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CI

CORPAY, INC. (FLT)·Q1 2024 Earnings Summary

Executive Summary

  • Q1 2024 delivered revenue of $935.3M (+4% YoY; +6% organic ex macro) and adjusted EPS of $4.10 (+8% YoY; +14% ex-Russia), with Corporate Payments up 17%; Lodging softened and Vehicle Payments was flat .
  • Full-year 2024 guidance was lowered on unfavorable FX and higher interest rates in April; FY revenue now $3.96–$4.04B and adjusted EPS $18.80–$19.20 vs prior $4.04–$4.12B and $19.20–$19.60 .
  • Q2 2024 outlook: revenue $960–$980M and adjusted EPS $4.45–$4.55; Lodging weakness to be offset by expense actions, with signs of stabilization in workforce business in April .
  • Strategic catalyst: Corpay announced a definitive agreement to acquire Paymerang (AP automation), expanding presence in education, healthcare, hospitality, and manufacturing; adds >250K merchants and supports ~$120B annual spend together .

What Went Well and What Went Wrong

What Went Well

  • Corporate Payments segment grew 17% YoY to $265.4M, with revenue per spend improving to 0.72% (from 0.62%) .
  • EBITDA rose to $482.4M with a 51.6% margin, demonstrating disciplined expense control despite macro headwinds .
  • CEO on execution: “Our results were in-line with our expectations. Overall organic revenue growth was 6% and our Corporate Payments segment grew 17%” .

What Went Wrong

  • Lodging segment revenue declined 9% YoY to $111.3M, with room nights down 12%; CFO: “Our Lodging segment experienced continued softness in the quarter” .
  • Guidance cut driven by unfavorable FX and higher interest rates worsening in April, pressuring the back half outlook .
  • Vehicle Payments revenue was flat YoY, with revenue per transaction down (mix shift toward parking and tags) .

Financial Results

Consolidated Performance (older → newer)

MetricQ3 2023Q4 2023Q1 2024
Revenue ($USD Millions)$970.9 $937.3 $935.3
GAAP Diluted EPS ($)$3.64 $3.48 $3.12
Adjusted Diluted EPS ($)$4.49 $4.44 $4.10
EBITDA ($USD Millions)$528.9 $508.1 $482.4
EBITDA Margin (%)54.5% 54.2% 51.6%
Operating Income ($USD Millions)$444.98 $424.05 $397.34
Net Income ($USD Millions)$271.5 $255.9 $229.8

Q1 2024 vs Q1 2023

MetricQ1 2023Q1 2024YoY Change
Revenue ($USD Millions)$901.3 $935.3 +4%
GAAP Diluted EPS ($)$2.88 $3.12 +8%
Adjusted Diluted EPS ($)$3.80 $4.10 +8% (14% ex-Russia)
EBITDA ($USD Millions)$460.1 $482.4 +5%
EBITDA Margin (%)51.0% 51.6% +60 bps

Segment Breakdown (Q4 2023 vs Q1 2024)

SegmentQ4 2023 Revenue ($mm)Q1 2024 Revenue ($mm)Q4 2023 Operating Income ($mm)Q1 2024 Operating Income ($mm)
Vehicle Payments$499.758 $494.061 $242.505 $225.695
Corporate Payments$251.101 $265.396 $101.092 $104.711
Lodging Payments$119.929 $111.295 $57.438 $47.276
Other$66.532 $64.499 $23.016 $19.656

KPIs (Q4 2023 vs Q1 2024)

KPIQ4 2023Q1 2024
Vehicle Payments Transactions (mm)193.9 199.7
Revenue per Vehicle Transaction ($)$2.58 $2.47
Parking Transactions (mm)58.7 60.9
Tag Transactions (mm)20.3 21.3
Corporate Payments Spend Volume ($mm)$33,583 $36,804
Revenue per $ Spend (%)0.75% 0.72%
Lodging Room Nights (mm)8.7 8.2
Revenue per Room Night ($)$13.86 $13.52

Guidance Changes

MetricPeriodPrevious Guidance (2/7/2024)Current Guidance (5/8/2024)Change
Total Revenues ($B)FY 2024$4.04–$4.12 $3.96–$4.04 Lowered
GAAP Net Income ($B)FY 2024$1.09–$1.13 $1.075–$1.115 Lowered
GAAP Diluted EPS ($)FY 2024$15.40–$15.80 $15.00–$15.40 Lowered
Adjusted Net Income ($B)FY 2024$1.36–$1.40 $1.348–$1.388 Lowered
Adjusted Diluted EPS ($)FY 2024$19.20–$19.60 $18.80–$19.20 Lowered
Interest Expense ($MM)FY 2024 Assumption$340–$370 $350–$380 Raised
Tax Rate (%)FY 2024 Assumption~25–26% ~24–25% Lowered
Diluted Shares (MM)FY 2024 Assumption~71 ~72 Increased
FX Rate BasisBalance of Year30-day historical avg April 2024 monthly avg Updated (more unfavorable)
Q2 Revenue ($MM)Q2 2024N/A$960–$980 New
Q2 Adjusted EPS ($)Q2 2024N/A$4.45–$4.55 New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2023, Q4 2023)Current Period (Q1 2024)Trend
Corporate Payments momentum20% organic in Q3; 19% full-year growth in 2023 +17% segment revenue; revenue per spend +16% YoY Strengthening
Lodging/WorkforceQ4 lodging revenue +1% YoY; seasonal softness noted Lodging −9% YoY; workforce showed initial signs of stability in April Softening, early stabilization
Vehicle Payments transformation (parking/EV)Sold Russia; acquired PayByPhone (mobile parking) in Q3 Parking transactions up; revenue per transaction down on mix Mix shifting toward parking/tags
Macro (FX, rates)Fixed ~60% floating debt via swaps; solid liquidity Outlook cut on unfavorable FX and higher interest rates worsening in April Headwinds intensified
Regulatory/legalFTC lawsuit referenced in risk factors FTC lawsuit risk reiterated in forward-looking statements Ongoing
Strategic M&APayByPhone (Q3 2023) Announced acquisition of Paymerang (AP automation) Expanding AP automation

Management Commentary

  • CEO: “Our results were in-line with our expectations. Overall organic revenue growth was 6% and our Corporate Payments segment grew 17%.” He also announced the definitive agreement to acquire Paymerang, calling it “right in our wheelhouse” with “meaningful revenue and profit synergies” .
  • CFO: “Our Corporate Payments and Vehicle Payments segments delivered solid performance… Our Lodging segment experienced continued softness in the quarter, but the workforce business showed initial signs of stability in April.” He added that FX and interest rates worsened in April and that actions are being taken to neutralize Lodging softness .
  • Q4 2023 context: “We now have the best charge point network in the UK and Western Europe, having added Tesla in the fourth quarter,” underpinning EV strategy within Vehicle Payments .

Q&A Highlights

  • Focus areas included Lodging recovery timing and April stabilization, FX/rate impacts on FY guide, Corporate Payments monetization and AP automation synergies, and Vehicle Payments mix shift toward parking/tags; management emphasized cost actions to offset Lodging softness and confidence in sales pipelines .
  • Guidance clarification: Q2 adjusted EPS $4.45–$4.55 with ~13% growth ex-Russia at the midpoint; FY assumptions updated for FX, fuel price and spreads, interest expense, tax rate, and share count .

Estimates Context

  • S&P Global consensus estimates were unavailable due to CIQ mapping limitations for FLT in our system; therefore, beat/miss vs Wall Street consensus cannot be determined for Q1 2024 and Q2 2024. As a result, estimate comparisons are not provided (S&P Global data unavailable).
  • Company-level guidance implies consensus likely needs to move lower for FY 2024 revenue and adjusted EPS given revisions driven by FX and higher rates .

Key Takeaways for Investors

  • Corporate Payments remains the growth engine (+17% YoY; rising revenue yield per spend), supported by AP automation expansion and the announced Paymerang acquisition, a potential cross-sell catalyst in large verticals .
  • Lodging weakness weighed on results; management is implementing cost measures and saw initial workforce stabilization in April—watch trajectory through Q2 .
  • Macro headwinds (FX and rates) drove FY guide cuts; hedge/investment posture should incorporate potential further FX/rate volatility risk .
  • Vehicle Payments mix shift (parking, tags) continued; expect revenue-per-transaction pressure offset by volume growth and EV/parking network expansion over time .
  • Near-term trading setups: attention on Q2 delivery vs new guidance ($960–$980M revenue; $4.45–$4.55 adj EPS) and Lodging stabilization signals; any incremental detail on Paymerang close/timing could be a sentiment lever .
  • Medium-term thesis: diversified payments portfolio with strong Corporate Payments momentum, improving retention initiatives, and inorganic drivers (Paymerang), offset by Lodging normalization and macro sensitivity (FX, rates) .

Additional Data and Disclosures

  • Non-GAAP methodology: Adjusted net income excludes stock-based comp, amortization, integration/deal costs, restructuring/other items; tax effected at effective rate (ex discrete) .
  • Macro adjustments to organic growth reflect fuel prices/spreads and FX; Q1 revenue had an estimated −$10M fuel price and −$6M fuel spread impact, partially offset by +$14M FX .
  • Geographic mix (Q1 2024): US 54%, Brazil 16%, UK 13%, Other 17% .
  • Conference call and materials (Q1 2024): press release and supplement posted; replay available via investor site .