• Revenue: $636.6 million for Q1, a decrease of 2.5% year-over-year.
• Adjusted Net Income per Diluted Share: $3.51, an increase of 1.4% year-over-year.
• Mobility Segment Revenue: Declined 1.5% year-over-year.
• Benefits Segment Revenue: $199.3 million, an increase of 4.2% year-over-year.
• Corporate Payment Segment Revenue: $103.5 million, a decline of 15.5% year-over-year.
• Same Store Sales Growth - Local Fleets: Down 3.9%.
• Same Store Sales Growth - Over the Road Customers: Up 2.6%.
• HSA Accounts Growth: 7% increase, totaling over 8.5 million accounts.
• Direct AP Volume Growth: Nearly 25% increase year-over-year.
• Leverage Ratio: 3.5 times, at the high end of the long-term range.
• Share Repurchases: $790 million returned to investors, reducing share count by approximately 13.1%.
• Q2 Revenue Guidance: Expected to be between $640 million and $660 million.
• Full Year Revenue Guidance: Expected to be between $2.57 billion and $2.63 billion.
• Full Year Adjusted EPS Guidance: Expected to be between $14.72 and $15.32 per diluted share.

• Warning! GuruFocus has detected 5 Warning Signs with WEX.

Release Date: May 01, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• WEX Inc (NYSE:WEX) reported adjusted net income per diluted share of $3.51, a 1.4% increase compared to the same quarter last year, with adjusted EPS growing 5% excluding fuel price and foreign exchange fluctuations.
• The company maintained high customer retention rates, even during economic uncertainty, highlighting the strength of its value proposition.
• WEX Inc (NYSE:WEX) successfully extended partnerships with major industry players like Circle K, Enterprise Fleet Management, and JB Hunt, demonstrating strong market trust.
• The benefits segment saw a 7% growth in HSA accounts, outperforming the industry average of 5%, indicating competitive strength.
• The corporate payment segment's direct accounts payable product experienced a 25% growth in volume, showcasing strong new account growth despite economic challenges.

Negative Points

• Total revenue for the quarter was $636.6 million, a decrease of 2.5% year over year, impacted by lower fuel prices and foreign exchange rates.
• The mobility segment saw a decline in transaction levels, partly due to external factors like weather events, with same-store sales for local fleets down 3.9%.
• The corporate payment segment's revenue declined by 15.5% year over year, largely due to a major travel customer's transition to a new operating model.
• WEX Inc (NYSE:WEX) faces macroeconomic uncertainties, including potential impacts from US tariff policies and a softening economic environment.
• The company anticipates a $31 million net negative impact on revenue for the full year due to fuel prices, interest rates, and foreign exchange fluctuations.

Q & A Highlights

Q: Can you explain the impact of tariffs and weather on the mobility segment and your expectations moving forward? A: Melissa Smith, CEO, explained that the local part of the business saw a 3.9% decline in same-store sales, partly due to weather and economic factors. The over-the-road (OTR) segment saw a 2.6% increase, attributed to a pull-forward in demand ahead of tariff implementations. Recent softness in OTR volumes has been factored into their guidance, and they remain confident in their full-year outlook, excluding macro impacts.

Q: How is the non-travel corporate payments segment performing, and what are the major verticals within it? A: Melissa Smith noted that about half of the corporate payments revenue is outside of travel, with a diverse customer base including mobility-related and healthcare sectors. There is some softness in discretionary spending, but the direct accounts payable product saw a 25% increase in volume year-over-year, indicating strong new account growth.

Q: Can you provide more details on the composition of the mobility segment's local fleet revenue? A: Melissa Smith stated that the local fleet revenue is not categorized by size but by different AX codes. The portfolio mimics the market, with a mix of small and large fleets. Public administration was up 2% year-over-year, while construction fared slightly better than other sectors. The international part of the business is about 10%.

Q: What is the outlook for the corporate payments segment, particularly regarding purchase volumes and yields? A: Jagtar Narula, CFO, indicated that Q1 was more normalized for purchase volumes, and they expect stability moving forward. Yields are expected to remain stable, with a slight decrease in Q2 and Q3 due to a higher mix of travel, which typically has lower yields.

Q: How is WEX positioned to handle potential credit risks in the current economic cycle? A: Melissa Smith highlighted that WEX has invested in proprietary credit tools to mitigate risks and improve decision-making. The company feels more confident in its ability to manage credit exposure compared to previous cycles, with portfolios holding up well.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.