WEX - Earnings call transcript Q3 2017

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Operator

Good morning. Thank you for standing by. At this time, we'd like to welcome everyone to the WEX Third Quarter 2017 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. to conference pleasure Elder. to my now turn over today's Steve It's the is Sir, yours. floor

Steven Alan Elder

submitted Simon. an and Relations of Holly, also is and CFO, posted A issued our you, morning, copy has morning our X-K Melissa President release included to been Roberto been website earlier our www.wexinc.com. this and the the Thank has CEO; good of SEC. Smith, the today Investor we release everyone. to press in we section The With me at

identified our X, SEC with in the various XX-K we a intangible Form GAAP Reform related specifically results we provides you certain foreign compensation, third result those Annual net factors, those filings. losses Private subsequent the Act and unable As of our and income. to debt for Report our XXXX Please forward-looking for Adjusted and discussing remind adjusted of and to net forward-looking the to will discussed the cost adjusted I debt acquisition agreement, items, Litigation reported instruments, adjustments in an to other tax-related year's guidance we reminder, may be factors of net to elements GAAP on XXXX. SEC press would statements discuss divestiture-related currency on of certain like from and tax that receivable predict explanation March materially and non-GAAP non-GAAP GAAP are items. release remeasurement net income risk guidance non-controlling press other in costs, basis, on quarter this see and statements that a amortization, Actual income call. adjustments Securities are a gains restructuring derivative metrics, restructuring excludes company net including gains as unrealized during acquisition-related release included differ basis and filed amortization, also revenue attributable interests and our on results. Exhibit on earnings non-cash income X ANI will a and issuance under stock-based The as losses, reconciliation

may we update to statements the do obligations future, we so. While disclaim forward-looking in any

forward-looking place as speak which undue of I'll reliance today. that, should of Melissa on call turn over these not statements, With all You only Smith. to the

Melissa D. Smith

our drive re-signings expanding report and to Good of core share on line encouraged trends, as thank to adjusted our compared this technology, of execution third growth is bottom and Earlier overall. quarter, pillars competitive last existing Net us was net this allowed share, year, morning, was highlighted fifth of joining everyone, favorable top business. and delivering strategic pillars to and and all Contributions across growth solid strong all by across wins for to growth, a post basis through drive leverage this lead to by The of $X.XX $XXX gain our third customer today. partnerships, and business from another to per range. record engine foundation upper our the all segments, diluted strong up in building year-to-date the performance to introduced our this pleased our these us technologies year's our has XX% contributed segments combined generated $X.XX relationships, superior reaching and we our above revenue we optimize progress with income three and grew We're as by to our to high-quality very serve beat share, that consecutive you innovative per against Executing investments market XX%. quarter of year track of a growth of end I'm line base. to testament income which of XXXX: our synergies. ability our a to Revenue service three continued guidance underlying performance double-digit made quarter, deepening partnership and results we new million. GAAP more quarter. organic,

additional high XX-year New Solutions, all-time relationship revenue In due our is to with federal an contract an at and influx X with customers strategic GSA the under a a government of extended we partners. Fleet new SmartPay agreement.

renewed and our Sheetz contract with We savingsXmembers. also

private AutoZone fleets In also all relevant to smoother our for Verizon, transition terms ensure possible. relationship Chevron country. significant contracts We're parties the of signed one new business, and is excited ramp in coordinate we with to of up we who as a with the as closely largest

delays, the and strong our transitioning Europe. are Asia, going Although our new we is in to over Internationally, in towards we've experienced pipelines and portfolio Asia live both are platform. business making Chevron progress

We our Fleet continued Europe. in to strengthen business

is market. online we XX% top-tier strengthen by relationships international notable Corporate our continued are and corporate agencies. we in saw growth with a businesses. and our continued remain our well have growth and yielded We're internationally capture purchase final business sales and revenue domestic Solutions, perspective, Overall, market we traction rapidly profitability. organic experienced in converting are well, in increase we're and We portfolio teams platform. emerging Esso WEX to positioned additional impressive drive this initial to capturing We Europe. we nearing and volume performing grew transformed cost portfolio Asia, structure both as In in which our the reshaped share. in payments to to the travel strength the on This we're Similarly, From and gained highlighted as the in purchase and marketing very streams the growth, goal a accelerating foster volume, products our phase, growth. new and our Travel refine

client Solutions Our record another re-signings wins continued Employee growth. business and the quarter Health new of Benefits with in of above-market and segment

such new signings, and partner Conduent, include as and successes MMA. with renewals Our Trion Infinisource expansions companies

partner COBRA. this Health several our offerings, our XX% the or eighth healthcare and our of WEX leading broadened more revenue S. industry's quarter U. including also one new and Healthcare business. consecutive billing We for with companies was software growth in Remarkably, consumer-directed administration long-time relationships of benefit accounts

impressive continued XX% XX%. with growth Benefits its leading In has than addition, up revenue growth, our Brazilian more of to also volumes business year-over-year,

are solid only provide products this highlight of successes, for the long-term also our in foundation a not how marketplace, strongly but solutions and We continued proud which quarter's resonate momentum growth. and

in in We through enhance also business, better serve continued our been continued and strategic us lead second the we on for and DNA has superior Being technology, secure to offerings innovation partners to leading and key customers. and is our our of retain our instrumental XXXX. to Fleet edge to strategic enabling pillar In customers. embedded refine

the new integrated. our while This is a and our for Crossroads reason tool. technology, fueling new that both Through fleet to offerings for business. technology many our the AOC truck-stop virtual in-town needs card WEX expanded product mobile In our new improved card app, provider our which customer closed-loop this certain to a for combination our primary and which offering acquired Verizon has product of we solution portal gained October, vertically been for we we we making of key features of more virtual added access experience won (X:XX) product, Solutions, assets acquisition, years. The and ClearView analytics quarter, adoption one-card, ClearView the fleet managers is

in and Healthcare Open with In look are In extend the to that plan. to as U.S. July, our business Leading corporate existing features the addition, long-term strategic new personalization This new platform. solutions. added consumer products released our our it release, innovative coupled product payment new FSA capabilities features post we deductible tool our XXX fits and release, within road we upcoming dashboard, functions business in product and technology Enrollment these employee November and support opportunities. a help initiative map,

business. schedule, be notable of of integration we business synergistic, EFS, well of We've to integration which on and except of this the our $XX has our for underway. activities, the platforms, our have and to remain and platform track Today, continue a consolidation achieve in has synergies. will most positive making continue is million constantly and which example the acquisition nearly all been efficient we're of on target While consolidation completed impact to had ahead more more the our

Before which on of recent like number I we a lately. received to over the to address turn business, about topic hurricanes I'd the the Roberto, questions call our is of the impact

foremost, those more as these and to previous by pattern similar high which a and disasters, devastating seen our reopen in move businesses into we've the weeks perspective, hearts is an following, in impacted the go in dip in out rebuilding aftermath, business occurs storms. First than offset which gear. volume From natural efforts a initial immediate

proactively customers. do the time, fees we all areas we right felt suspended affected one because to During in for for our businesses for late like that was month, thing this

to due term fostering we up place gave the emphasis relationships. we short some greater long-term on in revenue policy, Although this

third highlighted This aging our slight our a the growth saw our of We're against very our objectives. also portfolio Roberto all business year. encouraged in by of of and accounts discuss strategic performance circumstances. to our the quarter, by we solid strong receivable addition, profitable by the growth underpinned engine later. three similar execution our consistent that pleased contributions history segments is this I'm in In summary, In by with on impact will

Our business is before. ever more diverse than

wins. increasingly leverage build core will successful track competencies upon to across help which continue our our marketplace, us competitive and of We evolving an global record

already successful forward and look we Roberto strong I Roberto? would year. to quarter the now year-end, As look to to Simon. turn to the call a an we like to our CFO, close over fourth

Roberto Simon

morning, Thank everyone. you, and Melissa, good

range XXXX, million per Net was increase $X.XX the share, prior-year the or to a total share million GAAP share share, $XXX quarter last for last For basis guidance end on million, range. the third a $X.XX of guidance up adjusted our million $XXX $X.XX our the income period Non-GAAP million $XX.X compared our $X.XX over year, $XXX or the or and $XX year. third quarter revenue the to diluted for of XX% $XX.X was diluted million. high per XX% period was diluted same from same income above and above net per for per quarter diluted of

for nearly solid pleased earnings QX. experienced of very normalizing which to contributed tailwinds we in our fundamentals guidance that, also FX underlying revenue the confident and are our strong of we our macro are and On performance strong fuel business. raising organic We prices, with across rates areas our trends, in top performance. and revenue all Due to

$XXX.X Payment third Solutions which $XXX as achieved to revenue. in $XX.X to XX% increased to or versus or X% processing a of Non-payment During to million QX segment the payment prior XX% transactions million the the increase compared quarter, $XX.X processing revenue, an million million or revenue last year, in increase processing compared X% last Fleet increased year. year. led

We saw last was domestic QX versus number the in Finally, $X.XX sales a organic in across $X.XX segment. growth, solid price of see fuel our trends stable. average We QX were transaction Fleet positive same-store and year.

posted fleet our on period to platform continue XX% very by of payment to million in customer XX% attrition our targeted efforts low conversion as both hurricanes continued fees rates. smoothly, to growth EFS our turned we modernization solid fee off year. even transactions saw in behavior areas another time quarter revenue is last the we up though track reach finance year, run price the our Integration with volumes we remain compared This on and synergies. for We in affected and a As $XX strong well, year-over-year. and of program, increased indicative versus charges of last in quarter. normalization continued customer late

compared and volume virtual approximately X% revenue net Corporate revenue interchange volume decreased Finally, $X additional to rate and million by net driven quarter guidance quarter prices across XX%, for year, impacts. our purchase million. our in was last billion, card In third $X.X spread basis us higher reached growth the fuel Solutions, $XX Travel points. to all in Total third the geographies. provided $X of with versus for The growing XX million

expected, have to from and volumes purchase net This on international impact from led rate U.S. year. did rate generally change in was the of lower. the revenue to it with greater our mix guidance volume beginning segment. see the third to there net the some material the second in outside for As the other are compared was quarter a no previously where of line occurring We growth of interchange strong rate growth quarter, our we interchange interchange the in percentage

corporate our XX% in Europe the positive payments. to close very led trend the domestic with revenue a in revenue U.S. segment, diversification business, growing outside Travel by of have and We

For revenue spend increased the account Health to million, for by driven Solutions, Healthcare and Brazilian XX% and Employee $XX.X volume both growth Benefit businesses. the quarter in U.S. and Benefit third

Bank new of now saw robust, the year-over-year, than and our XX% sales converted partnerships strong America onto U.S. a pipeline portfolio from and mentioned, fully stemming grew a Melissa with the momentum As platform. cross host we of sales. remained more The

business consecutive the pace, XX% benefit impressive more is excluding in in which its quarter XX% continued Our quarter, currency of than from more the Brazil impact growing also than growth, fluctuation. the fifth

company $XX.X Moving down million, $XXX.X year. expense were million third in quarter, the company operating GAAP was income statement, expenses for basis on total up from for the the $XX.X million. a last QX Salary

head had our increases areas, to to third-party certain back support house also count increases addition of technology provider. In as high-growth part from functions we bringing in a

the decline compared is date, Finally, variable acquisition quarter, repeat was closing based didn't prior compensation million in the the results EFS this on that majority $XX.X $XX.X to is our we of are year. the to estimates to Service year. year The cost increasing our due strong year. down the which million last for of fees

the previously ago, in segment. MasterCard these we comparisons. quarter is pressure of our with which benefiting year Travel be signed a As will offsetting discussed, the are we favorable have see from the some agreement final where interchange This we seen

high the off. of spend totaled the have our losses a the $XX.X credit million. to In which was XX.X reduce During of points have consolidated credit range. we quarter, loss Fleet steps volume, loss taken was fraud slightly pay third guidance basis segment, on The started to from basis above end

from we quarter card down As progressed. trended anticipated, fraud the as skimming

XX% fraud from quarter. to last and point expense positive month We around is quarter. each The October high are down see during pleased the September from trends monthly the

new software and helping transactions. now fraudulent Our is operational prevent real-time to

the credit also paying bankruptcy, than saw regular saw portfolio quarter. in did this, were operating impacted Shifting hurricanes were expenses quarter higher We in as rates our we average traditional with an would in slowly And U. in volume in we line our factors, Turning increase to the On in an we million increases shape, Brazil higher was $X.X these quarter Without been tax saw tax guidance for by the of We but XXXX. the and for more quarter. expectations. in than S. rate an the Because this fuel to in debt XX% within customer loss, by gears, XX% normally discrete two last significant third ANI a remains to basis, GAAP the increase effective On good the the the items. our interest areas expense. credit have the would. increased. see in finally, loss they affected rate customer range we levels quarter operating for was basis, and year. one third quarter are and year. XX.X% for compared third prices the our Also, of the contributed third XX% interest last

had end, of we total cash a from and At ended Moving last $XXX term balance our the sheet, on line cash, to the up to the credit, in $X.X billion we year. revolving loans the compared quarter on with of notes. of end million position quarter million as at $XXX balance

the as at we to ratio, defined added to year. of credit the agreement, approximately our our ratio our in the times. leverage In this AOC additional with with closing credit of line us expect acquisition, leverage including times conjunction end million Based and to stands $XXX Our X.X acquisition, have and capacity of X.X provide at the approximately of revolving liquidity on be flexibility. guidance we our

loans During our of secured the existing the credit QX, facility. closed we repricing term under

points. expense annualized spread on in by the B million our As release, approximately by basis, savings press basis loan in I $XX an Term points on anticipate on and XX stated interest the we reducing basis of the interest to in Term A loan quarter financing than offset led This in expense reduction a the which XX was close transaction. million, to more $X by our paid by fees

on guidance note third guidance, as views a basis that income. respect and Now, the made net to reflects is for expectation are the This on quarter. of adjusted based our at end our non-GAAP of this rates with exchange today

price net $XX in in the range share. in based For to and figures per report income quarter applicable losses. million future seasonality our this $XX the $XXX on normal will trends NYMEX average as domestic or $X.XX revenue that of we as XXXX, points assumption assumes credit expect gallon. XX U.S. from $X.XX the XX virtual card be These range diluted basis guidance This and in million credit million, We of loss will well basis adjusted assume is week. the that of fleet to business prices to between fourth $X.XX to per points. for the fuel This million $XXX the assume

to We XX%. rate expect adjusted our and net XX% tax between income be

of million acquisition, we part immaterial in revenue earnings. AOC $X the impact approximately have an on As included with

expect when Health slow we performance to business than due Employee Finally, in exceptional it our QX XXX%. an more in Brazil and segment revenue growth Benefit to Benefits year last grew

be For $XXX the net revenue diluted the XX on is $XXX expect range to questions. guidance adjusted will approximately EPS income open that, the to and to full $X.XX of billion, lines of $X.XX for year, million $X.XX $X.XX share. or billion million shares based we range million we in per With outstanding. the in to

Operator

from the Our with first Jefferies. question Ramsey going line to El-Assal of is come

Ramsey El-Assal

a happens at later? at the should taking going to higher sort or expect until of the EMV level where in to be I going pump wanted about, fuel back little in, elevated we think level transition sometime that and skimming-related operating a levels, and fraud ask the historical QX? And of then also Can then to technology little rate come fraud should of are you question. Hi, sort or I through my about bit next A, bit the a of of you we we issue. normalize Thanks solution guys. walk year guess, to talk forward, always for implemented, that the kind us

Roberto Simon

this Yeah. Good Roberto. morning, is

to provide me picture. you first some Let the which is important full color understand

there be nothing fraud is alarmed, coming to down we as because all, of is especially, First expected. we said, as

Our (XX:XX) we point. at good portfolio see in don't shape, this and remains

range, impacted Our hurricanes the guidance our this credit And our also bit loss two fraud off within loss that as slightly discussed. quarter. numbers items and was in had for the said, I we credit because a is

to into QX, the XX than as of from that said, see can is past. still which As I in credit points, norms. loss, expect basis we the historical fraud look range fleet is basis you be But to the slightly just points elevated we the XX higher

give We I'll levels are because in QX looking continue they changes norms. at to obviously, the our XX.X previous losses, any reference. basis year from into or XXXX, think very historical said, regular you in as And we fraud the quarter-over-quarter. fraud recall But don't expect trend regular you obviously, macroeconomics. were XXXX, credit conversations, loss, we a about we I major changes, Last down any if don't of see points. will closed small. you very, But trends When our

coming low will we obviously historical see but down, as the trend as dates. So not

Ramsey El-Assal

I that of certainly kind getting be in terms is going quarter a that to Thanks. Okay. of is – didn't to of in, what you then I timeline. terms I give there guidance implementation That kind about of it XXXX hands, that any is has consummated? the falling Chevron wanted deal that's time or there not an That's ask taking hit And in there And helpful. believe. changed might in still portfolio noticed expectation

Melissa D. Smith

I say that said because in And then to begin had part a and is have to would X. January more of signing QX QX on we particularly makes terms in of call work the which accounts involved, through. you to that got parties expected complicated complete just last new the it three that transaction this Yeah. actual in we in start timing, and conversion you've

which on of plays from of it's rest we accounts, The a is would of this over, out the occur bringing perspective, we business some timing we new don't. So new really say planned. January how still conversion X of as some have on dependent signing it control which in regularly

the smooth the closely we to Chevron the go that want of work And going making with continue they so sure as don't ever timing. of the are and but considerate around it if have is day that total can, as to through just to possibly at this the fact control very to recognize we conversion, be we customers around this end

Ramsey El-Assal

Okay. Yeah. just me if your one pricing, and don't of outlook. little bit from kind a mind, commentary, you on of Last is strategy

in I incremental being the kind late ongoing your those in to A, think productive actions, have quarter and innings geographies. your the in and this – have in that as pricing trajectory payment of of lever Is where still might terms able we pricing on in – customers business, or behavior, is charge result fees them was hurricane of your and kind a that especially of encouraging, the availability context you innings, late maybe see to we adapted to kind terms behavior are their take it's the pricing should early of this of not price?

Melissa D. Smith

the you're of North bunch of fleet about far specifically talk a recognized the Yeah. fact that market. starting And American the where small to were portfolio changes business, quite really where out we we we made Fleet to

constantly, And have each part of make And so the of business, we We're this have them. each doing piece in globe making in do the pretty changes tweaks what that made that sure making of across continue we're and we is mechanisms tweaks the of And bunch portfolio to significant European year. place well in competitive. to portfolio. we as across our we're a that in will

in to our it the changes us which time made And as we just a them easier of to the things usual kind like also online terms in of the now. of do business enhancement to have products they fleets, more as pay as our bunch same impact on at made us customers, think of past. for we allowed than we the So

of where attrition And fleet as are in our North still, from really And so than portfolio, that a we combination. result, customer a on X% impact standpoint, American less thought attrition seen as – a very this voluntary little of attrition. rates we've

way actually rolled So the that we like with customer feel job we the a base. out good did in communicated and we a that changes

And so, appropriate. it's far so and tweaks where make across I'd we'll good business to we our think say, continue so

Ramsey El-Assal

for questions. Great. my Thanks taking

Operator

Sir, to question line come from the next line Our is Oscar your SunTrust. is open. of going with Turner

Oscar Turner

mute. Sorry, on morning. I Good was

Melissa D. Smith

morning. Good

Oscar Turner

is My the segment. question Travel on

Just following the that revenue And deal, general of AOC over how much from business? you payment how about in the BXB there business think growth time? is

Melissa D. Smith

innovation allowed that an us gives to what that build effectively. a really more corporate perspective business from as revenue from the think the from from do business mentioned, cost – part that perspective, we allows about why payment also the it's of coming the integration, us business we around coming reason to like – all It up – us a technology, It's and we it acquisitions new arena. The from the we related, is we bunch scale banks. of tools And the businesses. vertical different other both did to intended the primarily the primarily in

there instead So able building we were of that. ourselves, to leverage

So the was that service marketplace haven't the have the we past. good we continuing the this and in But people marketplace, about the perspective, we the that had behind the and from product do to are with the around with conversations and needs feel can a in build channel relationships had that think the now, of this customer-facing their we as create in integration, technology, using we can with do this. more what technology, we synergies the a what rationale and around

Oscar Turner

signing Good. Verizon Fleet. of those takeaways? just you AutoZone Okay. just and about those talk And Can about in competitive then, signing process you customers, the talked and were

Melissa D. Smith

we that now EFS the around them able acquisition positioned North in – we what in to customer. American competitive much assets our is do largely talked little historically – and the was Pretty Verizon, be I the doing it that is to And was a takeaway. bit I'll and to highlight that have going from a we market use combine win about but Fleet the anything Yes. and idea we're were the

their we And closed-loop goes was were the stops that retail that the into both consider able traditional to so from historical look perspective, what they what a arena. one at also truck has product network and through would

have also technology. data So we've use They card information do they this allows much that and they're the more analytics actions out, to like upon tools way the can information What easier a that in them that really that is targeted packaged one on. rolled our getting. look they one at product to ClearView

so And broader with compelling we the in together that, merchants, bundled relationships more what the with some marketplace for is this of believe them. have we made that

think And able of Fleet combine really we're corporate so Over way as did. been the of where good the for the business, EFS growth And the historically which we've what different $XX the lot example that able of we growth But we've I synergies to EFS, million EFS. a upon of XX%. business been pulling that's what And a pieces accelerate that to think in arena, the XX% business talk about our EFS the Fleet business. we've on build we of We the top specifically, out includes talked worth growth. that that that, win real is One package payments with EFS of XX%. done about you if old Roberto so and within was historical Road our the the grew us

– some really are able these are really a to organic together. pieces result of all things of great pull and as So being

Oscar Turner

Congrats. Right.

in as losses. guess, as just And what clarifying implied were in the that far pretty basis go? fraud like then around I is are XQ? business points the are I then what strong. What a And in question, guess losses last question, losses is Sounds October fraud fraud XQ running guidance? the trends

Roberto Simon

Roberto. is this So

And Let loss. talked regular and quarter, we last with XX-XX percentage came me we credit fraud on better. When losses gave the credit the split we directionally a slightly start loss in QX between numbers.

fraud And was piece the we as as continuing we anticipated. is slightly So into XX% expected. as move the below also we this down, trend QX,

had which was... question, a You third

Oscar Turner

of the just basis around third My what in guidance for terms question points. loss yeah. is Oh, fraud XQ was

Roberto Simon

Yes.

we you So is the guidance Obviously, slightly have of the on XX.X from to basis credit XX regular a said previous And the if of a fraud different point loss. they year also a reference, points. view difference points. don't credit as any in historical from basis I the anything provided question, higher than rates we had that a or as losses, trend add loss historical – from XX were rates. in We last

Oscar Turner

Okay, Thanks great. lot. a

Operator

with line will question next the Sakhrani KBW. come Our from Sanjay of

Sanjay Sakhrani

to around hurricane we was as on look I volumes, wanted you. do specifically Good guess more waivers a give any as morning. data had. on us have impact. fee hoping revenues the Thank bit some just in around I maybe at you little mean, the impacts transaction I well I dig that? bit could you specific specifics a more of the as you little

Melissa D. Smith

late What big a off grand you're month. it's In scheme of number. to said the going something about million; that's fees in is, we maybe not we not $X.X move things, turned affected talking a the areas number. the for It's

this a times A that doing really we think about right the And we'll more do time. of of hurricane for a us things hitting protocol at in the point it's lot thing. so around and

of affected off emergency us to areas. number they a because and turn We tools – give be the to fees is making response so issue do – tends where customers we have see actually that access. they will it an can around consider sure hurricane. out that late fuel a have that located, with which We'll vehicles, that We in are around particularly them business

steps of we number a there's that so, take. And

people It's And also are those We together unusual the have we've in did, online things stacked pattern a bit hurricanes. of have in that little things all couple of individually say, would saw to incremental of and seen material. But of all bit blip historically set back kind they that have to we those the is of we a of our seen aging, this getting payments. a hit little happen because making are quarter. a I have difficulty things like an but None similar.

Sanjay Sakhrani

impact on transactions? Any

Melissa D. Smith

an around afterwards. see a because we the see bit typically, of but a Not you slowdown little offset hurricanes,

an of much not so all. at And impact

if quarter. it it impact time, at of period happened a the the might over precisely of it of think end you a If quarter,

Sanjay Sakhrani

know just And, of guess, investments think occurring. when has lot about there I general, Okay. expenses been in a we also I

ahead, should question to leverage tag go-forward a then to basis? had that. I more we look operating on we expect mean, maybe on I As And

Esso the of expense on sort think on of be about impact way portfolio any by most virtue conversions Is revenue? we to or that? completed, basis go-forward now its revenue of there can mentioned You just a maybe the

Melissa D. Smith

I'll last one. answer the

But there Roberto pickup the question. an expense related asset answer think to will I that. leverage is the portfolio,

of moves things we we've the along of over restructuring had about So done of doing to different number years the talked on profitability And pretty portfolio. lots were major things really which the around last frankly business that's improve Asian we've so that resources. winning a all some several particularly we in the that We've then, and customers marketplace, was of re-platforming. pretty knew And in focused been – consolidation piece implementing last we've the the marketplace. been in

think more get the we the agreement us our we from do also start have service that that transition does do once in that that product off migration place, we that get window is own us allow doing And to have then Europe. can the we migrate We platform. affect allows on with It this our will to in what scalability. and and

Sanjay Sakhrani

Okay.

Roberto Simon

is It's Sanjay, for would would the the on in that this every a What say I where say growing business is us. been four focus of will view, point where say, keep margins and quarter every we have seeing line. where expenses. the organic answer would quarter we improving the to to what I from we quarters, your you areas also feel is on last, in five you underlying to to our more are key investing nicely are Roberto very trends bottom in we comfortable But deliver we we I these that question more an importantly revenue. can

consider other you losses. is credit plus need loss The fraud thing to the

of that If business, you exclude credit that loss. piece, the the not the remainder from

continue momentum continue better see much – business the organic But is side. keep point areas, we in opportunity want we going we're and significantly of the expense something view. high-growth than growing higher see to the doing investing that really the because to is from doing. so this again, we and as an to in If revenue Our

Sanjay Sakhrani

outlook point made, should steady a digits I double cost just state final to next one fair fraud well, we digits you a the everything year. go to assume range Roberto, question the on assume? mean, clarifying And into sort on of from on goes we and like mid-single basis if that is a

Roberto Simon

on You're side? talking, fraud the specifically,

Sanjay Sakhrani

the I'm Yes, sorry, fraud cost.

Roberto Simon

last said quarter. are very we what we said absolutely. I confident as Yes, on we mean,

We range those it's as with into for consider The next move a are fair to the QX. is And year, in planned is as and line statement expectations. our in we guidance we QX within numbers. obviously,

Melissa D. Smith

that just technology had it we call the now, little to The of Roberto right color last place. that. So, we new technology. a is bit about things that new implement we're would said on doing talked The in add

rules It said a down would adjust we for burn-in really burn times is that where period be there will are We or in a period. take of us the period also now. to place, which

this of month just We that missing. losses. with adjustments are lot making so in that we've this process the are saw piece technology, making to is I outside the in last that month of what and And logic by learn last process the we number were So couple think next quarter real-time by seen the a really we through months. to the a tool, reduction of which technology, we'll every now that able more is couple far of the of changes we in the

Roberto Simon

full Melissa of as a are And losses the slightly second because half on fraud expect of what year to implementation, said in half than system. year of we system (XX:XX) correct. the point you expectations your and next view, But have should fine-tuned from first the

Sanjay Sakhrani

All right. very you Thank much.

Operator

come will with Christiansen the of question Peter next from line Your Citi.

Peter Christiansen

Good same-store the morning, I you quarter? us also guys. Roberto, and Thanks just for can were I'm excluding for fuel sorry, this, organic what was, growth sales tell if what my taking but call. missed

Roberto Simon

X% in exclude the over Yes, FX. and growth is the organic you and flat our quarter, were same-store sales this quarter prices overall, fuel when

almost all-in-all If XX% you are we together, include growth.

Peter Christiansen

where last into and implementing quarter systemwide that activity, Great, other I relates seen thank you are But this as geographic And, have saw specific fraud activity issue, you changes. talked regions heightened you it I about were there the know to you. spread regions? kind guess, of you

Melissa D. Smith

of that's occur compromise duplicated. little about points California still Arizona that, being fraud of a with But a were is California. card's to well. spread Florida, of Texas occurring. of The and been just and point talked is bit have plastic used kind as because kind of into true. and But comprise pieces then There's where that and emphasis And the being ones the and Arizona then differentiate everywhere and what being to point there's we skimmed made list they're two where the

Peter Christiansen

Is there those pump, any that patch at way the changes happen is a near-term? that in can transactions instead of implement that of can in potential more you store the

Melissa D. Smith

we includes and our with have we've a Look, changes actually merchants number the of working very been closely announced that merchants.

them Some that implemented. has of we've been limits

stores. we down certain into pushed We in times have and considered to we high-risk location, that also shut locations be people a

is that and that protective For but the time our of where product be. to is between the at the we're us there making convenient loss a customers is for going balance sure works same

we're using to all And tools of those mitigate activities. so

it's the we where that that do. higher we board, answer guess across we will So, something think risk. We its – do but yes, the to yes, it I don't is it that's do

Peter Christiansen

enterprise have guess, XXX,XXX vehicles know of That year, out you've you well? other and or fleet finally, you also pretty you've kind seeing wins to a wins wins looks called sense what sense. of impressive. smaller so Verizon, these like as makes been and of I a in Is give mix your quarters. It portfolio. fleets I us are And – can AutoZone is? more far this more recent your added level couple then, But share And this of some market this are gains they

Melissa D. Smith

combination. It's really a

did includes North If and than That's and our inside more this bringing for outside front end XX% just we're at an you traditional our which sales Chevron. fuel is force that's of both brand sales. look on revenue American the they in excluding business, fore sales new thinking year, year forces, Fleet about sales last

in And areas the products more in pipelines, sales year. on growth that on the bringing these accounts. really we're has and really we're at effective, other to this delivering out well just talked so and marketplace. managing comes with and large promises But good that's we our sales really named the small business. are particularly people nature the it the that the I are EFS business seeing that's of about And we're in some globe growth are think teams And of as down making across to sure good there as seeing credit the sales of really together great – the we're having come all

Peter Christiansen

Very you. Thank helpful.

Operator

Blair. line is of Napoli next question come William Our going the with to from Robert

Robert Paul Napoli

growth rate. some Thank the in you first numbers Question still growth. I this mean, year impressive payment you. morning. Good volume on very getting very segment. reduction big interchange had in Obviously, Travel and the the you're

XXXX type in you volume you what into type interchange growth of what term, little and that diminution of expect Looking get XXXX, a piece? and as the payment you think would can longer about business

Melissa D. Smith

The had year. this business we is growing anticipated faster than what

few that, expected little doing talk we're of last And we part a about of of across better those quarters, so – (XX:XX). bit the to with each areas start we the it's business just than

about XX%. of the think arena, States, Growth in outside the United as of but also we of some so in Roberto of the that growth corporate business, talked penetration online and of that agencies, we're is existing diversification about growth the the from And XX%. seeing the being the it's aggregate seeing grew travel we're that payments

it's I exceptional seeing the you a look has depending around of seeing at been volume and from customers larger the think XX% But are And you're future, talked this with some us, somewhere was happening, this kind perspective. year the and past, what's when XX% of between we normal in range moved than we mix. what that more on in year for particularly, so about a

Robert Paul Napoli

into and profit to this B, And growth? into I revenue; then through to line; growth on A, profit faster are – question going the the that know we for it's start essentially segment growth the bottom to to so, interchange, fall see

Melissa D. Smith

So, we year. you know big had a adjustment really as this

Robert Paul Napoli

Right.

Melissa D. Smith

for side to vertical the last with acquisition thought the cost a piece done that, the related month be talked this how of know a We've lot around because we and that's so. the continue we a competitive, we on even about repricing it. integration that will is has been predating highly fact to that this and marketplace of focus And ours the AOC

in part in in this And sure reinforcing of are on We're And innovation we're place. so us creating products making us deliver organization, sure the to that for are that that we continue big is this scale through things of is technology the some two to part on the making and the focused then, the focused differentiated we're in that the in marketplace we marketplace. that second allow to really side, have we on business. continue that charge doing premiums that

highly volume business (XX:XX) more growth. in are sure a it And – always those that so focus us the revenue to strategic see tensions be to Knowing this make some competitive. because of can two and close areas two of that continue to association there's in for we going is between growth

Roberto Simon

Melissa to, Bob, the said, business just our add quarters margins both dollars of that to the in these will operating in up. year, I going percentage And in three what reinforce are

of both and cost and said, overall So despite the working is in business profitability some areas, dollars revenue view percentage. and a from in we're pressure, point as other Melissa improving

Robert Paul Napoli

interchange $XX impressive year-over-year No, quarter? rates. the have segment, XX% million the that's been What in in decline despite quarter, $XX the the revenue in the other million margins the that up in the is

Roberto Simon

other call The basis we briefly. international volume, companies, you But points in structured cross what those Yes, on interchange way get a get you fees. side, bit I'll rate. talk have we borders the a our international lower

you upside net on as the then it view, other a look processing point the of from a we at reduction in overall revenue revenue. the But revenue, see But and a get total basis. look So revenue. we you the

Robert Paul Napoli

$XXX Okay. forward then And you acquisition. business that million? what out for it and you you paid revenue profitable, I why that So Is about just term? like it didn't wasn't looks and I do What's million year? on for next is what And announced. you it It longer that about $XXX expect for acquisition think do AOC. see mean, And that year? quickly next how of do look announced?

Roberto Simon

of price. $XX the on a And and the ballpark you that are point our with can on $XX from between results. aligned million million, estimate revenue view, range you Yeah, QX

it's earnings QX. we to said, can I revenue of view, smaller I $X a day it's obviously, what from directionally so But for will the October, to transaction, going have to We say our to the same; you EPS. so point accretive have it's is in going closed in million million an be an As $XX million From one. estimate. immaterial $XX impact

Robert Paul Napoli

very Appreciate you Thank much. it. Okay.

Operator

Our next question line will come from the Tien-Tsin JPMorgan. of Huang with

Tien-Tsin Huang

Thank morning. you. Good

and deals I any side, wanted on renewals, change Fleet ask guess, on the there? pricing both new contract Just on to and Travel,

Melissa D. Smith

most win. to But have this we've of year is some is a contract the And we've new don't different generally that competition. think marketplace is in been signings contracts. been talked But premium speaking, the to we're markets. much able different do differentiated. competitors there there's There's number the and in able XX-year wrap private label actually because really marketplace. about XX-year Everywhere business, in long-term that charge I wins. the We a – had of had GSA – them being we're doing we a in we've what that

And so a a period I a time, pricing positively perspective. anything note, I us long a can lock about so long of haul. build would we really that way we strategically business think either think partner don't it's with But in a remarkable the or there's over for them how to negatively, from mutually good for

Tien-Tsin Huang

And it, was right, good to if customer the the All hear. EFS bankruptcy, in sorry I business? then that missed

Roberto Simon

the in EFS was that Yes, business.

Tien-Tsin Huang

Benefits, been next volume has growth high rate, just sized point quarter, maybe one Brazil Okay. obviously just and fourth comps. look tough mentioned But okay, know Health very that's just outlook. at the last Fourth at got quick on I quarter a then and the you this year. And whatnot.

there? detail more any So

Roberto Simon

Yeah, had piece last to year business, the impressive terms segment. business therefore, of that quarter because put to But I a we the the we had the next of QX mean, Last only year. this to great slowdown quarters growth. had year be thing the Brazil we the in I we move good in growth going a impressive marketplace. obviously, would as small on for is say we and, an shape although have nothing are to see highlight, And, into and in some of smallest you there's products it's we alarmed, is year, three we also wanted

Tien-Tsin Huang

Got you. it. Thank

Operator

line Our with Oppenheimer. next of will Greene question the from come Glenn

Glenn Greene

corporate I are called Travel sounds areas on XX% called to on Thanks. out volume it the accelerating, Could you I in of components Travel the payments, now, sort international; side. out think, may question really XX%. newer of growth, international, and Bob actually the of of you follow growth It Good Travel up domestic, parse of wanted morning. domestic like the business well? as Napoli's you what's payments, sort corporate Europe I think of whatever kind some the and thinking the like the be,

Melissa D. Smith

across well. look Yes. strong in you business as the growth is the domestic Actually, if volume the business,

business see And faster. the the is still diversification are to you're so as increased other base some But starting growing. pieces growing

the and of spend spend is initiated XXXX. U.S. And in was U.S. XXXX was so not the much the about XX% in a – of there's that change XX% overall. of It's the about mix happening still in it's in

just E-Money allows we quarter And haven't that (XX:XX) more about been talked there's what that, into the of growth kind it operate where of fact Europe, regions last we've the we a is we're so, just outside And Europe. do expand States we really building in slow license as an because to other we're diversification to got And the upon in. change to seen. getting into United able us

through And been that that that adding more And market well there, migration, up gone resources we've Asia. (XX:XX) really have diversification. been had cautious ability as we've ramp we and the in the so with the success we've some that good we and market in as fairly live now to license

Glenn Greene

think nice of in now? sort accelerating a sustainable, a you there's like while sounds it Europe growth for good trajectory So

Melissa D. Smith

that the would say States there growth outside the salespeople, us. seeing we've as for seen we've of is And great of benefits United I opportunity added Yeah, that. a we're And that.

add can We continue And of again, But we we the over have those that think happen think think, that Asia, longer yeah, to be are to so we located well. is We market that global the business; originated American add can term, accounts most market opportunity a America. into. a in. big there is North in North we as considerable

Glenn Greene

on Okay. the upcoming then XXXX And of SaaS I for the business, just the parts know trajectory? obviously the And there? and broad then the which maybe dynamics thinking interchange of sort is what just a the through healthcare enrollment are on key between that outlook growth season, maybe sort of side, the

Melissa D. Smith

part that ready business, release. down, I Yeah, the say They're focused to very season. next they the on into are heads of should go enrollment

co-branded a enrollment But They've season. added through into leading just the A it's I admin, So but partners. partners of entering about marketplace also of a they number is channel up release the a will do another the admin benefit benefit product are new marketplace marketplace. TPA, lot they're channels. administrators. really – those entering third-party new into talked into

this think around marketplace. been good ways really I year. they the particularly, that product into So, they distribute can the are, at creative Retention looking has

of to lot enrollment them. for a focused So, is happens a like just on There's ready in this season, work we a be and time strong short period they're it. that for going feel getting of

Glenn Greene

Thank you. Okay.

Operator

of question the Mizuho. for McCrohan line from final our And with the day come will Tom

Thomas McCrohan

questions. Thanks Appreciate question I of in the Hey. the for call. at two squeezing end me quick had quick – a it.

larger On extent robust given more you ability of proposition helped the customers, a for some to sounds value Fleet to have addition the EFS has win the some Verizon. side, it that corporate like and

offering? differentiated for that what that is this of offering trying business that the with to side to for this loop helped Verizon? how closed sense the So I'm on unique pipeline get WEX, is? that And cards Is a

Melissa D. Smith

Yeah.

what were associated we the when that really about the were what acquisitions, we've and it synergies. modeled really that places Verizon been hopeful business, the portfolios. saw collectively. we There's the about been together we've we've the we that we've that we And good Canada. EFS a traditional for talked learned with around with is more the that synergies on looked of capabilities and revenue expense take think based about WEX been I excited more have at to do can what Enterprise where what able a example that of done has but in they number join we

enables part more us is care have means another what something new going having EFS. had yes, after important together network called actively to vehicles. particular Crossroads, it's talking be And to mixed prospects And this which think prospects more about at the about customers with We that both had saw product It's trucks over-the-road the for closed-loop that that's the marketplace which fleets, tool mixed put we're just historically do what combined in we so WEX that they people light that's some for that product. and are EFS like we us, who with. our fleets. of going we about, that And has in with that

about thinking seeing and a that. we've just more to about thinking individual been opposed what collective as And as them more we're as of so And pieces. it

going we for have think do the this us. So is momentum to

Thomas McCrohan

good excludes in fraud, businesses a across and in growing one which like folks. really transitory type your just be outlook And to of question. the and you looks issue seems double organically low the momentum It right this now Great. to have digits;

growth. grown was mid-teens growth, really EPS This It's fraud of but line kind XX%. still like the bottom on over quarter, you would have drag

growth trends these year, in the into growth the it next sustained have sustainable So double-digit next top wouldn't in into going going on year? EPS reason there is line, assuming why are acceleration any a low

Melissa D. Smith

we some give earnings XX% the There's long-term have period to XX%, targets. been to growth given or course any in XX%. long-range and happens revenue have our those growth to So, that going XX% always said our is that of range be takes that is

Thomas McCrohan

you. Thank Great.

Operator

turn like to over Thank comments. you. I'd call closing now for the Mr. Elder

Steven Alan Elder

speaking all this quarter. we Just next for and morning, us thank to to you forward you again joining look

Operator

we you today's XXXX third thank to again, WEX on participating earnings conference quarter would for like call. Once

disconnect. You may now

WEX (WEX) 1 Nov 172017 Q3 Earnings call transcript