WEX posts better-than-expected Q1 results, tweaks full-year guidance

WEX Inc. headquarters building in Portland.

Photo / Renee Cordes WEX Inc., a fintech services provider headquartered on Portland's waterfront, posted first-quarter results after markets closed on Wednesday.

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By Renee Cordes

WEX Inc. posted better-than-expected first-quarter results and tweaked its full-year financial guidance in anticipation of “small but manageable” headwinds.

First-quarter revenue fell 2%, to $636.7 million, from $652.7 million a year earlier, the Portland-based technology services provider said Wednesday after stock markets closed.

The revenue decrease includes an $8.5 million unfavorable impact from fuel prices and spreads and a $2.5 million unfavorable impact from foreign exchange rates, WEX said.

Adjusted first-quarter net income was $138.4 million, or $3.51 per diluted share. That's 1% higher than a year earlier.

Both earnings and revenue exceeded the consensus forecast of analysts polled by Zacks Investment Research. Over the last four quarters, the company has surpassed consensus earnings per share estimates three times.

WEX, led by CEO Melissa Smith, provides fintech services to businesses in fleet mobility and fueling, corporate payments, travel industry payments and employee and member benefits.

“I am pleased with WEX’s Q1 performance and the continued progress we are making against our strategic priorities,” Smith said in Wednesday's earnings release. “WEX’s strong financial position and diversified portfolio provide a meaningful bugger against short-term softness in any one sector and position us well to navigate ongoing macro uncertainty.”

A conference call with analysts and investors was scheduled for Thursday morning.

Updated outlook

For the second quarter, the company said it expects revenue in the range of $640 million to $660 million and adjusted net income in the range of $3.60 to $3.80 per diluted share.

The company also adjusted its financial outlook for the full year.

Full-year revenue is now projected to be in the range of $2.57 billion to $2.63 billion, down slightly from a previous forecast of $2.6 billion to $2.66 billion issued in February.

The company also said it expects 2025 net income to be in the range of $14.72 to $15.32 per diluted share, slightly higher than February's forecast of $14.65 to $15.24 per diluted share.

Projections are based on assumed average U.S. retail fuel prices of $3.18 and $3.10 per gallon, respectively, and a 25% adjusted net income effective tax rate.

“Our guidance is based upon current trends, focusing on what we can control, and small but manageable incremental headwinds since providing our original outlook,” said Jagtar Narula, WEX’s chief financial officer. “The business environment is dynamic, and our guidance does not include the impact of a potential further slowdown in the economy.”

As of Wednesday’s market close, WEX shares were valued at around $4.46 billion. The stock is trading 38% lower than a year ago.