Release Date: February 05, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Corpay Inc (CPAY, Financial) reported a 10% increase in Q4 revenue, reaching $1,034 million, and a 21% rise in cash EPS to $5.36.
• Organic revenue growth accelerated to 12% in Q4, with the corporate payments line of business achieving 26% organic revenue growth.
• Sales growth was impressive, with a 36% increase in Q4, including significant 'elephant sales'.
• The company successfully rebranded and simplified its operations, focusing on corporate payments and achieving a 20% sales growth for the full year.
• Corpay Inc (CPAY) has a robust M&A pipeline, with recent acquisitions like Paymerang and GPS expected to contribute $0.50 of cash EPS accretion in 2025.

Negative Points

• The macroeconomic environment negatively impacted print revenue by approximately $20 million in Q4 due to unfavorable FX rates.
• Gift card shipments were delayed, causing a slight shortfall in expected revenue.
• The company anticipates a very unfavorable macro environment in 2025, with weak international currencies and a higher tax rate compressing print revenue by over $100 million.
• Despite strong sales, the lodging business is still recovering and is expected to grow at a slower rate than historical trends in 2025.
• The US vehicle payments segment is still in recovery mode, with expectations for gradual improvement throughout 2025.

Q & A Highlights

Q: What is driving the expected acceleration in vehicle payments growth for 2025? A: Ronald Clarke, CEO: The acceleration is driven by strong performance in Brazil and improvements in U.S. prepayments. Brazil remains robust, and the U.S. has turned a corner, contributing to the expected growth.

Q: Can you provide more details on the Gringo acquisition and its financial profile? A: Sanjay Sakhrani, KBW Analyst: Gringo, along with last year's Zapay acquisition, will contribute over 10% of Brazil's total revenue, growing much faster than the rest of the business. The acquisition is in early stages of digital penetration, with a significant runway for growth.

Q: What could drive upside from the current guidance, and is Gringo included in the 2025 numbers? A: Ronald Clarke, CEO: Gringo is not included in the 2025 numbers as it hasn't closed yet. Upside could come from macro improvements, capital allocation, or adding Gringo to the numbers. Same-store sales assumptions are conservative, providing potential upside.

Q: How are the recent sales changes and rebranding impacting sales momentum? A: Ronald Clarke, CEO: The recent sales changes and rebranding have not yet contributed significantly to sales momentum. The acceleration in sales is primarily due to existing business momentum and some large sales wins in Q4.

Q: What is Corpay's strategy for expanding the payables business into Europe? A: Ronald Clarke, CEO: The strategy involves leveraging existing assets in the UK and Europe, using the new cloud tech for payables, and connecting it to the cross-border product. A team of specialists will be established to market the product, with feedback expected by summer.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.