WEX - WEX Inc. (WEX) Q4 2023 Earnings Call Transcript

2024-02-08 16:30:03 ET

WEX Inc. (WEX)

Q4 2023 Results Conference Call

February 08, 2024 10:00 AM ET

Company Participants

Steve Elder - SVP of Global Investor Relations

Melissa Smith - Chair and CEO

Jagtar Narula - CFO

Conference Call Participants

Darrin Peller - Wolfe Research

Sanjay Sakhrani - KBW

Ramsey El-Assal - Barclays

Andrew Jeffrey - Truist Securities

Dave Koning - Baird

Trevor Williams - Jefferies

James Faucette - Morgan Stanley

Cris Kennedy - William Blair

Presentation

Operator

Thank you for standing by. And welcome to the WEX Q4 2023 Earnings Call. I would now like to welcome Steve Elder, SVP of Global Investor Relations to begin the call. Steve, over to you.

Steve Elder

Thank you, operator, and good morning, everyone. With me today is Melissa Smith, our Chair and CEO; and Jagtar Narula, our CFO. The press release we issued earlier this morning and a slide deck to walk through our prepared remarks have been posted to the Investor Relations section of our Web site at wexinc.com. A copy of the release has also been included in an 8-K we filed with the SEC earlier this morning. As a reminder, we will be discussing non-GAAP metrics, specifically adjusted net income attributable to shareholders, which we refer to as adjusted net income or ANI, adjusted operating income and related margins as well as adjusted free cash flow during our call. Please see Exhibit 1 of the press release for an explanation and reconciliation of these non-GAAP measures. The company provides revenue guidance on a GAAP basis and earnings guidance on a non-GAAP basis due to the uncertainty and the indeterminant amount of certain elements have been in reported GAAP earnings. I would also like to remind you that we will discuss forward-looking statements under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those forward-looking statements as a result of various factors, including those discussed in our press release and the risk factors identified in our annual report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 28, 2023, and in our quarterly reports on Form 10-Q and subsequent SEC filings. While we may update forward-looking statements in the future, we disclaim any obligations to do so. You should not place undue reliance on these forward-looking statements, all of which speak only as of today. With that, I'll turn the call over to Melissa.

Melissa Smith

Thank you, Steve, and good morning, everyone. We appreciate you joining us today. Before diving into our results, I'd like to take a moment to reflect on 2023. As I've said in prior quarters, our business model is resilient and it delivers strong results in a variety of environments. This is true over the past 10 years, during which time we have delivered a revenue CAGR of 14%. I am very proud of what we've accomplished in 2023 as we continue to achieve our long term growth targets despite macroeconomic uncertainty, higher interest rates, higher inflation rates, a freight recession and lower fuel prices. Our incredible team of WEXers has consistently risen to the occasion further positioning WEX for long term success, and demonstrating our ability to grow, to deliver that growth profitably and to advance our strategic priorities. Let me start with the full year results. Revenue of $2.5 billion for the year was a new record high and grew 8% compared to the prior year despite a headwind of 5% from fuel prices and foreign exchange rates. Full year total volume processed was $225 billion, an increase of 6% year-over-year. Adjusted net income per share grew 9% year-over-year. Excluding the impact of lower fuel prices and foreign exchange rate differences, revenue grew 13% and adjusted net income per share grew 21%. Both of these growth rates were within or above our long term target ranges as we continue to deliver strong results in the face of the headwinds I just mentioned. I'm particularly pleased about the strong performance in benefits and corporate payments, which further demonstrates the resilience of our model across many environments....

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