WEX(WEX)2025-02-20 16:18Regulatory Compliance - WEX Bank is subject to the Durbin Amendment, which regulates interchange fees for debit transactions, with minimal applicability to prepaid or debit card products as of the filing date[99]. - Compliance with the Dodd-Frank Act has added costs to the business, particularly in the over-the-counter derivatives market, which may require changes in hedging practices[100]. - WEX Bank's acceptance of brokered deposits is restricted unless it is "well capitalized," impacting funding strategies[101]. - The company is subject to significant anti-money laundering compliance obligations, including monitoring and reporting unusual account activity[122]. - WEX's European operations must comply with the Payment Services Directive (PSD2) and the Electronic Money Directive (EMD2), with specific regulatory requirements in Ireland[124]. - In the UK, WEX's operations are governed by the Electronic Money Regulations 2011 and the Payment Services Regulations 2017, requiring safeguarding of customer funds[126]. - The company has established anti-money laundering compliance programs, including internal policies, employee training, and independent review functions[122]. - WEX Bank must provide initial and annual privacy notices to customers under the Gramm-Leach-Bliley Act, ensuring transparency in information sharing practices[111]. - The company is subject to various international privacy and data protection laws, including the GDPR, which imposes stringent privacy protections for EU residents[115]. - WEX's operations are impacted by economic sanctions imposed by the U.S. government, affecting transactions with designated foreign countries and nationals[102]. Market and Financial Risks - The company is exposed to market risks including interest rates, foreign currency exchange rates, and commodity prices, with ongoing management of these risks through derivative instruments[407]. - As of December 31, 2024, the company had 31.4 million on interest expense related to the company's Credit Agreement[418]. - The company expects to incur a full contingent consideration liability of 2.0 million decline in revenue for 2025[408]. - If all currencies in which the company earned revenue weakened or strengthened by 10% against the U.S. dollar, revenues and operating income would each change by approximately 2% or less[410]. - The company is not currently hedged for changes in fuel prices, but management continually monitors the market for alternatives[408]. - The company does not utilize hedging instruments to mitigate foreign currency risks but may initiate strategies in the future as international operations grow[410]. Financial Performance - Total revenues for WEX Inc. in 2024 were 2,548.0 million in 2023[434]. - Payment processing revenue decreased to 1,213.7 million in 2023, a decline of 1.3%[434]. - Account servicing revenue increased by 6.8% to 646.4 million in 2023[434]. - Net income attributable to WEX Inc. rose to 266.6 million in 2023, reflecting a growth of 16.1%[434]. - The company's cash and cash equivalents decreased to 975.8 million in 2023, a decline of 38.9%[438]. - Total assets decreased to 13,882.1 million in 2023, a reduction of 4.0%[438]. - Total liabilities decreased to 12,061.5 million in 2023, a decline of 1.9%[438]. - The company reported a comprehensive income of 343.7 million in 2023[436]. - Basic earnings per share increased to 6.23 in 2023, a rise of 21.7%[434]. - The provision for credit losses decreased to 89.8 million in 2023, a reduction of 24.0%[434]. - Total cash flows from operating activities decreased to 907.9 million in 2023, reflecting a decline of 46.9%[441]. - The company reported a net cash used for investing activities of 2,138.3 million in 2023, indicating a reduction of 55.1%[441]. - Cash, cash equivalents, and restricted cash at the end of 2024 totaled 2,230.0 million at the end of 2023, a decrease of 35.5%[442]. - Stock-based compensation expense increased to 127.0 million in 2023, a decrease of 11.3%[441]. - The company repurchased common stock totaling 297.6 million in 2023, an increase of 120.4%[441]. - Accounts receivable increased by 195.1 million in 2023[441]. - The company experienced a foreign currency translation loss of 15.6 million in 2023[441]. - The total stockholders' equity at the end of 2024 was 1,820.6 million at the end of 2023, reflecting a decline of 18.2%[439]. - The company reported a provision for credit losses of 89.8 million in 2023, a decrease of 24.1%[441]. Investments and Acquisitions - The company completed the acquisition of Payzer Holdings for approximately 4.3 million to Mobility segment revenues from acquisition date to December 31, 2023[534][537]. - The Ascensus acquisition was completed for approximately 14.0 million to Benefits segment revenues from acquisition date to December 31, 2023[538][542]. - The company entered into an ASR agreement to repurchase 3,845.2 million, an increase from 378.6 million in 2023 to 107.9 million in 2023 to 1,206.5 million as collateral for FHLB advances as of December 31, 2024[551]. - The total amortized cost of debt securities due after 10 years was 1,903.3 million as of December 31, 2024[558]. - The company reported no expected credit losses recorded against its investment securities for both 2024 and 2023[551]. - The receivables portfolio showed no individual customer with a balance representing 10% or more of the outstanding receivables at the end of 2024 or 2023[550]. Goodwill and Intangible Assets - Goodwill is reviewed for impairment at least annually, with the last review conducted on October 1[477]. - Net goodwill decreased from 2,983.4 million by December 31, 2024, a reduction of 1.1%[561]. - Gross goodwill for the Mobility segment decreased from 1,545.2 million, a decline of 0.7%[561]. - Accumulated impairment losses remained stable at 714.4 million in 2023 to 143.0 million in 2024, up from 107.7 million in 2022[472]. - The amounts expensed for amortization of internal-use computer software were 78.7 million in 2023 and 242.9 million in 2023 to 119.5 million in 2024 from 20.8 million in 2023 to $18.6 million in 2024, a decline of 10.6%[560].