Corpay, Inc.

Greetings and welcome to the CorPay 4th Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jim Eglesleiter, Investor Relations. Thank you, Jim. You may begin.

Good afternoon, and thank you for joining us today for our earnings call to discuss the 2024 results, both fourth quarter and full year. With me today are Ron Clark, our chairman and CEO, and Tom Panther, our CFO. Following the prepared comments, the operator will announce that the queue will open for the Q&A session. Today's documents include our earnings release and supplement, which can be found under the investor relations section of our website at corpay.com. Throughout this call now, we will be covering several non-GAAP financial metrics, including revenues, net income, net income prediluted share, all on an adjusted basis. We will also be covering organic revenue growth. This metric neutralizes the impact of year-over-year changes in FX rates, fuel prices, and fuel spreads. It also includes pro forma results for acquisitions and divestitures or scope changes closed during the two years being compared. None of these measures are calculated in accordance with GAAP, so may be different than at other companies. Reconciliations of the historical non-gap to the most directly comparable gap information can be found in today's press release and on our website. It's important to understand that part of our discussion today may include forward-looking statements. These statements reflect the best information we have of today. All statements about our outlook, expected macro environment, new products, and expectations regarding business development and future acquisitions are based on that information. They are not guarantees of future performance, and you should not put undue reliance upon them. We undertake no obligation to update any of these statements. These expected results are also subject to numerous uncertainties and risks, which could cause actual results to differ materially from what we expect. Some of those risks are mentioned in today's press release in Form 8K and in our annual report in Form 10K. These documents are also available on our website and at sec.gov. So now I'll turn the call over to Ron Clark, our Chairman and CEO. Ron?

Okay, Jim. Thanks. Good afternoon, everyone, and thanks for joining our Q4 2024 earnings call. Upfront here, I'll plan to cover four subjects. First, provide my take on Q4 results. Second, I'll hit the highlights for full year 2024. Third, I'll share our 2025 guidance along with the major priorities for the year. And then lastly, I'll provide a bit of an M&A update. Okay, let me begin with our Q4 results. We reported Q4 revenue of $1.34 billion. That's up 10%. And cash EPS of $5.36. That's up 21%. Overall, the results really in line with our expectation. Each of our core businesses pretty much coming in as planned with accelerating revenue. The macro turned unfavorable during Q4, compressing our print revenue by about $20 million, but fortunately a favorable tax rate effectively offset the unfavorable FX, really landing us back at our expected Q4 EPS print. Kind of the same thing on the revenue front. We did pick up some unplanned GPS acquisition revenue in the quarter, but that was offset by some delayed gift card shipments. Organic revenue growth accelerating quite nicely in Q4, coming in at 12% overall. Inside it had our corporate payments, line of business, finishing at 26% organic revenue growth. Quite importantly, the trends improved significantly in the quarter. Same-store sales finished positive, up 1%. That compares to minus 3% in Q4 last year. Sales growth, crazy good, accelerated to 36%. Really impressive. that did include some elephant sales in the quarter. And retention remained steady at 92%. So look, the wrap on the quarter, the underlying businesses really spot on. Our expectations, the environment both giveth and taketh, and kind of zeroing out in the quarter. And then importantly, our revenue growth, same-store sales and sales or new bookings trends improving really quite materially in the quarter. Okay, let me make the turn and call out a few highlights for full year 2024. I characterize it overall as really quite successful. Cash EPS of $19 was up over $2 on a print basis. and up 16% versus last year, excluding Russia. We did rebrand and simplify the company, now Corpay, the corporate payments company. We scaled our corporate payments line of business, adding two acquisitions. Again, sales growth for the full year, over 20%. We managed credit losses to extremely low levels, lower than 2023. We progressed our vehicle payments add-on idea, seeing real success with that in Brazil. We have hired a world-class USA sales leadership team to take us forward. And we have begun the slow turn of our two problem children businesses back into positive territory. So all in all, we think a pretty good performance. Okay, let me transition to our 2025 guidance along with our major priorities for the year. So today we're providing full year 2025 guidance at the midpoint of 4.4 billion in revenue and $21 of cash EPS. So both of those numbers up 11%. The guidance reflects... pretty strong underlying business fundamentals. So within the guide, we anticipate organic revenue growth at the midpoint of 11%. That's up a bit from our view 90 days ago. We're planning a full year overall sales or new bookings growth of 20% here in 2025. And we're planning macro neutral growth a cash EPS growth of 17%, which is in line with our midterm earnings target. Unfortunately, we are outlooking a very unfavorable macro at the moment, a combination of weak international currencies along with a much higher tax rate. So taken together, we expect... our print revenue to be compressed by over $100 million, and our cash EPS to be compressed by about $1.20. Obviously, FX and SOFR forward curves can change, but we're using the January forecasts that are out there. Tom will provide some additional details on the guidance math along with specific Q1 guidance when we get to his prepared remarks. In terms of priorities, we have four major priorities here in 2025 with an emphasis on expanding our corporate payments business. So first priority, our portfolio. We'll continue to simplify our portfolio. We'll go deeper versus wider. We will look to shed some additional non-core assets and we'll look to add more corporate payment assets. So already quite active on this front. Second, USA Sales. We are planning a step change improvement in USA Sales production this year. We plan to invest more in the Corpay brand, scale our field and Zoom sales teams, and progress our dedicated cross-sell team. Third, on the payables front, we'll take our payables business upmarket to the enterprise segment. That's in addition to our core middle market focus. We have secured our first big enterprise win, so quite exciting. Additionally, we're going to expand our payables business into Europe this year and launch our Corpay Complete Payables product in the UK. We do have lots of UK assets to help us get going there. And then finally, the priority and cross-border will expand our MCA or multi-currency account product. That holds multiple currencies for our clients as deposits, really making it easier for clients to expand the countries that they participate in. This could be really a game changer to help us compete with banks on the cross-border front. So all in all, a pretty exciting set of initiatives planned this year. Okay, last up, let me run through just a brief M&A update. So first, our two 2024 corporate payment acquisitions, Paymerang and GPS, well underway integrating both of those businesses into our tech environments, and executing on our synergy plans. We're still on track to deliver 50 cents of cash EPS accretion from these two deals here in 2025. A second gringo, it's our second Brazil mobile payments acquisition. We announced that on Monday. So this acquisition, along with last year's Zappay acquisition, gives us entry into a pretty big Brazil payments TAM. It's, in fact, about three times larger than our toll TAM in quite early days in terms of its digital penetration. So taken together, these couple of deals will add 5 million active monthly digital users all of whom become potential buyers for our vehicle payment solutions, including toll, parking, insurance, and even fueling. Lastly, we do have a pretty active pipeline of corporate payment acquisitions opportunities here in front of us. The goal, obviously, to increase our corporate payment mix, which could lead to revenue acceleration. So in conclusion today, again, Q4, again, kind of finishing in line with expectations, although revenue and profit growth accelerating quite nicely. 2024, we think quite successful. We grew profits, but importantly, we did simplify and better position the company for the midterm. Our 2025 macro neutral guidance, calls for 11% organic revenue growth, 17% cash EPS growth, both of those consistent with our midterm targets, although we do expect, again, our print results to be negatively impacted by macro headwinds. Finally, we do expect some upside in 2025 from our capital allocation and corporate development activities as we work our way through the year. So with that, let me turn the call back over to Tom. He'll provide some additional details on the quarter and on our 2025 guidance. Tom?