Corpay, Inc.

Please stand by, your program is about to begin. If you need audio assistance during today's program, please press star zero. Today, I'd like to welcome everyone to CORPAY second quarter 2024 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'd like to withdraw your question plus please press star, then the number two on your telephone keypad. Today's call is being recorded. I would now turn the call over to Jim Egglestetter. Please go ahead.

Good afternoon, and thank you for joining us today for our earnings call to discuss the second quarter 2025 results. With me today are Ron Clark, our chairman and CEO, and Peter Walker, our 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 on our website at corepay.com. 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 discuss organic revenue growth. Now, 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 and may be calculated differently than in other companies. Reconciliations of the non-GAAP to 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, business development expectations, future acquisitions, or synergies are based on that information. They are not guarantees of future performance, and you should not put under-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 on Form 10K. These documents are available on our website and at sec.gov. Now I'll turn over the call to Ron Clark, our Chairman and CEO. Ron?

Okay, Jim, thanks. Good afternoon, everyone, and thanks for joining our Q2 2025 earnings call. With me today here is Peter Walker, our new CFO, joining his first earnings call with us. Hopeful that you'll get an opportunity to interact with Peter over the coming weeks. At the top here, I'll plan to cover three subjects. First, provide my take on Q2 results along with rest of your forecast. Second, I'll provide a brief update on our 2025 top priorities. And then lastly, provide a bit of an update on our M&A activities. Okay, let me begin with our Q2 results. We reported Q2 print revenue of $1,102,000,000, up 13%, and cash EPS of $513,000,000, also up 13%. Cash EPS would be up 17% on a constant macro basis. The Q2 results really right in line with our expectations, both in terms of revenue and profits. We did enjoy a bit more favorable Q2 macro than expected. But that was mostly offset by both weaker lodging performance and fewer gift card shipments than we had planned, really landing us kind of right back at our Q2 revenue target of $1.1 billion. Q2 overall organic revenue growth, 11% in the quarter. That's up 2% sequentially from Q1. Inside of that vehicle payment segment grew 9%. Our corporate payment segment grew 18% in the quarter, and our lodging segment declined 2% year over year. Trends in Q2, quite good. Q2 sales finishing up 31%. That's on the back of 36% growth in Q4, and 35% in Q1. three consecutive quarters of 30% plus sales and bookings growth. Again, we think the best indicator of demand. Retention in the quarter ticked up to 92.3%. That's the highest level we've seen in quite some time. Same store sales really essentially flat in the quarter. So look, in summary, Q2 really finishing right on expectations. We did enjoy accelerating vehicle payments revenue growth, continued high teams, corporate payments revenue growth, and again, really solid fundamental trends. Okay, let me make the turn to our rest of year guidance. So updated full year 2025 guidance today, mostly unchanged. So after Q1, we provided $4.4 billion in revenue and $21 of cash EPS at the midpoint. So today, we're inching up a full-year revenue, $25 million to $4.4 billion, and full-year cash EPS to $21.06. So our second half outlook does reflect a bit more positive macro, particularly more favorable FX. Some of that will be offset by continued lodging revenue softness, so results in $25 million of incremental print revenue. Really, most everything else in the second half is tracking the plan. We do expect our second half vehicle segment revenue growth to reach 10%. So hallelujah. And inside of that are U.S. vehicle growth accelerating to mid-single digits. Outlooking corporate payments to report high teens' organic revenue growth for the full year. So this updated guidance would imply full-year print revenue growth of 12% and full-year organic revenue growth of 10%. Okay, I'll transition now to our 25 top priorities, which are intended to first simplify the company so that it's easier to manage and understand, and then second, to better position the company for the long term. So first priority, the portfolio, working hard here to have fewer bigger businesses, rotating the portfolio to more corporate payments, with the recent AVID and Alpha announcements, and we are expecting the corporate payment segment to reach $2 billion in revenue and represent over 40% of the company next year. Second priority, USA Sales. We're now live in market with our new Corpay brand advertising. That targets CFOs now with our entire solution set. We do have some impressive sales momentum, a streak of three straight quarters with 30% plus sales and bookings growth. Third priority, payable. So we have successfully implemented the new enterprise client, which I spoke about. That client has reached $1 billion in spend in the month of July. So now in search of our next enterprise client. Additionally, we have just launched our Corp A complete payables tech platform in the UK, so bringing those capabilities now into the international arena. And then fourth priority is cross-border. We have successfully extended our cross-border business to now serve four market segments. You can see that on page 15 in the supplements. So we've moved beyond our original core business serving just middle market corporate accounts to now also serving FIs and more aggressively now with the MasterCard partnership. We're serving and plan to serve more institutional asset managers as a result of the alpha acquisition. And we're beginning to serve digital asset and stable coin providers like Circle and Ripple with our on and off-ramp services. Super excited about the Circle partnership we announced earlier. Should give us a fast start in the space. In terms of products and cross-border, our new MCA multi-currency account product off to a terrific start We've got 10,000 accounts live now from zero a year ago, and we've reached 1 billion in deposits in July. So clearly one of the best new product launches in the company. So overall, we're making terrific progress, transforming the company into some faster growth categories and across more geographies. should extend the company's runway for years. All right, last subject up. Let me cover the progress on the M&A front, beginning with our 2024 acquisitions. So Paymerang, an AP automation and payment company, acquired last July. That's on track to double EBITDA this year. It also extends the verticals that our core payables business can serve. GPS, a cross-border company acquired in December, performing quite well. We have shuttered the GPS IT infrastructure and also seeing the GPS sales or bookings double from the same sales group as a result of them being in our system. And last is the Zappay Gringo Brazil car debt companies. They are growing literally like crazy. The combined revenue of those two businesses in the first half growing over 50% versus prior year. Additionally, we've cross-sold about $4 million of car debt alerts services to our existing SEMPRA client base. So really an exciting new vehicle payments category to ride. We're advancing our two newest partnerships, MasterCard and Avid. Both of those investments are tracking towards a Q4 closing. The MasterCard partnership's out of the blocks. Both companies, we believe, taking the opportunity seriously. We've held a number of senior level planning sessions and are literally in market now with our initial set of prospect calls. Avid, our Avid take private investment with TPG, again, tracking to close in Q4. We've now cleared HSR and still expecting the Avid transaction to be accretive to earnings in 2026. And then Alpha, again, just recently announced our agreement to acquire Alpha, the European cross-border company, for $2.2 billion enterprise value. Couldn't be more excited about the addition of Alpha's global alternative bank account solution. As you might recall, that targets the institutional asset managers, but we think it would be quite interesting to the Tier 2 FI partners, which we can accelerate via the MasterCard partnership. We are reaffirming again that the alpha acquisition will be at least 50 cents accretive in 2026. And then last on the M&A front, non-core divestitures. We have formally teed up two non-core vehicle divestiture candidates. We've hired investment bankers and expect to launch post-Labor Day. Both of these are very good businesses. and our divestiture candidates, because of their relatedness or lack thereof, not performance. We're hopeful that the net proceeds from these couple of businesses will exceed 1.5 billion if we can successfully transact. So look, all of this recent M&A activity intended to go deeper, not wider, and again, result in fewer bigger businesses. So look, in conclusion today, the story of 2025 is that we plan to basically finish where we started out the year, approximately 4.4 billion in revenue, approximately 21 of cash EPS. We do expect a bit more favorable macro, but a bit weaker lodging business. The vehicle segment really tracking the plan and expected to accelerate to 10% here in the second half. Corporate payments business continuing to rock. Outlooking high teens grow for the full year. Progress, again, lots of progress repositioning the company towards corporate payments. Again, in the payable segment, we've added this upmarket enterprise opportunity Again, also taking that business internationally to the UK and cross-border. Our new MCA product looks like a hit. We've also added three really brand-new customer segments to serve, the FIs, the institutional asset managers, and now here most recently the digital asset providers via these new partnerships. So, look, these moves go a long way to extend the runway and potential of the company. So with that, let me turn the call back over to Peter. He'll provide some additional detail on the quarter and outlook. Peter.