CORPAY, INC. Q4 FY2024 earnings call

Management Statement and Operational Highlights

• Q4 Results: Q4 revenue $1,034M, up 10%; cash EPS $5.36, up 21%. Organic revenue growth 12%, corporate payments organic growth 26%. Same-store sales positive 1% vs. minus 3% last year.
• Full Year 2024 Highlights: Cash EPS $19, up over $2; rebranded to Corpay, the Corporate Payments Company; scaled Corporate Payments with two acquisitions; managed credit losses to low levels; progressed Vehicle Payments in Brazil; hired USA sales leadership; turned problem children businesses positive.
• 2025 Guidance: Full year 2025 revenue mid-point $4.4B, cash EPS $21, both up 11%. Organic revenue growth mid-point 11%, sales/new bookings growth 20%, macro neutral cash EPS growth 17%. Priorities: simplify portfolio, improve USA sales, expand Payables to enterprise and Europe, expand Cross-Border MCA product.
• M&A Update: 2024 Corporate Payment acquisitions (Paymerang, GPS) underway; Gringo acquisition in Brazil announced, adding to Brazil payments TAM.

Segment Performance

• Corporate Payments: Q4 revenue up 26%, full year up 20%. One-time deal synergies contributed 4 points in Q4. Direct business grew 28% excluding synergy, full suite sales up 29%. Secured first big enterprise win.
• Cross-Border: Q4 and full year revenue up 20%. Closed GPS transaction in December, integration underway. Competes with banks in global middle market.
• Vehicle Payments: Organic revenue up 8% in Q4 (4 point improvement from Q3), full year up 5%. Brazil toll tax up 9%, insurance revenue up over 130%, sold nearly 300,000 insurance policies in Q4. Acquired Gringo, which expands Brazil payments TAM.
• International Vehicle Payments: Q4 revenue up 12%, full year up 11%. Consistent performer despite Europe economic softness. U.S. sales increased over 60% in Q4.
• Lodging: Q4 organic revenue improved to 1% from down 5% in Q3. Impacted by Hurricane Helene and Milton, but expected to normalize.

Guidance

• Full year 2025 revenue mid-point $4.4B, cash EPS $21, both up 11%.
• Organic revenue growth mid-point 11%, up from 90 days ago.
• Planning full year sales/new bookings growth 20%, macro neutral cash EPS growth 17%.
• Macro headwinds expected to compress print revenue over $100M and cash EPS by ~$1.20.
• Q1 2025 expected print revenue growth 7%-9%, organic revenue 8%-10%, cash EPS 9%-11%.

Risks

• Unfavorable macro environment including weak international currencies and higher tax rate.
• Volatility in FX rates creating uncertainty.
• Integration risks with acquisitions.
• Dependence on key customers and retention rates.

Question and Answer

Q: Tien-Tsin Huang on Vehicle Payments growth and Gringo financials A: Ron Clarke said Vehicle Payments growth in 2025 driven by Brazil strength and U.S. turn, Gringo is a decent size, early innings with 5M active users, 3x Brazil toll TAM.

Q: Sanjay Sakhrani on Corporate Payments pruning, Multi-Currency Account product A: Ron Clarke said pruning non-core assets fitting Corporate Payments, Multi-Currency Account product is exciting, could attract new clients.

Q: Andrew Schmidt on sales initiatives and Payables enterprise win A: Ron Clarke said sales initiatives still early, big sales in Q4 including first enterprise payables account, go-to-market via partners.

Q: Andrew Jeffrey on Corporate Payments right to win and AP monetization A: Ron Clarke said Corporate Payments advantaged by tech, virtual card network, and senior sales team; AP monetization through ACH and subscription models.

Q: Darrin Peller on Lodging mix, Corporate Payments margin A: Ron Clarke said Lodging yield impacted by hurricanes, Corporate Payments Q4 growth due to one-time synergies and channel turn.

Q: Ramsey El-Assal on Lodging recovery, Payables expansion to Europe A: Ron Clarke said Lodging recovery expected with normalized mix, Payables expansion to Europe using existing tech and Cross-Border product.

Q: Nate Svensson on Vehicle Payments visibility, consumer vehicle opportunity A: Ron Clarke said Vehicle Payments recovery through sales execution, Brazil growth strong, UK/Europe expansion ongoing.

Q: Andrew Bauch on macro impacts, M&A contributions A: Ron Clarke and Tom Panther discussed macro impacts on EPS, M&A contributions from Paymerang, GPS, and Gringo