WEX posts record 3Q revenue, raises full-year financial guidance

Photo / Renee Cordes WEX Inc. (NYSE: WEX) is headquartered in Portland, on the city's East End.

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WEX Inc. (NYSE: WEX), the Portland-based financial technology service provider, on Thursday posted record third-quarter revenue and raised its full-year financial guidance.

Revenue rose to $616.1 million in the third quarter of 2022, up 28% over a year ago. The increase includes a $55.7 million favorable impact from fuel prices and spreads, and an $11.7 million negative impact from foreign exchange rates, WEX said.

Adjusted net income attributable to shareholders, a non-GAAP measure, was $157.8 million, or $3.51 per diluted share. That is 43% higher than earnings of $2.45 per diluted share last year, and above the $3.43 per share consensus forecast of analysts polled by Zacks Investment Research.

Over the last four quarters, WEX has surpassed Zacks consensus earnings per share estimates four times.

"I am pleased to report that WEX had record third-quarter revenue that exceeded our expectations," Melissa Smith, the company's chair and CEO, said in a statement accompanying the results. "We continue to leverage our powerful growth engine to win new customers, expand on relationships with existing customers, and diversify our offerings with compelling solutions that extend out addressable market."

Smith was honored as a Mainebiz Business Leader of the Year in 2017.

"As we move forward, our ability to generate strong cash flows, combined with the flexibility and diversity of our business model, gives us confidence in our capacity to invest in the business and return capital to shareholders," Smith said Thursday.

During a Thursday morning conference call with analysts, Smith spoke of WEX's "resiliency" in continuing to perform well despite significant economic and geopolitical events.

She also said the company continues to see strong account growth in its health and employee benefits segment, and strong volume in the company's travel and corporate solutions segment.

WEX shares were trading 4.46% higher at $154.67 a share Thursday morning, giving the stock a market value of around $6.84 billion. Shares are trading 16.02% lower than a year ago.

4Q and full-year projections

Looking ahead to the fourth quarter, WEX said it expects revenue in the range of $570 million to $580 million and adjusted net income in the range of $3.15 to $3.25 per diluted share.

WEX also raised its full-year revenue projection to a range of $2.302 billion to $2.312 billion, up from the previous guidance range of $2.250 billion to $2.280 billion.

Adjusted net income is now expected to be in the range of $13.24 to $13.34 per diluted share, an increase from the previous guidance range of $13.05 to $13.30 per diluted share.

Fourth-quarter and full-year 2022 guidance is based on assumed average U.S. retail fuel prices of $4 and $4.38 per gallon, respectively.

Thursday's results release comes two weeks after WEX said it will shed 150 jobs globally of 6,100 total. That includes 30 jobs being cut in Maine out of around 1,100 people on the payroll.