WEX - Earnings call transcript Q4 2018

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the WEX’s Fourth Quarter 2018 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host Mr. Elder. Steve

sir. begin, may You

Steve Elder

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

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

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

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

Melissa Smith

joining of that results to and and M&A to quarter revenues our business. exchange This compared everyone, thank fuel the and of as revenue Solutions guidance recognition finish making us for grew excited growth. segments Revenues activities Healthcare exceeded million top Fleet Good XX% positive year-over-year. delivered XX% higher strong XXth double-digit to today. our U.S. new report We revenue well XXX afternoon, were rates and standards I’m Travel prices, X%. you revenue includes Corporate year, bottom strong the in range our consecutive strong as quarter of in our foreign and growth impact a XXXX. The end were in last for that fourth line Solutions

this $X.XX diluted conditions. favorable share. On a per per income of we backdrop macroeconomic on the basis adjusted $X.XX Overall, was on GAAP quarter net bottom line, was well share net income the diluted and executed

as operations to for. XX% disclosed some guidance slightly we for previously diluted XXnd the to announced year will to full not during XXXX adjustments we changes share our February immaterial total detail, net Roberto well year increased preliminary more income were we the as The Revenue was share corrections due errors Looking give other to to issues the billion, to per year, diluted of $X.XX. and for XX% at per results corrections corrected the the share, our while WEX. diluted relating XXXX XXXX but per net earnings $X.XX $X.XX to preliminary adjusted our Brazil XXXX record increased income from identified GAAP to another increased review. related include

We we and employees. technology, performance allowed upon Our by to us guide scale innovative and against and payments corporate through acquisition ability these Executing culture gain new the in pillars executing the strategic relationships, customer strategy is testament guided growth. by for post has service retain long-term was made M&A markets. XXXX healthcare delivering quality dynamic in record high superior to which attract high growth execution our building a a revenue, engine, to as our by products innovative expanding to in another and growth our and leading best through that delivering best-in-class and market and our XXXX deeply levering into serve a extended superior our year base progress our while pillars strategic new year ago, directed set as underscored existing committed business. remain to has for the share The for building partnerships consumer our outstanding on penetration technologies

Fleet fuel and have revenue driven higher by increased tailwinds continue growth, favorable to volume wins We prices. fees macroeconomic in late including renewals and the segment grew new fourth And higher contract Solutions significant quarter. XX%

strong partnership contract track new gained wins XXXX. and renewals momentum in record of Our

the several also of contracts made also on notably pleased and two Shell new large period wins, all contracts and Financial progressing For Card well contract most example, WEX positioned quarters in and we We're pull in the to us, and progress conversions prior of convert over several been and the and implementation issued new Those had with the as are history Chevron new had renewed business best now signed portfolio. Xpress be to with including in win report a In new I'm growth. Canada one to Rental. balances generate Transport and the of Aeromar integration customers Element which months. our we of that business, portfolios. accounts to the transition customers significant the implementation the remain RailCrew we significant to it the Enterprise products receivable in organic over-the-road revenue We expect to we and business, Horizon CSI, fleet next complete

and Our helping teams sales share. capture best-in-class us to marketing are additional market

corporate portfolio, In closed of an ever addition one solutions, Travel year to Approximately the example service our impressive than This support our space. we driven over account billion year. in online has wins provide of while increase is QX. leading in $XXX in during the volume U.S. out, growth by and customers revenue travel into agencies, came XX% purchase in day peers. strengthening this increase $X.X with its in our In rapidly of the last from industry and best business. which our this million differentiates growing renewals, was had of payment in relationships and further the us we One more is day XX% quarter terms new increase ExxonMobil With payment penetrating Corporate years which corporate of this an with and truly our

driver be strategy sales effort, to successful our us. strong proven to has for partnership own addition and revenue our In

signed we get beginning the to we relationship, as running. use technology these Express, stages of of still up we increasing and There QX of in One see volumes our are is we're agreement program early for an platform. American partners and in the the this

of the a had One significant also excited quarter. the to corporate Etraveli, renewals largest announce Travel in wins remains the that in We the is of Swedish size and and contract fourth Top payments and Europe OTAs of the growth, based handful I'm during globally. signing area important in the XX of market. growth future underlying dynamics for our given the an one

is ample look during purchase forward in room for $XX billion While these the there more coming we've to still we growth XXXX, had than year. opportunities in volume and

key I will Day, mentioned of XXXX for November payments in in us a and Investor corporate beyond. focus area As the be

onto with Moving and XX% a season partners. posted and of enrollment in constant and innovation of our from app XX% We renewed we quarter XX% this U.S. Employee Solutions, up volume our portal. line with apart Health, closed of or robust mobile In the growth open These The we success full more top experience service successful and XXXX us our the competition for utilization business XX% Health sets new tools the continue than healthcare exceeded in year-over-year. and partner growth online see partners in partner XX saw in to our the we was year. the transactions, over continue the offer enhance to Benefit market.

Health the renewing and contracts. Stanley more Boyu Benefits, to in to platform. the Cloud signed additions We business, over deeper I'd a bank million pillar, renewals. about the process, year in in bedrock quarter in than which of pleased little have the our We're Nova, cloud-first a associated XX have second we consumers on signings time WEX adopting number a new announce like fourth to of spent WEX's Financial meaningful now technology. strategic talked to superior length November. Turning development We a of past significant our at we delve amount and

began couple platform to our first migrating cloud. we of the of QX, During fleet years. the This technology over next conversions many is the

little processing platform with year. great a plan this making we're progress continue and one consolidating, making to fleet strategy. with Also as segment, this are disruption We eliminated customers. our We progress to from platforms consolidation towards

already of completed to virtual card of a onto our to is basis We're and platform, TAG, U.S. one as to our customers. call business was we rate TAG, little travel We move cloud-based billion are to acquired run $X.X transactions This also starting processing we over XXXX, migrating no of internal on product in disruption part too an QX. the AOC acquisition. our the with processed have which

spoke, growing excited November, We're expands in Since this which one guidance. it marketplace these of Discovery improve us the Benefits, with see last are our states. Day to fastest our As benefits XX all the savings, we've the increase cost in transaction, deliver in acquired performance providers cloud, Investor talked XXXX solution significant allow product of into we to strengthens WEX's the technologies penetration competitiveness to significant potential. successfully operations our transaction consumer directed stability, solution, and enhances away as growth our leverage development will leading particularly core complements about in and We size, upside proposition our in of eventually we pace high attractive the the provide starting innovative about we PBH Ultimately, synergies, to the acquisitions. this we platform as business from marketplace to healthcare and with market diversifying position are our future with including with scale long-term healthcare growth provider strong and greater fuel, in plan capability. for aligns our believe a the further technology strategy, in improve cost of value and market, moves

Noventis the on up remarks, we January. wrap my acquisition to wanted I provide update also Before closed I in an

payments. as As This a on supplier, billing seamless delivery schedule to enhance reminder, network who their reach AP they are payment new payments and that by payment provide more aggregators platform year. It of acquisition corporate scalable Noventis and a corporate optimize delivery delivery financial to our current the institutions. through the offerings WEX fully payments complements this process patented We're and payment an the electronic technology. integrate expands electronic of with channels payments into WEX provides end capabilities

very new years excited we in ahead. expect to about are We capture that opportunities the

recognition target, XX% will As all Work, in filled I share we revenue line had our of long-term look Great of almost be who by employees achieved XXXX, out we with our survey. We've that I'm pleased per WEX rated against pillars. execute the it's again growth able back Place earnings to to all and strategic with at very

progress for our undertaken significant advantage. the which capabilities. while are built digital Finally, that Simon. Chevron. our business performance for milestone of the our our on value thankful as In year successfully long-term on support will growth strategic look very a all to had transformation expectations. proud to executing XXXX. the WEX. technology our significant and of marked and Most of now are I'd poised our summary, of XXXX successful our our We're that foundation Roberto wins our this maintaining very a next, marketplace, AOC we call for of force We've investments pleased WEX. a Roberto? to another all successful in for the and in We've turn the surpassed integration, initial culture and with competitive corporate I'm I'm Shell over year made and what's our I'm years the creation. remain to execution expand see had all, who past Company. excited backbone like I like huge We of forward of few pillars year to employees, CFO, we've over We growth in

Roberto Simon

and you good everyone. afternoon Thank

internal I update earlier, will on review. Melissa an financial you provide with As WEX's statement to like mentioned

In preliminary press and addition, on the the issued February XX-K/A XXXX. to filed results recently contain release XX-K, updates XX,

we During same are correct primarily process, corrected errors revised immaterial that material The previously other the the consolidated and Company's year-end and of have is immaterial before the believes statements. close accounts issued statements these of variances, effects the payable. prior impacting identified our not in the provision time, At to XXXX financial receivable statements WEX matters. financial were which for accounts subsidiary, Brazilian recorded. financial related previously XXXX statements not financial been began WEX that the to our years to

the appropriately to implementation XX% and to significant XXXX and a full when revenue growth Corporate growth XXXX, moment results XXXX. XX% had WEX relates our income factors I and engaged compared revenue again half In adjusted operate grew with approximately this outperform economic and grew in to the this of to the M&A want XX% M&A year. for are Changing of organic was revenue macro pause for discuss the Fleet actively and business, revenue due recognition. revenue to of results, effectively. supplement the of with that remediation recognition. in plan In growth XX%, the activity. to segment gears to We will the In revenue growth net of designed segment, Solutions Travel XX% We ensure are the controls

Health U.S. XX%. business grew the Finally,

and growth, Solutions to QX strong Fleet results. revenue with solid the from move performed better performance by earnings net a trends, results. results Overall, had with continue benefit also line these lower tax rate. let's from revenue U.S. Solutions we macroeconomic business than top pleased segment. of and organic fourth income growth. organic From we Healthcare and Now growths, an the driven expected positive to bottom on point both are Travel adjusted robust We and Corporate view, The and quarter a

total For or was guidance. are to with the adjusted XX% diluted recognition want in was benefit fourth point I prior share, income we new quickly $XX.X XXXX, Non-GAAP million, year. $XX.X from from is similar line prior revenue benefiting to revenue quarters. our XX% of million quarter $XXX.X $X.XX, $X.XX up which that still The standards. total the was out the over per increase net million,

by achieved increased gains to to increased standards. segment by $XXX.X year. the results, and fee from Both XX% an and steel increase on The grew XX%, the grew were America these North the Solutions in of million segment Now revenue fleets of business, Fleet rates recognition led which XX%. revenue, revenue prior prices compared XX%. revenue Payment Processing the higher benefited over-the-road, the which XX%, growth followed new finance

a saw XX% at also in rate at We strong XX%. Asia growth and Europe

continue XXX see the due to segment, time, part And of negative At interchange we last attrition in up the There was European spreads rate net recognition three basis QX in points, on over positive changes. year. XX that the rate, revenue items impact The finally, Within maintain government same-store marginally sales. to solid growth new continue same are organic by was and the we low driven the were operations basis to rates. year-to-date a shutdown. revenue sales X.X%, the fleet reclassification, transaction very had higher from steel which points

in in the QX XXXX. was Finally domestic $X.XX the in fuel segment, $X.XX average price versus

year, $XX.X Europe. to additional versus We higher spread revenue fuel million prices, including impact have approximately of prior due in

was we all increased for Total last volume Travel customers. we reached and growth quarter issued the strong Corporate that $X.X This Total the AOC billion. XX% WEX revenue XX% same the by versus finished almost our with year, represents organic. purchase all excludes had segment, to year Turning which year. momentum and Solutions organic

revenue Within the steady, exceeding the the was U.S., XX%. with Travel And strong, of revenue very business business XXX%. Corporate remained payment with growth growth

volume domestic net Brazil, higher was was was Australia. fourth mix XX basis interchange basis compared XXXX. Lastly, and which by rebates. the Europe, spend led points, to and growth increase international The and in customer the QX to mix, rate was lower due XX international The business points quarter

business. segment, to business accounts year-over-year of and to purchase and XX% number Moving the Employee health up volume during expect The such XX% expectations The Benefit this support XX% growth in on average XX%. and transactions volume again, high continue of the And surpassed remains up continues was term, strong. was growth enrollment open we vigorous U.S. year. up season was the to total Health prior momentum. growing teens the over pipeline In long

business. significant to expected, low in benefits bound the see continue As we Brazilian

Employee revenue Benefits result, X% Health segment the As in in and quarter. Solutions a the decreased

move to now expenses. Let's

the million, XX.X quarter, were interest costs higher $X.X from part items million, line due million. Total volume. due QX expectations legal end $XX.X recorded Shell reclassification during was credit last million was the changes. million. loss up at on In service basis spend benefit and as in expenses expenses which the of $X.X of segment, loss ago. at Operating G&A fuel $XXX.X business. We $X.X the expenses. $XX.X have $XX.X mostly million costs rates. up would interest was million costs Breaking related is onboarding points Chevron. within the $XXX.X to prices, the This depreciation year. quarter year is coming Fleet to in of AOC million for from SG&A, acquisition-related Brazil and the down with a mainly expense, and fees the $X.X was the up cost million, was guidance, low processing of and up of total expenses million, or down were network For to $XX.X recognition and increased $XXX.X line million, due categories, amortization these the Service revenue primarily to Revenue the fees in

marketing largely up and the were to sales and $XX.X new Shell revenue the recognition costs boarding and Finally, for expenses due on million, Chevron.

On on this XX% rate discussing from tax now million The year. Company ago. be of year basis, discuss from a tax benefit the up quarter I effective rate balance to a last XX% in was million cash, continued the was the Now tax basis, ANI XX.X%. end to taxes. GAAP at We compared $XXX our onto the a $XXX will non-GAAP reform. sheet. with ended quarter On

portfolio. acquisition balance cash corporate making $XXX the to stands Our the related Chevron at at after year-end million, the of payment

revolving us Additionally, to we credit, $X.X credit, in of have credit and leverage $XXX Also balance end times, approximately had ratio, agreement at $XXX which stands down give term the a of loans than The year-end, the notes. million of total X.X more capital. year. at line of timing times million the approximately access line on revolving from X.X available at at our billion last the we on

half reminder, of a have a since rate the year. acquisition As to been turn of de-levering, three turn we ESS time per of expected as the at quarters a

can that be we leverage financial expect borrowing acquisitions. forma covenants we pro approximately During When and we January, for and the announced we capacity the ratio in our four transactions, to DBI fund order increase Noventis to improved times.

We in see rate the continue we have on to place. gains interest unrealized hedges

quarter hedges market the was $XX of million. those end, As of value

the of rolling have end $XXX off XXXX. We million hedges at of

essentially of DBI we about XX% interest at we and had from the During LIBOR to hedges. debt another fixed of March $XXX rate year, at expect approximately Noventis XXX interest deals, rates. the basis our balance, in debt financing this have including points, secured Locking million

net basis, to Finally, at a income. reflect today non-GAAP are expectations of on made guidance. as our our look that and adjusted Note views respect with let's these

puts you get we when modeling takes XXXX. considered be into to that numbers, want Before give should I the some and

to key in Day constant within revenue the targets important, our long-term and First in targets to factors. long-term our Fleet growth FX XXXX prices plan assume than is higher at targets for provided most of and growth XX% earnings. three fuel Starting and XX% the rates. notably the Investor segment, These are the XX% XX% with guidance

to look maintain strong we First, transaction rates. growth a

Specific the to Chevron from give and third, the Second, second year. fully the look around the the we win, benefit to Shell in I the forward continued And want Shell to through we portfolios progress of anticipate you and half details year. Chevron to businesses. some international the in progression

to have the significant customers complete. we several our all are mailed for months to Melisa see did and end As to we we the platform. transition carrying beginning be as of out are to take It this them Meanwhile at of said, costs on XXXX. will we transition

the fully year we expect beyond. diluted year when portfolios normal towards and second and the half the of So move to in to be two the first compared profitability of half

prices impacting negatively that segment, in be million. lower by fuel this will than revenue Finally, anticipate approximately we $XX XXXX,

grow Solutions $XX Moving revenue into in is expected the segment, Noventis of XX%, including to excess approximately from Travel acquisition. and the Corporate million

guidance our of expect growth. will we Noventis, to Excluding within the long-term revenue XX% be range XX%

grow also expect mid-to-high in to volume the We teens. organic

OTS increase Turning reasons the for other basis year to net shape of processing Noventis in acquisition rate from full revenue. interchange points XX versus approximately contract, are to and rate, The for expect will the of payment the revenue we the XXXX. increase the renegotiation year revenue to which full rate main the the

Health revenue expect and the teens, segment, Investor U.S. in at to with high our in grow Benefits the line expectations Employee business said Regarding health we Day.

acquisition, month. approximately as the $XX expect million this a which DBI revenue, result of earlier we closed Additionally, in

when year. the earnings expect benefits Brazil material year. a we business, expect said this the do we announced another As not impact we we deal, challenging In on

points Moving of from average debt, which side, $XXX impact This of on we includes basis the would million XX floating Noventis. to LIBOR the in for and on financing increase an approximately assuming increase debt XXXX. DBI are approximately rate

in In $X.X have the approximately that billion by interest addition, impacted be rates. at higher deposits our will we bank also

numbers. Now for our guidance

transaction. $XX from $XX by an concluding the range Noventis increase recognition revenue revenue DBI, million revenue our previously to guidance. after our will how reduction also includes million includes for new $XX from million standards approximately issued of at these is This updated have place We this

$X.XX adjusted adjusted For be net expect share. income diluted billion the and million. expect basis, year, we in to the the EPS million $XXX of On per $X.XX in an we $XXX range net range and between to to $X.XX be income to full $X.XX billion revenue

$XXX For the the be million first in $XXX of to million. quarter, we range expect revenue to

adjusted to Our we basis, income $X.XX be diluted range share. million; million $XX to an between in expect $XX net adjusted and EPS per net on of be the to income $X.XX

great you expects based based, future and first between we XX. Exchange XX.X% of me assumption Company points approximately year. XX%. now the We year. more of that average February rates XX.X on through the walk basis there to full guidance starting be will first XXXX are This the XX assume tax as assumptions. steel year. And let income the fleet a Now rate its full from outstanding U.S. and adjusted prices The opening for questions. The shares mid and are in we price line looking for for XXXX. the applicable million full To assuming quarter are And we the basis domestic points is will $X.XX are confident the conclude, $X.XX NYMEX year credit and the net the the be XXXX forward for both February week between of about be will loss for quarter for year. XX finally, that to very are

Operator

from Our question line comes of first [Operator Instructions] El-Assal Barclays. the Ramsey from

open. is line Your

Ramsey El-Assal

no is of error indication malfeasance you've just results, an on color color anything of could us type little Brazil error, of cleared that statements exactly? any it there and give you is be or of more little accounting that now appreciated? situation sort a Was would just like behind what there this you, happened but Can as is or an the completely simply there willfulness more up if you a it provide past

Roberto Simon

that improving particular processes been to volume good in is the say in the And on two years. process the found this significantly Roberto, have I know in has would The two the thing, fleet past where afternoon. years, the So finally, this highly is issues of majority climbed other business. overtime. segment we is fleet and manual we Brazil past our was The you you both

we comfortable So you is XXXX, this as on feel we are. look why know where into we

Melissa Smith

It is Melissa. your we second respond sure to question. make I that

of evidence things of fraud not One process. find firms or for us. work as errors engaged big the part of we the did we did And four intended was of one the to any process by we that perform

are absolutely clear. things So

Ramsey El-Assal

growth in was well. then what increases, a or the wanted little it about XXXX year full I'll payments hop elevated what of your than ask to extraordinary. color a industry as I bit, Can the onto just give queue. as also curious outlook. be in rather higher expectations are side And also bolted credit little what which in more I credit solutions like verticals on that that. back terms that And it that little driving fraud there it have was help to side rate us you just loss And causing to -- is XXXX your the is for is or looks your color any driving corporate or you could are that, there

Melissa Smith

payment increasing and areas health. of portfolio, we towards the side. saw bigger good growth, gave the higher think and across and the we some sized the a look some more payments, in between an business, pretty you segmenting sure, we're And saw amount but growth it's We like putting been payments And -- corporate it the capital growth rates. market, space. travel of of corporate actually color that actually, it we've Yes, payment if government is efforts Roberto great we of over corporate the

base it, it of of but going a of that States. piece small United helps, piece are also relatively that's So we of which growth outside

we've talked have that benefit that the that we our strengthened And making space up and globalizing think added what continued also just talent we I in seeing and that but business office direct really on European there the had one sure is really Europe, we've correlation globalize present high As we in to you're focused done is but I office. in that product between, a that's that about, development.

Ramsey El-Assal

Great.

the credit on Just

Roberto Simon

Roberto. is this Yes,

see. you. this credit Let loss question me for take is I we mean way the the

the basis change to We small credit basis credit XX.X this American points we on And that the come there XX average accounts also of is another points Shell with is don't have portfolio loss with 'XX which XX our XXXX closed average today. the and And with we higher credit that loss to the expect with as exception thing higher spend that business. businesses, fleet are a basis the two come any I've the than Shell, related one, to business guided one fleet North know, a specifically you loss. number than pieces, of just is points. So here And second have results, portfolios. volume the the Chevron from

Operator

next of comes the Wolfe question Research. Darrin Peller Our from from line

is line open. Your

Darrin Peller

Thanks guys.

you the organic -- get continuously at industry level driving segment, and little in expand that in see some forward? on then your a -- more what levels we just You that's growth which going that I we seeing us to show of you're transaction update guess your fleet give is more competitors, as it single-digit maybe versus just sustainability on mid what

Melissa Smith

that you brand and different brand in we're we of ours what WEX might product, about marketing about of them which host behalf portfolios have something that great of is has pick the something of our roll of to are help grow we directly thoughtful we people they're our our to to selling market growth about people you many if them. brand business make And growth of something universal And partners particular accept think it people to you in actually part that's one implementations history options. that to attracted because but working area as business. really that's make our each is interested to and marketplace the look had over-the-road having maybe well and at the that there added time, that be drive -- reasons and time, we to year be lot loyalty of that there's ability an -- conjunction in the the somebody then biggest blocking sure offering year we've are maybe tackling overall over that. And products, this that counterintuitive, the as whole in business, try what we on partners, we in a when done of about a who same noted both alternatively. to Yes, if a that with had unique to against product that partner sure And sales universality builds going portfolios, on have business around we understand a to gives but are the expertise really is then you really talked the the it continue partner about across customers have

and good momentum to products that's fact think reached always new the but behind technology this resonating I really that the with the we features added on for that the was marketplace. good in

Darrin Peller

associated gallons Melissa, expected Shell think All I million the right, for to XXX year. mentioned with you've roll thanks. and on Chevron

is quick First on on of all, trend is just on that And still it those then overall and target? going? bringing on how the clients update the integration

Melissa Smith

in is customers over we that to but getting being have of will cards card, process us. out activation had those -- on And rolled they're now They two onto our what online. -- in migrate, actually still are but periods they a still hand. the happen with platforms. also process, through tools, we're go the target the interested of starting to to customer, where through which if That have process, is lot then people they using a go They online our have an have for

migration seeing but still we're in now, by do talked thick we're on those half target and before this year, so We to of the we're first executed that. tranches And having that happened. right the about of that

this would tranches that first the have the to a over. up costs the some be, costs are volume size there are and and implementation. now. two new this bit worth coming out label through people of So when through very talk out of half tried very we in but in of abnormal normally are normal advance we the but dilution we've the private concept come customers that's of to to the selling little cards converting a that it going target, stack new We're so we're year have little it's these products, seeing year, accentuated than see It's go -- sales about at to that revenue. point as on much got ideas going are we end of the last process And bit

track feel we so on said very we on call. And what much to our

Operator

the question William next from line from comes Napoli Blair. Bob Our of

open. is line Your

Bob Napoli

business First investment its with healthcare on well has increased the the Discovery healthcare. acquisition Benefits, WEX has of the stated over in years

but but and at Discovery up was there business a is Discovery you're of if from growing FSA. if and -- is your the Now conflict Benefits a Benefits, talk that high whether bit seeing HSA, in some a investment could -- does a you -- business basis just bring channel the can, some of you little are rate, and between growth about think the it this Discovery questions partners, that more conflict product high-teens that other you Benefits healthcare I

of of kind business. interest just healthcare the question there, broad it's So overall conflict a and

Sorry.

Melissa Smith

product we like the we that are part interested time we we're around how partners of and into there of sure deep of comes I'd after a direct Actually, very an and of We it need a space, same history extension, having we and we make we they're you're you products are have we we most a I'd making what adds have like we at And the conscious to we is think that well mean partners same it existing the they transparent the core going marketplace that the use of a an can in it's know that making to and certainly I like had we into time, our higher able and shortly. our the through rate the in a do. into doing When rich an business products. as in that's that were transparent. growth than that marketplace, lot very about rules marketplace we show do ability healthcare high-grade like have part that. to partners, of as us can of a think partners that interesting and around business our every think sure background DBI, to that's something also at it that a growing and how rate directly, with ability can be they when this about it's that's sell to -- supporting partners marketplace, actually what that they down And to channels with to being practices follow into we marketplace of what great. our about have you part do last that we're as and that that. our the people to in go with offering unique that a we setup what some engagement to then sure integrated to -- best is that creating share we at going with And marketplace have with some question. and

growth, a every business. have intend cost part size Healthcare partners with other that complicated, of and is can to HSA a that things. that's general we sized our think of and just our account the actually you combination we people partners like in to that -- And just some think pricing. interest the like going got at then on in the of through work all in help. new So kind the perspective from do, as And and in market all it's they we we comes continued that spend over being of market from of this the terms of a over that those is way We place great it's it market. in grow, lower they adding And coming partners, dynamics, We'd market to growing see it the HSA we something continue rate it. but grow place not growth of side as that volume tailwinds a up, it asked the marketplace, growth think we is have and behind you the about

Bob Napoli

would going My economy, Reserve some to Federal mean just today rates saw FedEx they're report you the said, the follow-up on news, raise weaker not anymore. I question be

like, sound certainly it global you same-store you little but call but So softness, sales the were of there doesn't are mean I as on -- your weaker, view what's economy? are the I as far out, signs didn't what seeing guess

Melissa Smith

as Same-store trends. didn't the volume we significant period it sales change were shutdown. see The latency through just a had I'd and primary X.X, government is really that negative say, in was letting

our pretty there what pretty remains And a good in been our from we perspective seeing if and we're do fleet change. we the [indiscernible]. that -- business business really So deal is for think market good of activity isn't the -- much

Bob Napoli

any and slowdown that's Nothing just can sneak if is Okay, quarter first economy. in in seeing and that worrying not quarter? the but dilution you, so talked know the you're dilution the could in Chevron, I EPS Shell, just, you about quantify guidance, I the the first you

Roberto Simon

are get a to significant. boarding as cost this to to what they Roberto, of portfolios few going you revenue are and on amount Melisa speed, those mean is how get in going to we quarter, a past I for specific is this bring up Shell but significant if them big they said and calls, obviously, not Bob, the position portfolios, So much the Chevron of is have I'm been saying the

obviously. year, we much we on to a long importance and important confidence we working the the the have that's full quantify where portfolios, say, term what So to want amount the is guidance And that. I I is is that those growth we within have that. are towards I wouldn't which its our for targets, reinforce is is what related a think but What -- Bob, amount how significant would

Operator

from the Goldman from Our line Schneider of comes Sachs. next question Jim

line open. Your is

Jim Schneider

pretty the I still things bit outside of you've difference in specifically Europe, a U.S. about It the and talk either maybe U.S. for sounds like Europe, maybe sales was strong wondering, macro already are little you're new can Europe the if I portfolio, environment more between but talked by geography. seeing about new and talk the about maybe guess your the in expectations

Melissa Smith

rates what needs said break year, question when perspective economic we the implementations by right then last of on. are we year. sales major I retention any and be as from by its we down look U.S. our products have pipeline, that executing year similar I new we at a at what to that geo, as go looking executing that and about Yes, current two need coming that guess to we into are we our sales these the And your world, being in. know across we're is, envisioning We now we marketplace

and say in the change are basis, being we're fact talked macro. to but albeit year, more that in we my growth Asia, something we're there impact, There similarly, We marketplaces that's still we've affecting don't the significant that had headwinds is envision little expecting of much to the those is the at would during terms in in this when last we of for in then as view at cause the backdrop, And least overall little but talked going So half of least bit pipeline, doesn't that we bit in we the off size about of And half XXXXX that's happen one and to we we or three look because lumpiness lumpiness a that more think say about 'XX. first bring good business, a account. calls, large of I that which but said just the one wins really what can unusual going and not that really in happen any XXXX. bring Europe it's two 'XX. how we have envisioned you we through Brazil is these that bit a first little in, I'd markets. across the new of at pretty the seeing again, feel standout of

Jim Schneider

in management continued acquisition have our your the M&A exclusively corporate specifically portfolios the accounts the And strength your to own your talk rely things payable the for in maybe partner to have software, but accounts and then competitors clearly that receivable space potential where from is some for of outright the of software payments future? turning type minute, there, solution a additional results seen to you on you Can we've appetite chosen one maybe for of strategy. about

Melissa Smith

prior combination the if what feeling have, look we our software then we and So AOC we on what EFS. We bought you to we're that like services of now, the had we've adding addition actually in at good capability it, about built product and we and we stack to fact that micro feel on pretty we keep have. the using the and cloud-based, that just underlying AOC,

about in so I we about And ways. when think think acquisitions, two different

unique I we the that build bills to to look becomes we vertical in has to more side like do of to will certain there it they're And product think think a of in we ability comes interested be piece we and plays versus well. the that buy us say, And about piece will analysis. need them in that of that continue and I the order space, a that's what business that, be that's is build someone of out a for as doing technology got. at what we've if are something, with we the things interested on to on to but or then marketplace. book product, the We'll continue play in

also -- pretty so based and look on we and things build we good pretty at what upon we So feel we've about of far. both what acquired can together those put already

Jim Schneider

acquisitions the of basis? clearly I portfolios just in one on clarification, of operating if to as will margins a flat some dilution expect could, up as to beginning XXXX, And be new is there you year-over-year as you or the down then be maybe on both QX exit year, well the

Roberto Simon

specifically mean, to I you, tell those portfolio. me let So

on you we going expect to the first on to then expect ramp. second and as we dilutive at be to -- like said XXXX obviously when we half look So we are the be fully a be half,

alone. and be combated year fuller better to what 'XX, base revenue and 'XX full you So is have the should because the obviously for margin fully the than expect will you two you XXXX with your portfolio XXXX, should is cost look the halves when obviously

Operator

Sanjay comes line the Our next KBW. question from Sakhrani from of

line open. Your is

Unidentified Analyst

business. should the quick Etraveli you we there ramp seem like I that potential announced a wins in? think for guess question to does about good including first when start had How there, [Indiscernible] I Sanjay. on opportunity guys It some the the portfolio. and travel

Melissa Smith

now. It's Sure. to ramp starting

XX% down push but And ramp in acquisitions see year. between on throughout to so would expect line range top I the with be it to about to about will in XX% business. expect are aggregate the that, be you restate -- it Roberto XX% course rate this you XX%, corporate what long-term is we guidance to us broadly The organic would our over guidance then that with to in payments we expected and of growth And be range the acquisitions, to when it XX%. of year. the said talked going our

Unidentified Analyst

and Shell bit Thanks on past a already, quite for we guess the a I think but I of that. quick portfolios discussion the rest We've once that you're upfront the expenses, of Chevron profitability business? on And versus guess portfolios. had should fleet these the how about clarification of the

Roberto Simon

of to I on have very mean ramped The other fully is will oil to for portfolio to operate. those question the you. once -- profitability of those portfolios the is going I two similar be companies we that a rate basis. any we answer this run

get when North fleet business within going that we larger fleet very more similar you when to the And fleet. the think fleet side, the is America know the-road the compare we be industry to we you the oil side, over- then portfolios companies more other those that trucking you on on oil You run. have you've profitability have the and companies, the

Unidentified Analyst

on on I an year, how contributing if squeeze accretion one this should the expectation a to earnings basis? Benefits, can we I but Discovery earnings forward, in about know I not last going And it's guess think

Melissa Smith

what in going grower. from healthcare continue obviously with think it to it that perspective about continue is the to we to more to time to do DBI, of margin -- a being versus So, think will to high their expect you said And we talked talked so like EPS year. million will this we've teens if profile immaterial combined also about We healthcare about of it grow synergies to it look scale, talked keep it business. mind continue things, we going we over we we that expect those worth it $XX that get about be fact we're see

Operator

SunTrust. question comes from the from next Our Oscar Turner of line

open. is line Your

Oscar Turner

wondering the we fleet, the provide clarify, First if Shell material year? of second did missed until expect it expected I shouldn't on this guys question just to And sounds was to that. from just 'XX? contribution revenue and Apologies see revenue half Chevron, contribution you like I

Roberto Simon

number don't of by We gallons on disclose revenue cost but and business. add if or that while ago, to profitability them has to a gallons you take and $XX to mention on million have these year portfolios those portfolio, -- translate revenue, we basis. will two a direction Melissa just in million -- approx. will our a you revenue full into $XX And you full the

we that now this have prices obviously ramped. we obviously today. give So, And you in fully those portfolios two on idea are considering whether will fuel an you be should the XXXX,

Operator

of line the Autonomous from from comes question next Matt O'Neill Our Research.

Your is line open.

Matt O'Neill

we of necessarily if in you want Actually, forward basically on most Corporate of answered, I the anything of in not? another try ask and momentum repeatable asked if maybe would to know, have going characterize that maybe them saw fourth you think guess is sort I to been way, if not what the versus and kind but being quarter we about Travel levels

Melissa Smith

I rates the and higher bit discount our his little the was about rates were of that There the is idea section, talked Roberto interchange around quarter. we had in fourth some -- don't think a in elevated.

-- talked something this do throughout about something that that's repeat expect the he and of So we review course running year. so outs, will it's

some significant we going the still terms depends In of spend what of the experience happen part -- overall a marketplace, in travel because we that's portfolio. will on volume, of what's

spend overall bring to XXXX that perform we pretty impact an seen have performance be but talked big prospectively but you about new portfolio. than kind expecting give adding be see that portfolios, different continue through continue so customers those indicator, on to of will to and to and volume. in new bit little we Roberto to the volume expect and in spend based business, a of existing mid-teens-to-high raise So on partners coming existing QX, happens more of teens that customers be that course the also how the driven that to and we our expect as

to track we just terms year-over-year, at -- growth keep If XXXX, rates looking in in the little of get of that it's bad of XXXX so a revenue. mind you in compared are benefit bit

Matt O'Neill

or that guess and segment. I follow probably guess the Noventis then to on going think correctly? am And with or just volume that think or it's forward the the the the that overall higher I kind going lower, in will then it complex maybe sort interchange Noventis gets prior I stable, what business average of Trying of to bias organic specific sort maybe business but internalized, to conceptually I'm to thinking hires, that about of wait

Roberto Simon

Yes, let in context -- you. for me this let me put

higher XXXX are expect as Noventis our of call, the we and XX Number rates. interchange I there average add a interchange on few -- reasons. obviously, one going of said than So couple approximately a net the during XXXX points that points the to for on to acquisition is of basis the

are we calculate as said, year revenue. is from the other reclassification net way we into contract. of impact thing processing our OTA's during based interchange the we on will And I the with revenue no amended our one the revenue, processing doing, total to you is second the The payment revenue. see There

you're and how comes So well that's between customer to domestic both final rate as go the spend the up. as to then to that And spend going see always see the reason the why mix more from manage international. thing you another difficult where

Operator

There phone. you may Presenters questions continue. more are the no over

Steve Elder

to Sorry, speaking with I Thank look all time But quarter. everyone you, we next for operator. couldn't And hear tonight. have we'll the that's forward think I you.

Operator

today's you concludes wonderful Have for day. a Thank This call. joining. conference

disconnect. all may You

WEX (WEX) 20 Mar 192018 Q4 Earnings call transcript