Wex Inc. · NYSE:WEX
Wex — Q2 2018 Earnings Presentation
21 slides from Wex's earnings presentation, Aug 2, 2018
Slide 1: WEX Second Quarter 2018 Earnings
WEX Second Quarter 2018 Earnings August 2, 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: 2Q2018 Highlights
2Q2018 Highlights 20.6% 37.8% 10.4% Fleet Travel & Corporate Health & Employee Benefits 22.0% 65.9% 21.5% 2Q2018 Revenue Growth Vs. 2Q2017
Slide 4: Strategic Pillars
Strategic Pillars HIGHLIGHTS FOR THE QUARTER Continue to experience strong organic revenue growth, driven primarily by volumeVisa issuing live - expanding product value proposition with added networkClearview Snap offering fleet analytics for small businesses launched in June with Amazon Alexa integ
Slide 5: Executing on the WEX Strategy
Executing on the WEX Strategy FLEET TRAVEL & CORPORATE HEALTH & EMPLOYEE BENEFITS Redesigned OTR mobile functionality with improved user experienceNew features added to fleet customer portal included new UI to enhance customer experience and provide more responsive featuresExpanding Driver Dash netw
Slide 6: Deep Dive on the US Health Business
DEEP INTEGRATION TO SYSTEMS AND INVESTMENT IN PLATFORM PRIMARY DISTRIBUTION CHANNELS HSA, HRA, FSA, VEBA, COBRA, Transit, Wellness, QSE-HRA Flexible Plan Types Benefit Accounts Mobile App, Consumer Portal, Personalized Messages, Stacked Payment Card Consumer Engagement Easy, Compelling Experience Co
Slide 7: WEX Second Quarter 2018 Financial Results
WEX Second Quarter 2018 Financial Results
Slide 8: Company Results - Q2 2018
Company Results - Q2 2018 2Q18 2Q17 $ ∆ Yr/Yr % ∆ Yr/Yr Total Revenue $370,876 $303,884 $66,992 22.0% Net income attributable to shareholders $39,298 $17,090 $22,208 129.9% Net income attributable to WEX Inc. per diluted share $0.90 $0.40 $0.50 125.0% Adjusted net income attributable to shareholders
Slide 9: Revenue Breakdown - Q2 2018
Revenue Breakdown - Q2 2018 2Q18 2Q17 $ ∆ Yr/Yr % ∆ Yr/Yr Total Revenue $370,876 $303,884 $66,992 22.0% Segment Revenue Fleet Solutions $241,470 $200,304 $41,166 20.6% Travel and Corporate Solutions $75,764 $55,000 $20,764 37.8% Health and Employee Benefit Solutions $53,642 $48,580 $5,062 10.4% Anot
Slide 10: Revenue Recognition Impacts
Revenue Recognition Impacts Total Fleet Solutions $8,376 Travel and Corporate Solutions 3,787 Health and Employee Benefit Solutions (272) Total $11,891 Q2 2018 total revenue included $11.9 million due to accounting changes In thousands unless otherwise noted No material impact on earningsCertain par
Slide 11: Fleet Solutions
Fleet Solutions 2Q18 2Q17 $ ∆ Yr/Yr % ∆ Yr/Yr Total Segment Revenue ($) 241,470 200,304 41,166 20.6% Payment Processing Revenue ($) 112,895 87,678 25,217 28.8% Finance Fee Revenue ($) 45,188 36,552 8,636 23.6% All Other Revenue ($) 83,387 76,074 7,313 9.6% Payment Processing Transactions 115,919 108
Slide 12: Travel and Corporate Solutions
Travel and Corporate Solutions 2Q18 2Q17 $ ∆ Yr/Yr % ∆ Yr/Yr Total Segment Revenue ($) 75,764 55,000 20,764 37.8% Payment Processing Revenue ($) 51,289 40,276 11,013 27.3% All Other Revenue ($) 24,475 14,724 9,751 66.2% Purchase Volume ($) 8,930,421 7,676,935 1,253,486 16.3% Net Interchange Rate (%)
Slide 13: Health and Employee Benefit Solutions
Health and Employee Benefit Solutions 2Q18 2Q17 $ ∆ Yr/Yr % ∆ Yr/Yr Total Segment Revenue ($) 53,642 48,580 5,062 10.4% Payment Processing Revenue ($) 14,554 13,400 1,154 8.6% Account Servicing Revenue ($) 26,702 24,199 2,503 10.3% All Other Revenue ($) 12,386 10,981 1,405 12.8% Purchase Volume * ($
Slide 14: Selected Operating Expenses and Margins
Selected Operating Expenses and Margins Service fees declined primarily due to Revenue Recognition changesFleet credit loss in basis points declined to 11.2; fraud at 2.5Sales and marketing expenses up mainly due to Revenue Recognition changes in thousands 2Q18 2Q18 2Q17 2Q17 $ ∆ Yr/Yr $ ∆ Yr/Yr % ∆
Slide 15: Tax Rate
Tax Rate Key Updates Following tax reform in December, our Q2 tax rate decreased significantlyTax rate down slightly from Q1 due to mix of US vs foreign earnings
Slide 16: Additional Balance Sheet Items
Additional Balance Sheet Items Key Updates Corporate cash1 balances increased $31.1 million to $75.6 millionBorrowing capacity of $516 million on line of creditLeverage ratio reduced to 3.5, down from 4.2 in Q2 last yearRepriced Term Loan B in January, reducing spreads 50 basis pointsInterest rate h
Slide 17: Guidance
Guidance 3Q2018 OUTLOOK ∆ Yr/Yr FY2018 OUTLOOK ∆ Yr/Yr Revenue (in millions) $363 - $373 12% - 15% $1445 - $1475 16% - 18% Adjusted Net Income1 (in millions) $88 - $93 43% - 51% $344 - $355 48% - 52% Adjusted Net Income Earnings per Diluted Share1 $2.03 - $2.13 42% - 49% $7.90 - $8.15 46% - 51% Dome
Slide 18: Appendix
Appendix eS .
Slide 19: WEX Non-GAAP Reconciliation
WEX Non-GAAP Reconciliation Three Months Ended June 30, Three Months Ended June 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 $ 39,298 $ 0.90 $ 17,090 $ 0.40 Unrealized (gains)
Slide 20: WEX Non-GAAP Reconciliation
WEX Non-GAAP Reconciliation Three Months Ended June 30, Three Months Ended June 30, (In thousands) 2018 2018 2017 2017 Operating income (GAAP) $ 102,911 $ 47,581 Acquisition–related intangible amortization 34,921 38,114 Other acquisition and divestiture related items 619 239 Debt restructuring costs
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