Executive Summary

Q3 2025 delivered a clean beat: revenue $691.8M and adjusted EPS $4.59, both above the high end of guidance and above consensus ($679.9M* revenue; $4.45* EPS). Management raised FY25 revenue to $2.63–$2.65B and adjusted EPS to $15.76–$15.96, citing momentum in Benefits and Corporate Payments . Q3 consensus: revenue $679.9M*, EPS $4.45*.
Benefits (+9.2% revenue) and Corporate Payments (+4.7%) drove growth; Mobility was modest (+1.0%) with macro softness in local fleets and OTR trucking, but higher-than-assumed fuel prices helped push results above guidance .
Margins compressed YoY (GAAP operating margin 26.5% vs 29.5%; adjusted operating margin 39.5% vs 44.0%) on increased sales/marketing and product spend and higher credit losses; management expects credit loss compare to ease in Q4 and sees operating leverage as volume normalizes .
Call highlighted strategic review (with BofA and JPMorgan) concluding WEX is “stronger together” across Mobility, Benefits, and Corporate Payments; AI is driving a 20% increase in product innovation velocity and efficiency gains across fraud, credit, claims, and support .
Near-term catalysts: continued Direct AP ramp (>20% volume growth) and BP-branded U.S. fleet card launch (conversion expected in 2026), raising confidence in sustained growth into 2026 despite macro headwinds in trucking .

What Went Well and What Went Wrong

What Went Well
- Benefits growth and profitability: revenue +9.2% to $198.1M; adjusted operating margin 43.8%, supported by higher custodial investment income (HSA yield 5.13%, average custodial cash $4.81B, +11.4%) .
- Corporate Payments returned to YoY revenue growth (+4.7% to $132.8M) with improved yields; Direct AP volume up >20%, and embedded payments signings (incl. a large fintech) ramping .
- Management tone and execution: “turning point with acceleration in revenue growth… confident in ability to deliver sustainable growth” — Melissa Smith; “sequential improvements and new business wins driving momentum” — CFO Jagtar Narula .
What Went Wrong
- Margin compression: GAAP operating margin 26.5% (down ~300 bps), adjusted operating margin 39.5% (down ~450 bps) on higher sales/marketing and product spend and higher credit losses vs an unusually low prior-year compare .
- Mobility softness: payment processing transactions down 4.5%; same-store sales weakness in local fleets (~-4%) and modest OTR softening, reflecting macro/trade dynamics and fuel-efficiency trends .
- Corporate Payments segment margin down (adjusted AOI margin 48.0% vs 56.4%) due to mix and increased sales/marketing to drive pipeline; purchase volume down 0.9% YoY despite yield gains .

Financial Results

Metric	Q3 2024	Q2 2025	Q3 2025	Q3 2025 Consensus
Revenue ($M)	$665.5	$659.6	$691.8	$679.9*
GAAP Diluted EPS	$2.52	$1.98	$2.30	N/A
Adjusted EPS	$4.35	$3.95	$4.59	$4.45*
GAAP Operating Margin	29.5%	N/A	26.5%	N/A
Adjusted Operating Margin	44.0%	N/A	39.5%	N/A

Notes: YoY revenue +3.9%; adjusted EPS +5.5% .
Estimates marked with * are Values retrieved from S&P Global.

Segment Revenue and Margins

Segment	Revenue Q3’24 ($M)	Revenue Q3’25 ($M)	YoY %	Adjusted AOI Margin Q3’24	Adjusted AOI Margin Q3’25
Mobility	357.2	360.8	1.0%	46.8%	40.7%
Benefits	181.5	198.1	9.2%	43.2%	43.8%
Corporate Payments	126.9	132.8	4.7%	56.4%	48.0%

Key KPIs

KPI	Q3 2024	Q2 2025	Q3 2025
Mobility payment processing transactions (M)	146.5	139.2	140.0
Mobility net payment processing rate	1.38%	1.31%	1.33%
Mobility late fee revenue ($M)	59.0	65.9	67.2
Corporate Payments purchase volume ($M)	23,394.4	20,496.8	23,176.6
Corporate Payments net interchange rate	0.45%	0.48%	0.47%
Benefits SaaS accounts (M)	20.3	21.2	21.5
Avg. HSA custodial cash assets ($M)	4,315.0	4,705.4	4,808.5

Additional P&L and Cash Flow Data (Q3 2025)

GAAP net income $80.3M; GAAP diluted EPS $2.30 . Adjusted net income $159.7M; adjusted EPS $4.59 .
Operating cash flow $376.6M; adjusted free cash flow $166.2M; leverage ratio 3.25x (down from 3.4x in Q2) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($B)	FY 2025	$2.61–$2.65	$2.63–$2.65	Raised at midpoint
Adjusted EPS	FY 2025	$15.37–$15.77	$15.76–$15.96	Raised
Revenue ($M)	Q4 2025	N/A	$646–$666	New
Adjusted EPS	Q4 2025	N/A	$3.76–$3.96	New

Guidance assumptions: U.S. retail fuel $3.09/gal (Q4) and $3.27/gal (FY), adjusted tax rate 25%, Mobility credit losses 14–19 bps (Q4) and 13–14 bps (FY), weighted avg diluted shares 34.9M (Q4) and 35.9M (FY) .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 2025)	Current Period (Q3 2025)	Trend
AI/technology initiatives	Launched AI-powered FSA claims; broader automation focus	20% increase in product innovation velocity; AI embedded across fraud, credit, claims and support; real-time insights in field service management	Accelerating adoption and impact
Supply chain/tariffs/macro	Tariff-related OTR pull-forward in H1; local fleet SSS down ~3–5%	OTR softened slightly (~0.5pt) and local SSS about -4%; trucking industry in rolling recession; macro still challenged	Persistent headwind
Corporate Payments performance	Transition headwind from large OTA; return to growth expected H2; Direct AP +25% volume in Q1/Q2	Segment revenue +4.7%; Direct AP >20% growth; embedded payments ramping (large fintech)	Re-acceleration underway
Portfolio strategy	Ongoing board review; diversification benefits	Rigorous portfolio assessment with BofA/JPM; conclusion: “businesses are stronger together”	Reinforced integrated model
Regulatory/legislative (Benefits)	HSA TAM expansion from exchange eligibility beginning 2026	Reiterated 3–4M account opportunity; leveraging partner channels	Medium-term tailwind
EV/mixed energy in Mobility	Pipeline building; gradual adoption	Continued pipeline; offer supports depot/home/on-the-road charging with ICE integration	Steady progress

Management Commentary

Strategic positioning: “The third quarter marked a turning point with acceleration in revenue growth, and we are confident in our ability to deliver sustainable growth, attractive margins, and robust cash flow” — Melissa Smith .
Macro and execution: “Even amid a challenged macro environment, we’re executing effectively, with sequential improvements and new business wins driving momentum” — CFO Jagtar Narula .
Portfolio review: The Board, with BofA and JPM, concluded WEX’s businesses are “stronger together” given shared backbone (WEX Bank, compliance, risk, tech, fraud prevention) and cross-selling synergies .

Q&A Highlights

Portfolio review and valuation: Banks advised focus on executing the strategic plan; conclusion was to keep segments together to maximize shareholder value .
Mobility dynamics: OTR softness worsened ~0.5pt; local fleets ~-4% same-store; sales and retention remain strong; BP conversion expected “sometime next year” (2026) and to add 0.5–1% revenue in the first full year post-conversion .
Sensitivities: ~$0.10/gal annual fuel move ≈ ±$20M revenue and ±$0.35 EPS; ±100 bps rates ≈ ±$40M revenue and ∓$0.30–$0.35 EPS (EPS moves opposite revenue given liability structure) .
Margin outlook: Q3 YoY margin down ~400 bps largely on higher credit loss compare (~200 bps) and investment spend; credit loss compare should ease in Q4; Q4 margins seasonally lower given travel mix .
Corporate Payments cadence: YoY growth re-emerged; seasonal Q4 volume down in travel, but yields typically up; Direct AP growth steady with added sales heads; embedded payments onboarding continues .

Estimates Context

Metric	Q4 2024	Q1 2025	Q2 2025	Q3 2025	Q4 2025
Revenue Consensus Mean ($M)	634.6* (636.5 actual)	632.5* (636.6 actual)	652.0* (659.6 actual)	679.9* (691.8 actual)	659.5*
Primary EPS Consensus Mean ($)	3.55* (3.57 actual)	3.40* (3.51 actual)	3.71* (3.95 actual)	4.45* (4.59 actual)	3.90*

Result vs consensus for Q3 2025: revenue +$11.9M; EPS +$0.14. Estimates marked with * are Values retrieved from S&P Global.

Where estimates may adjust:

Mobility macro remains a headwind; however, credit losses tracking better than guided ranges and pricing/mix improved sequentially (1.33% processing rate) could limit negative estimate revisions .
Corporate Payments momentum (Direct AP and embedded ramps) and BP program revenue contribution (new sales in Q4; conversion 2026) support FY25–26 revenue and EPS trajectories .

Key Takeaways for Investors

Quality beat and raised FY guide: Q3 revenue/EPS above both guidance and consensus; FY25 revenue and adjusted EPS raised, de-risking year-end and supporting estimate stability/upsides .
Mix shift drives resilience: Benefits’ high-margin growth and Corporate Payments’ re-acceleration offset Mobility macro softness, with operating leverage expected as volumes normalize .
Investments pressuring margins near term but building pipeline: Sales/marketing and product spend compressed margins YoY, yet underpin Direct AP growth and embedded payments diversification for 2026 .
Sensitivity skew: Higher fuel prices are a clear EPS tailwind (~$0.35 per $0.10/gal), while lower interest rates would reduce revenue but lift EPS by ~$0.35 per -100 bps given balance sheet structure .
Balance sheet flexibility: Strong operating cash generation ($376.6M in Q3) and declining leverage (3.25x) provide capacity to invest while de-levering, enhancing medium-term equity value .
Strategic clarity: Independent portfolio assessment affirmed integrated model; AI deployment is improving velocity and efficiency, reinforcing competitive advantages across segments .
Setup into 2026: BP win (0.5–1% revenue uplift in first full year post-conversion), HSA TAM expansion in 2026, and corporate payments ramps are medium-term growth catalysts despite near-term Mobility headwinds .

Estimates marked with * are Values retrieved from S&P Global.

WEX Inc. (WEX)·Q3 2025 Earnings Summary