CORPAY, INC. Q1 FY2025 earnings call

• Q1 2025 results: Revenue of $1.6 billion, up 8%; cash EPS $451 million, up 10%. Organic revenue growth 9%.
• Rest-of-year forecast: Macro factors set to be effectively neutral, maintaining full-year 2025 guidance at midpoint of $4 billion to $4.20 billion in revenue and $21 in-cash EPS. Organic revenue growth expected 11% midpoint.
• M&A activity: Announced strategic Cross-Border partnership with Mastercard (Mastercard invests $300 million for ~3% stake in Cross-Border business), invested $500 million in Avid with a call option to acquire remaining equity, and plans to divest three non-core businesses.
• 2025 top priorities: Expanding corporate payments mix, USA sales progress (25% year-over-year USA sales growth, new cross-sell team and brand campaign), payables progress (live with enterprise client, launching new payables product in UK), and cross-border push into institutional clients (signed over 2,000 new clients, aggregated $800 million deposit balances).

Corporate Payments: Organic revenue growth was 19% during the quarter. Print revenue was $1.06 billion, up 8% year-over-year. Vehicle Payments: Corporate Payments revenue up 19% organically. Cross-border sales grew 51% for the quarter compared to prior year, revenue increased 18% organically. US vehicle payments had 3% organic revenue decline but saw improvement in new customer application approvals. International vehicle payments had 8% organic revenue growth. Lodging: Organic revenue growth for the quarter was down 1% compared to down 9% in Q1 2024. Airline revenues were lower due to tough prior-year comps and volume softness.

• Maintaining full-year 2025 guidance at midpoint of $4 billion to $4.20 billion revenue and $21 in-cash EPS. - Full-year organic revenue growth expected 11% midpoint. - Corporate Payments business expected to grow high-teens to 20% full year. - Revenue flash for April spot on forecast, with macro factors neutralizing impact on rest-of-year guide.

• Uncertain macro environment could cause actual results to differ from expectations. - Limited direct tariff exposure but clients affected by tariffs could soften their volumes with Corpay. - FX, fuel, and SOFR fluctuations could impact financial results.

Q: On Mastercard partnership and incremental revenue growth, A: Ron Clarke states the big opportunity with Mastercard's reach and the potential for significant growth over the cycle, though it's a marathon.

Q: On Avid investment, A: Ron Clarke says it's a strategic investment for corporate payments growth, with the aim to progress profit acceleration and eventually acquire Avid.

Q: On US vehicle payments sales trends, A: Ron Clarke talks about retention improvement and sales initiatives, noting that retention rate for US vehicle business improved over 200 basis points from Q1 2024.

Q: On payables expansion, A: Ron Clarke says focused on enterprise and UK launch, with no specific tariff impacts on the UK launch as it's an intra-market product.

Q: On hedging business performance, A: Ron Clarke says cross-border business was strong in April but conservative on second half due to potential tariff impacts, trimming the second half guide slightly.