WEX(WEX) - 2025 Q1 - Quarterly Report

Financial Performance - Total revenues for the three months ended March 31, 2025, were $636.6 million, a decrease of 2$652.7 million in the same period of 2024[141]. - Net income for the same period increased to $71.5 million, up 8.7$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$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$4,608.9 million[151]. - Total revenues in the Corporate Payments segment decreased by $19.0 million, or 16$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 $6.2 million for the three months ended March 31, 2025, due to reduced integration costs and changes in performance-based compensation estimates[154]. - Segment adjusted operating income margin for Mobility improved to 39.4$(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].