WEX - Earnings call transcript Q3 2019

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the WEX Third Quarter 2019 Earnings Call. [Operator Instructions] Please be advised that today’s conference is being recorded. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions]

I would now like to hand the conference over to your speaker today, Mr. Elder. Steve you. Thank

begin. You may

Steve Elder

been and operator, is and Roberto With you, this morning, The through to our good Smith, our today morning the X-K have deck remarks SEC. at included earlier section in Melissa website issued CFO, submitted Investor release, also me of to slide slide have prepared A CEO; deck and press copy the Relations walk Thank we everyone. a and Simon. our our we the wexinc.com. of posted to the release been

at be reminder, instruments, we refer amortization, non-GAAP a foreign income amortization, and net non-controlling quarter attributable restructuring call. As and interests losses, these acquisition-related financial adjusted and adjusted items, this arrive and income as on restructuring, to ANI items. will certain or cost metrics, debt we tax-related remeasurement discussing which net debt include stock-based for intangible divestiture-related currency metrics, issuance adjustments other compensation, our during third acquisition Adjustments shareholders, other unrealized specifically ANI net the losses attributable to year’s costs, to to

attributable of we The net elements unable Exhibit company guidance GAAP as a and shareholders. to adjusted GAAP guidance the press results. to of income provides X explanation on in basis, reconciliation non-GAAP income predict an on earnings certain reported included and that a see are basis, GAAP revenue are Please net for release to

XX, forward-looking Reform ended a the statements Report the may of of Form on XX-K results would identified statements our March and the XXXX, the I discussed in year our XXXX XXXX. factors remind to Litigation and those subsequent those factors, filings. that including result materially discuss also risk XX, with like SEC on press Act filed as and SEC from for various in differ release under December Annual will you Private Securities we forward-looking Actual

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

today. You which undue forward-looking on all as reliance place not these statements, of should of speak only

I’ll over that, the call Melissa to turn Smith. With

Melissa Smith

to thank gained We and Good including new our strong performance today. us this quarter. by Recent and customers to quarter. products full of verticals contributed wins our and each markets. Shell growth our acquisitions from our another morning, of momentum core very everyone, results also you and quarter continue joining reflecting and Overall, benefit bringing execution, Chevron. are seeing new in capabilities we We to impressive for of leveraging the the innovative pleased last delivered

revenue XX% X% a The came the remaining GAAP quarter the and to wins. partners existing quarter acquisitions. share, rate. contract our exchange our million, Turning new well This and shareholders growth XX% our growth decline through per lower third over segments. XX% foreign XX% included diluted net growth $X.XX prices in to was due share attributable year. up per by of $XXX and revenue performance, grew unfavorable as was driven diluted $X.XX to fuel another net Partially offset prior from of quarter income to adjusted from of approximately double-digit customers this three each as by income

top earnings unfavorable above quarter. adjusted the our rates us prices our for exchange end X%, targets which fuel growth by growth puts foreign Lower reduced long-term the and of

expanding third growth line it top beyond. quarter. quarter focus continue strong where the fourth expected, maximizes shareholder operating the drove margins, improved and value on As to leverage in We’ll in

a rate Chevron the that. our portfolios Implementation our revenue earnings to Slide factor growth of helped compared and growth strategy in and the X, maintain solid significant Turning rate us quarter. execution to were accelerate adjusted of last Shell

customer ramped with servicing with and teams relationships. Chevron marketing, and global programs to Both are respective out both Shell We’re and place. companies also in the fully working sales, closely grow built

was Benefits, we’re revenue full by the Fleet segment and to are improving contribute quarter. growth which and years. Importantly, in These margins strong the Growth growth WEX’s quarter incremental million reflected is integration revenue this next phase in the in realizing bolstered now Fuel Noventis, also generated Discovery expected their to contributions, a and in third the $XX Card. Go of in coming meaningfully acquisitions of

The WEX compared U.S. a part the in fastest of year. had increase revenue Healthcare business last growing is currently to and XX%

up great Payments a to significantly corporate culture our a is measure Work grow Travel final business. top segment volume quarters. results the consecutive the We year, Great third which is talent a rate, for the the as certified addition, posted Place survey, key and a by been this work. Having our culture our part Corporate new securing of success pillar from to And In talent key XX% around growth prior is a place to winning business. to we’ve great corporate in of

had Slide processing the generated we Solutions, fee transaction of in the revenue X partially offset driven In late quarter. a noteworthy rates, highlights few business growth contract XX% lower by new strong third payment we and prices. and volume wins by renewals higher Fleet growth and of fuel

softer double-digit Shell the impressive Payment customers contributing of market from approximately with volumes up growth. for the were and environment. execution down X.X%, quarter. revenue Nevertheless, processing existing approximately XX% growth drove Chevron reflecting were Year-over-year strong transactions XX%, a

market. of saw Turning to from quarter, wins continuation the the SMB new during coming wins we the

On and front, including we quarter. Tree major Ferrellgas and partner Gulf Lewis Sinclair two Pepsi, with and the this accounts partner renewed strategic portfolios

increase volume. saw our XX% Travel strong performance, payable from growth to including products very in segment from Corporate by another This strong had of the on revenue accounts quarter Moving with contributions of growth Solutions, We a year-over-year. driven purchase XX% Noventis. and year-over-year is

signed U.S. new quarter, airline. customers, a travel we major During the several including third

provider for on large also We agreement signed with a processes focused Automation cutting-edge enterprises. SaaS an Inspyrus, improving AP global of AP

bring We’re proud accounts payment Inspyrus our technology to help and drive for payable expertise core to to partner transformation clients.

number of customers APAC favstay.com. with In agreements a addition these we wins, renewed signed to including or

XX%. the Benefits Solutions and growth our the in by momentum of This Lastly, year-over-year, line SaaS average was quarter, driven of XX% year-over-year generating XX%. XX% top into Healthcare growth business number growth U.S. from incredible our accounts. the Health increase with Employee Revenue of maintained third segment an organic grew

Discovery and impressive strides to synergy business ramp of remain track preparation be for revenue The contributed successful in to performance enrollment quarter. and million and $XX model continues operational on incremental this upcoming Benefits continue make a season. we

including this of over the Rollins, that In platform employer numerous I MEDNAX, WEX addition, we Fortune quarter, and Pro, say added Solutions XXXX. Denver HR partners Health, and excited XX% used renewed am to Schlage. by Health groups now is Connecture,

series and York, networking SPARK WEX the Local events learning Lastly, partner in New of held in third quarter, called and a Denver. Minneapolis, inaugural we

in hosted educating and the also literacy Awareness where public We number our a support stay joined many time, October, us HSA partners Day as first the and to such annual open benefits partners financial allowed an connected on during of the important of HSA. to in events National significant These us enrollment.

developing we Staying from positive important on year. DriverDash Slide which very Fleets the our WEX to serve remains and platform, from gaining continue integral customers industry-leading Clearview share, market grew our the to the analytics segment. feedback differentiation business. products usage product as Large and also long-term technology X, and on to Clearview in contributor foundation is throughout committed an growth are to and particularly Adoption Within Fleet, receive our innovation, of our

transformation feedback, will our next our repeat work us a to business. continue of high receiving offerings, very seeing usage large by digital drivers we and which enable on to in which great the very projects this milestone the also We’re quarter, augment completed landmark represents

team We moved our platform And North with completing of customer migration to our Fleet the cloud. American minimal for proud particularly impact. the I’m

transformation discussed market our during marks stability, ours, in would the scalability, been Day to significant the continue XXXX. will and into platform As cloud be migration of increased and moved speed and functionality. year, a last third Investor technology result has to to this goal This this

Corporate segment, customer the the now during to a We completed a improved annually to in platform a proprietary run-rate the travel enhancements, experience than pilot hosts transaction more program quarter, our third basis. large the made and on recently which with also billion internal improvements positive In processing result. transactions platform Turning we including with $X.X platform, meaningful maintenance. customer Payments Travel

production in prevention capability. with learning machine currently also We’re fraud the

in quarter, to release. Administrators commuter efficiency. segment, more invest than the to deliver technology this and as with benefits mobile The were enhancements built the platform engage better increases Health healthcare and release on health ensure Commute, to Smart to well product experience The ongoing release To we October continue the to user enhances experience cloud the the also and their COBRA Billing XXX introduced for Advanced a and with partners. WEX made Employee enable that as employees both spending Finally, in Benefits technology enhancements. commitment, product mobile

platform are well underlying executing as that leverage Overall, for bedrock that business. our far, our core targets as to well. confident Day on continue strong We’ve our we technology made We’ll our also strength and progress outlined partner very positions our the we’ve relationships, are strategy last market-leading our serves customer profitability the very growth, Investor pleased year-to-date. and we’re well to of Based performance markets, a the and year. meet of with so in as at the positioned the established long-term growth we’re

and drivers corporate into XXXX, Chevron, with of platform including U.S. payments. quarter swing and so business head a and in of we a stronger growth As we do the Shell health number our final full

expect also our WEX’s recent next of phase acquisitions We to meaningfully contribute to growth.

close for business value ever the diversified investments a look past which will strong I this year in support the our before, that quarter. through is WEX. XXXX have sustained over forward and am years long-term. more built reflected than is growth few Our another proud we over and successful We creation of today and performance foundation more the resilient to our

turn With to will it Roberto. that, I over

Roberto Simon

Good morning, everyone.

Melissa, As this results you’ve were from the heard impressive. quarter financial

double-digit execute quarterly the integration Shell Benefits, acquisitions. This exceptional core Chevron continue contributed had Discovery Fuel We and which growth, and and portfolios, business, Go the to Card segment the top Noventis, of line performance. the to the on the

the the the in U.S. emphasize health the over-the-road Chevron the to business businesses. U.S. payments corporate U.S., Shell of and growth and portfolios, want I Specifically, the

negative rate percentage continue acquisitions the These we outstanding benefit to macro perspective, year. prices, factors rates. growth the earnings FX was produced and we growth made From revenue points. the from impacts earnings this offset from X lower by Additionally, adjusted partially fuel by an

results attributable revenue million, look million, Total $XXX $XX.X number or net to increase a per year-over-year. diluted the at income share. GAAP X. net the shareholders take million a Now, for was XX% on non-GAAP third $XXX.X adjusted let’s quarter was was Slide $X.XX income

by the X, revenue Slide performance segment. overall shows

just Employee increase, XX% a XX% the and I revenue and XX%. growth total cut breaking mentioned, Benefit with the Solutions it finally, growth down, Health growth Solutions segment posted Corporate led Travel rate. was As XX%, and Fleet

number XX%. Slide finance increase to on Now, let’s revenue results, Fleet was up move of The when processing segment XX% segment to Fleet quarter. million in Payment fee Solutions year was and $XXX.X up prior X% an X. revenue, with starting achieved revenue compared the

Looking also new customer had boosted highlights Asia-Pac we the the The North segment, at by substantial Fuel driven over-the-road the Fleet X%, business by growth benefited of XX%, Card business grew Chevron. Shell and grew Fleet transaction. Go and American the region from gains, the

due this XXXX, new diesel fuel to net spreads domestic business domestic rate a up the and The rates Finally, XXXX. FX points XX due was processing a increase compared last XX to Go and fee was average in we Shell rate These rate was and small price XXXX Chevron Card was The and wins net points portfolios. to XX QX points increases. The fuel want basis on partially Shell to with revenue impact in mix the to in $XX increase and To XX segment, finish $X.XX versus note in the acquisition to $X.XX offset year. the continue in XXXX were to Europe this basis lower positives in higher negative of million U.S., quarter the QX comparison prices. basis by fuel quarter. QX the late Chevron. from payment prices line and lower basis had expectations with last in points, and the A Fuel fuel QX

Purchase grew volume business of Travel in U.S., in U.S. WEX growth the corporate reached the Slide increased equates the quarter on payments signings. by revenue. to year, XX% XX%. excess and approximately $XX grew new in Latin a versus Travel America, to by XX% and and prior to this payment Noventis revenue Turning America, the Corporate number business XX, which benefits billion, the of added to XX%, Solutions million $XX.X ramp from outside of total million, business issued up incremental In driven $XX.X corporate for primarily acquisition, North the due

interchange Similar prior a was is contract the business. points, QX the acquisition, was XX Noventis XX in to basis in and quarters, year. renegotiation due net last points which rate quarter, which the last described travel performance Finally, from increase U.S. basis up the the customer, this continued segment, I the of payment large strong corporate to

Moving on impressive number the XX% to year. Solutions Benefit for and up Health for last quarter an was Slide XX, Employee compared to revenue

high-teens that run. trajectory we fundamentals Benefits all Within of to which business, the are SaaS the relative the Benefits, business The a long. the middle growth Health the have for includes million. to health accounts incremental legacy continuing an XXXX, was number Discovery grew business XX% up the added average $XX place trend acquisition in We plus XX% in long grew WEX XX%. seen substantial U.S. believe year legacy continued of Discovery a revenue The and

view, integration the in million an Benefits end and to least this acquisition, of $X track $X of from we another are synergies deliver year on point at by XXXX. From Discovery million the

XX. gears Changing expenses number on to Slide

For in and QX $XXX SG&A expenses year. $XX.X million quarter, million, last up is total total XXXX. amortization versus expense from up of was which were cost service million $XXX.X $XXX.X the million, depreciation And

million than Breaking is down $XX.X versus loss QX better costs primarily Service due up fees million, million. acquisitions. guidance. and went within million basis This these on was million categories, year. the items consolidated processing $XX.X Credit $XX.X a to line in last $X.X $X.X lower increased

loss and rates credit of higher growth. increased and the G&A less was year. points last Operating segment, basis volume $X.X than integration due million versus mostly the interest volume, to interest due including basis year million, expenses line million compared the $XX.X with expectations costs. to acquisitions, to expense spent XX.X points quarter, Fleet XXXX, was is mainly in was prior which In is XX.X and restructuring $XX.X this

went rebates Fleet Lastly, the million, driven recent the the $XX.X the segment, and sales on partner Shell up by costs. and line and marketing Travel both in acquisitions, Chevron

Slide On was on and rate quarter basis, for XX.X% XX. tax GAAP taxes, number compared effective of a rate for the an tax XX.X% quarter year. for for XX.X% XX% Now ANI third On basis, the was to QX the last XXXX. the

Looking from liquidity $XXX balance end cash perspective, million end on was position as now $XXX million XXXX. the Slide XX, quarter, compared with a to QX quarter, in cash, number down at the the the of sheet we a of the $XXX ended the to balance From at this corporate cash million.

borrowings agreement, the year-end. gives credit, $XXX at $X.X stands portfolio. generation defined Additionally, Card had after ratio, term capital. of X.X cash acquisition in the we balance Fuel at quarter balance reduced billion there the total Go company’s $XX of loans for the agreement. times, the up $XXX credit as times million notes. outstanding approximately than available revolving debt access in from line quarter leverage X.X The financing The even credit was of At were end, of immediate the million a and us and on more the million under This approximately by flow to

the QX increase As XXXX, reflects acquisitions ratio during leverage the in we from XXXX. completed expected,

continue to year. We a to a delever to turn X.XX turn X.X expect per of

rates. XX% in exposure This Finally, as have essentially the a to changes approximately of mitigates LIBOR of today, rate. debt, largely the fixed we financing

let’s Slide guidance move call, the on out close number To on XX. to

year expect so with quarter, continue far, rate QX. earnings have each got We in impressive an and which revenue to higher growth we

Noventis, and the Card also will Fuel integration Discovery of benefit from the acquisitions. to We the continue Go Benefits,

macroeconomic anticipated forecasting and trucking to Fleet weaker, X% a we seen factoring well related environment we growth gave However, as volumes’ deceleration have Travel local quarter, specifically, with be rates. More to over-the-road than volumes revenue. guidance we compared when lower are fleet customer the in X% last to the as and

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

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

points the you few the fleet walk basis in points based, and $X.XX me fourth basis prices points a last quarter, fourth gallon fuel NYMEX to through will of Domestic the The full basis let Now, $X.XX XX fuel XX from rates for XX year. basis assumptions. more per loss XX middle for future are the points Exchange between credit is price of in and The year. and assumption on the quarter for be will U.S. October as week. the based XXXX. prices full average

be To The for both and there in the the rate are remain adjusted income the full year. guidance tax conclude, for XX.X we are the outstanding. shares assuming net to approximately are XX.X% million finally, and between fourth is with proud we the projected And year. confident year-to-date expected remainder quarter the XX.X% of performance and

line open And operator, please that, questions. with the for

Operator

Tien-Tsin comes Instructions] first [Operator line from JPMorgan. you. Thank the of Huang question from Your

is line Your open.

Tien-Tsin Huang

time. good morning, for thanks Hi, the

the on detail. Just,

like I the comment, macro Just on weakness. bit guess sounded a of it the, little

the account looks is that quarter. to I’m like fleet you’re the You uptick a month-to-month, just credit if uptick Is macro, in loss expected going in mentioned to an behave it’s is over or two. as volume, it isolated curious or the how loss. road in credit fourth and seeing

Melissa Smith

Yes.

credit on loss. start going what sales. add then same-store And seeing we’re me with on in to Let is Roberto

that projected saw in seeing, And the and was fairly and you the worse. it on industry, the that, bit do second in the that if off the same-store is being what It’s slightly saw it – on of going below based little continue bit third kind weak fleet, was wholesale sales to were the look quarter, we’re assumption So, bit kind pervasive, with at it a a something last negative American we in That about fourth forward accelerated quarter. when is one trade transportation was X.X% it quarter. click was into we in and call. we the now our call-outs of and it we talked a that that little North little

Roberto Simon

If on loss. credit I the you give color some

anticipated. about higher the better of if you we and XX.X take So points be year, around X than points spent if was year, we you this think overall. full quarter XXXX And a was basis volume. model this basis it going is to And

So, in have small the QX just well, the from to credit seven obviously point was what we if come look think seeing be mix obviously, revolver is the loss. QX, recall, of at we’ve that the past are portfolio, we anything you on you a also don’t And different were earlier overall, is fleet higher. get this bit than we have year, view, now a it results and the But impact on you an going side are And we credit in our full year. from expected. because you loss where business growing when the been expected the that better I portfolio, quarters, where other see we the in and Shell of as

Melissa Smith

two we business the that, we’re an in trends typically together, – not in those slightly seeing higher. seasonality continues credit wouldn’t, the is kind things down to it’s see and see on we’re a fourth where But quality explanation what just we I volume point slightly just good Yes. are look year-over-year. tying quarter, of

Tien-Tsin Huang

there? mentioned had on a the And renewed as XXXX, Thank then or accounts, these clear. into of planning, term time. then the, you wins. pricing pipeline, that on you’ve surprising perspective, And from that. year very Melissa, anything just bunch the you a win any ability walk Thank rates is Yes, for to Again with replenish or thoughts on renewals. you’re your great you a we and for

Melissa Smith

year, good new good terms wins we No, It’s and you Sure. a continues. bringing in our pipeline. said, feel that been as in really about of

the across the pipelines look you each to business, the if So full. be of continue of parts

through. phases things progressing that We’re contracts in We’ve implementation. different are of a sitting got of bunch

to and in new So progress from win a XXXX, about continue to good feel we business. go our ability bring as forward and we into

are have. And we in type rate terms rates more different around of products the of structure, the

So our the across but different they’re are if portfolio, you profiles, margin look holding. margin profiles

that in we there is a on it been point that any holding what has in the the bring has overall that way a customers So in at that historically. happens depending mix is type time, given pricing of

Tien-Tsin Huang

so Great. much. Thanks

Operator

question next from the comes Your from El-Assal of line Ramsey Barclays.

You question. may your ask

Ramsey El-Assal

my taking question. for thanks Hi,

side business on you also least EMV should at working down machine the across here, we migration fuel Following that with credit to metric the is that of fraud on see the step point, year trend at of you’re fraud loss, up given we the that question because really of learning, on something that Tien-Tsin’s things, should next more the at with expect? expect pump certain a piece down guys or

Roberto Simon

this Roberto. hi, is So,

Let me couple we not about in couple years. the of place years now seen credit a that fraud past we major in of system. a you put anything a losses, And have ago, we talk know the lot start,

to in the losses say are fraud year, you In would XXXX versus last down. I fact, slightly

then the So really losses on about minimal. when you fraud credit total the are now think loss,

we as go this So have said, as credit are and now we from differences as been any year. where I Melissa into last year, we and said, seeing XXXX, around not

implemented, points. we are that, of full approximately end year, or basis are You should and obviously is the fraud to losses we once the expect where of PIN now, as into we the if think But XXXX, to see move this the of year, similar said, the chip improvement. year, range expect as be next you range small a half I on on about the and at XX%

So it’s a small amount.

Melissa Smith

so to learning side it’s whatever And we’re a lot is machine making of going of the happen, more that on what is being doing ahead we’re preventative. sure

and about the it’s tools, as preventive a developed so segment, really frauds. what we develop travel corporate we seen something we is to transaction that largely, added lot of card-not-present, were intended talked virtual the and we based we that toward plastic really be the in was a it internally geared class. tools into external payments, best I there’s minimal have it’s think the proprietary are to which So But

Ramsey El-Assal

thanks. politically of follow-up can how benefits of – which see sort terms you right And OpEx parter, in plays Okay, maybe the then presidential comment as a healthcare your here, for I two kind over hop season in back business queue on time I’ll mostly guys. on built migration, and read we that – mean just your we then is it’s the the is, out. not. sort any the any do you that of election Thanks cloud Roberto, a to of on one to exposed expect from business should or of political sensitivity migration. see the a as And

Melissa Smith

regardless plan that’s usually in that whether attached of it’s accounts government-based some with plans an that, that when there at HSA a that, be end you prevalence of offered attached will up the the We tax look it’s associated that any co-pay associated scenario the account, and most between. with think it. that We likely so version think likely, of in deferred an getting or

an we envision So happening terms the the on election. business up of in there what don’t impact with ends being

Roberto Simon

from way what a moving the I mean, from about us Number point things. of I it, centers also we times mean, cost be see the cloud, of couple and important, cost flexibility is couple view. we is see on and the one speed expensive to having we market. the have into that moving into expect avoidance the, a very cloud talked That’s of other we of and is it fixed about side data for are talking a And the

and now, we say one priorities ability the are as move flexibility and market of why into the cost the the fast reason would the now having are look you, thing, doing is the to this. So we to avoidance I into the future number

Ramsey El-Assal

Got it. Thanks so much.

Operator

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

Your line open. is

Sanjay Sakhrani

revenue to impact and Thanks. you bit I first it off, could that you revenue understand could sort because I’m greater maybe want of like of you losses, following me. to made more I good the just but the Thanks, talked I I guidance. the know EPS, to morning. maybe you seems just some impact, changes disaggregate guess, was and guys Roberto, a sure, EPS for the disaggregate the make than little if of

Roberto Simon

course, happy I’m that. Of do to

So first of all, have QX of and you good, than QX, they remember first look let’s break an from view, were you are very point the side. on if But ANI me remember so, QX, all the to are better even results we they at all to that. revenue let

Let couple takes. of me and the give you a puts

revenue spreads have side, were the on So of side, Net U.S. in Europe, the we fuel on we positive positive. we have obviously prices in the

performance that from business payments partner also was the better positive. have also channel a corporate We

Health is on the on fuel they and in segment was other segment Health revenue and on spreads side, had have the a positive, were also positive. over-the-road thing that good the We the that also the the you have side the very The quarter on We very over-performed. health then segment.

On year-over-year have and pressure still are side, we that deceleration are it but the still you guidance-over-guidance. flip putting FX of impacting seeing rates is impact, the a FX

fleet thing the the on what is the travel Melissa and column, also volumes. we And is mentioned talked final

And – put lower So EPS are together, a lower And when mixed are the on positives could the the impact, is impact EPS, rates volume by in Health There FX of bit, negatives. the of the deceleration performance. from the the summarize if the positives fuel higher a offset some the and and have on ANI, ANI bit more prices I mostly you and were Travel volume all of the I’m, margin some you precise of negatives. give things is fleet slightly the a the then these you offset majority are comes the a side.

be that ANI the from the from would So revenue summary and the side

Sanjay Sakhrani

And perfect. That’s Melissa. then, Okay.

we that in appear the itself. the the sales at and you’re this some typically do a made cloud of migration. assumption how seeing it or feel seeing how sort discussions answer lower that’s question what mentioned guidance, does the of on you’re more just And that’s might you a temporary look sustain then the you’ve of has should You know to out. curious related like that verticals but it played same-store the related little to bit trade just it, clarification the I’m weakness the and composition I

that data have cloud for been be Just of you’ve businesses them shuttered? some centers over the of the all or to you clear, are running moved to Thanks.

Melissa Smith

Thanks.

couple a there. questions of in have You

So so sales, far is to look what seeing going so what if in see fourth quarter, we’re well. is our you it’s that you is volume see the October the as changes, into same-store expectation rapid at, don’t continue which we’ll historically,

is second the question data centers. Your around

down We data have that we the some shut have. centers of

the still continuing We doing are in process of that.

about with down, So yet. we talking North American we shutting fleet, have to one but you’re the are the it close specifically, if not

Sanjay Sakhrani

Thank you.

Operator

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

ask your may question. You

Darrin Peller

Hi, thanks guys.

talking Melissa. segment been media know, actually travel interviews about a your overall slower trends some accelerated. mean in I curious, on bit know I Just you’ve travel, corporate I and

been how the some can has just And you comment as bit had more there how well? like you’ve was Europe all I the corporate guys? you side, side doing it in on on for So really a know it is the and wins pipeline travel

Melissa Smith

sales. about be of deceleration, just concept talking we’re same-store Yes. about this And to when specific, really talking we’re

be last looking that and we and soft QX, and we’re customers. trends publicly then that about we’ve we a we talking bit. volume And again, saw little also for at been slightly call, in accelerate but, when talked the year-over-year them saw same what about QX, was which in elsewhere, So

very precise be X%, continue we at really to to and we win trying trends. to to the saying business, continue were same growth new X% strong time, we see its So

so travel look And all metrics growth, across if processing you that our grew in payments. XX% payment grew our we we and fleet despite corporate XX% of in

are an so, seeing growth strong And we metrics. incredibly still

of the points the resilience it think I model. to

seeing despite continuing strong So an we this see deceleration, the are incredibly growth. fact we’re that to

Darrin Peller

Okay.

bit the but been sales, So to macro-wide a adding on travel decelerated business same-store specifically enough offset. you’ve

Melissa Smith

right. that’s Yes,

– places corporate in point. so exactly look if you that’s And yes added, and outperformed. the we at of So travel the corporate payments some payments,

came a what in expected. little and but soft So in came we expected the than travel stronger than Healthcare stronger payments corporate is we

we in business well. And of other seeing the are parts lift as so

Darrin Peller

right, all thanks. Okay,

I guess, what you And that then Just but checks can on still, could Edge you on side it’s gone what the the is attached can of give update you’re a there. of on seeing. just kind spend, and pretty mean the I there that comment to just well, industry rollout, what increased the that, fleet and seeing kind us on fuel the it’s going follow-up room average WEX you, an business or you kind on you’re heard the called maybe side, test usage lift from – we’ve potential repeat maybe opportunities DriverDash, of or that

Melissa Smith

sure. Yes,

more allowing on to and little just people of to tested Edge bit, up kind we this buy Fleet half test a said year we So a what back is the our product to we are relating as WEX products. doing of second

doing really in been that other have marketplace the the over-the-road that extending of parts portfolio. into functionality and We

know there next of preliminary test. we go We into We product until seen are the early in interest production the is on based we’ve full that won’t for year. in but the what results, stages

us. So it’s to still the in put caveat, early that for

something signs DriverDash, of continue add Shell, that which ExxonMobil we that we product, when up it. great are seen starting DriverDash. really we’re into the and And to of they the got for where have, repeat have portfolios those And offering it someone particularly customers acceptance we to use look usage, is that with in we’ve for.

And metrics we’ve really part as the package, that something something back got from are interested that far. of if it are out this that because instead having be is rolling of customers that you good in using we’re so so

that So add we more to they the do think increased think something you’ll continue we see to that adoption their time. see to and acceptance, of be over network and will merchants, continue as that you’ll more

Darrin Peller

guys. thanks Okay,

Operator

William from Blair. question Your Robert the next from of Napoli comes line

your question. may You ask

Robert Napoli

and you, good morning. Thank

that seeing be earnings And for Just growth? in of your, as be feel the that would ranges some look segment you overall targets, by your we thinking business you if organic some I of your within pieces you revenue on, can target comment, just about your this XXXX, mean, we’re and and do could maybe of into deceleration helpful.

Roberto Simon

Obviously any good Bob, guidance So, morning. formal prepared we are talk today. about to not

about color me as we some the budgeting process that let speak, talk we will but we through going now and are you know We what can portfolio. give hopefully discuss

benefit, of the you in three So some the be remember year number the Noventis, at as we have next then acquisitions, mostly end the will we on QX Card. are half now closed And and Discovery by we then year we have in tailwinds closed we will Go in still ramped, we one, know second and you March, obviously the January, QX, have will incremental. Benefits have Chevron Shell and fully that portfolios Fuel have this

we tailwinds also that know we there. So have

same continue We but volumes deceleration sales organic first in Melissa year, continue expect will expect perspective, to model the if has growth we crystal should rates in what expect their obviously today. time, specific, to growth. we And and of to the still we also trying know into have each the finally, very today, talked then a and expect put next continue of At everything ball, And are momentum the been driving from you on the is new half the should you this we businesses we second than higher XXXX. half. you don’t together as

today, we out we and year I the what guidance when have of end know our the we at will you, there. to will formal So, this into say get is

Melissa Smith

said, the then year, year. beginning Roberto and you’ll investments saw as the the ramp the the So opposite of next in see year, this trend we

we new growth in. as that we that you the through what year, feel that’s see annualize prospects the our about get we coming business really but in still have the good pipelines, have You’ll

Robert Napoli

And Okay. then just a follow-up.

growing been at some has to is You AP at involved that business AP your of there you acquired point? travel that that the Automation outside business think a I a Automation talked one just corporate in expect on the to about more Automation, to I need with AP strategy high mean and, I – payments you AP business. Automation competitors sizable own in rate more piece, the get partnership continue? organically, Inspyrus, overall, What a do of the do think

Melissa Smith

of different the players. We participate to trends, We we across have have the to market of the own order AP history a we like in of in the don’t business market, feel the the with place. growth in partnering like and lots market. like size We

with the so in and partners partner working multi-channel indirectly we So going and the FinTech particularly a where approach, that channels where the going with resonates with having other finding concept play of is to us, We do, you’re we talk resonating were tech well companies. something idea behind of sits able the to that is they and marketplace. can payment tech, – whatever in of so the being can kind be that enabler the is of we

terms through that’s through to can Inspyrus want And have of other business highly in backbone speed then with, be too, would the say resilient whether with market to to and to sure effective growth. technology by so, with APIs, DBI being way channels that we there just see the short-term And going some connect of able is enable the important the business tech in these being make in, I that or we’re players doing just or model their how partner channel important to been we but really direct is us. and

Robert Napoli

is conflict distribution that revenue of much your know of strategy being over so partner one business, a the to HSA or there, material. and the long-term, balances balances, which income have you business, partners a I that of are doing Thank channels. earn something quick I on able Healthcare but well. that’s just any thought your the is very I earn the you mean custodial you. think the there can And that the is And on too is with

Melissa Smith

distribution business or the Well, with then partner with if – will it – places custodian. associated our of We the those transaction and bank the directly channels. to doing through is help someone that that keep bank, then think related DBI not are with we that with doing they’re business therefore it’s channel, going that’s we’re deposit through the

at because kind And we but incremental look for the some so it partners, been grouping material if you so get hasn’t associated us, of of do with far. the revenue that, isn’t,

do revenue, interest SaaS you and we little list not, a stream the being changes, third from the being payment I it’s part that look when get it’s benefit. where coming processing, fees, the revenue, interest business, first of mean, revenue you third in see that’s but the the getting rate So, at lift of second if the the we’re bit of being

why the HSA that customer had day, part of it’s of big of people really they a up that and a this of setting think concept that funding on think more they partners that of this there statistics consumers’ benefit to a We could have making high we you as protected our you deposit base, around population large into do terms under-funding really event, we worked increase also think to an us in of sure there important, both the balance. is that if can or account is not there is the prevalence see and really healthcare within a see, we when deductible opportunity when dove that that as plans we still are we that it, either it

So will over us time industry whole I to as benefit going to the see think, you’re from continue well. but it,

Robert Napoli

Melissa. you, Roberto Thank and Okay. Appreciate Steve. Thanks, it.

Operator

Merrill Your of Cary comes line America next from Bank from question the Ryan of Lynch.

is open. Your line

Ryan Cary

the be Hi crossover We’ve along make T&E from would of of which spend, spend my quarter the guys, some into AP as things some would lines of my slowed, that I there thanks more question. this guess the heard sense. networks is for assume this well. taking corporate side could commentary is

as you some do corporate of corporate side the remained in for the well, like quarter, So AP weaker demand on demand think the progressed? you seems the it well, growth these as business did any impact strong can first, payment second, in And slowdown see trend? very ultimately quarter

Melissa Smith

good a question. That’s

is of relatively If you part the small and business, of that to compared the business look it the growing. at rest

of it’s So, kind stages beginning business. you’re little harder to of look when bit year-over-year a the at trends, the in

it. I something And that think we’re because that in nothing we marketplace. stages that there’s we’ve in would grow if notable there for even notable us, seen So was through early

Ryan Cary

could this and this quarter, that of quarters, around Makes expectations these more possibly to new the initial next rate Chevron that sounds is to a accelerate $XX portfolios would the revenue for how in curious, or Shell do I middle the Is of get new at fair, And and XX% on toward then, Thanks. and it. range. $XX initiatives the wanted portfolios? sense. look you Got you like follow-up good it Fleet of basis. growth million the to run an sales your just we annualized responsible portfolios, several It should are right for trended more as on compared million was

Roberto Simon

morning. good Hi,

of on no, and expect So $XX we gave and progress you’re right, into revenue next we to two specifically is, the to portfolios growing we two $XX when we QX those continue as expected, million those so this where year come range have the for two full XXXX, as now and portfolios. closed first quarter the million, the run we to portfolios years of is rate the we

said and and grow be, was because into start come the said is before, for I those have obviously But Napoli, us expect expect in QX to year, they then with to now we is that’s QX, move should the with for we Bob overall them. ramp next it as our portfolios think and to expected the ups. we XXXX, XXXX. want You grow as as should we will QX, I of reason always and overlapping where feel you same And why what thinking the we

is obviously them. the get over of revenue So from idea we growth time, both that

Ryan Cary

my for taking questions. you Thank Great.

Operator

Citi. Your next Christiansen line of Peter the comes from question from

is line open. Your

Peter Christiansen

this taking quarter. changes Thanks some Melissa, there organizational question. morning. my were Good for

across we these platform going priorities forward You also you and new with thoughts patches. like whole Are corporate have of company a changed soft pay the have, on sounds has investment the vertical some developments. some in FI new – its

across how other then a Fleet sense particular like that trying in to Thank you even trade, weakness trends to get market, some And just are isolated follow-up in transportation that the a similar construction. wholesale end perhaps of business, Solutions end is you you. some seeing as out called markets

Melissa Smith

relatively Construction year-over-year, actually I’m big so going wasn’t with your last really actually, looked to swing. I’ll question. start there a flat

was two bigger You that that in see aspects, to across the Construction them. relevant see the of of the a were one were, them not go and probably us you’d number half But if I different you kind were did size. them there of all down. markets, probably call and that of down more across you of that different are look were year-over-year.

it, impacted. by So, industry well. I of isolate small businesses, do other portfolio, you think can as of be something reported this about to one of that’s seems And when a particular their thematically this tend reading they that’s softness overall seeing getting do other to us say, a be we I’m you that kind about when concept are business bunch relatively of companies is something slight that you with like that talk and think number, to customers,

our of and is strategy. overall I’d change there strategy, in say no terms our In

we’re in We’re to of very growth that technology. we’re the we’re from business, to focused grow to to see continuing business continuing that delivering, invest going on we’re any new our in bringing that metrics can grow, year-over-year, you continue and a

because cloud focused the us. all that’s it’s this the fourth our we’re build saw But So see that earnings From place continuing just coming if we’re the to side, a you competitive have it’s that idea in the places kind for strength year we of scaling future. the growing, on going in where quarter, what tax really of upon underneath make what we third already in to about where and work milestone quarter. can that a projecting technical that we look we our the sure business across four the focus, the sure of transformation, been we’re we’re the make we movement, we a and want feel talked through perspective, you that, numbers on

can just business many doing but now and lot sustain a the So is the that on, work years. over quarter making focused sure we’re that this of not grow continue to

the of focus we each in multi-channel partner a markets FI the FIs sure say So to change effective dedicated reach in have is an we’re thinking as sits that, shift to and a to that there adding think saw channel, in, we I’d really that no, AP a way working with or into it’s the so. way and concept behind about there it’s no you of making is is marketplace that when do people

Peter Christiansen

Thank you.

Operator

Mr. back Steve to call the turn now Elder will I

Steve Elder

quickly, with you, to joining this And February. just forward Thank Thank you. us quarter most in thank you to next today. likely And year wrapping look up sometime want operator. for we everyone very

Operator

conference Ladies you and for Thank gentlemen, participating. today’s this concludes call.

disconnect. now may You

WEX (WEX) 31 Oct 192019 Q3 Earnings call transcript