Fleet business drives big gain in WEX sales

Photo / Peter Van Allen WEX Inc., a global payment solutions company headquartered in South Portland, announced today its total revenue for the second quarter increased 30% to $303.9 million, with adjusted net income for the same period increasing 15% to $54.2 million.

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By James McCarthy

WEX Inc. (NYSE:WEX) posted strong second quarter financials today, reporting its total revenue increased 30% to $303.9 million from $233.9 million for the three months ended June 30, with adjusted net income for the same period increasing 15% to $54.2 million.

In a telephone interview with Mainebiz this morning, WEX President and CEO Melissa Smith noted the company “delivered better-than-anticipated organic revenue growth” within its three business segments of fleet card payments, travel and corporate solutions and health and employee benefit solutions.

Its core fleet business posted a 39.1% revenue increase for the quarter over last year’s quarter, growing $56 million to $200 million. Revenues for the health and employee benefits segment grew almost 33% to $48.6 million and for travel and corporate solutions by 3.1% to $55 million.

“I’m excited that the growth is coming from all parts of our business,” she said, noting that the growth in each of its markets helps drive the purchase volume that is fueling strong revenue growth this year. “We make money little bits at a time.”

In Q1 of 2017, WEX’s total revenue increased 41% to $291.4 million.

Smith said the company expects the underlying drivers of its strong performance across the three business sectors to continue through the second half of the year.

In the forward-looking section of the Q2 earnings report, WEX reported that it expects full-year revenue to be in the range of $1.20 billion to $1.22 billion and adjusted net income in the range of $221 million to $230 million, or $5.15 to $5.35 per diluted share.

For the third quarter of 2017, it expects revenue in the range of $302 million to $312 million and adjusted net income in the range of $58 million to $61 million, or $1.35 to $1.42 per diluted share.

Highlights of its second quarter performance metrics:

Average number of vehicles serviced worldwide was approximately 10.9 million, an increase of 13% from the second quarter of 2016.
Total fuel transactions processed increased 24% to 130 million. Payment processing transactions increased 15% to 108.1 million.
Average expenditure per payment processing transaction was $68.43, which represents an increase of 23% from the second quarter of 2016.
U.S. retail fuel price increased 5% to $2.41 per gallon from $2.29 per gallon in the second quarter of 2016.
Total travel and corporate solutions card purchase volume grew 37% to $7.7 billion, from $5.6 billion in the second quarter of 2016.
Total health and employee benefits solutions purchase volume increased 7% to $1.1 billion in second quarter of 2017.

Smith said another less tangible metric that WEX focused on this past year involves “becoming an employer of choice” — with one measurement being that it has been certified as a “Great Place to Work” in 2017 by Great Place to Work^®, a global authority on high-trust, high-performance workplace cultures whose assessment process includes a survey of employees.

“Our next goal is to make the Fortune Top 100 Companies to Work For list,” she said.

Smith said the company also continues to work at improving its paid internship program, which this year attracted 1,350 applications for 32 spots. “Creating opportunities for young people to live and work here is particularly important in our state,” she said.