Sign in

You're signed outSign in or to get full access.

CI

CORPAY, INC. (CPAY)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered revenue of $1.006B (+8% YoY) and adjusted EPS of $4.51 (+10% YoY), essentially in line with guidance; adjusted EBITDA was $555M (+8% YoY), with 9% organic revenue growth and adjusted EBITDA margin steady at 55.2% .
  • Results were supported by strong Corporate Payments performance (+19% organic), resilient Cross-Border activity amid FX volatility, and improving fundamentals: same-store sales +1%, retention ~92% and sales/new bookings +35% .
  • FY25 guidance was maintained at $4.38–$4.46B revenue and $20.80–$21.20 adjusted EPS, with updated macro assumptions (lower fuel, better SOFR/GBP/EUR) and incorporation of Gringo; Q2 2025 guide: $1.09–$1.11B revenue and $5.05–$5.15 adjusted EPS .
  • Strategic catalysts: Mastercard’s $300M minority investment and exclusive cross-border referral partnership, and a $500M minority investment (33%) alongside TPG to take AvidXchange private with a call option to buy 100% later; management expects the Mastercard FI channel to add +2–3 pts to Cross-Border revenue growth starting 2026 .

What Went Well and What Went Wrong

What Went Well

  • Corporate Payments led with 19% organic revenue growth; spend volumes rose to $50.7B and payables direct sales up strongly, indicating durable demand across AP automation and virtual card programs .
  • Cross-Border pipeline and activity were robust; management cited April flash “way ahead” of plan and expects FI referral from Mastercard to materially expand distribution over time (“enormous opportunity…a marathon”) .
  • Fundamentals improved: same-store sales +1% vs -2% last year, retention ~92%, and sales/new bookings +35%; Ron Clarke: “despite everything going on, the business performed as planned here in Q1” .

What Went Wrong

  • Macro headwinds (FX and fuel spreads) reduced reported revenue vs constant macro; CFO quantified ~$6M unfavorable fuel spread vs February expectations and noted FX headwinds as the biggest drag in the bridge .
  • U.S. Vehicle Payments print revenue was down 3% organically, though management signaled a turn with better retention and expected mid-single-digit growth exiting 2H 2025 .
  • Lodging organic revenue declined 1% YoY, with softer airline volumes and yield compression from emergency work mix, though room nights rose 19% and underlying trends improved versus last year .

Financial Results

Headline Financials vs Prior Periods and Estimates

MetricQ1 2024Q4 2024Q1 2025
Revenue ($USD Millions)$935.3 $1,034.4 $1,005.7
GAAP Diluted EPS ($)$3.12 $3.44 $3.40
Adjusted EPS ($)$4.10 $5.36 $4.51
Adjusted EBITDA ($USD Millions)$516.5 $571.2 $555.4
Adjusted EBITDA Margin (%)55.2% 55.2% 55.2%
Operating Income ($USD Millions)$397.3 $488.3 $427.1

Estimates Comparison (S&P Global)

MetricQ1 2025 ConsensusQ1 2025 Actual
Primary EPS Consensus Mean ($)4.514*4.51
Revenue Consensus Mean ($USD)1,015.4M*1,005.7M

Values retrieved from S&P Global.*

Segment Revenues

Segment ($USD Thousands)Q1 2024Q4 2024Q1 2025
Vehicle Payments$494,061 $497,657 $487,110
Corporate Payments$265,396 $346,189 $352,659
Lodging Payments$111,295 $120,894 $110,224
Other (Gift & Payroll Card)$64,499 $69,691 $55,674
Total$935,251 $1,034,431 $1,005,667

KPIs

KPIQ1 2024Q1 2025
Corporate Payments Spend Volume ($USD Millions)$36,819 $50,688
Corporate Revenue per $ of Spend (%)0.71% 0.70%
Vehicle Transactions (Millions)199.7 213.0
Vehicle Revenue per Transaction ($)$2.47 $2.29
Lodging Room Nights (Millions)8.2 9.8
Lodging Revenue per Room Night ($)$13.51 $11.26

Guidance Changes

MetricPeriodPrevious Guidance (Feb 5, 2025)Current Guidance (May 6, 2025)Change
Total Revenues ($USD Billions)FY 2025$4.35–$4.45 $4.38–$4.46 Slightly raised range top/bottom
Net Income ($USD Millions)FY 2025$1,174–$1,224 $1,167–$1,207 Slightly lowered
GAAP EPS ($)FY 2025$16.50–$17.00 $16.37–$16.77 Slightly lowered
Adjusted Net Income ($USD Millions)FY 2025$1,482–$1,532 $1,485–$1,525 Maintained/marginal tweak
Adjusted EPS ($)FY 2025$20.75–$21.25 $20.80–$21.20 Maintained midpoint ($21.00)
Q2 Revenue ($USD Billions)Q2 2025N/A$1.09–$1.11 New disclosure
Q2 Adjusted EPS ($)Q2 2025N/A$5.05–$5.15 New disclosure
Assumptions (Fuel, SOFR, FX)FY 2025Fuel $3.24/gal; SOFR ~4.10%; FX Jan’25 forward Fuel $2.96/gal; SOFR ~3.97%; FX Apr’25 forward Updated/neutral vs prior guide
Tax Rate (%)FY 202525.5–26.5 25.5–26.5 Maintained
Fully Diluted Shares (MM)FY 2025~72 ~72 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024 / Q4 2024)Current Period (Q1 2025)Trend
Corporate Payments/AP expansionQ3: +18% organic; retention up; strong AP sales . Q4: +26% organic; first enterprise AP win; high TAM .+19% organic; enterprise account live, pipeline building; direct payables sales strong .Improving/Scaling
Cross-Border growth & hedgingQ3: +20% rev; banks dominate flows; tech/sales advantage .April “gangbusters” vs plan; FI channel via Mastercard; multi-currency account targeting PE/AM .Accelerating
Tariffs/macroQ4: Macro headwinds (FX, tax); guide constant-macro targets .Direct tariff exposure limited; Cross-Border goods/US flows <20%; H2 impact ~$10–15M .Manageable headwind
U.S. Vehicle PaymentsQ4: turning corner; expected high-single-digit organic in 2025 .Q1 softness (−3% organic) but retention +200 bps YoY; expect pivot to mid-single-digit growth in 2H .Inflecting 2H
LodgingQ3: −5% organic; workforce activity rising . Q4: +1% organic; emergency mix compressed yield .−1% organic; room nights +19%; airline softness; unified go-to-market across U.S. .Stabilizing
M&A / Portfolio strategyQ4: Paymerang & GPS integrations; simplify portfolio; add Brazil assets .Gringo closed; $500M Avid minority; evaluating 3 divestitures (~$2B liquidity potential) .Active rebalancing
Credit lossesQ4: managed to 4–5 bps of spend .5 bps of spend consistent YoY .Stable

Management Commentary

  • Ron Clarke: “We reported… revenue… up 8% and cash EPS… up 10%. Organic revenue growth… percent overall. Our two biggest businesses doing quite well… Corporate Payments, 19%” .
  • On Mastercard: “If Mastercard dedicated people get us introduced… this thing will go… size of the flow… just massive… enormous opportunity over the cycle” .
  • On AvidXchange: “Strategic for sure… looking for… profit acceleration… we have the option… to acquire the remaining equity… we will be over the moon [if they add spend and flow-through]” .
  • Alissa Vickery: “Revenues were impacted by approximately $6M of unfavorable fuel spread… Adjusted EPS increased 10%… Cross Border… rebound in April post announcement of the ninety day tariff pause… tariff impacts… relatively modest… unfavorably impacting… $10M–$15M” .

Q&A Highlights

  • JPMorgan: Confidence in FI distribution via Mastercard; management sees “enormous opportunity” and expects tier-2/3 bank clients to benefit from certainty/speed and FI introductions .
  • AvidXchange strategy: Corpay views it as strategic, focused on accelerating spend through vendor networks and margin flow-through; option to acquire 100% later disclosed to be detailed in upcoming filings .
  • U.S. Vehicle Payments: Retention improved by >200 bps YoY; management expects pivot to mid-single-digit growth in back half driven by sales and better same-store sales .
  • Cross-Border volatility: April flash significantly above plan; management trimmed H2 guide by $10–15M as a conservative measure given tariff uncertainty .
  • Divestitures: Evaluating three non-core units (two Vehicle, one Lodging) that could generate ~$2B liquidity to redeploy into Corporate Payments .

Estimates Context

  • Q1 2025 EPS was in line (Actual $4.51 vs Consensus $4.514*; 18 EPS estimates) and revenue was a slight miss (Actual $1,005.7M vs Consensus $1,015.4M*; 15 revenue estimates), reflecting FX/fuel spread headwinds noted by management .
  • With Q2 guidance implying 13% print revenue growth and 12% adjusted EPS growth at midpoint on constant macro, estimate revisions may bias modestly upward for Corporate Payments and Cross-Border if FI referrals begin ramping, while Cross-Border goods-related flows may keep H2 forecasts conservative .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • The quarter was clean and on-plan: Adjusted EPS in line; revenue up 8% YoY with 9% organic growth; margin profile steady at 55.2% despite macro headwinds .
  • Corporate Payments continues to be the growth engine, with enterprise AP and direct payables momentum; this supports the mix shift toward higher-quality, less cyclical earnings .
  • Mastercard partnership creates a meaningful FI distribution channel for Cross-Border over 2026+; expect an incremental +2–3 pts to Cross-Border revenue growth with long ramp dynamics .
  • AvidXchange investment is strategically aligned to AP, with a call option to acquire the remainder—potential for network synergy and monetization improvement over time .
  • U.S. Vehicle Payments likely inflects in 2H 2025 as retention improves and sales ramp; watch sequential trends through Q2/Q3 .
  • FY25 guide maintained (midpoints unchanged) with updated macro assumptions; Q2 guide signals acceleration vs Q1, a near-term catalyst for estimate stability .
  • Tariff exposure is limited (Cross-Border goods/US flows <20%); management trimmed H2 Cross-Border by $10–15M—a conservative stance that reduces downside risk .
Note: All non-GAAP measures are reconciled in the company’s exhibits; “Other” segment includes Gift and Payroll Card.