Wex Inc. · NYSE:WEX
Wex — Q3 2018 Earnings Presentation
21 slides from Wex's earnings presentation, Oct 31, 2018
Slide 1: WEX Third Quarter 2018 Earnings
WEX Third Quarter 2018 Earnings October 31, 2018
Slide 2: Forward-Looking Statements
WEX Forward-Looking Statements This earnings presentation contains forward-looking statements, including statements regarding: financial guidance and assumptions underlying the Company's financial guidance. Any statements that are not statements of historical facts may be deemed to be forward-lookin
Slide 3: 3Q2018 Highlights
3Q2018 Highlights Fleet Travel & Corporate Health & Employee Benefits 18.1% 53.1% 17.9% 3Q2018 Segment Revenue Growth Vs. 3Q2017 (1.2)% +35.7% +17.7% US Healthcare up 13%
Slide 4: Strategic Pillars: Highlights for the Quarter
Strategic Pillars HIGHLIGHTS FOR THE QUARTER Continued to experience strong organic revenue growth, driven primarily by volumeSigned agreements recently with Chevron and FleetCor to transition Chevron portfolio to WEXNew JCB issuing contract further opens up the Japanese market for travel late next
Slide 5: Executing on the WEX Strategy
Executing on the WEX Strategy FLEET TRAVEL & CORPORATE HEALTH & EMPLOYEE BENEFITS Significant progress towards readiness for onboarding Chevron and Shell portfoliosDriver Dash network expanded to more than 10,000 accepting sitesSmartHub app includes real time push notifications and declined transact
Slide 6: Noventis Acquisition Overview
COMPANY OVERVIEW Noventis is an electronic payments network focused on optimizing payment delivery for bills and invoices to commercial entitiesScalable underlying technology to optimize payments using robotics process automation (RPA) technology and API deliveryGTM strategy via three channels: bank
Slide 7: WEX Third Quarter 2018 Financial Results
WEX Third Quarter 2018 Financial Results
Slide 8: Company Results - Q3 2018
Company Results - Q3 2018 3Q18 3Q17 $ ∆ Yr/Yr % ∆ Yr/Yr Total Revenue $382,690 $324,002 $58,688 18.1% Net income attributable to shareholders $57,322 $33,971 $23,351 68.7% Net income attributable to WEX Inc. per diluted share $1.31 $0.79 $0.52 65.8% Adjusted net income attributable to shareholders $
Slide 9: Revenue Breakdown - Q3 2018
Revenue Breakdown - Q3 2018 3Q18 3Q17 $ ∆ Yr/Yr % ∆ Yr/Yr Total Revenue $382,690 $324,002 $58,688 18.1% Segment Revenue Fleet Solutions $249,612 $212,078 $37,534 17.7% Travel and Corporate Solutions $82,810 $61,026 $21,784 35.7% Health and Employee Benefit Solutions $50,268 $50,898 $(630) (1.2)% Ano
Slide 10: Revenue Recognition Impacts
Revenue Recognition Impacts Total Fleet Solutions $8,863 Travel and Corporate Solutions 1,880 Health and Employee Benefit Solutions (356) Total $10,387 Q3 2018 total revenue included $10.4 million due to accounting changes In thousands unless otherwise noted No material impact on earningsCertain par
Slide 11: Fleet Solutions
Fleet Solutions 3Q18 3Q17 $ ∆ Yr/Yr % ∆ Yr/Yr Total Segment Revenue ($) 249,612 212,078 37,534 17.7% Payment Processing Revenue ($) 116,023 90,270 25,753 28.5% Finance Fee Revenue ($) 51,644 40,773 10,871 26.7% All Other Revenue ($) 81,945 81,035 910 1.1% Payment Processing Transactions 117,680 110,
Slide 12: Travel and Corporate Solutions
Travel and Corporate Solutions 3Q18 3Q17 $ ∆ Yr/Yr % ∆ Yr/Yr Total Segment Revenue ($) 82,810 61,026 21,784 35.7% Payment Processing Revenue ($) 54,345 44,177 10,168 23.0% All Other Revenue ($) 28,465 16,849 11,616 68.9% Purchase Volume ($) 9,620,787 8,662,533 958,254 11.1% Net Interchange Rate (%)
Slide 13: Health and Employee Benefit Solutions
Health and Employee Benefit Solutions 3Q18 3Q17 $ ∆ Yr/Yr % ∆ Yr/Yr Total Segment Revenue ($) 50,268 50,898 (630) (1.2)% Payment Processing Revenue ($) 12,503 11,255 1,248 11.1% Account Servicing Revenue ($) 26,818 26,258 560 2.1% All Other Revenue ($) 10,947 13,385 (2,438) (18.2)% Purchase Volume *
Slide 14: Selected Operating Expenses and Margins
Selected Operating Expenses and Margins Service fees declined primarily due to Revenue Recognition reclassificationsFleet credit loss declined substantially to 14.2 basis points from 23.5; card skimming losses remain lowSales and marketing expenses up mainly due to Revenue Recognition reclassificati
Slide 15: Tax Rate
Tax Rate Key Updates Following tax reform in December 2017, our tax rate decreased significantlyANI tax rate down slightly from Q2 due to mix of US vs foreign earnings Year to date ANI tax rate of 25.5%, which is expected to continue into next year
Slide 16: Additional Balance Sheet Items
Additional Balance Sheet Items Key Updates Corporate cash1 balances increased $120 million to $195 million as compared to Q2 2018Borrowing capacity of $666 million on line of creditLeverage ratio reduced to 3.3X, down from 4.1X in Q3 last yearRepriced Term A and Revolver in August, reducing revolver
Slide 17: Guidance
Guidance 4Q2018 OUTLOOK ∆ Yr/Yr FY2018 OUTLOOK ∆ Yr/Yr Revenue (in millions) $370 - $380 12% - 15% $1478 - $1488 18% - 19% Adjusted Net Income1 (in millions) $89 - $94 38% - 46% $354 - $359 52% - 54% Adjusted Net Income Earnings per Diluted Share1 $2.05 - $2.15 38% - 44% $8.13 - $8.23 50% - 52% Dome
Slide 18: Appendix
Appendix eS .
Slide 19: WEX Non-GAAP Reconciliation
WEX Non-GAAP Reconciliation Three Months Ended September 30, Three Months Ended September 30, 2018 2018 2017 2017 in thousands except per share data per diluted share per diluted share per dilutedshare per dilutedshare Net income attributable to shareholders $ 57,322 $ 1.31 $ 33,971 $ 0.79 Unrealize
Slide 20: WEX Non-GAAP Reconciliation
WEX Non-GAAP Reconciliation Three Months Ended September 30, Three Months Ended September 30, (In thousands) 2018 2018 2017 2017 Operating income (GAAP) $ 100,688 $ 63,723 Acquisition-related intangible amortization 33,439 38,510 Other acquisition and divestiture related items 1,536 1,006 Debt restr
Slide 21: WEX Non-GAAP Reconciliation
WEX Non-GAAP Reconciliation The Company's non-GAAP adjusted net income, adjusted operating income and adjusted operating income margin exclude (as applicable) unrealized gains and losses on financial instruments, net foreign currency remeasurement gains and losses, acquisition-related intangible amo