Booking.com Contract Impact
Q: What's the impact of the Booking.com contract renewal?
A: WEX renewed its contract with Booking.com, facing short-term headwinds as Booking transitions some activities in-house. This will affect reported purchase volumes and interchange rates, but WEX expects long-term benefits from the continued partnership. Corporate Payments revenue is still expected to grow in the high single digits, consistent with prior guidance.

Benefits Growth and HSA Outlook
Q: How will Benefits growth and HSA accounts perform?
A: Excluding the loss of a Medicare Advantage account, total accounts grew by 8%. WEX anticipates continued strong account growth, aiming to outpace the market. Long-term guidance remains at 15%-20% growth for the segment, though anomalies this year may affect results.

Mobility Margins and Growth
Q: What's the outlook for Mobility margins and revenue growth?
A: Mobility margins are expected to improve over the year due to higher fuel prices, improved late fees, and a better interest rate environment. Revenue growth is guided at the high end of the long-term range at 8%, with contributions from Payzer and pricing initiatives. First-quarter growth was 5% excluding fuel prices, up from below 2% in Q4.

Credit Loss Outlook
Q: Why are credit losses expected to increase in Q2?
A: WEX anticipates slightly higher charge-offs in Q2 based on recent trends. New credit adjudication models and automated credit line monitoring are being implemented to contain losses. Credit losses are expected to trend down over the course of the year.

Guidance and Interest Rates
Q: What changes influenced the guidance adjustments?
A: Adjustments in fuel price assumptions increased EPS guidance. Interest rates also impact revenue through merchant contracts and HSA assets, but WEX manages interest rate exposure to be neutral at the EPS level. Fuel-related changes flow through to earnings, while interest rate changes affect revenue but not EPS.

Corporate Payments Mix
Q: How is the mix between travel and nontravel revenue expected to change?
A: Currently, travel accounts for about 55%-60% of revenue and 70% of spend volume in Corporate Payments. Over time, spend is expected to normalize as travel rebounds from the pandemic. Nontravel purchase volume rates are expected to remain stable, with overall growth influenced by the Booking.com transition.

Direct Sales Growth
Q: How is direct sales impacting Corporate Payments growth?
A: Half of the growth in Corporate Payments came from direct sales outside of travel. WEX continues to build its pipeline and execute in this area, resulting in sustained growth. Nontravel payment processing revenue has trended upwards for three consecutive quarters.

HSA Growth and Rate Cuts
Q: How will HSA growth and rate cuts affect performance?
A: WEX aims to outgrow the market in HSA account growth by continuing sales efforts and cross-selling additional products. Most HSA balances are in fixed-rate instruments, so expected rate cuts should not significantly impact them. Guidance includes assumptions of about two rate cuts this year.

Medicare Advantage Impact
Q: What's the revenue impact of losing the Medicare Advantage account?
A: The loss is expected to impact Benefits revenue growth by a couple of percentage points this year. Despite this, WEX feels confident in its overall growth trajectory.

EPS Guidance and Costs
Q: How do cost savings affect EPS guidance in the second half?
A: WEX front-loaded investments and expects cost reductions to flow through in the second half, supporting EPS growth. Increased revenues from pricing and volume, along with anticipated cost savings, provide visibility into the EPS trajectory.

Booking.com Long-term Benefits
Q: What's the long-term opportunity with Booking.com?
A: WEX views the renewed partnership as a long-term opportunity to work on other areas across Booking.com's portfolio, potentially creating new revenue streams.

Interchange Rate Trends
Q: How will interchange rates in Corporate Payments trend?
A: Interchange rates decreased from Q4 2023 to Q1 2024 due to revenue recognition timing. Rates are expected to be flat to slightly up for the rest of the year, despite dynamics related to the Booking.com contract.

Credit Loss Modeling
Q: How is WEX forecasting credit losses?
A: WEX uses sophisticated models to forecast losses and expects a slight increase in Q2, followed by a downward trend over the year. New systems are being implemented to monitor and manage credit risk.

Virtual Cards and Sales
Q: What's happening with virtual card attach rates and sales?
A: WEX continues to benefit from the migration to the merchant model in Europe, though growth this quarter was driven more by transaction growth outside Europe. Direct sales efforts are contributing significantly to growth in Corporate Payments.