Financial Performance - Total revenues for the three months ended March 31, 2025, were $636.6 million, a decrease of 2% compared to $652.7 million in the same period of 2024[141]. - Net income for the same period increased to $71.5 million, up 8.7% from $65.8 million in 2024, resulting in a net income per diluted share of $1.81, compared to $1.55 in the prior year[141]. - Adjusted net income was $138.4 million, down from $146.7 million year-over-year, with adjusted net income per diluted share at $3.51, slightly up from $3.46[141]. - Operating income for the three months ended March 31, 2025, increased by $9.8 million, or 21%, to $56.5 million compared to $46.7 million in the same period of 2024[153]. - Segment adjusted operating income rose by $7.5 million, or 9%, to $86.9 million for the three months ended March 31, 2025, compared to $79.4 million in 2024[153]. - Total segment adjusted operating income was $258.7 million for the three months ended March 31, 2025, down from $274.9 million in 2024[174]. Revenue Breakdown - In the Mobility segment, total revenues decreased by $5.2 million to $333.8 million, primarily due to lower average domestic fuel prices, which decreased revenue by $8.5 million[143]. - Total revenues in the Benefits segment increased by $8.1 million to $199.3 million, driven by a rise in average HSA custodial cash assets, which increased by 9% to $4,608.9 million[151]. - Total revenues in the Corporate Payments segment decreased by $19.0 million, or 16%, to $103.5 million for the three months ended March 31, 2025, compared to $122.5 million in 2024[155]. - Payment processing revenue declined by $17.5 million, or 17%, to $85.7 million for the three months ended March 31, 2025[155]. Expenses and Margins - General and administrative expenses decreased by $4.2 million, or 41%, to $6.2 million for the three months ended March 31, 2025, due to reduced integration costs and changes in performance-based compensation estimates[154]. - Segment adjusted operating income margin for Mobility improved to 39.4%, up from 38.6% in the prior year, primarily due to a reduction in credit loss provision[148]. - Segment adjusted operating income margin for Corporate Payments decreased by 13.6 percentage points to 39.1% for the three months ended March 31, 2025, compared to 52.7% in 2024[159]. Cash Flow and Liquidity - Operating cash flow for the three months ended March 31, 2025, was reported at $(481.6) million, compared to $(153.3) million in 2024[177]. - Adjusted free cash flow for the three months ended March 31, 2025, was $16.2 million, an improvement from $(9.2) million in 2024[177]. - The company reported a net cash used for operating activities of $481.6 million for the three months ended March 31, 2025, an increase of $328.3 million compared to the same period in 2024[191][193]. - Cash used for investing activities decreased by $294.3 million to $23.5 million for the three months ended March 31, 2025, primarily due to the absence of HSA deposit transfers to WEX Bank during this period[195]. - Financing activities generated $318.4 million in cash during the three months ended March 31, 2025, a decrease of $35.7 million compared to the prior year, influenced by a reduction in restricted cash payable[197]. Debt and Compliance - The company completed a private offering of $550.0 million in senior unsecured notes due in March 2033 during the three months ended March 31, 2025[179]. - The company had outstanding term loan principal borrowings of $2,689.9 million and borrowings of $954.3 million on the Revolving Credit Facility as of March 31, 2025[181]. - The company believes its current cash and cash equivalents, along with cash generating capabilities, will be adequate to fund its cash needs for the next 12 months[181]. - As of March 31, 2025, the company maintained compliance with financial covenants, including a consolidated interest coverage ratio of no less than 3.00 to 1.00 and a consolidated leverage ratio of no more than 4.75 to 1.00[189]. - WEX Bank is subject to a consent order from the FDIC requiring compliance improvements, with a civil money penalty of $650 thousand assessed and paid in full[201]. Stock and Shareholder Information - As of March 31, 2025, there was $173.9 million worth of WEX common stock available for repurchase under the authorized plan[198]. - The company has the ability to redeem up to 40% of the Senior Notes at a redemption price of 106.500% of the principal amount, provided at least 50% of the original amount remains outstanding[188]. - The company had $144.8 million available to borrow from the Federal Reserve Bank Discount Window as of March 31, 2025, with no outstanding borrowings on this line of credit[190].

WEX (WEX) Q1 2025 Earnings Call May 01, 2025 10:00 AM ET Speaker0 Thank you for standing by. My name is Kayla, and I will be your conference operator today. At this time, I would like to welcome everyone to the WEX First Quarter twenty twenty five Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. I would now like to turn the call over to Steve Elder. You may begin. Speaker1 Thank you, operator, and goo ...

Core Insights - Wex reported revenue of $636.6 million for the quarter ended March 2025, a decrease of 2.5% year-over-year, while EPS increased to $3.51 from $3.46 in the previous year [1] - The revenue exceeded the Zacks Consensus Estimate of $630.4 million, resulting in a surprise of +0.98%, and the EPS also surpassed the consensus estimate of $3.40 by +3.24% [1] Financial Performance Metrics - Purchase volume in the Benefits segment was $2.33 billion, exceeding the average estimate of $2.19 billion [4] - Payment processing transactions in the Mobility segment totaled 134.5 million, slightly below the average estimate of 136.53 million [4] - Corporate Payments segment reported a purchase volume of $17.29 billion, lower than the estimated $18.78 billion [4] - Average US fuel price in the Mobility segment was $3.32 per gallon, above the average estimate of $3.29 per gallon [4] - Mobility revenues were $333.80 million, slightly above the estimate of $331.20 million, representing a year-over-year decline of -1.5% [4] - Benefits revenues reached $199.30 million, surpassing the estimate of $197.88 million, with a year-over-year increase of +4.2% [4] - Corporate Payments revenues were $103.50 million, below the estimate of $104.85 million, reflecting a year-over-year decline of -15.5% [4] - Payment processing revenues were $271.80 million, under the estimate of $274.30 million, showing a year-over-year decrease of -10% [4] - Account servicing revenues were $179.10 million, exceeding the estimate of $177.13 million, with a year-over-year increase of +3.4% [4] - Finance fees revenues were $75.70 million, above the estimate of $67.74 million, indicating a year-over-year increase of +7.7% [4] - Other revenues were reported at $110 million, slightly below the estimate of $112.18 million, with a year-over-year increase of +2.7% [4] - Benefits-Other revenues were $53.60 million, below the estimate of $54.77 million, reflecting a year-over-year increase of +16.5% [4] Stock Performance - Wex shares have returned -18.1% over the past month, compared to a -0.2% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 2 (Buy), suggesting potential outperformance against the broader market in the near term [3]

Core Viewpoint - Wex reported quarterly earnings of $3.51 per share, exceeding the Zacks Consensus Estimate of $3.40 per share, and showing a slight increase from $3.46 per share a year ago, indicating a positive earnings surprise of 3.24% [1] Financial Performance - Wex's revenues for the quarter ended March 2025 were $636.6 million, surpassing the Zacks Consensus Estimate by 0.98%, although this represents a decline from $652.7 million in the same quarter last year [2] - Over the last four quarters, Wex has exceeded consensus EPS estimates three times and topped consensus revenue estimates two times [2] Stock Performance - Wex shares have declined approximately 24.9% since the beginning of the year, contrasting with the S&P 500's decline of 5.5% [3] - The company's future stock performance will largely depend on management's commentary during the earnings call and the sustainability of the recent earnings numbers [3][4] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $3.58, with expected revenues of $653.3 million, and for the current fiscal year, the estimate is $15.22 on $2.61 billion in revenues [7] - The estimate revisions trend for Wex is currently favorable, leading to a Zacks Rank 2 (Buy), suggesting that the shares are expected to outperform the market in the near future [6] Industry Context - The Financial Transaction Services industry, to which Wex belongs, is currently ranked in the top 29% of over 250 Zacks industries, indicating a favorable outlook for stocks within this sector [8]

Exhibit 99.2 ____ These earnings supplemental materials contain forward-looking statements including, but not limited to, statements about management's plans, goals, expectations, and guidance and assumptions with respect to future financial performance of the Company. Any statements in these supplemental materials that are not statements of historical facts are forward- looking statements. When used in these supplemental materials, the words "anticipate," "believe," "continue," "could," "estimate," "expect ...

Revenue Performance - Total revenue for Q1 2025 decreased by $16.1 million compared to Q1 2024, driven by an unfavorable impact of $8.5 million from fuel prices and spreads, and $2.5 million from foreign exchange rates[12] - For the twelve months ended December 31, 2024, total revenue was $2,628.1 million, reflecting an 8.4% year-over-year increase[11] - The company’s underlying revenue growth during Q1 2025 was down 0.8% when adjusted for fuel prices and foreign exchange impacts[12] - Mobility segment revenue for Q1 2025 decreased by 1.5% year-over-year, impacted by a 2.9% drag from lower fuel prices, with total revenue at $333.8 million[6] - Total revenues for the twelve months ended December 31, 2024, increased by 10.6% to $739.5 million compared to $668.4 million for the previous year[22] Income and Profitability - Adjusted net income per diluted share for Q1 2025 was $3.51, a 1.4% increase compared to the prior year[11] - The company’s GAAP income per diluted share for Q1 2025 was $1.81, reflecting a 16.8% year-over-year increase[11] - The adjusted operating income margin for the Mobility segment was 39.4% for Q1 2025, compared to 42.7% for the twelve months ended December 31, 2024[14] - GAAP operating income margin for the Mobility segment was 29.8%, up from 29.3% in the prior year, with non-GAAP adjusted operating income margin at 39.4%, an increase of 0.7%[6] - GAAP operating income margin for the Corporate Payments segment was 26.3%, down from 41.7% in the comparable prior year quarter[27] - Adjusted operating income margin for the Corporate Payments segment decreased to 39.1% from 52.7% in the same quarter last year[27] Segment Performance - The Mobility segment generated $333.8 million in revenue for Q1 2025, accounting for 52% of total revenue[14] - The company’s total segment adjusted operating income for the twelve months ended December 31, 2024, was $1,059.7 million[14] - Benefits revenue in Q1 2025 was $199.3 million, reflecting a 4.2% increase year-over-year, driven by strong growth in the HSA business[21] - Average SaaS accounts increased by 6.1% year-over-year to 21.5 million, with HSA account growth at 7% compared to a market growth of 5%[21] - Total purchase volume for the Corporate Payments segment decreased by 27.8% year-over-year to $17.285 million for the three months ended March 31, 2025[28] Cash Flow and Capital Expenditures - For Q1 2025, the company reported an adjusted free cash flow of $16.2 million, with trailing twelve months adjusted free cash flows totaling $587 million[33] - Capital expenditures for Q1 2025 were $32.6 million, while total capital deployed in the same quarter reached $913.8 million[35] - The adjusted free cash flow for the twelve months ended December 31, 2024, is projected to be $562.0 million[60] Financial Guidance and Market Outlook - The financial guidance for Q2 2025 projects net revenue between $640 million and $660 million, with a full-year revenue expectation of $2.568 billion to $2.628 billion[38] - The adjusted net income per diluted share guidance for Q2 2025 is between $3.60 and $3.80, with full-year guidance ranging from $14.72 to $15.32[38] - The company anticipates U.S. GDP growth of approximately 2% in 2025, without accounting for potential economic slowdowns[38] Liquidity and Debt Management - The company ended the quarter with $770 million of available liquidity, including corporate cash and borrowing capacity under its revolving credit agreement[29] - As of March 31, 2025, the leverage ratio increased to 3.5 times, remaining within the long-term target range of 2.5 to 3.5 times[29] - The company has maintained ample access to debt markets, with a three-year runway before the next debt maturity, allowing for opportunistic market positioning[31] Shareholder Returns - The company repurchased approximately 4.9 million shares at a price of $154 per share, totaling $750 million in cash for the tender offer completed on March 31, 2025[36] Non-GAAP Measures and Adjustments - The company's adjusted net income and adjusted operating income are non-GAAP measures and should not be considered superior to GAAP measures[56] - The company has begun utilizing a fixed annual projected long-term non-GAAP tax rate starting in fiscal year 2024 for better consistency across reporting periods[58] - Stock-based compensation is treated as a non-cash expense, differing from other forms of compensation[58] - Impairment charges represent non-cash asset write-offs and do not reflect recurring costs relevant to the company's continuing operations[58]

Core Viewpoint - WEX is currently identified as a strong value stock, exhibiting favorable valuation metrics compared to its industry averages, indicating potential undervaluation and a positive earnings outlook [4][8]. Valuation Metrics - WEX has a Forward P/E ratio of 8.44, significantly lower than the industry average of 22.36, with historical fluctuations between 7.27 and 12.93 over the past 12 months [4]. - The stock's P/B ratio stands at 3.40, compared to the industry's average of 8.27, with a 52-week range of 2.96 to 5.15 [5]. - WEX's P/S ratio is 1.72, which is lower than the industry average of 2.31, indicating a more favorable valuation based on sales [6]. - The P/CF ratio for WEX is 8.27, well below the industry's average of 17.50, with a historical range of 7.19 to 16.79 [7]. Investment Outlook - Given the combination of WEX's strong earnings outlook and its undervalued status based on various financial metrics, it is positioned as an attractive investment opportunity for value investors [8].

Core Insights - WEX has introduced a feature allowing fleets with electric vehicles (EVs) to utilize the WEX Fleet Card at private chargers, enhancing their EV charging and payment solutions [1] - The WEX EV Depot provides a comprehensive solution for fleet managers transitioning from internal combustion engines to EVs, facilitating data consolidation across various charging infrastructures [2] - The new feature enables EV drivers to access preferred charging locations and schedule overnight charging, streamlining the payment process [3] Company Developments - WEX EV Depot is integrated with a reporting system that allows fleets to manage EV charges from any source using their WEX fleet credit line, minimizing the number of cards required [2] - The company is exploring various payment options, including tokenized virtual cards and mobile wallets, to enhance operational efficiency [4] - WEX has partnered with Engine to offer Over The Road Fuel Cards as a payment option for eligible customers, indicating a strategic move to expand payment solutions [5]

Core Investment Thesis - WEX Inc. is identified as a compelling long-term investment opportunity due to its strong market leadership, diversified revenue streams, and global growth potential, with a long-term expected earnings growth rate of 5% [1] Group 1: Growth Drivers - WEX's top-line growth is driven organically through an expansive network of fuel and service providers, product innovation, and effective marketing strategies, leading to solid revenue and earnings growth [2] - Strategic acquisitions have reinforced WEX's growth momentum by adding to its revenue base, introducing new capabilities, and creating synergies for long-term expansion [3] Group 2: Market Position - WEX has established itself as a leader in the fleet payments industry, providing integrated payment solutions that optimize fuel efficiency and reduce operational costs for fleet operators, fostering long-term client relationships [4] - The company operates through three primary segments: Mobility, Corporate Payments, and Benefits, which broadens its customer base and protects against downturns in any single sector [5] Group 3: Innovation and Technology - WEX consistently invests in technology-driven innovation, enhancing customer experience through mobile platforms, real-time analytics, and seamless digital payment options, which strengthens client retention [6] Group 4: Challenges - WEX does not distribute cash dividends, which may deter income-focused investors, as shareholder returns rely solely on stock price appreciation [7] - The company faces intense competition from established financial service providers and emerging fintech startups, necessitating continuous innovation and investment in advanced technologies [8]

Core Insights - The integration between Reclaim Health and WEX aims to transform the health and benefits landscape for employers and employees through AI-powered claims data and analytics [1][2] - This collaboration is designed to empower employees in managing healthcare costs and optimizing health coverage, while also helping employers control rising healthcare expenses [2][3] Company Overview - Reclaim Health is an AI-powered, claims-driven healthcare financial advocacy platform that assists families in managing healthcare expenses and optimizing health coverage [4] - The platform focuses on proactive management of healthcare spending, optimization of benefit offerings, and maximizing employee benefits [4] Integration Details - The integration combines Reclaim's innovative platform with WEX's benefits administration technology, creating a fully integrated solution that provides real dollar savings for employees and helps employers manage costs [2][3] - The partnership is expected to deliver enhanced claims analysis, proactive cost-saving recommendations, streamlined benefits selection, and personalized support for employees throughout the year [5]