WEX Inc. (NYSE: WEX), a leading financial technology service
provider, today reported financial results for the three months
ended March 31, 2021.
“In the first quarter, we delivered strong momentum
sequentially, exceeded our revenue expectations and achieved $16.8
billion of total purchase volume, driven by meaningful
contributions in all segments. In aggregate, Fleet, Corporate
Payments and Health are above pre-pandemic revenue levels. These
solid results reflect a number of exciting new wins and renewals as
well as a robust pipeline of opportunities that give me confidence
in our ability to drive market share gains through the remainder of
the year.” said Melissa Smith, WEX’s Chair and Chief Executive
Officer.
Ms. Smith added, “In the first quarter, we built upon our strong
technology foundation and are accelerating our innovation by
integrating our product capabilities across the entire WEX platform
and exposing these capabilities through APIs. We continue to find
new ways to deliver value to customers and prospects, creating
strong new sales momentum which will be coupled with the continued
recovery of purchase volume as mobility increases. Importantly, we
focused on empowering our employees to grow and thrive in a
values-based environment. These efforts, guided by our refreshed
strategic pillars, will serve as the foundation of WEX’s next
chapter of growth. I’m pleased with the impressive accomplishments
made this quarter, which I expect to be just the start of another
exciting and pivotal year for WEX.”
First Quarter 2021 Financial Results
Total revenue for the first quarter of 2021 decreased 5% to
$410.8 million from $431.7 million for the first quarter of 2020.
This revenue decrease in the quarter includes a $1.0 million
unfavorable impact from fuel prices and spreads and $3.9 million
positive impact from foreign exchange rates.
Net loss attributable to shareholders on a GAAP basis decreased
by $13.7 million to a net loss of $2.6 million, or $(0.06) per
diluted share, compared with a net loss of $16.3 million, or
$(0.37) per diluted share, for the first quarter of 2020. The
Company's adjusted net income attributable to shareholders, which
is a non-GAAP measure, was $81.3 million for the first quarter of
2021, or $1.79 per diluted share, down 1% per diluted share from
$79.7 million or $1.81 per diluted share for the same period last
year. See Exhibit 1 for a full explanation and reconciliation of
adjusted net (loss) income attributable to shareholders and
adjusted net income attributable to shareholders per diluted share
to the comparable GAAP measures.
First Quarter 2021 Performance Metrics
- Average number of vehicles serviced was approximately 15.8
million, an increase of 4% from the first quarter of 2020.
- Total fuel transactions processed decreased 3% from the first
quarter of 2020 to 146.4 million. Payment processing transactions
decreased 3% to 118.4 million.
- Travel and Corporate Solutions' purchase volume decreased 24%
to $6.1 billion from $8.0 billion in the first quarter of
2020.
- Health and Employee Benefit Solutions' average number of
Software-as-a-Service (SaaS) accounts in the U.S. grew 7% to 15.5
million from 14.5 million in the first quarter of 2020.
“We carried the strong momentum exiting 2020 through the first
quarter as we continued to successfully execute against our refined
strategic pillars and position WEX for long-term sustainable
growth. Improvements in macro-economic factors, the faster pace of
vaccinations and increasing re-openings across WEX’s end markets
combined with underlying strength across the business, drove WEX to
see sequential improvements and exceed our revenue expectations
this quarter,” said Roberto Simon, WEX’s Chief Financial Officer.
“Additionally, our balance sheet and liquidity remain healthy with
the amended credit facility that closed in April as we prepare to
make the strategic acquisitions we have announced. I am encouraged
by this strong start to the year and expect these trends to
continue.”
Additional Information
Management uses the non-GAAP measures presented within this news
release to evaluate the Company's performance on a comparable
basis. Management believes that investors may find these measures
useful for the same purposes, but cautions that they should not be
considered a substitute for, or superior to, disclosure in
accordance with GAAP.
To provide investors with additional insight into its
operational performance, WEX has included in this news release in
Exhibit 1, reconciliations of non-GAAP measures referenced in this
news release, in Exhibit 2, tables illustrating the impact of
foreign currency rates and fuel prices for each of our reportable
segments for the three months ended March 31, 2021, and in Exhibit
3, a table of selected non-financial metrics for the quarter ended
March 31, 2021 and four preceding quarters. The Company is also
providing segment revenue for the three months ended March 31, 2021
and 2020 in Exhibit 4 and information regarding segment adjusted
operating income margin and adjusted operating income margin in
Exhibit 5.
Conference Call Details
In conjunction with this announcement, WEX will host a
conference call today, April 29, 2021, at 10:00 a.m. (EDT). As
previously announced, the conference call will be webcast live on
the Internet, and can be accessed along with the accompanying
slides at the Investor Relations section of the WEX website,
www.wexinc.com. The live conference call also can be accessed by
dialing (866) 324-3683 or (509) 844-0959. The Conference ID number
is 2378288. A replay of the webcast and the accompanying slides
will be available on the Company's website.
About WEX
Powered by the belief that complex payment systems can be made
simple, WEX (NYSE: WEX) is a leading financial technology service
provider across a wide spectrum of sectors, including fleet, travel
and healthcare. WEX operates in more than 10 countries and in more
than 20 currencies through more than 5,200 associates around the
world. WEX fleet cards offer approximately 16 million vehicles
exceptional payment security and control; purchase volume in travel
and corporate solutions was $20.9 billion in 2020; and the WEX
Health financial technology platform helps more than 33 million
consumers better manage healthcare expenses. For more information,
visit www.wexinc.com.
Forward-Looking Statements
This earnings release contains forward-looking statements,
including statements regarding: assumptions underlying the
Company's future financial performance, future operations; future
growth opportunities and expectations; expectations for future
revenue performance, future impacts from areas of investment,
expectations for the macro environment; and, expectations for
volumes. Any statements that are not statements of historical facts
may be deemed to be forward-looking statements. When used in this
earnings release, the words “anticipate,” “believe,” “continue,”
“could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project”
and similar expressions are intended to identify forward-looking
statements, although not all forward-looking statements contain
such words. These forward-looking statements are subject to a
number of risks and uncertainties that could cause actual results
to differ materially, including: the extent to which the
coronavirus (COVID-19) pandemic and measures taken in response
thereto impact our business, results of operations and financial
condition in excess of current expectations; the effects of general
economic conditions, including those caused by the effects of
COVID-19, on fueling patterns as well as payment and transaction
processing activity; the impact of foreign currency exchange rates
on the Company’s operations, revenue and income; changes in
interest rates; the impact of fluctuations in fuel prices,
including the impact of any reductions in fuel prices and the
resulting impact on our revenues and net income; changes or
limitations on interchange fees; failure to comply with the
applicable requirements of MasterCard or Visa contracts and rules;
the effects of the Company’s business expansion and acquisition
efforts; potential adverse changes to business or employee
relationships, including those resulting from the completion of an
acquisition; competitive responses to any acquisitions; uncertainty
of the expected financial performance of the combined operations
following completion of an acquisition; the failure to complete or
successfully integrate the Company’s acquisitions or the ability to
realize anticipated synergies and cost savings from such
transactions; unexpected costs, charges or expenses resulting from
an acquisition, specifically including the recent eNett and Optal
acquisitions; the Company’s failure to successfully acquire,
integrate, operate and expand commercial fuel card programs; the
failure of corporate investments to result in anticipated strategic
value; the impact and size of credit losses; the impact of changes
to the Company’s credit standards; breaches of the Company’s
technology systems or those of our third-party service providers
and any resulting negative impact on our reputation, liabilities or
relationships with customers or merchants; the Company’s failure to
maintain or renew key commercial agreements; failure to expand the
Company’s technological capabilities and service offerings as
rapidly as the Company’s competitors; failure to successfully
implement the Company’s information technology strategies and
capabilities in connection with its technology outsourcing and
insourcing arrangements and any resulting cost associated with that
failure; the actions of regulatory bodies, including banking and
securities regulators, or possible changes in banking or financial
regulations impacting the Company’s industrial bank, the Company as
the corporate parent or other subsidiaries or affiliates; legal,
regulatory, political and economic uncertainty surrounding the
United Kingdom’s departure from the European Union and the
resulting trade agreement; the impact of the future transition from
LIBOR as a global benchmark to a replacement rate; the impact of
the Company’s recently amended and restated credit agreement and
its presently outstanding notes on our operations; the impact of
increased leverage on the Company’s operations, results or
borrowing capacity generally, and as a result of acquisitions
specifically; the impact of sales or dispositions of significant
amounts of our outstanding common stock into the public market, or
the perception that such sales or dispositions could occur; the
possible dilution to our stockholders caused by the issuance of
additional shares of common stock or equity-linked securities,
whether as result of our convertible notes or otherwise; the
incurrence of impairment charges if our assessment of the fair
value of certain of our reporting units changes; the uncertainties
of litigation; as well as other risks and uncertainties identified
in Item 1A of our annual report on Form 10-K for the year ended
December 31, 2020, filed with the Securities and Exchange
Commission on March 1, 2021. The Company's forward-looking
statements do not reflect the potential future impact of any
alliance, merger, acquisition, disposition or stock repurchases.
The forward-looking statements speak only as of the date of this
earnings release and undue reliance should not be placed on these
statements. The Company disclaims any obligation to update any
forward-looking statements as a result of new information, future
events or otherwise.
WEX INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(in thousands, except per
share data)
(unaudited)
Three months ended March
31,
2021
2020
Revenues
Payment processing revenue
$
188,389
$
204,037
Account servicing revenue
118,623
113,840
Finance fee revenue
52,153
55,927
Other revenue
51,592
57,875
Total revenues
410,757
431,679
Cost of services
Processing costs
109,762
104,917
Service fees
11,146
13,754
Provision for credit losses
5,059
33,987
Operating interest
2,624
8,385
Depreciation and amortization
29,194
24,789
Total cost of services
157,785
185,832
General and administrative
86,431
62,036
Sales and marketing
78,347
68,782
Depreciation and amortization
37,653
40,200
Operating income
50,541
74,829
Financing interest expense
(33,284
)
(32,031
)
Net foreign currency loss
(2,755
)
(28,727
)
Net unrealized gain (loss) on financial
instruments
7,033
(32,047
)
Income (loss) before income taxes
21,535
(17,976
)
Income tax benefit
(1,670
)
(5,707
)
Net income (loss)
23,205
(12,269
)
Less: Net income from non-controlling
interests
726
1,363
Net income (loss) attributable to WEX
Inc.
$
22,479
$
(13,632
)
Change in value of redeemable
non-controlling interest
(25,044
)
(2,624
)
Net loss attributable to
shareholders
$
(2,565
)
$
(16,256
)
Net loss attributable to shareholders per
share:
Basic
$
(0.06
)
$
(0.37
)
Diluted
$
(0.06
)
$
(0.37
)
Weighted average common shares
outstanding:
Basic
44,343
43,416
Diluted
44,343
43,416
WEX INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands)
(unaudited)
March 31, 2021
December 31, 2020
Assets
Cash and cash equivalents
$
561,199
$
852,033
Restricted cash
412,451
477,620
Accounts receivable
2,506,479
1,993,329
Securitized accounts receivable,
restricted
133,280
93,236
Prepaid expenses and other current
assets
95,002
86,629
Total current assets
3,708,411
3,502,847
Property, equipment and capitalized
software
182,911
188,340
Goodwill and other intangible assets
4,172,402
4,240,150
Investment securities
36,832
37,273
Deferred income taxes, net
21,050
17,524
Other assets
195,127
197,227
Total assets
$
8,316,733
$
8,183,361
Liabilities and Stockholders’
Equity
Accounts payable
$
1,123,018
$
778,207
Accrued expenses
321,081
362,472
Restricted cash payable
412,451
477,620
Short-term deposits
1,043,457
911,395
Short-term debt, net
354,298
152,730
Other current liabilities
53,440
58,429
Total current liabilities
3,307,745
2,740,853
Long-term debt, net
2,508,311
2,874,113
Long-term deposits
118,591
148,591
Deferred income taxes, net
198,790
220,122
Other liabilities
152,454
164,546
Total liabilities
6,285,891
6,148,225
Commitments and contingencies
Redeemable non-controlling
interest
142,616
117,219
Stockholders’ Equity
Total WEX Inc. stockholders’ equity
1,875,149
1,904,895
Non-controlling interest
13,077
13,022
Total stockholders’ equity
1,888,226
1,917,917
Total liabilities and stockholders’
equity
$
8,316,733
$
8,183,361
Exhibit 1
Reconciliation of Non-GAAP
Measures
(in thousands, except per
share data)
(unaudited)
Reconciliation of GAAP Net (Loss)
Income Attributable to Shareholders to Adjusted Net Income
Attributable to Shareholders
Three Months Ended March
31,
2021
2020
per diluted share
per diluted share
Net loss attributable to
shareholders
$
(2,565
)
$
(0.06
)
$
(16,256
)
$
(0.37
)
Unrealized (gain) loss on financial
instruments
(7,033
)
(0.16
)
32,047
0.74
Net foreign currency remeasurement
loss
2,755
0.06
28,727
0.66
Acquisition–related intangible
amortization
42,454
0.96
42,538
0.98
Other acquisition and divestiture related
items
14,796
0.33
7,942
0.18
Stock–based compensation
18,943
0.43
11,820
0.27
Other costs
12,237
0.28
2,240
0.05
Debt restructuring and debt issuance cost
amortization
5,092
0.11
2,082
0.05
ANI adjustments attributable to
non–controlling interests
23,800
0.54
2,224
0.05
Tax related items
(29,205
)
(0.66
)
(33,680
)
(0.78
)
Dilutive impact of stock awards1
—
(0.04
)
—
(0.02
)
Adjusted net income attributable to
shareholders
$
81,274
$
1.79
$
79,684
$
1.81
1 As the Company reported a net loss for the three months ended
March 31, 2021 and 2020 under U.S. Generally Accepted Accounting
Principles (“GAAP”), the diluted weighted average shares
outstanding equals the basic weighted average shares outstanding
for those periods. The non-GAAP adjustments described above
resulted in adjusted net income attributable to shareholders
(versus a loss on a GAAP basis) for the first quarters of 2021 and
2020. Therefore, dilutive common stock equivalents have been
included in the calculation of adjusted diluted weighted average
shares outstanding to arrive at adjusted per share data.
Reconciliation of GAAP
Operating Income to Total Segment Adjusted Operating Income and
Adjusted Operating Income
Three Months Ended March
31,
2021
2020
Operating income
$
50,541
$
74,829
Unallocated corporate expenses
16,209
16,543
Acquisition-related intangible
amortization
42,454
42,538
Other acquisition and divestiture related
items
14,796
7,942
Stock-based compensation
18,943
11,820
Other costs
12,237
2,240
Debt restructuring costs
637
78
Total segment adjusted operating
income
$
155,817
$
155,990
Unallocated corporate expenses
(16,209
)
(16,543
)
Adjusted operating income
$
139,608
$
139,447
The Company's non-GAAP adjusted net income excludes unrealized
gains and losses on financial instruments, net foreign currency
gains and losses, acquisition-related intangible amortization,
other acquisition and divestiture related items, stock-based
compensation, other costs, debt restructuring and debt issuance
cost amortization, adjustments attributable to our non-controlling
interests and certain tax related items.
The Company's non-GAAP adjusted operating income excludes
acquisition-related intangible amortization, other acquisition and
divestiture related items, stock-based compensation, other costs,
and debt restructuring costs. Total segment adjusted operating
income incorporates these same adjustments and further excludes
unallocated corporate expenses.
Although adjusted net income, adjusted operating income and
total segment adjusted operating income are not calculated in
accordance with GAAP, these non-GAAP measures are integral to the
Company's reporting and planning processes and the chief operating
decision maker of the Company uses segment adjusted operating
income to allocate resources among our operating segments. The
Company considers these measures integral because they exclude the
above specified items that the Company's management excludes in
evaluating the Company's performance. Specifically, in addition to
evaluating the Company's performance on a GAAP basis, management
evaluates the Company's performance on a basis that excludes the
above items because:
- Exclusion of the non-cash, mark-to-market adjustments on
financial instruments, including interest rate swap agreements and
investment securities, helps management identify and assess trends
in the Company's underlying business that might otherwise be
obscured due to quarterly non-cash earnings fluctuations associated
with these financial instruments. Additionally, the non-cash
mark-to-market adjustments on financial instruments are difficult
to forecast accurately, making comparisons across historical and
future quarters difficult to evaluate.
- Net foreign currency gains and losses primarily result from the
remeasurement to functional currency of cash, accounts receivable
and accounts payable balances, certain intercompany notes
denominated in foreign currencies and any gain or loss on foreign
currency hedges relating to these items. The exclusion of these
items helps management compare changes in operating results between
periods that might otherwise be obscured due to currency
fluctuations.
- The Company considers certain acquisition-related costs,
including investment banking fees, warranty and indemnity
insurance, certain integration related expenses and amortization of
acquired intangibles, as well as gains and losses from
divestitures, to be unpredictable, dependent on factors that may be
outside of our control and unrelated to the continuing operations
of the acquired or divested business or the Company. In addition,
the size and complexity of an acquisition, which often drives the
magnitude of acquisition-related costs, may not be indicative of
such future costs. The Company believes that excluding
acquisition-related costs and gains or losses of divestitures
facilitates the comparison of our financial results to the
Company's historical operating results and to other companies in
our industry.
- Stock-based compensation is different from other forms of
compensation as it is a non-cash expense. For example, a cash
salary generally has a fixed and unvarying cash cost. In contrast,
the expense associated with an equity-based award is generally
unrelated to the amount of cash ultimately received by the
employee, and the cost to the Company is based on a stock-based
compensation valuation methodology and underlying assumptions that
may vary over time.
- We exclude certain other costs when evaluating our continuing
business performance when such items are not consistently occurring
and do not reflect expected future operating expense, nor provide
insight into the fundamentals of current or past operations of our
business. These include costs related to certain identified
initiatives (including technology initiatives) to further
streamline the business, improve the Company's efficiency, create
synergies, and globalize the Company's operations, all with an
objective to improve scale and efficiency and increase
profitability going forward. For the three months ended March 31,
2021, other costs additionally include a penalty of $10.3 million
incurred on termination of a contract. For the three months ended
March 31, 2020, other costs include certain costs incurred in
association with COVID-19, including the cost of providing
additional health, welfare and technological support to our
employees as they work remotely.
- Debt restructuring and debt issuance cost amortization are
unrelated to the continuing operations of the Company. Debt
restructuring costs are not consistently occurring and do not
reflect expected future operating expense, nor do they provide
insight into the fundamentals of current or past operations of our
business. In addition, since debt issuance cost amortization is
dependent upon the financing method, which can vary widely company
to company, we believe that excluding these costs helps to
facilitate comparison to historical results as well as to other
companies within our industry.
- The adjustments attributable to non-controlling interests,
including adjustments to the redemption value of a non-controlling
interest and non-cash adjustments related to the tax receivable
agreement, have no significant impact on the ongoing operations of
the business.
- The tax related items are the difference between the Company’s
U.S. GAAP tax provision and a pro forma tax provision based upon
the Company’s adjusted net income before taxes as well as the
impact from certain discrete tax items. The methodology utilized
for calculating the Company’s adjusted net income tax provision is
the same methodology utilized in calculating the Company’s U.S.
GAAP tax provision.
- The Company does not allocate certain corporate expenses to our
operating segments, as these items are centrally controlled and are
not directly attributable to any reportable segment.
For the same reasons, WEX believes that adjusted net income,
adjusted operating income and total segment adjusted operating
income may also be useful to investors when evaluating the
Company's performance. However, because adjusted net income,
adjusted operating income and total segment adjusted operating
income are non-GAAP measures, they should not be considered as a
substitute for, or superior to, net income, operating income or
cash flows from operating activities as determined in accordance
with GAAP. In addition, adjusted net income, adjusted operating
income and total segment adjusted operating income as used by WEX
may not be comparable to similarly titled measures employed by
other companies.
Exhibit 2
Impact of Certain Macro
Factors on Reported Revenue and Adjusted Net Income
(in thousands, except per
share data)
(unaudited)
The table below shows the impact
of certain macro factors on reported revenue:
Segment Revenue
Results
Fleet Solutions
Travel and Corporate
Solutions
Health and Employee Benefit
Solutions
Total WEX Inc.
Three months ended March
31,
2021
2020
2021
2020
2021
2020
2021
2020
Reported revenue
$
243,837
$
249,847
$
70,642
$
84,359
$
96,278
$
97,473
$
410,757
$
431,679
FX impact (favorable) / unfavorable
$
(3,626
)
$
—
$
(305
)
$
—
$
—
$
—
$
(3,931
)
$
—
PPG impact (favorable) / unfavorable
$
966
$
—
$
—
$
—
$
—
$
—
$
966
$
—
To determine the impact of foreign exchange translation (“FX”)
on revenue, revenue from entities whose functional currency is not
denominated in U.S. dollars, as well as revenue from purchase
volume transacted in non-U.S. denominated currencies, were
translated using the weighted average exchange rates for the same
period in the prior year, exclusive of revenue derived from 2020
acquisitions for one year following the acquisition dates.
To determine the impact of price per gallon of fuel (“PPG”) on
revenue, revenue subject to changes in fuel prices was calculated
based on the average retail price of fuel for the same period in
the prior year for the portion of our business that earns revenue
based on a percentage of fuel spend, exclusive of revenue derived
from 2020 acquisitions for one year following the acquisition
dates. For the portions of our business that earn revenue based on
margin spreads, revenue was calculated utilizing the comparable
margin from the prior year.
The table below shows the impact of certain macro factors on
Adjusted Net Income:
Segment Estimated Earnings
Impact
Fleet Solutions
Travel and Corporate
Solutions
Health and Employee Benefit
Solutions
Three months ended March
31,
2021
2020
2021
2020
2021
2020
FX impact (favorable) / unfavorable
$
(1,689
)
$
—
$
(136
)
$
—
$
—
$
—
PPG impact (favorable) / unfavorable
$
486
$
—
$
—
$
—
$
—
$
—
To determine the estimated earnings impact of FX on revenue and
expenses from entities whose functional currency is not denominated
in U.S. dollars, as well as revenue and variable expenses from
purchase volume transacted in non-U.S. denominated currencies,
amounts were translated using the weighted average exchange rates
for the same period in the prior year, net of tax, exclusive of
revenue and expenses derived from 2020 acquisitions for one year
following the acquisition dates.
To determine the estimated earnings impact of PPG, revenue and
certain variable expenses impacted by changes in fuel prices were
adjusted based on the average retail price of fuel for the same
period in the prior year for the portion of our business that earns
revenue based on a percentage of fuel spend, net of applicable
taxes, exclusive of revenue and expenses derived from 2020
acquisitions for one year following the acquisition dates. For the
portions of our business that earn revenue based on margin spreads,
revenue was adjusted to the comparable margin from the prior year,
net of non-controlling interests and applicable taxes.
Exhibit 3
Selected Non-Financial
Metrics
(unaudited)
Q1 2021
Q4 2020
Q3 2020
Q2 2020
Q1 2020
Fleet Solutions:
Payment processing transactions (000s)
(1)
118,389
118,287
120,900
103,086
121,591
Payment processing gallons of fuel (000s)
(2)
3,233,943
3,265,927
3,247,507
2,830,265
3,123,066
Average US fuel price (US$ / gallon)
$
2.72
$
2.26
$
2.23
$
2.07
$
2.57
Payment processing $ of fuel (000s)
(3)
$
9,176,960
$
7,767,530
$
7,609,098
$
6,135,265
$
8,412,642
Net payment processing rate (4)
1.20
%
1.27
%
1.35
%
1.47
%
1.35
%
Payment processing revenue (000s)
$
110,577
$
98,954
$
102,419
$
90,147
$
113,323
Net late fee rate (5)
0.45
%
0.54
%
0.48
%
0.57
%
0.56
%
Late fee revenue (000s) (6)
$
41,150
$
41,901
$
36,232
$
35,071
$
46,740
Travel and Corporate Solutions:
Purchase volume (000s) (7)
$
6,107,675
$
4,968,321
$
4,699,737
$
3,168,064
$
8,041,112
Net interchange rate (8)
0.94
%
1.26
%
1.13
%
1.37
%
0.87
%
Payment solutions processing revenue
(000s)
$
57,248
$
62,376
$
53,239
$
43,261
$
70,268
Health and Employee Benefit
Solutions:
Purchase volume (000s) (9)
$
1,484,226
$
1,074,977
$
1,120,786
$
1,017,318
$
1,592,313
Average number of SaaS accounts (000s)
(10)
15,513
14,502
14,599
14,487
14,458
Definitions and explanations:
(1) Payment processing transactions represents the total number
of purchases made by fleets that have a payment processing
relationship with WEX.
(2) Payment processing gallons of fuel represents the total
number of gallons of fuel purchased by fleets that have a payment
processing relationship with WEX.
(3) Payment processing dollars of fuel represents the total
dollar value of the fuel purchased by fleets that have a payment
processing relationship with WEX.
(4) Net payment processing rate represents the percentage of the
dollar value of each payment processing transaction that WEX
records as revenue from merchants, less certain discounts given to
customers and network fees.
(5) Net late fee rate represents late fee revenue as a
percentage of fuel purchased by fleets that have a payment
processing relationship with WEX.
(6) Late fee revenue represents fees charged for payments not
made within the terms of the customer agreement based upon the
outstanding customer receivable balance.
(7) Purchase volume represents the total dollar value of all WEX
issued transactions that use WEX corporate card products and
virtual card products.
(8) Net interchange rate represents the percentage of the dollar
value of each payment processing transaction that WEX records as
revenue from merchants, less certain discounts given to customers
and network fees.
(9) Purchase volume represents the total US dollar value of all
transactions where interchange is earned by WEX.
(10) Average number of Health and Employee Benefit Solutions
accounts represents the number of active Consumer Directed Health,
COBRA, and billing accounts on our SaaS platforms in the United
States.
Exhibit 4
Segment Revenue
Information
(in thousands)
(unaudited)
Three months ended March
31,
Increase (decrease)
Fleet Solutions
2021
2020
Amount
Percent
Revenues
Payment processing revenue
$
110,576
$
113,323
$
(2,747
)
(2
)%
Account servicing revenue
39,991
39,208
783
2
%
Finance fee revenue
51,840
55,342
(3,502
)
(6
)%
Other revenue
41,430
41,974
(544
)
(1
)%
Total revenues
$
243,837
$
249,847
$
(6,010
)
(2
)%
Three months ended March
31,
Increase (decrease)
Travel and Corporate Solutions
2021
2020
Amount
Percent
Revenues
Payment processing revenue
$
57,248
$
70,268
$
(13,020
)
(19
)%
Account servicing revenue
10,687
11,063
(376
)
(3
)%
Finance fee revenue
294
535
(241
)
(45
)%
Other revenue
2,413
2,493
(80
)
(3
)%
Total revenues
$
70,642
$
84,359
$
(13,717
)
(16
)%
Three months ended March
31,
Increase (decrease)
Health and Employee Benefit
Solutions
2021
2020
Amount
Percent
Revenues
Payment processing revenue
$
20,565
$
20,446
$
119
1
%
Account servicing revenue
67,945
63,569
4,376
7
%
Finance fee revenue
19
50
(31
)
(62
)%
Other revenue
7,749
13,408
(5,659
)
(42
)%
Total revenues
$
96,278
$
97,473
$
(1,195
)
(1
)%
Exhibit 5
Segment Adjusted Operating
Income and Adjusted Operating Income Margin Information
(in thousands)
(unaudited)
Segment Adjusted Operating
Income
Segment Adjusted Operating
Income Margin(1)
Three Months Ended March
31,
Three Months Ended March
31,
2021
2020
2021
2020
Fleet Solutions
$
118,258
$
104,608
48.5
%
41.9
%
Travel and Corporate Solutions
$
7,015
$
21,915
9.9
%
26.0
%
Health and Employee Benefit Solutions
$
30,544
$
29,467
31.7
%
30.2
%
Total segment adjusted operating
income
$
155,817
$
155,990
37.9
%
36.1
%
(1) Segment adjusted operating income margin is derived by
dividing segment adjusted operating income by the revenue of the
corresponding segment (or the entire Company in the case of total
segment adjusted operating income). See Exhibit 1 for a
reconciliation of segment adjusted operating income to GAAP
operating income.
Three Months Ended March
31,
2021
2020
Adjusted operating income
$
139,608
$
139,447
Adjusted operating income margin (1)
34.0
%
32.3
%
(1) Adjusted operating income margin is derived by dividing
adjusted operating income by revenue of the entire Company. See
Exhibit 1 for a reconciliation of adjusted operating income to GAAP
operating income.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210429005306/en/
News media contact: WEX Inc. Jessica Roy, 207-523-6763
Jessica.Roy@wexinc.com or Investor contact: WEX Inc. Steve
Elder, 207-523-7769 Steve.Elder@wexinc.com
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