our – again nicked was, saw bit. the that this

James Schneider

you. Thank Great.

Operator

the with comes Humphrey. SunTrust proceed with your Turner question. Robinson from Oscar question of next Please Our line

Oscar Turner

Hey. Good afternoon.

wondering strong it the what those main in cited part. or non-tolls term? the long partners what speed seems as have Toll the in revenue segment, And So it seen new-partner the on opportunity have look so then core Is based STP on in the do just or safety versus at momentum the far that value with guys pretty you first questions I over non-tolls was how proposition? what? you've you tests signing

Ronald F. Clarke

Oscar. Yeah,

There's just McDonald's you're speed and obviously security that thing I today, the of thing parking like in not reduction people think you for that have one down the two right? in case Fuel, – is Of Toll. the attendants things, and having are lanes, having on females as security your their cost so roll about right, obviously and you parking where see the of but They particularly Brazil. even where automated one convenience, one windows. to think, the And point, is fueling. to Fuel, don't have

up add having down, thing as put and think the not I'd one just pulling guy innovative is the but window I it having payments. So them automatically also showcases to the said McDonald's another that refueled. And in

So your like a on. car turn pump lot of have the mobile or do things the fueling are to trying guys

the in got McDonald's easiest be to that show, And say. so hey, think pay another and innovative, versus get thing the partners guys ways we've fast we're food would out as to I other front

I communicate think help X then it. we that to. got fact like that and talk love direct So they million can the and And obviously users, they with, we've right, basically,

And partners the those the with – parking those that benefits biggest I guess, they major think the you're see. be, evidence like The So I they're guy. ones right. benefits biggest would is contracts And that the us. signing

of We have two the three fuel biggest guys.

five. whatever, guy fast biggest factor by the of have We food a

rental car we're So company. talking largest to the

biggest talking So they've to the got. we're signing and very biggest that partners very partners the

Oscar Turner

second just that a for then on mix. question color. business And one broader Thanks Okay.

revenue under-penetration from away just given should investment, envision to few Tolls, I a Payments, then And wondering some markets? Corporate strong mix expect years, businesses the organic command color give shift nonfuel relative more Fuel? given or Just continue those if we it's guess on in businesses. in we M&A, related, So can that Do card just et you see next whether cetera. mix the the looking over those growth the you see how you

Ronald F. Clarke

at math the are mean, I math. guys good you I think Yeah, –

the lines A. I'm Probably new some what obviously at of nonfuel. there's three-quarters rates is the the takes acquisition think have in fair we're the outlining looking these I And obviously we're couple this last that looking up, of differential or nonfuel of are fast, So targets. targets, number in and year at mix those categories enormous a least at, growth year, growing years, business potential. that of B, this

say I'd we'll that things probably nonfuel. So that pretty are it's acquire likely

– So XX% it the Fuel the is be or the point want clear to barriers it, lower. years are card And it have proprietary And is there like the XX% be love mix are that to unique, incredibly I But out, business. we love can – is protectable. on we we in massive of one And answer would is have limits it you products we which networks. that we number three people super and because probably I and the look it. incredibly love make

aren't So it's markets model our mind business of and than those in things super high The big. just big, is the card structure some a the but quite different other in as maybe. Fuel they're plenty But businesses. defensibility

businesses. better, business, because want the go, are – hang the business And it's and our We to up we'll great Fuel call even in in and the a to business. businesses this So be average. business. want Fuel I nonfuel line get people we oh, only Eric, like margins keep like And buying than Fuel the the don't they profit

Eric Richard Dey

Yeah.

Ronald F. Clarke

up" don't card take "giving on we're So that business. the Fuel it

Oscar Turner

you. Thank Okay.

Operator

proceed line the question. with from Glenn Oppenheimer. Greene comes your question next Please of Our with

Glenn Greene

Thanks.

seemed comment segment, color a us Was incremental wanted you growth also XX,XXX clean like made quarter, may still grower And mid-teens of the to Can driving not about, I a And to have the on all clarify it is to reasonable to a just but think from Just XX% that? it give sort little XXXX? a what's go that? benefit. like you would of be meaningful FEMA bit sort the this, XX,XXX also locations in the locations. going any from growth. missed Can you back really Lodging this more And it online tool? booking

Ronald F. Clarke

is growth so the what here. Yeah, the first drove one

FEMA. Virtually You're correct, it much not none. was

selling than book We're losing. we're business selling growth losing and was way small the One, more I all So XX% things. XX%. think the two of really the

group's that big business. ago When more obviously that then, what where up nonusers adding add of think, that then, bit their more with in And We're many we the account way we're soft. the was has had were lastly, taking they're booking is booking So new mentioned. are us, versus the of there the they growing the because faster. previously business a users gotten of I tool nights actually a we thing, spend the room getting because tool, more don't study we a accounts from year while And tool. you healthier. there with some. two, We business think, nights accounts us but room And the

So that column. thing's turned into the positive

those be think the I three. So would

mean, mid-teens year, business? If of lose, the the a sales using hack which we would down more accounts. FEMA, FEMA in out, thing, we prospects like out low any amount we'll FEMA to no from in got big and it you who healthier the people of be So Houston somewhere more the digital the a that XXXX. fair teens. high of, we bit the I it than is mid-teens. my back probably a be spend tool, Yes, terms FEMA particularly the have for to next into And if guess knows would do into

healthy extended incredibly But in onto network is the last hotels XX,XXX idea? thing an going our And then bolt we'd network you QX. zero. to another asked, it's So business. obviously the plan next We're

room that the when we'll not run And think we'll room and XX% want. search, so up got people we've if a so nights incremental finding up, think they more now, you pick put XX,XXX now that clients are nights choices room from basically we

and head QX we should see as some so into QX. And we lift

Glenn Greene

gift an just of Okay. And are on tell but old know resolving portfolio. Anywhere resolution quickly, What it's card the topic, options in then close you're terms coming that? at? us can looking I to anything to the you

Ronald F. Clarke

bit Yeah, broken this. a on record little like I a feel

out, but a are, people. strikes we're I that far don't structure a have of know, pretty Series new new along idea, this a with you're we we couple do with three concluding World So,

So been this working was we've thing different a on.

or won't either say but by or we have an hoping talk I kind the found won't. next This I'd answer idea. this, our I'm that we this, say So that last to that time is we'll

It's to issue to get And so retaining talk executed. it's idea and if into lot allows don't the the if a work, growth it out, it's quite earnings structure an it attractive so idea and we're we us it. But again can then works, we revenue this we retain if get it a attractive. and an approach, get of and

Glenn Greene

All you. right. Great. Thank

Operator

and gentlemen, have reached conference end Ladies the as our the as question-and-answer you of your we today. session participation. for well Thank

your now disconnect this time. You lines may at

Corpay (CPAY) 30 Oct 182018 Q3 Earnings call transcript