Wex Inc. · NYSE:WEX
Wex — Q1 2018 Earnings Presentation
20 slides from Wex's earnings presentation, May 3, 2018
Slide 1: WEX First Quarter 2018 Earnings
WEX First Quarter 2018 Earnings May 3, 2018
Slide 2: Forward Looking Statements
WEX Forward Looking Statements This earnings presentation contains forward-looking statements, including statements regarding: financial guidance; assumptions underlying the Company's financial guidance. Any statements that are not statements of historical facts may be deemed to be forward-looking s
Slide 3: 1Q2018 Highlights
1Q2018 Highlights 20.7% 40.0% 9.2% Fleet Travel & Corporate Health & Employee Benefits 21.8% 47.2% 19.0% 1Q2018 Revenue Growth Vs. 1Q2017
Slide 4: Strategic Pillars
Strategic Pillars HIGHLIGHTS FOR THE QUARTER Continue to experience strong organic revenue growth, driven by our acquisition and integration investments over the past few years.Run rate impact of EFS acquisition - value creation coming through in revenue.AOC synergies - both product and financial.In
Slide 5: Executing on the WEX Strategy
Executing on the WEX Strategy FLEET TRAVEL & CORPORATE HEALTH & EMPLOYEE BENEFITS Leveraging artificial intelligence to elevate customer experiencePiloting intuitive mobile payments with Driver DashBringing the power of advanced analytics in an easy to consume format to our small business portfolioI
Slide 6: Expanding The Corporate Payments Value Chain
Expanding The Corporate Payments Value Chain HIGHLIGHTS Products from the EFS and AOC acquisitions were combined with existing WEX Virtual Payments business to enhance Travel and Corporate offerings.Expected run rate expense synergies of more than $10M at the end of 2018 from AOC.Complementary, acqu
Slide 7: WEX First Quarter 2018 Financial Results
WEX First Quarter 2018 Financial Results
Slide 8: Company Results - Q1 2018
Company Results - Q1 2018 1Q18 1Q17 $ ∆ Yr/Yr % ∆ Yr/Yr Total Revenue $354,829 $291,357 $63,472 21.8% Net income attributable to shareholders $48,633 $29,401 $19,232 65.4% Net income attributable to WEX Inc. per diluted share $1.12 $0.68 $0.44 64.7% Adjusted Net Income $78,681 $52,888 $25,793 48.8%
Slide 9: Revenue Breakdown - Q1 2018
Revenue Breakdown - Q1 2018 1Q18 1Q17 $ ∆ Yr/Yr % ∆ Yr/Yr Total Revenue $354,829 $291,357 $63,472 21.8% Segment Revenue Fleet Solutions $230,365 $190,823 $39,542 20.7% Travel and Corporate Solutions $66,779 $47,713 $19,066 40.0% Health and Employee Benefit Solutions $57,685 $52,821 $4,864 9.2% Recor
Slide 10: Revenue Recognition Impacts
Revenue Recognition Impacts Total Fleet Solutions $7,384 Travel and Corporate Solutions 2,195 Health and Employee Benefit Solutions (260) Total $9,319 Q1 2018 total revenue included $9.3 million due to accounting changes In thousands unless otherwise noted No impact on earningsCertain partner rebate
Slide 11: Fleet Solutions
Fleet Solutions 1Q18 1Q17 $ ∆ Yr/Yr % ∆ Yr/Yr Total Segment Revenue ($) 230,365 190,823 39,542 20.7% Payment Processing ($) 106,978 86,262 20,716 24.0% Finance Fee Revenue ($) 43,604 36,429 7,175 19.7% All Other Revenue ($) 79,783 68,132 11,651 17.1% Average US Fuel Price (USD/gallon) $2.78 $2.40 $0
Slide 12: Travel and Corporate Solutions
Travel and Corporate Solutions 1Q18 1Q17 $ ∆ Yr/Yr % ∆ Yr/Yr Total Segment Revenue ($) 66,779 47,713 19,066 40.0% Payment Processing ($) 44,777 34,875 9,902 28.4% All Other Revenue ($) 22,002 12,838 9,164 71.4% Purchase Volume 7,940,543 6,599,797 1,340,746 20.3% Net Interchange Rate (%) 0.564% 0.528
Slide 13: Health and Employee Benefit Solutions
Health and Employee Benefit Solutions 1Q18 1Q17 $ ∆ Yr/Yr % ∆ Yr/Yr Total Segment Revenue ($) 57,685 52,821 4,864 9.2% Payment Processing ($) 16,699 15,241 1,458 9.6% Account Servicing Revenue ($) 27,025 25,315 1,710 6.8% All Other Revenue ($) 13,961 12,265 1,696 13.8% Purchase Volume* 1,503,400 1,3
Slide 14: Additional Financial Items
Additional Financial Items Key Updates Processing costs up due to AOC acquisition and technology insourcingFraud-related losses down to 2.8 basis pointsNon-fraud fleet credit losses at 9.7 basis pointsSales and marketing expenses up mainly due to revenue recognition changesGeneral and administrative
Slide 15: Additional Financial Items
Additional Financial Items Key Updates Following tax reform in December, our Q1 tax rate decreased significantly
Slide 16: Additional Balance Sheet Items
Additional Balance Sheet Items Key Updates Leverage ratio reduced to 3.6, down from 4.6 in Q1 last yearRepriced Term Loan B in January, reducing spreads 50 basis pointsInterest rate hedges in place with a market value of $27.7 millionSignificant mitigation of interest rate risk
Slide 17: Guidance
Guidance 2Q2018 OUTLOOK ∆ Yr/Yr FY2018 ∆ Yr/Yr Revenue (in millions) $357 - $367 17% - 21% $1435 - $1475 15% - 18% Adj. Net Income1 (in millions) $85 - $90 57% - 66% $337 - $355 45% - 52% Adj. Net Income Earnings per Share1 $1.96 - $2.06 56% - 63% $7.75 - $8.15 43% - 51% Fleet Credit Loss (Basis Poi
Slide 18: Appendix
Appendix eS .
Slide 19: Adjusted Net Income Reconciliation
Three Months Ended March 31, Three Months Ended March 31, 2018 2018 2017 2017 per diluted share per diluted share per dilutedshare per dilutedshare Net income attributable to shareholders $ 48,633 $ 1.12 $ 29,401 $ 0.68 Unrealized gains on derivative instruments (13,508 ) (0.31 ) (1,565 ) (0.04 ) Ne
Slide 20: WEX Non-GAAP Reconciliation
WEX Non-GAAP Reconciliation The Company's non-GAAP adjusted net income excludes unrealized gains and losses on derivatives, net foreign currency remeasurement gains and losses, acquisition-related intangible amortization, other acquisition and divestiture related items, stock-based compensation, res