WEX Inc. Q3 FY2025 earnings call

• Strategic pillars: Amplifying core, expanding reach, accelerating innovation.
• AI utilization: 20% increase in product innovation velocity. AI used in various areas like customer discovery, fraud prevention, etc.
• Portfolio review: Businesses stronger together. Four core competencies: payment intelligence, workflow optimization, scale and infrastructure, industry expertise.
• Q3 segment results: Detailed performance of Mobility, Benefits, and Corporate Payments as outlined.

Mobility remains the largest segment, representing roughly half of revenue. Excluding the benefit from higher fuel prices, Q3 results for the Mobility segment were in line with expectations. Transaction levels were down slightly from the prior year. Benefits segment total revenue was $198.1 million, which rose 9.2%. SaaS account growth of 6% contributed the majority of the revenue growth. Custodial investment revenue increased 14.9% to $61.7 million. Corporate Payments revenue of $132.8 million increased 4.7%. Purchase volume in Corporate Payments declined 0.9% on a year-over-year basis, but the increase in the net interchange rate led to revenue growth.

• Q4 revenue expected in the range of $646 million to $666 million. Adjusted net income EPS expected between $3.76 and $3.96 per diluted share.
• Full-year revenue expected in the range of $2.63 billion to $2.65 billion. Adjusted net income EPS expected between $15.76 and $15.96 per diluted share.

• Macro environment uncertainties.
• Credit risks in Mobility segment.
• Impact of fuel price and interest rate fluctuations.

Q: Sanjay Sakhrani asked about the stock and how to get investors to appreciate how the factors come together and about Mobility's over-the-road softening.

A: Melissa Smith said the Board did a strategic review with independent investment banks, and they're excited about growth coming out of the third quarter. On Mobility, the over-the-road had a pull forward and softening, but they're focused on retention and new customers.

Q: Darrin Peller asked about trends in Corporate Payments.

A: Melissa Smith said they've lapped the OTA headwind, seeing good momentum in embedded payments and AP direct product with volume growth.

Q: Mihir Bhatia asked about Mobility's underwriting and credit in the trucking segment.

A: Melissa Smith said they tightened credit standards, used AI in risk models, and feel comfortable with credit quality.

Q: David Koning asked about Mobility's comp and Corporate Payments' cadence.

A: Jagtar Narula addressed the comp and said they're back to the cadence where volumes are down but interchange rates are up.

Q: Michael Infante asked about Visa's new program and Benefits SaaS ARPU.

A: Melissa Smith talked about using different schemes, and Jagtar Narula said ARPU is roughly flat and expected to remain so.

Q: Christopher Svensson asked about Corporate Payments' new customer and direct account volume.

A: Melissa Smith said the new customer is ramping, and the direct business is consistent with sales output despite some softness.