WEX posts 5% drop in Q1 revenue as pandemic 'headwinds' linger

File photo / Courtesy of WEX WEX Inc. is a financial technology service provider headquartered in Portland.

Write a Comment

Portland-based financial technology service provider WEX Inc. (NYSE: WEX) on Thursday posted decreases in first-quarter revenue and earnings amid declines in fuel transactions processed and its Travel and Corporate Solutions purchase volume.

First-quarter revenue decreased 5% to $410.8 million from $431.7 million a year earlier. The decrease includes a $1 million unfavorable impact from fuel prices and spreads and a $3.9 million positive impact from foreign exchange rates, the company said.

Diluted earnings per share were $1.79 in the first quarter, down 1% from $1.81 per share a year ago but above the $1.60 per share consensus forecast of analysts polled by Zacks Investment Research.

The revenue figure was also 0.03% above the consensus of analysts polled by Zacks, which noted that WEX has topped consensus revenue estimates twice over the last four quarters.

In a Thursday conference call and webcast, WEX Chair and CEO Melissa Smith noted that the first quarter of 2021 marks a full year since the onset of the pandemic that was "full of unprecedented challenges and headwinds, some of which are are still navigating today."

Earlier in the results announcement, she noted that revenue exceeded the company's own expectations, attributing the $16.8 billion in total purchase volume for the quarter to meaningful contributions in all of the companies business segments.

"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," she said.

She added that "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 ... 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.”

In mid-morning trading, WEX shares were 6.4% lower, at $212.73, giving the company a market value of $9.48 billion.

'Healthy' balance sheet, liquidity

In terms of business segment performance, WEX Health and Employee Benefit Solutions' average number of software-as-a-service accounts in the U.S. grew 7% to 15.5 million from 14.5 million in the first quarter of 2020 while an average of around 15.8 million vehicles were serviced, up 4% from the first quarter of 2020.

At the other end of the spectrum, WEX Travel and Corporate Solutions' purchase volume decreased 24% to $6.1 billion from $8.0 billion in the first quarter of 2020 while payment processing transactions decreased 3% to 118.4 million.

WEX recently announced an agreement to acquire benefitexpress, a Schaumburg,Ill.-based provider of configurable, cloud-based benefits administration technologies and services in a $275 million transaction it expects to be complete in the second quarter.

Looking ahead to the rest of 2021, WEX CFO Roberto Simon said the company's 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."

He added: "I am encouraged by this strong start to the year and expect these trends to continue."

About WEX

WEX Inc. is a financial technology service provider across a wide spectrum of sectors, including fleet, travel and health care. It is a global company that operates in more than 10 countries and 20 currencies. It employs more than 5,200 people worldwide. WEX Chair and CEO Melissa Smith was honored as a Mainebiz Business Leader of the Year in 2017 and as a Mainebiz Woman to Watch in 2012.