WEX - Earnings call transcript Q1 2022

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Operator

Good morning. My name is David, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the WEX Q1 2022 Earnings Call. Today's conference is being recorded. All lines have been placed on mute to prevent any background noise. there a remarks, session. speakers' the will question-and-answer be After [Operator you. Instructions] Thank Investor Vice may Senior Elder, Relations, President Steve of you conference. begin your

Steve Elder

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

earnings As contingent our other a which of on items, interests and attributable change consideration, issuance applicable. an adjustments attributable to adjusted explanation press non-controlling earnings. uncertainty in included elements amount a basis also to we intangible release fair forward-looking are our the restructuring XX-K of explanation will be stock-based attributable Actual identified currency filed income annual statements Adjustments first of year's you call. adjusted income, X arrive risk shareholders certain cost the factors, non-GAAP shareholders, press in net as tax-related income. forward-looking foreign net remeasurement to income reconciliation basis gains, December discussed amortization, guidance for the factors of and filings. as on that GAAP on items debt GAAP to ended results Exhibit metrics, remind and a XX, debt costs, amortization, and The materially adjusted release differ Please certain as and would on acquisition-related net for operating SEC these in gains SEC Act for and and adjusted we this the reminder, specifically unrealized X, we other that reported subsequent discuss company net various Form Reform to non-GAAP including income and metrics revenue will year of the include a ANI refer result on of March compensation, or XXXX, and XXXX. and of like financial quarter GAAP to acquisition to see to XXXX, to an under those statements Securities during divestiture-related Litigation income to and shareholders the at in reconciliation may net provides income I Private GAAP attributable our instruments, due from indeterminant operating ANI, those discussing adjusted with guidance report operating value

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

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

Melissa Smith

We morning, joining good appreciate Steve, everyone. Thanks, us and today. you

QX I'd of globe, continue our our in into deliver great impact thank Omicron to members the results, the like to who even that diving included dedicated team quarter Before across variant. the the results

to touch XXXX As also moment in the to great for on off start a of their WEX. take I'd efforts, a result war like is Ukraine. a to

Our Ukraine the hopeful hearts returns to and a with of remain be for people continue piece. we

The Russia. stop financial and supporting at operations results immaterial per decisions to conflict, in is spoke not impact additional year less four or the did we these last have We million we revenue. of any does As not our of since than in employees beginning communicated WEX steps in business the at Russia. $X took

year-over-year unfavorable in a X% negative increase continued volumes, foreign discussed environment. quarters. season open volumes, quarter, favorable in and good all the includes of we results, And approximately in each the a higher enrollment a recovery fuel $XX travel exchange driven put a million presentation delivered revenue rates. price fuel $XXX first our the perspective related from turning once generating strong again other of fuel record prices XX%, increase million of a and approximately a for Now million to year-over-year This by in increase million to have a of increase, impact this was $XXX accounting in two change To revenue in last $XX we was factors. very

rates in pleased grew quarter, record billion, the purchase of high across result. double-digit $XX in a So Total very processed we're segment. this our year-over-year strong first to with volume XX% the growth reflecting each organization

globally While as more for levels, first an at travel volumes high than industry purchase had quarter $X yet billion. pre-pandemic have to volumes the travel-related returned WEX not record

of resulted as had half new from last about contributed with share year. also growth diluted first prices. higher scalability an the basis the an We On the experienced the per XX% XXXX the increase in income drove fuel paired of prices fuel was the expense $X.XX operations, contribution significant quarterly in quarter of WEX’s a half of well the to same most EPFs adjusted which We compared relationship, significant and from increase. AVID Record of quarter net other in as profitable revenue adjusted Exchange high increase history.

to on all fronts. execute well continue we As

Now me take quarter in first the let key results step of more a drivers discuss to back our detail.

the expand with and customers new win to ecosystem. existing across relationships WEX continue We partners

the uncertainty recovery than first deemed less customers conflict last caused Asia. Russia in There travel in This demand for a in volume XXXX severe enjoyed hotel variants. in of key markets trending travel-related threat some strong levels and of Omicron was sharp hotel by the level. both a times resulted above when in purchase nearly rebound slower March. and the February three revenue increase air travel of Ukraine, was quarter industry previous with First, and year's our in Despite

side, phase volumes AVID complete. Exchange to ramp On the payment implementation the corporate now and continued is

the applications, a our with the products, Bank, payment customers, solution major range reminder, seeing in looking wide mobility, rise strong agreement and card high Also corporate uptick one are carriers State and small As our a fuel its partner in we money different payable of discounts in AVID’s technology funding who the in of a platform capabilities. technology the prices; help the to renewed across costs. for bank are won spending more reliability, uses contracts. defray on in need small and our credit to programs on new we Commerce right based particularly of are the given Arkansas extremely over-the-road more business space, our from carriers, renew fuel, we In all-in-one card those long-term to

new this the implemented sold from half and were than And applications year-over-year to last digitally. XX% market highest applications Similar accounts these had ever. more the up quarter. New new March volume quarter, of were in of

a a program, to the centers in to travel benefits America. quality private-label with agreement many a signed platform professional new drivers, WEX's of global provide also purchasing TA options. program provide competitive We powerful allows to with Engaging

addition during In XX customers the a propane our retail new U.S. city. to success U.S. top including large smaller the distributor largest with we signed quarter, fleets, several in

In Service, UK addition, of for U.S. is Crown in equivalent the list the suppliers Commercial the we were added of to GSA which the approved

auto Our is health broad-based benefit success employee renewals, retailer. our major strong and segment. also including parts reflected the In in a

seamless meet to talked processes, we across platform, technology but foods, sale. that improvements applies healthy merchant needs. is their their of clients able multiple Investor product in to the or the utility a They clients. positions the uses the into our The to money the nation's to technology state extend of WEX deliver great right part one being to because customer-driven to was at offering, and behind integration run and due Not point company benefit independent create market their the able have the the able use funds, do in to custom vocational programs programs network only WEX customers a network differentiates to card. achieve we offering have simplified vision eligible that adds stipends in and customer rules we living and our program, find be from were chose for solution. at a healthcare our network In each they meeting enhancing core of us our which delivered met, they're want all new simplifying the business example for. offering. networks that the effect to the education, is they help support state One Like WEX unique benefits. one be to to by purse streamlining level benefits deploy where platform maximize to marketplace additional and about to consumer-directed This deep wanted the scenes to of on in new benefits our correct the Day. product to of ability a work to transportation able uniquely way a effect overall applies with available the programs, experience partner our rehabilitation largest The distribute

Turning our technology down to platform.

to continue our invest of We needs. ahead to their customers anticipate

rise are recent fuel a the in sharp around we customer positive app. mobile Given driver feedback receiving prices, very

to new a and best As integrated area. solution. utilizing software been customers the FLUME, the fuel week, price launched in This find we've have their payment app

leveraging we're Investor an are solution As and searching mid-sized our that targeting we as Day, excited for businesses about while discuss marketing at solution we're our automated our small this digital tools. XXX,XXX

and rolling a market continue experience feedback to the seamless out to while customer based product digital on delivering We’re the customers. we’ll to FLUME enhance our

highly went product and significant March. products live We that for release and The investment application relief data consumer channel. partner a a bench tools healthcare and personalized in engaging also marketing and had a mobile updated for analytics our experience, delivered in that

our Turning electric to vehicle now vision.

XXX,XXX well-positioned to charging existing that part be charging the on In a this to vehicles. to we our report and comprehensive Investor seriously, ESG cleaner and As summer. our customers We billing publishing transition Day, access fleets, rollout our electric fleet European in transition to of we our will for central to providing outlined their customers customers account, second to ESG solution as their updated take succeed helping directly at ties over are broader role quarter, help a expect points. focus

purpose, remain focused forward, a we As and move business running this business. on business the includes own of simplifying our we our

employees business operate our evolve, we they core that benefiting to We’re work value looking the for and and from our want more advanced this we’re we’re to need how position. take customers, at are AI focus increasingly we business robotics our our so of is of doing from currently developing growth. in free business. higher complexities can to create strengthen on future ways even resources the way to continue to Like that automation competitive and tools and advantage One amount like we

near-term We benefit travel levels. also bookings summer from the U.S. of a seasons ahead and are industry stand European XXXX environment, well robust to for

well-positioned channels are digital trends capitalized and on company. Our the we to improving great marketing results macro continued to deliver across

momentum significant with future WEX delivered results Looking for remain quarter. and trends We bright. the entered year The incredibly first strong. ahead, the impressive remains financial this during

We leading continue new each of us. the win in opportunities our to on technology platform customers front capitalize enhancing our segments, of in and

our these trends our targets. of to give me confidence in ability long-term deliver financial All on

Jen, new CFO Narula be I to this to Before I effective May turn welcome our joining who over will as Jagtar WEX want XX.

Chief begins proven organization like year Jen to Jen? of to May take and innovative As you through Jagtar more will Accounting in through Tuesday’s experience continue serve as having I’ll leading turn past I key role forward in both walk play into during job critical detail. jumping Day. over doing Jen Interim companies, looking we’re for throughout Board. months, mentioned over a the role time Officer to Jagtar’s a on strategic XX. few moment finance technology leading Jen now and also results until to him it new both Investor on his to thank to a and an financial and CFO change our amazing the announcement, I’d also

Jenny Kimball

you, morning, Melissa, Thank good and everyone.

momentum just a into we strong coming the quarter from first you building heard the Melissa, year. As had on delivered we

guidance In on us all record of yet February. year revenue long-term now we remainder in had operate XXXX, better The markets are and growth attractive with our raising sight of in we EPS our cylinders quarter first quarter. back provided that our well-positioned and light firing and full we the for to target. We’re line breaking another our strong make large achieve of

with start the on Let's quarter results X. Slide

exceeded on recurring and travel ramp revenue million, in $XXX.X XXXX came fuel with our of quarter, three for revenue define the revenue, spend, revenue accelerated reasons: QX a end the continued fleet XX% recurring perspective processing increase fees processing and factoring favorability, an as GAAP For net guidance and primary see high higher prices. a quarter income of per over for the From transaction margin. $XXX.X of items. million at Non-GAAP and volume total income over Total account XX% to than our We This servicing in higher payment revenue net as diluted other benefit million. year through the share. revenue business, more or XX% nature. from small revenue adjusted first attributable prior $X.XX increase to of was represents drop basis, our earnings $XXX.X had we a we shareholders

for total Turning corporate impact in that comps see appendix. contract revenue Slide increase the segment travel in the XX% down breaking corporate you finally revenue will and The the growth of Fleet quarters segment a in growth this and XX%. and X% that to by through and will travel health presentation XX%. QX to X, basis, grew a in company solutions revenue a for booked XX%, was comparable revenue the change On was compared this and we've discussed a segments. specific customer in solutions last two up

segment the increase Now by X. to from prior on for and North America up year-over-year. XX% million, new Slide $XXX.X wins and quarter powered revenue fleet Over-the-road existing year, renewals, results; let's over transactions was with a up up customer with starting strong customer fuel and Fleet recovery move higher the strong XX% base. their fleet transactions in growth, XX%. processing XX% Payment were maintain prices volumes

fees is U.S. the relatively of with due on late fee opposite revenue price saw fuel QX in to rate up higher approximately price which XXXX, QX than flat offset to There European first and would $X.XX fuel two up. $XX for $X.XX of prices The direction guidance the fee for lower instances. primary stayed volume, prices of spread, increases takes fuel approximately and XX% the are our The in EPS, in was quickly prior as when $X.XX to Finance this, fee you it year. as in time which moves of million As to significant prices fleet approximately did normally average we generally late March, was expect. domestic fuel revenue net metrics, they drivers our spike to compared increased an XXXX in this million $X.X includes fuel catch QX was benefit versus to

which we is Second, fee in increase saw bigger prices, fixed diesel more fuel based.

up, As payment fixed know, prices transaction fees trend rates you revenue included to our fuel interchange due in go processing down. the when

finish in To OTR rising in from In versus prices assuming focused remains to prices seeing you're fuel basis impact volume customer what That more XX extent slightly in of cope fuel fleet changes point the are historically are with the we that's economy So prices. being change behavior. on transactions high to that year. the on local last haven't fleet, smaller we lesser strong. seeing higher frequent the said, meaningful a and we're seen

higher prices more of absorb will We as losses the are high also high expect increase end which that the costs. customers with range, these credit levels pre-pandemic annual in our towards guidance line our

quarter for Total X. accounting slide Slide was revenue on solutions that million. in QX an corporate $XX.X the earnings adjusted segment occurred increased presentation appendix change and comparable details revenue On to in a year, that growth There's last travel XX%. basis a to X% the Turning adjustments. presentation for the

over approximately nearly adjusted last XXX% XXXX, down volume issued strength last related payments the was WEX exchange represented year. for Revenue partner was reflecting from by revenue relationship. increase $XX.X customer the which revenue customers demand. led including Travel by purchase corporate increasing and year. XX% change volume versus revenue the was channel, in total QX customer tripled up is Additionally the continued up consumer avid presentation travel related spend of of versus XX% XX% Breaking billion, we an

results growth capture with its well pleased future are as travel to and recovery. global the positioned are continues these industry We

at Finally, let's take look segment a the health Slide XX.

processing versus a X% represents We QX in account year Benefit in growth over strong Purchase enrollment was approximately strong QX This and including of SaaS volume Express XX% building year. XX% the growth of accounts to related drive in resulting revenue. increased The revenue a XX% Express. continue million. million leading payment $XX to increase acquisition the revenue. season increase in the $XXX.X a open to prior Benefit up prior contributed

in deposits that that to lever The approximately bank driving we million realized increase into significant deposit also WEX revenue a moved as the and these from interest income late We growth. $X year. the be were HSA last growth deposits from long-term revenue earned rates interest will based

continue Slide Now quarter with from fleet XX.X%, ability operating margin trended lets operating drop basis our fourth XX%. income XX. margins us In-fleet loss the this increasing we adjusted as expected adjusted credit benefit is volume. consecutive for income through high move on spend margins is on XXXX. of higher points revenue from than up quarter XX.X% was quarter the to increase This is from scale in the to to XX The adjusted

timing expense synergies. and year-over-year margin XXXX. Although adjusted closer health the solutions also corporate year. income and ranges pandemic the much Benefit compared the back We segment spoke from comparison. drove in delivered a years. acquisition fixed margins decline in improvement adjusted adjusted some lower in and we operating XX.X% last continue margins provided QX margins up to this through saw volume is from of total see versus benefits sequential to Revenue QX. company norm and is we in base operating been basis. card the last due The in that is X% of guidance cost network to significant had eNett our driving X.X% margin improvement from drop a was saw In The we two given XX.X%, XX.X% high and expect to we relatively February. in on There's approximately basis the remain in incentive the of already lows points we Express to the considered as about in we a historical benefit income Optal accelerated, of for travel adjusted Travel

led Shifting income healthy All gears borrowing agreement. quarter of $XXX company's remain million million now XX.X%, which adjusted driven under travel is from segment. ended up credit update to operating cash. the position with solution of and by defined cash on available had the I'll $XXX year, to of and as over balance company of largely XX% corporate $XXX We Slide an both We the the this in sheet. capacity last million, margin and a in for the XX, provide corporate financial

would you a sizeable receivable million As fuel and volume. in versus we saw no $XXX prices expect, increase higher accounts our year-end of more from

invested approximately HSA of yielding we Our $XXX of funds million QX deposits revenue. million assets at held WEX WEX These ended as HSA certificates at X.X% the $X that bank using currently are million. an bank at or additional about deposits currently are $XXX quarter deposits. for in There's replacement

earnings our optimize We X.X the X.X at times, be the These is the sheet to to HSA term revolving end of as deposits interest bank. opportunities due well and total X.X as XXXX source that times, down to to credit to act a target to revenue notes catch the and rate stands this defined rates in We the our balance The held will interest the cycles. long-term of good continue should earning. from ratio strong At to control, are deposits line balance but leverage $X.X from end convertible of of of billion. loans within intend more agreement which we and credit, bring the $X.X remaining of quarter, was through on outstanding evaluate natural year. continue deposit not billion us WEX as assets at a rise for

The of non-controlling period a flow discounted and interest an in to invest totaling that interest liabilities. over at in plus Our the $XXX WEX three-year see off million general, health back March to to XXXX. you'll will contractive the shown we strong balance growth million business and into the beginning make amount related This business. is cash a so consistent a to amount $XXX flexibility sheet, our pursue Finishing of tremendous that's opportunities. payments other structured purchase that financial free agreement remaining came

move the quarter Finally, for Slide on revenue earnings year and to second the let's guidance and full XX.

pleased The first that quarter our are share significantly for we and for us quarter very was guidance I'm a XXXX. to good increasing

significant to gross Before of I for the accounting that a QX, corporate into the revenue in you which partner impact altered the payments want renewed from net in again, in slide. the material with not presentation occurred revenue get I remind of specifics, corresponding metrics including several sales a the of recognition on contract to the from rates but to this There appendix is periods. the change and growth segment marketing prior impact as no earnings shown comparable of change, are costs a

appendix of $XXX to You to the in the second in report in numbers and million comparable Starting revenue we to range slide can the see net million $XXX to adjusted expect deck. the million $XXX income of the the quarter, with $XXX range million.

We expect ANI be diluted and between EPS $X.XX $X.XX per share. to

income year in expect and in million million. $XXX of net to to full report $X.XXX we range $XXX the revenue to billion the the of For adjusted range billion $X.XXX

EPS expect diluted $XX.XX between and share. per ANI to $XX.XX We be

good ranges also based $XX $X.XX the and increase actual sensitivity impacts I of volume. full means our by $XX million execution to This in at Including excluding prices year XXXX guidance. in rebound that EPS these increase lower million $X to midpoint raising prices would as we and in about our revenue amounts guidance. fuel historical a in EPS, and our our on are strong of continuation of talked slightly the revenue fuel the earlier. revenue fuel price a are represent QX higher at our EPS changes $X.XX our results results, both of suggest, million is contributed approximately than the guidance the to an and These previous compared previous of from and QX $XXX of guidance, midpoint For updated

XX% of few from are the for full-year. March $X.XX futures average based gallon Now for notes. million more the me a will adjusted quarter on XX.X the year. Both continue shares to income rate And including XXXX we're second The to XX% of fuel convertible finally assumption between assuming Exchange second quarter expected include the that net $X.XX be through the full price for tax the NYMEX for million will is associated and count we and domestic walk the with last share rates shares you let per and outstanding week. assumptions. end prices approximately are X.X estimate as the

result to each of approximately will million net the a net of please back expense to be calculate As including shares questions. operator, income open added $X.X interest the tax of quarter EPS. for And with that line

Operator

Thank first We'll Bank Instructions] take you. America. our question from Bhatia with of [Operator Mihir

Your line's open.

Mihir Bhatia

there's the right? Thank – my recent trends more for to discussion freight you're you. bit, what you just about Thank freight So movement in weeks? regarding in little more be Hi. worth trends talk about the here the various volume market with about you're out a segments taking a just hearing in seeing but to prices, talk procession questions. in seeing about back anything Wanted just the and calling quickly go the

Melissa Smith

It's I respond Melissa. Sure. back that. to

to spot are – We over a the than side lot softer really trends look great customers more than just of that having business with there. a last in from over-the-road of years talking the softness we the that to they to hearing that terms how And you the fleet we're around trends is volume customers would are, across In some bit from portfolio. focus businesses, say have our I couple they access rates make and what to bit have macro is seeing the the volume labor in trends, of seen emphasize but the think and are certain portfolio tied little I conversations of embedded little a of that about that some more big sure business, everyone's people North the on we've we're fleet American hearing across and inflation, customers been. continues so rebound, the across business reopening our the the if to is have they're

Mihir Bhatia

anything I be and guess weeks thinking around is recent that losses from, just like like even the in recently? just here comment in really should there anything And – about more season, credit your we

Melissa Smith

Yes.

of that remained and volume we look second part baked at looked our at You its guidance. trends what for us, when quarter strong we really

kind less but to I from which revenue will run perspective, at like remains strong. spot across in we've guidance a bit our from into volume softness of a in perspective, volumes a from, our business, within business little the they're translate freight of said and assumed second factoring quarter seeing So And a little rates, that year the that for we reopening see. full our year of and strong just we quarter that we for about – this guidance thought trends kind of to when one both our half the laid the started second some guidance, in last things we see and full is we and second of year movement continued to

field from that a you prices for if can growth rates adjusting one and and back look perspective. recognition excluding QX revenue FX that overall, for our reflected see You at cost

at seemed the growth our growth we're And XX% pinpoint. year First perspective in quarter that EPS. assuming was XX% and from midpoint the And XX% of is a like-for-like ANI growth full XX%. at EPS revenue in revenue that

really of to some ranges. of year, as the trends you strengthening end long-term we end believe that within you'll some toward the because at to continue to But play see started our the comps get over out you're going of have as of happen strong the these XXXX. harder So year. the of course But

Mihir Bhatia

helpful. Yes. question. this last then is That's my And

commentary some just travel through also and this seen positive a year. airlines, looks from nice, we It even recovery quarter. terms – what in saw some Just volumes hearing like good remind And progress cetera. as of you've achievement you we're are the us, had you we obviously the the et OTAs good volumes

are guidance? assuming the Thank what all you travel you. So for recovery

Melissa Smith

No. Yes.

we facilitating so our reminder hotels, volume payments were for because where largely If as by part to there tend travel our they're about were the, forma the our actually number booking. in quarter XX% broader that some first you when and it hotels. is XXXX. of airline quarter lag when stay look first And quarter the far at you the travel pro But opposed volume we results, for the first and large to people facilitating marketplace the are

to that's of nicely tracking up, closer and we're numbers been XX% for So XX%, moving in April April. our XXXX

business. So that really drop not to actually ability trend, of about of part good their the nice really that earnings scalability we through and trend feel that because the of show the only

Mihir Bhatia

Thank you.

Operator

Next we'll Cantwell Wells Fargo. with go to Jeff

is line open. Your

Jeff Cantwell

little what whether good and could you was for in health of growth the expectation and Hey, for improve next is now if allowing year, drill everyone. in the guidance the the me I call. where are? join the growth a thoughts right trends this Thank seeing months? in bit like so this you Thank curious qualitatively all perhaps quarter, morning, forward for down XX% of to you. about terms QX guidance your on wondering rest It looks just what strong, obviously you're your going in core the

Melissa Smith

Jenny, amount, you about talk why and total don't I'll the talk about health.

Jenny Kimball

sure. Okay,

with terms in well really volume Melissa of segments all did reflects momentum, they're which an QX the remainder So and year quite of strong had of the mentioned. it three year. guidance the We really for to that expectation lot our end a going last for full a obviously, do of

two QX I prices. versus in as said as a are keep the strong It's was just it's the fuel from And then really parts the but on travel ramp well really my – areas. ramp two of the remarks, tail top it – there continued about XX/XX for moving $XX of travel fuel simple million, And again like lot coming performance the business just really about end improvements. prices. again, course travel and Of kind of volume I'll the through key

flow for through the the year. So remainder that's to continuing of

what added similar long-term even fuel that well prices, without that's We're forward. cash They target nice us we it moving being you're within daily, and seeing. said generate So our for risk. are some going will

that I'll turn So to over Melissa.

Melissa Smith

the mentioned then quarter. in It's And growth health really the first XX% growth, SaaS on Yes. side, growth XX% you a strong in accounts.

of the remarks year. intend we good fact Jenny we out the through about enrollment So open we deposits that really we feel have preparative in mentioned course season. the invest came how additional the of that

year. as of year and So will anniversary additional that an through the be June will this of you go the benefit course

going if look we'll start have will deposits. of first express – out XX% benefitted latter to annualized. the So the XX%. quarter the the how health long-term rates to of couple pickup that out benefit acquisition solutions roll put The growth will from a quarters at is reminder; are that we've the you year's the And part, segment a see this for to of employee benefit more and there become

Jeff Cantwell

sales. Okay. both all love Thanks. us Great. selling hear some I the any And making then and of to been maybe quarter would on and on over efforts those color? also your you've about color. updates in progress the direct give Appreciate that cross areas past

Melissa Smith

Yes.

health it the is also we of base. us bloom talked excited is to our paid even avenue, say a that The fleet us. cloud really selling of existing are we we doing that extended, only prepared I business. and what cross of fleet excited. Not offering rapidly, particular one things excited There are a first. we We it I'd place for It's get through our about customer are in the launch customer my paid. on examples for we really on organically. So and where within digital for that happened customer get We're couple early when for have market states It's the side. did it remarks all about It's have testing bring within we've that that. talked a that to

through customers have allowing in customers. to beta the us target and and We're using advancements. size that's that product We existing we smaller alpha are rapid for using the their So they're learning from make went really audience XXX,XXX experiences, test how product. are both this that

not So are us piece have beyond like products with we're solve ecosystem the of the the and hearing but verticals have existing only our them we we're an have that into we providing and of ability, extend that for actually really that some with we marketplace together, offerings for our bring now. problems feel that to customer right the technical capability, base to the that customers things those combine allow our that

Jeff Cantwell

Great. Thanks Appreciate color. all much. Okay. very the

Operator

with to Morgan. Next, Huang JP Tsin we'll go Tien

Your line is open.

Tien Tsin Huang

Appreciate pieces. and travel and morning. to the just ask so time the corporate on here. the want I many know Good moving great. segment there's I visibility. Hey,

and second explaining for of to year the site, fall job good what's line relation a targets within second that just did quarter here and of in but You both might on, or the going half the the visibility thinking term about of longer segment? how your that

Melissa Smith

Sure.

there's So in lot interest it. color XX, of Page that around lot I a we actually of added appendix on segment, in the know a because

expected in a what's what in that payments our year had course out you our split terms close related like travel on some did And because what also full the embedded in that business which then we'd and last we year, quarter what happened, actually across both payments And to of can fourth a see is we more perspective trail this we little corporate travel we we as you corporate that be would that adjustments true-up of into better than customers a is and during that So payments. expected. volume lend came bit terms the perspective, side see rate see, see that rate we last rate down in of from expected. have happening quarter said rate the in we and as to in made from year,

provided created we're when guided, continuing over translating of came the year-over-year. in when the So still come what to expected to around where we the from The lagging talked XXXX as we up thought a on being is significantly forecast on getting very little actually but than we for from we've higher really through path trends year, year we prior growing in significantly payments volume rate about we had that down up back that a normal. volume guidance. we that travel has a range as that's about perspective. the the of And possibility and side. thing corporate what And The perspective, our much

Tien Tsin Huang

at Yes. looking it size now. appreciate I And this

good. think that's Okay. No, I

year. use to we think that I the can run rate through rest of

the is demand see there, given bullishness depending around you timing. maybe plays border, and how if on as questions I just given about I Just a this recovery lockdown before right differences my tons on regional mean, quickly, really demand talked recovery across call that rightly, know you lockdown Melissa? they on don't changes? out there's MasterCard know perspective follow Asia see what's of from differences quick pent-up mind and you earlier, collision, Do I a in in some probably Do pent-up travel look given where that you well? that that

Melissa Smith

there Yes, lagged And is that Asia. are Yes. Then differences Yes. are totally. in seeing of definitely regional no, playing what the has rest we're out Asia the world.

about in one the that's – so possibilities been the as Does year part nice take And normal in trends Europe of that's the so time? returning guide And in yes, our part that back where both seen and I'd standout we've return that or in range the back. mind. some as U.S. of thought what's for to we've of that does some say

Tien Tsin Huang

Yes, it happens later. got it. rather Thanks. Hopefully sooner

Melissa Smith

Tien. Yes. Thanks, Yes.

Tien Tsin Huang

Thank you.

Operator

Next Bob to Napoli go we William Blair. will with

Your open. line's

Bob Napoli

they're income funds when against should returns? you then Are imagine is it assets XX% the you would also that or when we about just take what the assets assets? rate How model it demand? that Should pre-tax we Question, returns does like you lowering level the fully margin HSA the is on how and morning. the assets? I how is fully have Good think those invested, what so moved? revenue. of amount of the long – modeling fed you. interest And Thank manage do

Melissa Smith

Yes.

Jenny billion a bank. our about of, we're $X.X that in shouldn't not right say uninvested, are uninvested. We're there her prepared in part that I well at they – invested are looking remarks So some of now is was talked what third-party with

So they are earning interest income.

into want to evaluating, will we year. through right and to want the process them replace of the through Now to invest we're and bank of the we year much we roll how how that course much use going the our are since we're we what CDs going course to them through move now, in

as, that that now think all the have are Jenny do market of is at right want changes rate that take over trending advantage once about at So terms the of the to of because X.X%, they're in higher we that time. fact rates to moment. we what And than going certainly talked not

Bob Napoli

So invested points when quickly fed next that or… move you raises – month, XX such they’ll are basis these are

Melissa Smith

of – longer Yes. fixed time. they When invested periods get rates they over in invested get

invested, right? we is So what think think is like I of the of four average have years, the – that Yes.

longer periods. over So they tend be to

Bob Napoli

to the mean, relatively mean, it talk care where you just the going that? the to the So a then I would automation the is revenue fall bit who FLUME, – to compare be competitive – Is I driven? is product does build – in standpoint? from more FLUME. where game I fit more it mean, I little set just more FLUME AP Thanks. guess What is stream the product And a does on competitively. Okay. set. plan And it into market about

Melissa Smith

It’s paid model. to a sure. digital Yes, paying

revenue looking And we that know competitively customers the they’re model solutions you digitally. these of automating already all and subscription our that other And a bill fees. as will this that so to and would allowing sitting What fee we that to help think collect be relationship in well The space, place. what We we’re customers. related as have transaction invoice for a of customer they offer in is have part is that mix. with combination

think their solve we able – so that’s we having have. that trusted relationship that they to customer And being in come of additional that problems a base from some to

We’re within portfolio. finding interest smaller XXX,XXX of fit existing And our said, of with we’ve some the I got that them as accounts.

Bob Napoli

telling What about could see on out been the – Thank and economy? just that last where you the months. the you over do several guess, sales same-store has seeing strength What why And lastly trend, trends? then are you you call you. I what is

Melissa Smith

across was a favorable, and when again, mix, it been American North fit about have customers in there’s some they’re you trends about the look of type talk sales talking of lot Same-store X% and of lot and the there is which customers a up of diversity I fleet, there. that if –

really some educational up services, accommodations. part different but a so construction, strong categories was which significantly, You number small is increases of the might in imagine like business pretty mining, of relatively is

in So look you them up up, digits. categories most the across a of lot double were mix were

Bob Napoli

Thank you. Appreciate it.

Operator

go we’ll Baird. to Koning with Dave Next,

is open. line Your

Dave Koning

you’ve of going answered lot I’m guys. on people thinking so there quarter yield it. to already on just question, seasonality Yes. consistent of looks because that to a each Hey yield, sensitive or mid-XXs know to the so. I that or basis points kind job. Thanks. just My through Nice is first like year? Is sequentially, questions be travel But are it

Melissa Smith

the call quarter, last we we up true fourth that that mentioned the Yes, had some adjustments.

expect quarters we the And high. year XXXX. for I rate quarter what That’s the same in thing if now. May in perfectly year’s And said average to rate. fourth artificially every so full we out why out I’d be XXXX. would see we but play the with It say largely not come play line the to do quarter, in expect rate was used had the last

Dave Koning

Okay.

or core X, obviously then Okay. mid The year, secondly, fuel teen’s to quarters maybe I Thank high digit going I all of in is mean, or the much guess, kind to there rest you. core different good, rates in growth of different segment, it’s it And fleet? have kind for of prices. be Fleet really the going quarters of single is growth the X kind difference? be

Melissa Smith

was adjusted up was It Yes. for a XX%. and it fax out great prices quarter, fuel

and that of we those And of the all that. see if were would the two. up think feel payment from gap some about we’re transactions the getting were where X%, So, good things between reopening XX%. still. – We of vehicles underlying in process the the that in that like can you really And up number do comes quarter benefit trends

to we’re digitally. our marketplace really some our into to out great seeing there And in continue sales sales. that be kudos are also vehicles, were for the just transaction that more but You’re there in increases teams business bringing seeing digital teams

And That’s of about looking of to sales new continue that the our in in the we’re to see at about long-term M&A products the good really line QX don’t you expect guidance to coming as year in whole from of things think very the growth. same-store customer the going kind from feel end that look of reopening. macro be started year, to have. on our – bring our is of we’re feel, new that if framework. see how that new coming we you really see that terms of the will in new then going to last at we our customer very we the existing with retain were rest from continue little customers that where net M&A, first year, we framework we’re – gave trail with pickup business the to ability from assuming benefit growth. rolling to throughout at we’ve and said, quarter part existing to year, that much out, because and we a the growth, customer least thing So the thing landed you new business, where course the that But it I customers we one good continued the benefit that products down same I continue and the to to additive much start go ability getting course framework existing through The added, you

Dave Koning

you. Thank great. Sounds

Operator

Next, we’ll with go to Sanjay Sakhrani KBW.

Your line is open.

Sanjay Sakhrani

how coming the prepared corporate, change I digging customer couple. know Thanks. my of accounting have a asked Good remarks, Maybe maybe asked, guys on remainder on yield as as volume their the morning. the to to and and the And yield. you well, which we been about the in course year? existing similar what’s Most much on this on? is questions the on just over travel but talked come of going of question impact Avid’s Like previous great. the in come then onboarding? is more with Avid Melissa, the are on the on where

Melissa Smith

perspective. say from that I’m going one migration customer. implemented Avid, we to I doesn’t Yes. that done we’re to did would talking say fully which mean a we about have be that sensitive

We with already. this growth that we’re we’ve we’ll year. so, see And about feel gone through the that we that courses in continued and seeing relationship through benefits fact coming them the in good process that do think

I to going where think leave I’m that’s it. probably

Sanjay Sakhrani

happens, like guess, as the... the year should lower drive that this course yield because I of And that of over

Melissa Smith

from payment actually revenue tend yield we our relationships be cost – have and technology it’s utilizing less a But It’s just stack. relationships customers embedded Those the a that those perspective, perspective. highly where underlying from to are scalable.

an perspective, what just a cost that. If in going you compare more customer to rate that where cost small we’re have more It’s with to there’s that. AP higher play a from yield have a we automation outsourced doing but with associated

to a sell bit. see rate what as a we expansion that nice bulk of believe we little bit to you for more mix as But down component But play it saying those will see we out see more that, the think over seen continue payments we’ll as we’ve payments in. time think, migrate So you’re of we you’ll perspective, volume year. profitability year, down do as the a that, embedded going trail we’re from as increases. of being the a that we is, embedded continue And to some little margin

Sanjay Sakhrani

Slide that No, on to Absolutely. you added XX very deck. that’s clear guys the that

where economy. blind questions of of you Do follow-up. last there on just well, spots? the chatter Just that out might in chain, be other Thanks. outlook? lots adequately inflation, Maybe possible Or you’ve supply all that as contemplated the recession, think one

Melissa Smith

it around in many And the mobility things time, year we’re those some the we from some guidance and been scale, provided. From a provided. perspective, that we’ve across see is perspective, you, uncertainty some going trends, we out like what thinking guide. factored in customer rebound, is the Sanjay. that’s inflation. strong spent happening that lot actually our perspective, into interesting volume great that the both where Thank the reopening since to there underlying our volume guidance we we feel really thoughtful trends where through think believe full of at and And from we we have of are the time about same we we And seeing ways. travel business, played really really that we And

Sanjay Sakhrani

you. Thank

Operator

Peller Wolfe with Darrin going to we’re go to Research. Next,

open. is line Your

Darrin Peller

that XX%. mean, hypothetically, we broadly there’s the is assuming, just never look and versus and an of about let’s don’t Thanks. And you how XXXX would. you upside I as thought most power mind. compounded then But you if you had of to at, think from I When normalize into other others even segments, but you speaking, be could amount travel Travel, back was the down where prominent, at guys. just there upside earnings think business, the said beyond levels. obviously, potential a you the still rate right do running parts to standpoint say you the think trending first Hey magnitude maybe pandemic getting through being where a And a well, with massive we breaking we’re obviously, that now? to

Melissa Smith

by projecting year saying Yes. to of would we’re And start ahead I the XXXX. be

that also U.S. impact internationally, places volumes specifically softness American some reopenings we’ve what from where there been business think as coming play – in have office If fleet and we what upside the have has we about we out kind the of relating pandemic. business. – or the where grown continued has than fleet we of to some still about we so part talking walk from the good there in a to pandemic had And through, perspective, across the feel you’re mobility North And more I which the continues from is was pandemic the

but knows a On upon. other then build return return that patterns, that normal the the just levels And environment. to spend a really from I and more health everybody we travel in to can There's to kind to some that's lives. of part is to side, we is are and strong place think – seeing demand see move normal grow. continue in travel, having a own desire on to certainly of and back I then perspective There continue – their that more personal think this to

So there to from. But continue think have pockets still we across the to benefit are company. an I ability

Darrin Peller

transition think customers data points And Got than quick one than from of at just one XX% more your about mentioned Investor the it. your your see Nice that's can up right. how I'm Anyway, we been opportunity around to learned more One some you is only I and while that guys. more regardless little segments. we cross-sell, Day following of utilize of that has All it's more But day. going. that? upside and been continue been progress what kind a the from curious made since there of

Melissa Smith

into a that importantly been because focused is rapidly focused on of say that, the believe just has capability. in ability I'd do compelling bring that couple Yes. areas. Flume a bringing a the really we've been very digital And really products that market equally marketplace we manner. cross-sell to We've on

been so a And cross-selling, this that's historically year. big first pretty process of more quarter ours has which the also over happened We're the of of organically. formalizing again focus

than hear And in our more now. that perspective so that out going you'll see later play I are think you about right the to from year

part the about ability we're offer And that product. more to has continued the excited of again, So happen both continue the business. to across organic to

to traditional of that with the ways. One journey more on have being through exciting digitally, think done set our component. to equally cross-selling people the I and different present the so and in ways to we've move – But work is it's also we So me. customer as able it's product technology, two that's the it this

Darrin Peller

Make sense. Thanks Melissa.

Melissa Smith

Thank you.

Operator

Steve And for any additional all or I time now will the today have session. the back for that remarks. call over closing question-and-answer Elder turn to the we is

Steve Elder

just the you speak join with again the wanted few you. call, say appreciate we'll Yes. thank for I to time everyone's efforts a months. Thank And morning. in you to and this

Operator

today's concludes conference call. This

now disconnect. may You

WEX (WEX) 28 Apr 222022 Q1 Earnings call transcript