Corpay, Inc.

Good day. I'd like to welcome everyone to CorPay's first quarter 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during that time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, please press star, then the number two on your telephone keypad. Today's call is being recorded. I will now like to turn the call over to Jim Egglestater, Investor Relations. Please go ahead.

Good afternoon, and thank you for joining us today for our earnings call to discuss the first quarter 2025 results. With me today are Ron Clark, our Chairman and CEO, and Alyssa Vickery, our Interim CFO. Following the prepared comments, the operator will announce that the queue will open for the Q&A session. Today's documents, including our earnings release and supplement, can be found under the Investor Relations section of our website at corpay.com. Now, throughout this call, we will be covering several non-GAAP financial metrics, including revenues, net income, and net income per diluted 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 closed throughout the two years being compared. None of these measures are calculated in accordance with GAAP, so may be different than that at other companies. Reconciliations of the historical non-GAAP to the most directly comparable GAAP information can be found in today's press release and on our website. It's important to understand that our comments may include forward-looking statements which reflect the information we have currently. All statements about our outlook, expected macro environment, new products, and expectations regarding business development and future acquisitions or synergies are based on that information. They are not guarantees of future performance and you should not put undue reliance upon them. And 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 and on Form 8K and in our annual report on Form 10K. These documents are available on our website and at sec.gov. With that out of the way, 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 Q1 2025 earnings call. Up front here, I'll plan to cover three subjects. So first, provide my take on Q1 results along with the rest of your guidance. Second, cover our recent M&A activity. And then lastly, I'll share a progress update on our 2025 top priorities. Okay, let me begin with our Q1 results. We reported Q1 2025 revenue of $1.6 billion. That's up 8%. And cash EPS of $4.51, that's up 10%. Cash EPS would be up 18% on constant macro. The results really right in line with expectations, along with the environment coming in mostly as expected. Organic revenue growth in the quarter, 9% overall. Our two biggest businesses doing quite well. Vehicle payments, 8% organic revenue growth, and corporate payments, 19% organic revenue growth. Operating trends in the quarter, quite good. Same store sales finished positive, plus 1%. Retention stayed steady at 92%, and sales or new bookings way up, up 35% versus Q1 last year. And again, that's on the back of up 36% of sales growth in Q4. So look, despite really everything going on, the business performed as planned here in Q1. All right, let me make the turn to our rest of year forecast. So first off, macro, the factors that affect us really setting up to be effectively neutral to our rest of year forecast versus our prior guide. So the forward curves for FX, fuel, and SOFR have moved just a bit, but essentially zero out in terms of their impact on our business. Obviously, with that said, we do acknowledge that the overall macro environment is quite uncertain, but we're just not seeing anything yet that causes us to revise our forecasts. Additionally, our revenue flash for April looks to be spot on our forecast. So as a result, we're pretty much maintaining our full year 2025 guidance at the midpoint as follows. So $4,420,000,000 in revenue guide at the midpoint and sticking with $21 in cash EPS. The slightly increased full-year guide reflects the gringo acquisition in Brazil, and that's net of the $6 million unfavorable spread shortfall we saw in Q1. So with this updated full-year guide, we're still expecting full-year organic revenue growth of 11% at the midpoint. Inside of that, corporate payments business expected to grow high teens, to 20% for the full year. As it relates to tariffs, we're not a particularly sensitive tariff stock. That is, we won't directly pay tariffs. Our businesses are services, not goods. Our international businesses in the UK and Brazil operate intra-country, so not subject to tariffs. So the direct tariff exposure that we have is really limited to our cross-border business where it does rely on our cross-border clients trading across borders. We have included a slide in our supplement that shows a bit less than 20% of our cross-border business will actually be affected by U.S. tariff policies. So look, all this is to say that our business is not directly impacted by much by U.S. tariff policy, but certainly we're not immune to our clients being negatively affected by tariffs, and that could ultimately soften their volumes with us. Okay, let me make the transition to our recent M&A activity. We have announced a couple exciting deals here in the last week. So last week we announced a strategic cross-border partnership with MasterCard. So in that case, MasterCard will invest $300 million for about a 3% share in our cross-border business that does value our cross-border unit in excess of $10 billion. Second, we signed a commercial agreement to be MasterCard's exclusive provider of cross-border services to their clients, to their FI clients. And we think this financial institution partnership could add about 2% to 3% incremental revenue growth to our cross-border business beginning next year. Secondly, just announced that we're making a $500 million minority investment into AVID. That's alongside their take private transaction with TPG. Many of you know AVID, a leader in B2B invoice automation and payments. And they do serve pretty distinct verticals from our payables business. We're out looking the investment in AVID to be accretive to our earnings in 2026 and really throughout the forecast period. Our agreement with TPG does provide us a call option to acquire the remaining equity of AVID down the road. So pretty exciting. So these two corporate payment acquisitions for sure strengthen our position in the space and do provide us the option to dramatically scale up our position over time. Lastly, we are looking a bit harder at divesting three of our non-core or less related businesses. Taken together, those three businesses could provide upwards of $2 billion in of incremental liquidity if we are to transact. We'll obviously keep you posted. Okay, let me make the turn to our 2025 top priorities. So in the February earnings call, we laid out four priorities for 2025, and here's a bit of the progress. So first, the portfolio, we said our goal was to expand our corporate payments business mix. We're doing just that. with the MasterCard and Avid transactions. And in addition, we are still looking at some additional corporate payments targets in our pipeline. So the goal, again, fewer bigger businesses. Second priority, USA Sales. We did have a good Q1 USA Sales result. USA Sales up 25% year over year. We have staffed. a new cross-sell team that goes back to our client base, and a new Zoom sales team. Both of those groups now live and in market. We have developed a new Corpay brand ad campaign that we expect to be in the market later this quarter to further support USA sales. Third, payables. So on the payables front, we did just go live with the enterprise client I mentioned in February. So far, so good. We do expect this single mega client will process over $30 billion, $30 billion in annual spend with us, so a significant opportunity. We do expect to launch our new payables product in the UK using our kind of next-gen tech this summer. So, Super excited to bring that product to our second biggest market. And then lastly, on the cross-border front, we're making a major push into this new segment for us, this institutional client segment. So think, you know, PE firms, asset managers. So we're doing that with our new multi-currency product. So progress quite good. We've signed over 2,000 new clients already since launch, and we've aggregated $800 million of total deposits balances. So off to a good start. So pretty pleased with progress here against our four top priorities. So look, in conclusion today, again, Q1 financial results finishing really on plan. maintaining a rest of year, full year 2025 financial guidance. That's based on what we're seeing. We are expanding our corporate payments segments with additional acquisition targets still in front of us. And as you can tell, laser focused on our 2025 top priorities and advancing them. So with that, let me turn the call back over to Alyssa to provide some additional details on the quarter. Alyssa.