WEX - Earnings call transcript Q4 2019

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the WEX fourth Quarter 2019 Earnings Call. At this time, all participants are in a listen-only mode. 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

begin. may You

Steve Elder

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

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

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

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

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

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

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

Melissa Smith

morning joining year quarter we our us growth execution to strong for for a that end pleased momentum, and record report had strong of business Good our the XXXX year by kept finished very effective performance highlighted thank and today. to WEX. another everyone you I'm in each and with segments. this We

foundation combined we has sustainable growth, as Solid with strengthened our up growth nicely acquisitions, entered further organic XXXX. strategic our for sets us recent and

performance the quarter quarterly delivered and on Solutions grew of three. slide results XX% guidance driven of growth year, our Corporate to our strong $XXX very by Travel for another earning last and first in compared at segments. Revenue our We million Turning range to Health to top QX. end

Fleet in range. reported later, guidance of to adjustment did growth. that X% reduction between impact and a end Roberto difference segment This revenue earnings, led our revenue reflects Our the not which adjustment top previous the will the revenue discuss in

growth caused environment. in unfavorable prices, From lower the fees by headwinds growth, late were reduction by grew volume by a partially FX from an fuel, revenue softer and increased perspective, processing X%. fuel a incremental Solutions adjustments, which Fleet included revenue EG X%, segment up transactions market offset X% driven and Payment

impressive $X.X an volume to billion We more than with during Corporate and Solutions. up Travel close the QX, XX% revenue increase to purchase in out Turning year with billion. $X.X

from by the meaningful segment which momentum contributions was in Corporate boosted We continue our Noventis. Payments strong

healthcare XX% growth than driven our and Discovery Health Benefits. contributions Finally, quarter. in expected in segments, Solution and organic U.S. fourth with business, from Benefit better our in was by revenue was up an Employee the XX% impressive double-digit This growth

a per diluted basis, XX% share, income On drive to continues $X.XX, the to GAAP was Strong XX income over growth attributable net top net line diluted year. was fourth adjusted shareholders prior per leverage share and quarter. operating up the $X in

on Now Revenue four. the of XX% recent looking for at better increased expected Discovery just $X.XX past to Noventis, over this fuel the full billion from than year, and noted WEX another performance record XXXX growth slide contributed EG acquisitions was year including our Benefits half as year.

performed rates, our the outperformed them. XX% range including which our to prices guidance and XX% well our range to range, compared backfill When to revenue X% XX% end acquisition we of long-term assumes top and we when excluding within FX

which our year the in an from revenue our year-over-year. health incredible solid business, grew XX% include across U.S. growth businesses, particularly Highlights all of

Shell results from ramp during and the integration notable achieved were acquisitions which portfolios, also from and and a the completed. we the that year the We Chevron focus up of major

a a to and the From share and ramp net with Shell from GAAP the the income standpoint, adjusted business, of per we throughout we $X.XX businesses XX% diluted revenue $X.XX. per Chevron, Similar the share nice share or per to growth net had acquired solid diluted profitability organic the diluted contribution during increased income year. growth,

solid In rates. target XXXX growth foreign income within addition, was just range, prices adjusted which exchange long-term our and assumes our in net flat fuel

five. to slide Turning

in We upon through and superior growth still engine, best-in-class Our execution strong ago the years aligned XXXX committed our scale leading strategic our performance that technology, serve building remain as set guidepost through business. double-digit best employees. post leveraging a to for and our profitability growth, milestones to the attract technology pillars driving all successful outstanding M&A and of by Executing integration underscored achieving another to against culture across segments. has business these revenue pillars to us of our and strategic year, retain allowed

best-in-class As in growth win marketplace. part in to our the ability us our engine, XXXX for was driver growth a significant of

in Chevron products six, highlighted of significant renewals made the the possible technology. wins of we've in the some of by segments. most These of leading across market Shell WEX team, best-in-class our can on contract you are XXXX, accounts superior As notably wins portfolios, of number most a see slide the and our all and execution

stability us complex as Day our marking year migrations to outlined and is and in of is XXXX efficient front, driving technology on focused of technology migration capabilities development This our was cloud, American Fleet most WEX scalability, during the migrate the On migrated ever technology, market, and and speed gaining more beyond. Northwest objective our with XXXX this very to to cloud and goals a migration. platform functionality. technology and platform third building disruptions, platform and existing Investor done it platforms main including has customer remained enhancing significant largest XXXX we one was increased our the one landmark continue with new little for Recall, of completed the of

focus transaction system processing Travel our internal and platforms our Corporate Payments of is for of customers. the One

releases to for scale. cloud addition more this OCR business In one platform, help largest new consolidating internally achievements year, migration XXX than to our features the including tools deploying us ever, of healthcare and a included of other implementing host product

the Our and one of cornerstones our commitment on will industry-leading remains fronts of drive in we innovation continue XXXX. to to advancements business all technological

long-term income XX% and ahead we a successful continue, XX% our XX% achieve momentum to adjusted expect look building net growth with XXXX. to top in to XXXX, we Once our tremendously off expect results line alignment of As to growth we XXXX. to targets our in XX% again, business

have this but assumptions of our Roberta underpinning like expected details some guidance on the provide to through I'd our color the will year, we take performance. you key

line our at business expected term we targets Investor to is First, generate with to growth our year. year, solid Fleet longer last Day growth our similar last in aligned

also we trajectory performance However, see as year XXXX softer Chevron, our throughout market the the of quarter the inverse XXXX. continue likely unlike the year last to which the in We're migration these environment anniversary begin portfolios. last assuming will will progressively discussed ramps and large into Shell the

American acquisitions robust expect and and Corporate announced businesses, provide our lifting XXXX. Optal acquisitions of which we these not will factored our to from Travel Payments guidance, from recently our contributions meaningful Second, double-digit be we growth have been profitability expect close, and in when but growth into North eNett

another combination bring, geographic exposure well driving that fluctuations, and next Health OTA reduce business. which technology a opportunities reminder, growth key macro new acquisitions WEX expect and provide advance product U.S. global the to our As is of diversification performance these our about WEX’s phase this lastly, We're economic portfolio. strategy record complement as as long-term excited our growth. And will to from

extraordinary growth as sustainable ever back have I against As pleased XXXX, this look this is achieving established that am which our and before, performance execute diversified continue we our get year. at than made we more year towards the to progress platform reflected a with is I we resilient steps taken past the pillars, more in strong strategic and

across bedrock serves the of leading leverage to continue partner of underlying markets market will our We that the core our relationships, the customer as positions business. as our well as and technology strength

backbone are to moment of success a who of our take Lastly, business. employees and I want the WEX possible to all the thank make truly

Simon. now would the Roberto like turn I Roberto? CFO, to over our call to

Roberto Simon

Thank you, in for Melissa the XXXX everyone. full the highlight morning momentum business. Strong year the fourth quarter good and and results the

level, I year the will details guidance. of moving XXXX with high onto my start then finally review the QX remarks the at to a of full and

Starting full compared on income. in target the income and XX%. adjusted and net solidly WEX adjusting the with range was their year. the to net revenue When results XXXX, for grew outperformed XX% grew revenue long-term

significant in of on income, $XX approximately Fuel each and growth prices net $XX the adjusted had a million and FX million revenue impact on negative our segments. rate impact with revenue

grew revenue Corporate X%, the and Solutions at and met Employee growth XX%. exceeded growth targets grew or Fleet Travel Health Day. outlined rates Each the and For Benefits organic these of year, XX%, grew Investor long-term

with these We very satisfied are results.

slide Now, adjusted quarter revenue let's growth on growth, segment. We nine Travel got net Healthcare the income QX the double-digit XX. another strong by driven top in line and move results and of and onto a and

reflect to by correction with impact the equal and Melissa sales point we benefit of from mentioned, reduction will to growth expenses. Overall, growth bottom earning to on There quarter performance $XX.X continue From and both revenue an an revenue that X%. fourth top revenue view, million and acquisitions due segment pleased as reduced we marketing earnings line previously during made the growth are the in Fleet year. X% the The was a results. revenue to no

For high-end total XX% per was $XXX a net diluted revenue XX% share, $X.XX the $XXX.X million, or up the the Non-GAAP fourth adjusted quarter million income at of was XXXX, guidance. of and over prior year. increase

came negatively X% X% a the from approximately from revenue I impacted XX% due factors. macroeconomic acquisition, the mentioned revenue XX% growth from by down from X% decline organic and organic, to revenue The correction growth, headwinds X% earlier. Breaking was

slide Fleet North quarter solid another Moving business, X%. led over-the-road. results, which million the with by were The from prior revenue, the an gains to beginning to $XXX.X achieved year, and American in XX% segment Fleet Solutions XX. increase grew Compared of

benefit to continue we Additionally, Fuel Go transaction. Card from the

of growth to transaction segment, we sales. low driven Fleet time, X.X%, see solid the organic processing attrition we Within to maintain same continue the by continue very new payment At rates.

Finally, to same-store anticipate a were We trend industrial XXXX. to in X.X% continue into due slowdown negative sales the economy. this

increase basis points net Finance XX business and fee And to Shell fee wins points last and seasonality, XX portfolios, the increased new continue in XX of this The The to revenue late to due rate in increases. XX%. was rate basis QX line mix XXXX quarter points and comparison the to quarter. the with was basis in a expectations Chevron small a increase

QX points was net the adjustment last XX revenue over was rate The was by payment basis basis XX to XXX in reduced which basis decrease primarily year. rate The down points, which points. processing due the

negative Shell the in impact versus In QX To addition, to average it price due XXXX. and from domestic in and fuel a the Europe. Chevron finish $X.XX spread $X.XX was also in Fleet, portfolios in decline

Noventis. XX. all to increase had number momentum slide $XX Approximately XX%. Travel Corporate to segment finished for Solutions strong was that year. We on with million the acquisition million, and of the an same quarter relate we the Total XXXX $XX.X revenue of Turning

XX%. In billion. versus XX% grew growth Outside WEX the America, This and year. grew Travel in Latin purchase XX% prior reached volume Europe. North Total America, the U.S., corporate of represents $X.X payment double-digit in increases we saw revenue by issued

points Noventis points, which conclude increase corporate net the fourth this contract basis past XX the basis was continued segment, change a higher with Like to quarters, rate our and year. was customer, in in payments. the than U.S. quarter the due QX last strong in To they acquisition interchange was performance sizable XX the travel

XX. on to slide Moving

Discovery includes was Solutions, and USH XX% quarter the the down, Health a Benefit million. For $XX last XX%. which we To expectations Discovery surpassed compared grew year. impressive substantial break the business of for plus added to Revenue this legacy Benefits and grew acquisition again. The Benefits WEX XX% up an sales the revenue, legacy Employee

the continuing XX%, up was accounts the year. we SaaS trend of have number average The throughout seen

high-teens additional run. to expect U.S. to We market growth the capture are continue the and middle well-positioned to growth in in long Health

successfully on integration deliver of deliver view, point we from than million $X Discovery of million an the track the are acquisition end From to $X more by and XXXX. Benefits synergies another

XX. move let's expenses Now, to on slide

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

categories, Breaking down acquisitions. loss was up from the a within costs year. to million flat operating Service million, $XX.X to $XX.X items primarily increased ago. processing prior fees $XX.X compared these were line and quarter Credit the million, interest during the due year

market, continue we loss trucking see prior points fleet over-the-road segment, Consistent North fire quarters, the In in America was business. small in spent basis with challenges credit performed the Fleet XX.X with the Fleet the and guidance. business of losses within to well volume

went announced and acquisition and based G&A Optal the eNett to of expenses higher due compensation. recently million performance up $XX.X

Finally, due Shell mentioned adjustment. expenses million, the This Chevron sales cost. and revenue and were acquisitions and down the to $XX.X marketing the recent offset largely by previously was

Changing basis, effective GAAP quarter a the ago. XX was onto slide ANI the a a tax taxes. from year was down non-GAAP basis, rate to this On rate XX.X%. XX.X%, points On basis gears discuss XX tax

quarter balance end up the ended of with slide We the at to year. million now cash, sheet in Looking $XXX last XX. on million the $XXX

strong liquidity For $XXX balance flow QX generation. $XXX approximately million. a cash to corporate balance from perspective, This increased cash approximately our due the million was

times defined borrowing agreement of of credit end up stands got year-end the $X.X million of billion the total we on agreement. $XXX the XXXX, of and company's ratio line last note. The at the available under as balance were X.X X.X revolving approximately our at end loans of year. there Also Additionally, term the from credit times credit, leverage at at

the we reflects completed increase the during acquisition expected, As XXXX.

less our After expect to leverage times. we assuming per year. and to term closing than for date forward, Looking a expect to closing, we term Xst our be July Optal, and eNett X.X delever full

we as Finally, financing at of debt of have today, essentially fixed the rate. approximately two-thirds

the we acquisitions. growth, with to With exceptional and rate, integration the look guidance an of Fuel Discovery Shell XX. slide on and as continue earnings will continue revenue Chevron Noventis, growth organic anticipate Go benefit let's the and this notable Now, portfolios the to Card We year, XXXX. from and Benefits, growth through

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

revenue is important, XX% First, growth target our of most the long-term acquisition guidance prices XX% in These in line with XX% fuel assume FX constant growth earnings. and our XX% and include to rate. and in to targets

and performance segment, of by Fleet Shell consistent driven long-term are growth plan transaction XXXX the of the with and target X%, Starting to within the continued our rate, Chevron portfolio. X%

growth business, slowdown to due XXXX. in in tracking a compared However, macroeconomic the to factors to over-the-road we see when expect

of of XX% the XX%. in expected middle the Moving Solutions revenues target grow long-term to into segment, Corporate and the Travel to range

mid and impact not rate. in and interchange eNett small growth a does this of include To clarify, be the transaction. expect the the decrease the volume We in teens to Optal

season, Health Benefits driven expect the customers a low our revenue successful U.S. we business past over be and from and several the we will Health open contributions years enrollment seen This Employee to Regarding Benefits. the by momentum continue and the range. XX% Discovery have in new grow segment, meaningful

billion million a in reflects of made billion and to of to range of our is for adjusted range our the date. The net Now in expectations income and the to the guidance, $XXX million. business $XXX revenue $X.XX year, on full which non-GAAP for basis $X.XX

$XX.XX to basis, between be expect diluted per $XX.XX and share. On net adjusted income we EPS an

quarter, $XXX $X.XX and to per share. On the the the to are is million revenue net expectations first range For adjusted in range million diluted are net to of $XXX million $X.XX and expectations in $XX between adjusted EPS expected basis, an income $XX income be million. of

the Now, XX loss its for XX $X.XX of first basis quarter few company prices between Exchange will rate year. quarter the February price credit be first be XX full week assumption the points to let of year XXXX will based to adjusted as is Xrd. XXXX. future mid-February expects XX.X% and full NYMEX in from on at are year. the XX.X%. $X.XX the through for Domestic the more me for a The based you full and assumptions. Fleet The for net tax This applicable the income and U.S. fuel the rates average XX walk for and between

shares for will be outstanding XX Finally, there year. the million approximately

to XXXX and are To forward looking successful about are conclude, guidance we confident year. a very

will open we now, for And questions. line the

Operator

[Operator Instructions]

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

now line open. Your is

Sanjay Sakhrani

in Good macro backdrop. more I morning. Thanks. a and the into little wanted appreciate the to Fuel bit I challenging dig segment

we in at it transaction sales than was seemed the versus same-store desal little when However, like same-store the sales. look more deceleration the some a of the bit the growth latter numbers,

you relationship us So, wondering going that if about I just forward. help could think was

Melissa Smith

this Sanjay, So, is Melissa.

the the You in talking are growth, about the growth quarter? we X% saw

Sanjay Sakhrani

Right. a growth year-over-year decent amount? rate that Like decelerated Like year-over-year.

Melissa Smith

Yeah.

talked about sales. last deceleration we've same-store of seen slight So, in the a couple we've quarters

a from coming you -- that a percentage And point QX so to can about see through QX. half

So, incremental. it's

Sanjay Sakhrani

Yeah.

Melissa Smith

Yeah.

same-store year. compared So, QX to prior bit degradation sales, X%. a over the little in And

business, there If rest look were business days what's across of you the at changes happening the sequentially. in

of number and excluding that getting similar, two that, talk within normalize sitting benefit days of The business little are happening base days we're about the QX, macro you you new to growth isn't and if happening with in what's in business. really those happening get that look anything what's were in quarters. business that there So, QX, for bit look at little rate the But in a in of a in QX. businesses we hit number QX a that bit

Sanjay Sakhrani

And specific accretion of think bit any Okay. exposure, risk to that to saw just And when you numbers, at the those macro weakness, about guess, we or they ahead there's look -- eNett Asia much we of I when sorry? how trade some -- the it have virus, do is the virus it feel like is impact I more that wondering little given I'm stuff we news? a the to related guess, of of

Melissa Smith

numbers Yeah. there's sequentially, same-store happening And biggest are fleet question. the we've the the On American seen fleet to changes let what we're -- to led that's for talking is segment. good our specific about it's me impact North clarify sales portfolio and transportation in so what's

the got that's So biggest to drag us.

If you sequentially, and that's in But the little positive the to slightly is sales only what's everything's Fleet. a QX worse. from looks other bit with so American thing period to look happening compared that public North administration worse period administration, same-store all

because make And that's to setting don't at ballpark I in to assumed customers in of would would And seen type if it's or indicator across it's similar. and need they're where QX, fueling have and pretty deliveries been and into we a -- and in little that QX, in XXXX. to have they and we've American you negative North what I'm we aside remember, They're say they're in volume. spend that the them to that different Fleet coming make stabilize look many but if of that going to so calls manufacturing, don't if continue service and they fuel say mining don't through see don't many happening industries. our bit in slightly they admin the we where looking put worse are season business, really what's they an -- have different the need they businesses, our

is in coronavirus, our business. And Travel different just of totally -- the our in Travel put volume thing This United it's about that that is Fleet recall the in spend our most a -- aside in States. business, our and talk

see on of In for in within relatively our an is We us didn't -- is a Kong you're January, regions business, our really coronavirus. did Asia. part and had that, see The amount it little softness impact no very sit a with slight But you're Australia. business. Asia a second Europe about that Hong impact talking business happening that's couple in to because talking about we small of of

in guidance And in dynamics of forwards in really range, again, for we're because if impact, said our XXXX, in we have off seeing the much of we our And portfolio. we at happens impact WEX. where but our have an assuming such not within assumed we're what minimal look if midpoint, because look when Asia, when that spend we you go guidance our at little contemplated and -- business who of we volume you

you market and When Asia, eNett question was which their around -- in volume the of their then And there impact Optal, in percentage Europe. third is a business ask XX is to XX% we've week out. into looked that Street Wall a things economist had there's they impact. an put just at call Journal want this research, travel article out of -- couple I looking to

at what they're saying look is If they're you volume hotel hotels, predicting to globally. and impact X.X%

of like research If that you done coronavirus, front, previous some this at they been looked has Stanley by look the events. at on Morgan

point but So, leads relatively this business time relatively impacted we regional WEX’s should short they term relatively impact think, be And box this situation, that which fluid what in to back a extent we're to feel core we remember, pandemic by step and showed Optal close. those issues, that a a if know us us we're helps for in assuming is midyear the that was that have impact looked at level, minor we've the would at we believe I impact very are macro what and -- virus this eNett the that would and that you brief. and is to

Sanjay Sakhrani

Okay. Thank you.

Roberto Simon

Melissa said, spend. a what do and our you $XX what business I for some add to if Maybe of we bit more this, Travel put numbers than Sanjay, overall, will take you billion

a year a talking on in couple on revenue are percentage basis, million of every dollars for full a you So full year point basis.

is of what would in volume as flavor So, be on the it most our you it North But gives today Melissa a said, now America. impact.

Sanjay Sakhrani

Thanks. it. Got

Operator

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

is line open. now Your

Ramsey El-Assal

you in little a Thanks be that'll you adjustment today. Can And if forgive taking helpful. And Solutions is the in I've between remarks. my on calls. been for the Hi. prepared color segment? Fleet it me made question hopping more couple your you addressed give What exactly? a

Roberto Simon

Yes.

Roberto. -- course Of this is

commission explain The agreements allow me to When gross record XXXX, January with on certain on top to adopted the Let it XXX customers be we basis in ASC P&L. you and the revenue you. that standard the it keep you the amount revenue and presented the all a line, side marketing line, only then sales in and record revenue in you on then that with in -- and related we report you there amount, are and arrangements other net no the the marketing. sales

doing So, the reviews, we're will relate as our with closing arrangements result as the to and were $XX didn't a revenue marketing identified guidance. quarters economics. million, three of million And approximately approximately certain prior reflect by classification costs properly And sales and the where partner we P&L XXXX. the of reviews the internal accounting we QX and $XX these the $XX to then million relative QX

what want clarify impact as there on that ANI or is to on a net no income basis was basis. to operating well And I GAAP or income

Ramsey El-Assal

is Okay. -- lastly And and two a helpful. quick parter. Thank That's this you.

minor from asked It reports The in is, outage it. impact about out about But recent it pretty I seemed any thought the call transitory. first EFS. to an and press

general your liability on the through loss impacts your terms EMV updated the us you think business, year, would -- help would the on to would most credit like lines And of second occurred was question thinking down anything then just where later go and in get I'll helpful? in be rates shift on of whether you fraud is your in then permit just is presumably business, the can part back the the after you the you queue. switch loosening it or any do or then know, the could, And impact

Melissa Smith

with third-party were I'll communicating disruption. the did customers, month. in the One with earlier actually picked experience one. glitch clear make outage actively database really due vendor. it want minimize our Sure. steps why to a up the we EFS cards obviously a We took first answer And is the this Fleet which that's short We our to immediate outage got press. sure that was to and

something that going So, just it was the the for into rectified. reinforces further we're us we And that move cloud.

is This is is the minimal that if have for call it in, migrations at was is ones which to that into we've on We've to scheduled important to had We other the far. talked This the one volume, the us time, reasons period and very of a go about move is the the we've we in cloud scheduled we you over it Transaction that platform had of in to so with look this impact. had. year, all periods. very XXXX. similar what seen three

going And Roberto was to question answer your second

Roberto Simon

a invested couple we of had fraud losses. implemented so, we and significant of money. And Yeah, if years systems a you recall a three we ago, significant -- couple amount

less today as you've credit the we -- the fleet And not our in any are a as If losses fraud I in -- the don't you So, credit report this within migration minimal. the longer, meaningful loss. of approximately losses. are but them are mean, XX% year, are they total they expect QX we impact seen know, do on not financials. They

area. And the this helping are us developing to also on the done, other some thing that are better to on on and of doing have fraudulent investments we and investments top more transactions that intelligence artificial on doing perform system detect working tools the we

to huge numbers because already the overall, expect see not a not So, low. are benefit, do we

Ramsey El-Assal

sense. Okay. Thank you. That makes

Operator

Your next question of line the Stanley. from comes Morgan Steven Wald from

open. Your line now is

Steven Wald

about you the the you're of and sort you would about trajectory, piece crescendo the just just you Morgan although over improvement the half is back about progress you were into really terms a the of sounded Maybe out there? if it sort for improve how weak progressing? into and looks are of not kind part But in on you guys for the thoughts moving talking the of it, being to shout sort wish then OTR you it think Yeah. time going upcoming of just XXXX, fraud But of talked think look credit the that But could like and a remaining losses, better the to topic. you Stanley, at give us last of just quarter base. I how with then the the like talking updated I talk morning. Good about about year. of -- I Thanks of could this think back here. we that the I just comments like expecting were a because to year better lower year-over-year see sort

Roberto Simon

Absolutely. Yes.

So, XXXX would I gave closed XX.X that we first range. the at earlier say the points. we And in year, is basis thing a

were we So, the range. within

year Shell If to there increases, compare points a that portion but to that a relates of big percentage to of and portfolios. XXXX, the were you couple prior Chevron

And fleets As fleets. you more loss. credit small small those carry know, they are

same your portfolio. make had a And revolver the recall You a fees, credit on money we bit side, losses time that there's the at more also Shell on late but are higher.

compared deterioration also that's and And XXXX. quarters year over-the-road, why then we the have is in And have we in that a on is we to earlier the on what it seen seen was spike where the from small in thought economy QX. you some different what the in past were two

around full When have bit last of points. year in over-the-road what have we modeling in a numbers first on higher half credit the obviously, than the the on a the year, of me, we the are the modeled, to here losses annualization basis we I similar model front of XX because XXXX segment. the midpoint, of XXXX, XX, And year around we have and

Steven Wald

Got it.

towards just you as maybe leverage And going below obviously, where to be as That's Could about reference some in the terms leverage to use M&A you're eNett room powder? about point room then close to moving remaining commentary week and that you way a -- there. in of us of and end the guys said on going you're talking payments. priorities X.X gears and you're of your M&A. a Optal like talking dry Okay. remind just of shifting where out even the either week thinking Optal. so Putting front side stacking eNett would know have the ratio, I and you corporate channels helpful. of FleetCor terms you the gave you software of other other towards was lot

Melissa Smith

capital of When Payments, go allocate think and and our about Fleet each how Travel, looking we for we verticals, core And of Corporate you core of or we're plays scale those this and And we we look year product across it's capital, we expansion, can did add bit XXXX, a it's verticals. in last about acquisitions in. think that when Health. I the can the that we geographic so made. little each And back extensions

run mix they strategically so really available from combination those of where there's different a going timing if becomes what between then a perspective. we And a And fit we're options. then

So, we've on got want a we ongoing map strategic on of road relationships basis. what acquire. to working an We're

meet of things all Some of take those and when we criteria. they them to execute these come years to fruition

do criteria, to they have ability financial our we want we geographic and the hit to what hit areas, fit They extension. product extension they those roadmap, strategically, absorb of when they are So, scale, or one it. three on

So, filters go we we have a host of that whole through.

So, process that continue the same going do past over into to years. we're future, the to that five as we're done we've looking

continue going And what happening you us. so, prices see combination and to to a will and be strategically the marketplace through, we for of a be we mix it do at in it's think sense that what's want that that will to makes come

Steven Wald

much. Thank Awesome. very you

Operator

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

now is line Your open.

Bob Napoli

my into and the Healthcare to Thank more business separate Corporate you for a like two Payments with little bit I'd dig question. questions. taking

that volume. interchange business that in did you Payments portion increase would attributed how for Corporate Travel -- the between a Corporate which you the And the on does Corporate the XXXX, more Travel upside payment on and in rate what growth break In there you mid-teens down portion? Payments. nice to and Payments First, have net the that? Is

Roberto Simon

good Bob, morning. So,

segment our -- Travel Payment on long-term midpoint. in and to Corporate Corporate within -- with or XX% way at range the guided of segment, we So the the XX% so our

volumes on growing X% Day, XX%. slightly this breakdown I look Investor We so we around the it, way slightly be XX% it, XX%, at the is remember at year, will you growing to the the down. on to Corporate higher overall similar the segment on market where mid-teens, the between if Travel, expect The slightly that, than to is that and call Payment

think growth the are you to So, going that volume growing directionally what the could two be to similar splitted markets at. are

net reasons saying I've year And there that the every was a point quarter. this interchange been of view, change from a of then because big

mix as We revenue we from change the just other we Noventis. customer got customer payment where dollars had contract we a got moved impact processing. And well. some into So,

model probably on small I that the of If will we than of and mentioned mix other more XXXX, spend -- the the see into you any thing. rate, a because decrease

that nothing there's see be But So small will on are the expecting similar I you are probably we XXXX. to think where decrease we to different. in but rate, Okay? a

Bob Napoli

then not That business, still revenue acquisition confident fair about a And of is very Okay. share. industry you the Discovery seem you're mid that lapping on to Thank Healthcare taking amount growing you. Benefits, growth. guess, high-teens you're market fast, the but so I

now an just amount share? to much like over you rates a to the acquisition medium bigger maybe gaining growth integration business the well. of going that in update. This how And those So, have is market It are long-term. is confidence types of sounds

Melissa Smith

Yeah.

been our the you If performance Health across at the look this outstanding year, just in business board. it's

you board, season. of if strong. ramp DBI, what in wins, very the business can across a it's look integration enrollment lot really the of signing, through see happening those DBI. we're trends all business, And been And and that very, New the bringing contract you at of

have, a we've good the we've for had we got we the our strong that growth enrollment the channels XXXX. the We the guidance So, in that's we've combined and feel leading pipelines have about in in Health season. established really our the that rates that that business, in business confidence to

Bob Napoli

guess, share I market Where mean...? is coming the is from, I

Melissa Smith

coming any place. lots wouldn't one as I from describe of it from places. coming It's

market systems continues to growing. internal it be of Some is that are the migrating, some as

As to we've FSA the but specifically, growth even HSA within the continues grow. seen market market

more rates, see going you costs adoption, healthcare keep up. So, growth

the they really things reasons All entered we the space, true. come of those have which were why

any have and for some I'd working of coming the in And it's say from bringing partner say through their bunch everyday are as different great one taking market that place. a wouldn't really share it's places. benefit coming market they're well. we then away, from brands And channels I in of with the marketplace

been Healthcare new programs. really and grow. there's these So, been those up partners. combination continue to all adding And more have some partners tailwinds adoption of costs to things Those for it's good a go of creating us.

Bob Napoli

Appreciate Okay. it. Thank you.

Operator

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

open. now is line Your

Darrin Peller

macro, look Fleet you the Thanks, to just at and -- for you adjust trends, adjust you you When look quarter of think trend wasn't a different alluded really that $XX guys. fourth the million for when at as earlier. it I

So, guess signs I'd others? last I I other when in one, think, some we curious seeing to are like of or consider sub-verticals? and to is any forward, areas update hear; there any guess, quarter. wholesale transportation going of out the or called weakening had be and you what I number strengthening those in construction, You

of any are And I'd of share curious be the if associated regulatory some reviews your on, seeing to impacts then competitors. one the going reviews you with market at hear

could market If there. you just comment share updates on

changes. any any of seeing you're If evidence

Melissa Smith

Yeah.

We We that's North of businesses the have years. American that in that And we have, about the EFS combination been feel continue the to business win The in really been good has rest addition strong of our Fleet competitive very we for pipeline into marketplace. our true positioning, marketplace. the the implemented.

strong And we for describe do years. feel the that that about so, good wouldn't us technology amount I have, we changing, that -- And as think been that's for I the that investing. we're

part, marketplace a in in in product we start continue win that's to and superior invest to continuing from to ability the we is because our it. So,

In in across I a slightly, more from sequentially QX. same-store and an terms change perspective from it's worse point. when slightly really mix sales, bit half seeing is But but what to a it a SICs, economic of we're in than from say most little QX

talked mining through big like portfolio the there's a I it not SIC a That's very business bigger one that don't perspective. negative a the oil but would thing from is single-digits year-over-year. with points that big equally an are transportation, few know quite out. negative most call having because or about impact, which and negative I look things I these I any if a being extraction. few But part of as mining, higher actually is of

continued in segments alarming. currently. It's for that there's seeing industrial the nothing Nothing what are us, we soft And so, we in achieve to portfolio. compared that's just softness just

Darrin Peller

embedded is guidance, that right? of Continuation your Yeah. in

Melissa Smith

you we'll throughout that going assuming theoretically, get comps when And all Yeah. but it next XXXX. half we're second of Yes. the better in continues of have into year,

Roberto Simon

to guidance an I see as was Obviously, sales that. we And improving. as same-store into if we we going get have year, XXXX. say exactly the we along the into update the on will move

Darrin Peller

Okay.

a quick Payment the Just on side. follow-up Corporate

think is that's your of the just rate. what differentiating talk and for and there blocking to you little doing allowing gems a you're be marketplace Given in the your more you continues -- business, the growth right one tackling about in now it guys

Melissa Smith

is a through of us coming coming ways. partner channels. for in growth couple The Yeah. It's

that We've financial highest tech That's the think technology so, Fintech both payment us. portfolio behind in also so with Fleet been for said those as the companies sales that think sits where had of force, us growth of more as And been well a and we've good of we within marketplace. and that. a of is institutions growth -- the both have cross-selling bunch our the us of existing direct for rate behind working

standpoint, a we've some I differentiation chops. pretty think competitive good tech got from

systems ability security an companies, compliance the talking from business that we we also to perspective front. doing integration both security take of and from into creates with a and to a that something we're us a well just just but basis, perspective, helps as have on we a but we're ongoing banks. the other the pure lot when have, technology That's so, that which little happening actually bit because overhead, a marketplace, are on that in competitively we very lot seriously do reviews of And

Darrin Peller

you. Thank guys. sense, Make

Operator

the Deutsche line Ashish next from question Bank. Sabadra Your of from comes

now is line open. Your

Ashish Sabadra

taking my for question. Thanks

in strong the were Margins quarter. margins. question pretty on So,

margins saw the into even segments Thanks. change. Any we going think the some benefit How were from should on other obviously color in You accounting segment But pretty the good. about margins XXXX? levels?

Roberto Simon

adjustment in both the you XXXX revenue But if recognition of and exclude is So, I XXXX revenue QX bit hi. XXXX tell a the years. look overall, can Obviously, on is FX from if been to have and we margins fluctuations, twisted I the you that because to improving side. the XXXX, prices fuel what

fuel prices on the both EPS said And time, if excluding continue improvement growing as that's you we take the growth, we on always the over fluctuation, XX%. focus margins overall XXXX, of is time FX our in and and revenue same another but midpoint And if expect improve and you growing what should the we again growing at business look Therefore, is year you revenue accelerating XX% investments. we the to have want margins. how at can the

the income margins we And have for as operating an the XXXX, past back to we view. guidance point and the I said, of look if adjusted continue you years improving two from

Ashish Sabadra

That's follow-up very And on the a helpful. accounting change. quick maybe just

wondering adjustment us three well? if $XX you forward quarterly And mentioned then should I that Thanks. going prior you there what the the quarters. give can expect we As was for were. as million just adjustments was

Roberto Simon

approximately as we $XX So, adjustment the million they QX, million -- that yes. They doing slowly and QX, are $XX three The XXXX are guidance full our as is I And include approximately prior revenue. million increasing. were relate go quarters. we on as if the But $XX year QX revenue number. already said net to

adjustment going have we won't guidance our for on So, the XXXX have we contemplated forward. that

Ashish Sabadra

Thanks. That's very useful.

Operator

time. There are this no question at

You may continue.

Steve Elder

And joining call progress. today. our months updating a speaking conclude our you couple and on you for you with to in forward will for Thanks us And everyone. the look Thank of day. that we

Operator

call. today’s conference This concludes

disconnect. You may Thank now your you participation. for

WEX (WEX) 13 Feb 202019 Q4 Earnings call transcript