Q2 2023 WEX Inc Earnings Call

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Chief Elder Senior Vice President of Global Investor Relations you May begin your conference.

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Thank you operate on good morning, everyone with me today, Martha Smith Charron C E O.

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Steve Elder senior Vice President of Global Investor Relations you May begin your conference.

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 website at <unk> Dot com.

Thank you operate on good morning, everyone.

With no co chair and CEO .

Copy. The relief has also been included in an 8-K, we filed with the SEC earlier this morning.

Turn the rural R. C F O.

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 website at <unk> Dot com.

As a reminder, we will be discussing non-GAAP metrics, specifically adjusted net income attributable to shareholders.

Copy of the release.

Which we refer to as adjusted net income or a ni.

Also been included in an 8-K, we filed with the SEC earlier this morning.

And adjusted operating income and related margin and.

As a reminder, we will be discussing non-GAAP metrics, specifically adjusted net income attributable to shareholders.

And adjusted free cash flow during our call.

Please see exhibit one of the press release for an explanation and reconciliation of these non-GAAP measures.

Which we refer to as adjusted net income or a ni.

The company provides revenue guidance on a gap basis and earnings guidance on a non-GAAP basis.

And adjusted operating income and related margin and.

And adjusted free cash flow during our call.

Due to the uncertainty and the indeterminate amount of certain elements that are included and reported GAAP earnings.

Please see exhibit one of the press release for an explanation and reconciliation of these non-GAAP measures.

I would also like to remind you that we will discuss forward looking statements under the private Securities Litigation Reform Act of 1995.

The company provides revenue guidance on a gap basis and earnings guidance on a non-GAAP basis due to the uncertainty and the indeterminate amount of certain elements that are included and reported GAAP earnings.

<unk> 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 28th 2023.

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 28th 2023.

And in our quarterly report on Form 10-Q for the quarterly period ended March 31, 2023 filed with the SEC on April 27th 2023, and subsequent SEC filings.

While we may update forward looking statements in the future, we disclaim any obligations to do so.

And in our quarterly report on Form 10-Q quarterly period ended March 31 2023.

You should not place undue reliance on these forward looking statements all of which speak only as of today.

The SEC on April 27th 2023, and subsequent SEC filings.

With that I'll turn the call over to Melissa.

While we may update forward looking statements in the future, we disclaim any obligations to do so.

Thank you, Steve and good morning, everyone. We appreciate you joining us today.

You should not place undue reliance on these forward looking statements all of which speak only as of today.

I'm pleased to share that wax continued to deliver impressive results and Q2 and ended the first half of 2023 in a strong position.

With that I'll turn the call over to Melissa.

Thank you, Steve and good morning, everyone. We appreciate your joining us today.

In this dynamic macro environment, they continued to execute against our strategic initiatives, which position us to drive longterm growth throughout the business.

I'm pleased to share that wax continued to deliver impressive results and Q2 and ended the first half of 2023 in a strong position.

I'm proud to we can report strong results for both revenue and adjusted net income per share.

In this dynamic macro environment, they continued to execute against our strategic initiatives, which position us to drive longterm growth throughout the business.

Revenue for the second quarter came in towards the high end of our guidance $3 million above the midpoint and adjusted net income per share exceeded our guidance feeding the mid point by 13 cents.

I'm proud to we can report strong results for both revenue and adjusted net income per share.

Revenue for the second quarter came in towards the high end of our guidance $3 million above the midpoint and adjusted net income per share exceeded our guidance feeding the mid point by 13 cents.

Now, let me provide a bit more color on these financial results.

Revenue for the quarter increased 4% year over year, reaching a record high for the second quarter at $621 million.

This increase of $23 million, a year over year with driven by growth of 21% and our corporate payments segment, and 34% and our benefits segment.

Now, let me provide a bit more color on these financial results.

Revenue for the quarter increased 4% year over year, reaching a record high for the second quarter at $621 million.

Our revenue growth for the quarter with notable when you consider the 26% year over year decline in fuel prices.

This increase of $23 million, a year over year with driven by growth of 21% and our corporate payments segment, and 34% and our benefits segment.

We saw an anticipated decline in mobility revenue of 10% as a result of the impact of lower fuel prices, which reduced revenue by $53 million.

Our revenue growth for the quarter with notable when you consider the 26% year over year decline in fuel prices.

The company's overall growth for the current fuel price headwinds reflects the strong execution and resilient business model that I have discussed on previous earnings call.

We saw an anticipated decline in mobility revenue of 10% as a result of the impact of lower fuel prices, which reduced revenue by $53 million.

This point deserves some emphasis.

A year over year decline in fuel prices this quarter with one of the largest that we've seen in our history, yet are diverse and resilient business model allowed us to grow top line revenue despite that.

And companies overall growth for the current fuel price headwinds reflects the strong execution and resilient business model that I have discussed on previous earnings call.

This point deserve some emphasis.

In fact on an organic basis and.

A year over year decline in fuel prices this quarter with one of the largest that we've seen in our history.

Excluding the impact of fluctuations in fuel prices and foreign exchange rates revenue in the quarter grew 13%. A result that continues to underscore are strong momentum.

He had our diverse and resilient business model allowed us to grow top line revenue despite that.

In fact on an organic basis, and excluding the impact of fluctuations in fuel prices and foreign exchange rates revenue in the quarter grew 13%. A result continues to underscore are strong momentum.

Strong quarterly revenue paired with the scalability of our business model was offset by lower fuel prices versus the prior year highs and resulted in adjusted net income per diluted share a $3.63.

Strong quarterly revenue paired with a scale the ability of our business model was offset by lower fuel prices versus the prior year highs and resulted in adjusted net income per diluted share of $3.63.

Total volume processed across the organization in the second quarter decline at 2.3% year over year to $55.3 billion, driven by strong performance and our corporate payments and benefits segment and offset by lower fuel prices.

Total volume processed across the organization in the second quarter decline at 2.3% year over year at $55.3 billion, driven by strong performance and our corporate payments and benefits segment and offset by lower fuel prices.

Oh that'll turn to an updated each of our segments starting with benefits.

We've had an active couple of months and the benefits segment on.

On June 1st we hosted an event to provide the investor community an in depth understanding of the business, including its products that opportunity and financial profile we.

Oh that would turn to an updated each of our segments starting with benefits.

We've had an active couple of months and the benefits segment.

We continue to believe this segment is uniquely positioned for success too strong strategic fit in the works portfolio, it's leading position in a large and fast growing benefits market. It's.

June 1st we hosted an event to provide the investor community an in depth understanding of the business, including its products that opportunity and financial profile.

Multiple product offerings and go to market channels, and it's compelling financial profile.

We continue to believe this segment is uniquely positioned for success too too strong strategic fit in the works portfolio, it's leading position in a large and fast growing benefits market. It's.

I'm also pleased to announce that works fine definitive agreement to acquire a census health and benefits line of business, a leading tech enabled provider of employee benefit accounts with a diversified portfolio, including HSA ffa's and other benefit account.

Multiple product offerings and go to market channels, and it's compelling financial profile.

I am also pleased to announce that works fine definitive agreement to acquire a census health and benefits line of business, a leading tech enabled provider of employee benefit accounts with a diversified portfolio, including Hsa's fsa's and other benefit account.

We are excited about this deal as it will both increase our scale and the benefits segment and expand our benefits product offerings by including a census is complementary affordable care Act compliance and verification capabilities.

We are excited about this deal as it will both increase our scale and the benefits segment and expand our benefits product offering by including a census is complementary affordable care Act compliance and verification capabilities.

The total consideration is expected to be approximately $180 million subject to certain working capital and other adjustments.

<unk> the transaction to close before year end, we will not update guidance for this acquisition until it closes, but we would expect it to be roughly neutral to adjusted net income for the remainder of 2023.

Total consideration is expected to be approximately $180 million subject to certain working capital and other adjustments we.

We expect the transaction to close before year end, we will not update guidance for this acquisition until it closes, but we would expect it to be roughly neutral to adjusted net income for the remainder of 2023.

We have no <unk> for many years and look forward to welcoming them to the works family.

We believe our combination will only strengthen and deepen our offerings.

Lawyers consumers and partners alike.

We have known the census team for many years and look forward to welcoming them to the works family.

And corporate payment, we continue to benefit from a strong rebound and travel volume globally was problem purchase volumes up 44% year over year.

We believe our combination will only strengthen and deepen our offerings employers consumers and partners alike.

We're seeing strong growth in all regions with the U S leading the way.

And corporate payment, we continue to benefit from a strong rebound and travel volume globally with private purchase volumes up 44% year over year.

We're at 149% of 2019 purchase volume for the quarter on a pro forma basis, including email, which is better than the 130% we saw it in Q1.

Being strong growth in all regions with the U S leading the way.

Across our corporate payments segment, we were pleased to sign a number of renewal and expanded relationships with customers, including a large regional banking partner and European online travel agency on the beach.

We were at 149% a 2019 purchase volume for the quarter on a pro forma basis, including email, which is better than the 130% we saw it in Q1.

Across our corporate payments segment.

In mobility, we continued to sign new customers across the portfolio and see the benefit of increased marketing as we continued to add small fleet for digital channels, New signings. This quarter includes merchant listen Ah competitive leasing company win.

Pleased to sign a number of renewal and expanded relationships with customers, including a large regional banking partner and European online probably agency on the beach.

In mobility, we continued to sign new customers across the portfolio and see the benefit of increased marketing as we continue to add small fleet through digital channels.

Merchant is a major fleet management company it'll be using both are mobility and corporate payment solutions over.

Over the road trucking customers continue to work through a slow freight environment in the same store sales were down 1%.

New signings this quarter includes merchant listen Ah competitive leasing company when.

Merchant is a major fleet management company it'll be using both are mobility and corporate payments solutions over.

We've seen an increase of about 2% compared to a normal attrition rates relating to higher credit standards in our portfolio.

Over the road trucking customers continue to work through a slow freight environment in same store sales were down 1%.

We're seeing the benefit of this and our earnings overall.

<unk>, there's a lot to celebrate across each of our segment.

We've seen an increase of about 2% compared to a normal attrition rates relating to higher credit standards in our portfolio.

Now I would like to highlight the progress we've made against our strategic initiatives this quarter.

We're seeing the benefit of this and our earnings overall.

I'll start with an update on our electric vehicles initiative.

<unk>, there's a lot to celebrate across each of our segment.

We're striving to meet our customers where they are on their easy journeys.

Now I'd like to highlight the progress we've made against our strategic initiatives this quarter.

Our strategy is to create a seamless transition for our customers as they transition to a mixed fleet environment.

I'll start with an update on our electric vehicles initiative.

We continued to build and partner to deliver tools for the Knicks Bleep World.

We're striving to meet our customers where they are on their easy journeys.

Our market leading products can be used alongside and seamlessly with EV capabilities that create flexibility for our customers to charge at work or home as well as fuel in charge while in transit.

Our strategy is to create a seamless transition for our customers as they transition to a mixed fleet environment.

We continued to build and partner to deliver tools for the Knicks Bleep World.

Our market leading products can be used alongside and seamlessly with EV capabilities that create flexibility for our customers to charge at work or home as well as fuel in charge while in transit.

It's still early days pricing is playing out consistently with what we laid out at our Investor day last year, and we continue to see a significant opportunity to expand our offerings.

We're also well positioned to capture revenue when the adoption curve accelerate.

While it's still early days pricing is playing out consistently with what we laid out at our Investor day last year, and we continue to see a significant opportunity to expand our offerings.

Initially this includes continued investments and our products and putting in place acceptance agreements with approximately 75% of the publicly available charging networks in the United States and approximately 85% in Europe .

We're also well positioned to capture revenue when the adoption curve accelerate.

Initially this includes continued investments and our products and putting in place acceptance agreements with approximately 75% of the publicly available charging networks in the United States and approximately 85% in Europe .

We're also in the testing phase of an at home charging reimbursement product and we expect the rollout of depot solution by early next year, where.

We're feeling positive about our progress to date as we work towards replicating the ease acceptance and control that are closed loop network provides the customers today.

We're also in the testing phase of an at home charging reimbursement product and we expect the rollout of depot solution by early next year.

We continue to believe that we're well positioned to be our customers adviser and partner an operating in a mixed fleet environment.

We're feeling positive about our progress to date as we work towards replicating the ease acceptance and control that are closed loop network provides the customers today.

Part of our ability to deliver a winning solutions to the market will come from both within wax and through unlocking the great innovation that is happening across the ecosystem.

We continue to believe that we're well positioned to be our customers adviser and partner an operating in mixed fleet environment.

To that end earlier this morning, we announced that our board of directors has authorized our recently formed works venture capital team to invest up to $100 million through the end of 2025.

Part of our ability to deliver winning solutions to the market will come from both within wax and through unlocking the great innovation that is happening across the ecosystem.

To that end earlier this morning, we announced that our board of directors has authorized our recently formed works venture capital team to invest up to $100 million through the end of 2025.

There is an emphasis on minority investments and earlier and gross stage companies that are innovating on how the energy transition impacts corporate mobility, including areas such as fleet electrification. The E V charging ecosystem energy management and optimization and adjacent.

There's an emphasis on minority investments and early and gross stage companies that are innovating on how the energy transition impacts corporate mobility, including areas such as fleet electrification, the EV charging ecosystem energy management and optimization and adjacent.

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We've already executed a set of minority investments with innovators that we believe have the potential to be great partners in providing solutions to our customers.

Our experience, thus far gives us confidence that our deep knowledge of the ability industry and relationships with hundreds of thousands of customers makes us an attractive investor to the early stage companies we are targeting.

Allergy.

We've already executed a set of minority investments with innovators that we believe have the potential to be great partners in providing solutions to our customers.

Our experience, thus far gives us confidence that our deep knowledge of the ability industry and relationships with hundreds of thousands of customers.

These investments enabled us to bring both internally developed and partnered solutions to the market as we aggressively build our capabilities in this dynamic space.

US an attractive investor to the early stage companies we are targeting.

We believe the years ahead are a crucial moment for businesses with mixed fleet and we're proud to lead and help them through the energy transition.

These investments enabled us to bring both internally developed and partnered solutions to the market as we aggressively build our capabilities in this dynamic space.

The second strategic initiative I want to share an update on is our operational improvement efforts.

We believe the years ahead are a crucial moment for businesses with mixed fleet and we're proud to lead and help them through the energy transition.

As a reminder, we're on track to remove $100 million and run rate expenses exiting 2024 with approximately half of the improvements expected to be reinvested in the company.

The second strategic initiative I wanted to share an update on is our operational improvement efforts.

Today much of the benefits, we have seen as an offset by the cost involved in achieving them, but we expect to see margin improvements as we laughed those expenses.

As a reminder, we're on track to remove $100 million.

And run rate expenses exiting 2024 with approximately half of the improvements expected to be reinvested in the company.

Before I wrap up I'd like to talk about how we are applying machine learning an artificial intelligence tool to our processes.

Today much of the benefits we have seen have been offset by the cost involved in achieving them <unk>.

Let me give you a few examples.

I would expect to see margin improvements as we laughed those expenses.

First on credit adjudication and monitoring it's significantly evolved our tools to provide us much more granularity to adjust credit decisioning based upon risk and profitability.

Before I wrap up I'd like to talk about how we are applying machine learning an artificial intelligence tool to our processes.

Let me give you a few examples.

We've invested in our credit adjudication and portfolio management capabilities leveraging machine learning models.

First on credit adjudication and monitoring significantly.

Significantly evolved our tools to provide us much more granularity to adjust credit decisioning based upon risk and profitability.

These enhanced capabilities have yielded strong initial results at the point of credit decision, while ultra providing improved insight on our portfolio leading to proactive actions were appropriate.

We've invested in our credit adjudication and portfolio management capabilities leveraging machine learning models.

The investments in machine learning position us to manage our existing portfolios with increased precision and support future growth.

These enhanced capabilities have yielded strong initial results at the point of credit decision, while all providing improved insight on our portfolio leading to proactive actions were appropriate the.

Second on software development, we began rolling out large language model AI tools for our software engineers earlier this year and.

The investments in machine learning position us to manage our existing portfolios with increased precision and support future growth.

And implemented this more broadly in the beginning of the second quarter. These.

Second on software development, we began rolling out large language model AI tools for our software engineers earlier this year and.

These tools augment their day to day work in useful ways.

Already seen meaningful productivity improvements, which we expect to continue into next year.

And implemented this more broadly in the beginning of the second quarter. These.

This has the benefit of increasing our speed to market and reducing the cost of developing new products.

These tools augment their day to day work in useful ways.

With these successes and others in place and the return so they have generated we've launched an AI center of excellence focused on hiring educating and training data scientists and analyst on best practices of model development and advancement in AI technologies the.

Already seen meaningful productivity improvements, which we expect to continue into next year.

This has the benefit of increasing our speed to market and reducing the cost of developing new products.

With these successes and others in place and the return so they have generated we've launched an AI center of excellence focused on hiring educating and training data scientists and analysts on best practices model development and advancement in AI technologies the.

The center of excellence increases the skill set of data science and data analysis teams are crossed wax through projects and rapid experimentation ultimately bring a new products using technology tools to market faster.

The center of excellence increases the skill set of data science and data analysis teams are crossed wax through projects and rapid experimentation ultimately bring a new products using technology tools to market faster.

Finally, I wanted to share that next week, we plan to publish our third annual ESG report.

This report provides an update on works is ESG efforts and importantly demonstrates how our initiative.

Finally, I wanted to share that next week, we plan to publish our third annual ESG report.

Like supporting our customers transitioned eev's and educating benefit customers at HSA day, Ah driving business outcomes, and making a positive impact.

This report provides an update on <unk> ESG efforts and importantly demonstrates how our initiatives.

I remain confident and works his path forward is longterm growth opportunities as we continue to deliver strong financial results, while managing the business through a dynamic economic environment.

Like supporting our customers transitioned eev's and educating benefit customers at HSA day, Ah driving business outcomes, and making a positive impact.

I remain confident and works his path forward as long term growth opportunities as we continue to deliver strong financial results, while managing the business through a dynamic economic environment to that and I'm pleased that we are raising our full year guidance for both revenue and earnings.

And I'm pleased that we are raising our full year guidance for both revenue and earnings despite a lower fuel price forecast, which jack-tar will discuss further in a moment with that I'll turn it over to <unk> to walk you through this quarter's financial performance in more detail.

Thanks, Melissa good morning, everyone.

Despite a lower fuel price forecast, which Jack terrible discuss further in a moment with that I'll turn it over to <unk> to walk you through this quarter's financial performance in more detail.

Reported a solid second quarter, achieving attractive top line growth in spite of the headwinds with a decline in fuel prices.

The results show, we continue to deliver.

Thanks, Melissa good morning, everyone.

Executions that are employees partners customers and shareholders, we've come to expect.

Reported a solid second quarter, achieving a truck to a top line growth in spite of the head rooms with a decline in fuel prices.

No.

With a quarter results.

For the second quarter total revenue exceeded the mid point of our gardens by $3 million to split lower fuel prices than we anticipated due to a combination of strong corporate payments purchase volume and the continuation of great results in or both of <unk>.

Oh.

Total revenue came into the queue to record level of $621.3 million, a 4% increase over two 222, two with more than 80% of revenue for the quarter recurring in nature.

As a reminder, we define recurring revenues payment processing electron servicing revenue.

<unk> business.

<unk> <unk> transaction processing fees and other smaller items.

In total.

Just to the operating income working for the company was 43%.

Which is down from 42.3% last year, largely driven by higher margins of the corporate payments and benefits offered by lower margins and the mobility.

From an earnings perspective on a gap basis, we had net income attributable to shareholders.

$95.3 million in Q2.

$2.20 per share.

<unk> adjusted the ZIP code was $159.3 million or $3.63 per diluted share.

Earnings perspective on a GAAP basis, we had net income attributable to shareholders of $95 $3 million in Q2 were $2 20 per share now.

I would like to underscore that are strong results were in spite of two significant macroeconomic headwinds we experienced over the past year.

non-GAAP adjusted net income was $159 3 million or $3 63 per diluted share.

The first significant year over year decline in fuel prices, but <unk> touched on earlier.

I would like to underscore that our strong results were in spite of two significant macroeconomic headwinds we experienced over the past year.

The second is the large increase in interest rates year over year with the fed funds rate, increasing 350 basis points that time periods.

The first was the significant year over year decline in fuel prices that Melissa touched on earlier.

While those rate increases impacted are operating in corporate dud cost.

The second is the large increase in interest rates year over year with the fed funds rate, increasing 350 basis points of that time period.

Natural hedges and our business, including the agency custodial cash balances.

Allowed us to mitigate those increases.

Diversity of our business creates the resiliency that Melissa has talked about and has the strength of the company.

While those rate increases impacted our operating and corporate debt costs.

Natural hedges in our business, including the HSA custodial cash balances allowed us to mitigate those increases the.

No, let's move to signal resolve starting with mobility.

Mobility revenue for the quarter was $340.2 million.

The diversity of our business creates the resiliency that Melissa has talked about and it's a strength of the company.

10% decrease from the prior year.

Fuel prices have retreated compared to the record the RLC last year for the Russian invasion of Ukraine, with a domestic average fuel prices and Q2 of $3.68 versus $4.98 in 2022.

Now, let's move to segment results starting with mobility.

Mobility revenue for the quarter was $342 million.

A 10% decrease from the prior year.

Fuel prices have retreated compared to the record highs seen last year after the Russian innovation of Ukraine with the domestic average fuel price in Q2 of $3 68.

We estimate the year over your 26% fuel price drop decrease segment revenue by approximately $53 million.

Versus $4 98 in 2022.

Lower fuel prices for the primary reason for the mobility segment revenue decline.

We estimate the year over year, 26% fueled price dropped decreased segment revenue by approximately $53 million.

Reducing revenue growth in the segment, but 14% versus last year.

We also had a 7.7 million dollar one time revenue item related to a contract amendment in the prior year, which contributed a further 2% the revenue decline.

The lower fuel prices were the primary reason for the mobility segment revenue decline, reducing revenue growth in this segment by 14% versus last year.

Together.

We also had a seven $7 million one time revenue item related to a contract amendment in the prior year, which contributed a further 2% the revenue decline.

Fuel price declines in one time revenue item from last year combined result is $61 million Edwards year over year.

However, at a more fundamental level.

This quarter continues to reflect a strong business model with stable volumes year over year combined with increased interchange in late fee rates.

Together, the fuel price declines and onetime revenue item from last year combined to result in a $61 million headwind year over year. However.

Payment processing transactions were roughly flat year over year, which was in line with our expectations for the quarter.

However, at a more fundamental level revenue. This quarter continues to reflect our strong business model with stable volumes year over year combined with increased interchange and late fee rates.

Local customers in the U S were flooded with last year, while we hit a small decline over the road transactions do too difficult fruit mercury conditions.

Payment processing transactions were roughly flat year over year, which was in line with our expectations for the quarter.

The impact on small trucking sleeps.

And are over the road segment, we do.

Local customers in the U S were flat with last year, while we had a small decline in over the road transactions due to difficult freight market conditions and the impact on small trucking fleets.

Did see an increase in a direct bill transactions model utilized by larger trucking fleets, which is reflected in the other revenue long.

We believe this reflects shipping volumes moving from smaller to larger fleets.

And our over the road segment, we did see an increase in our direct bill transactions Ah model utilized by larger trucking fleets, which is reflected in the other revenue line.

The free market is.

Area, we continued to watch closely and we believe the more stable.

Stabilized at low levels for now.

Next let's turned late fees.

We believe this reflects shipping volumes moving from smaller to larger fleets.

Is he from sooner metrics.

Lee fee rate was up 10 basis points versus the prior year, mostly as a result of the timing of the rapid increase in fuel prices last year, which depress the rate.

The freight market is an area. We continue to watch closely and we believe the market has stabilized at low levels for now.

Next let's turn to late fees.

Fee revenue decreased 10%, even with a higher rate earned.

As you can see in our metrics. The net late fee rate was up 10 basis points versus the prior year, mostly as a result of the timing of the rapid increase in fuel prices last year, which depressed the rate.

Previously mentioned declines in fuel prices this year at a 30% slowdown in our factoring revenue, which is related to the free market conditions are just mentioned caused the decline in revenue.

Finance fee revenue decreased 10%, even with a higher rate earned.

The net interchange right in the mobility segment was 1.25%, which is four basis points for Q1, and 60 basis points over last year.

Previously mentioned decline in fuel prices this year and a 30% slowdown in our factoring revenue, which is related to the freight market conditions I just mentioned caused the decline in revenue.

Higher interchange rates compare compared to last year reflects benefits from the interest rate escalator clauses contained in various brixton contracts.

The net interchange rate in the mobility segment was $1, two 5%, which is up four basis points from Q1, and 60 basis points over last year.

Impact from lower fuel prices and higher rates earn for merchant contract renewals a favorable terms.

Higher interchange rate compare compared to last year reflects benefits from the interest rate escalator clauses contained in various merchant contracts there.

<unk> item I mentioned earlier was a benefit to the right in the prior year of study these increases.

The rate impact from lower fuel prices and higher rates earned for merchant contract renewals at favorable terms.

The segment adjusted operating income margin for the quarter.

Was 44.2% from 59% in Q2 2022.

The one time item I mentioned earlier was a benefit to the rate in the prior year offsetting these increases.

The decline in margin was due to higher operating interest expense based on higher interest rates and lower fuel prices, partially offset by significantly better credit losses.

The segment adjusted operating income margin for the quarter.

It was 44, 2% down from 59% in Q2 2022.

Let me briefly address the credit losses, which were better than our guidance range of 15 basis points of spin volume.

The decline in margin was due to higher operating interest expense based on higher interest rates and lower fuel prices, partially offset by significantly better credit losses.

The elevated loss rates and the over the road truck some business that we have seen over the past several quarters are abating.

Let me briefly address the credit losses, which were better than our guidance range of 15 basis points of spend volume.

The improvement in delinquency rates noted last quarter are reflected in the improved losses, we experienced this quarter.

The elevated loss rates in the over the road trucking business that we have seen over the past several quarters are abating.

Likewise, the local free customers in the U S has a low loss rates.

Peer to historical norms.

The improvement in delinquency rates noted last quarter are reflected in the improved losses, we experienced this quarter.

Losses in the segment are awful back close to a normal range following several quarters of elevated losses.

Likewise, the local fleet customers in the U S has a low loss rate when compared to historical norms.

Cause you will see that our guidance, we believe we will be back to normal as loss levels for the remainder of the year.

Rod losses in this segment are off hold back close to a normal range following several quarters of elevated losses.

No turning to corporate payments.

Total segment revenue for the quarter increased 21% to $121.9 million purchase volume ish, but works was $22.9 billion, which is an increase of 34% versus last year.

As you will see in our guidance, we believe we will be back to normalized loss levels for the remainder of the year.

Now turning to corporate payments.

Total segment revenue for the quarter increased 21% to $121 9 million purchase volume issued by works was $22 9 billion.

The net interchange right in the site was down two basis points sequentially.

Dominantly due to travel customers contributing a larger percentage of total volume versus Q1.

Which is an increase of 34% versus last year.

<unk> further <unk> related customer volume represented approximately 76% of the total spin and grew 44% compared to last year.

The net interchange rate in this segment was down two basis points sequentially predominantly due to travel customers contributing a larger percentage of total volume versus Q1.

Revenue from travel related customers was up 50% versus Q2 2022.

Breaking this segment down further Trump related customer volume represented approximately 76% of the total spend grew 44% compared to last year.

This reflects continued strength in consumer travel demand and we're very pleased with these results.

The corporate payments delivered and adjusted operating income margin of $54, 4% up from 58% in Q2 last year.

Revenue from travel related customers was up 50% versus Q2 2022.

This reflects continued strength in consumer travel demand and we are very pleased with these results.

<unk> to be significant improvement in these margins volume accelerates our business model here is very strong and revenue drop through for this segment is high given a relatively fixed cost base.

The corporate payments segment delivered an adjusted operating income margin of 54, 4% up from 58% in Q2 last year.

Finally, let's look at the benefits segment, we continue to drive strong growth, resulting in Q2 revenue of $159.2 million.

There continues to be significant improvement in these margins as volume accelerates our business model here is very strong and revenue dropped through for this segment is high given our relatively fixed cost base.

The $46 million increase represents 34% over the prior year.

Finally, let's look at the benefits segment, we continue to drive strong growth, resulting in Q2 revenue of $159 2 million.

Source account growth was up 11% in Q2 versus the prior year.

Benefits segment purchase volume increased 13%, leading to an 11% increase in payment processing revenue.

The $46 million increase represents 34% over the prior year.

We also realized approximately $42 million in revenue for the custodial H as the cash deposits that were invested by works bank and funds held a third party banks compared to $10.2 million last year.

SaaS account growth was up 11% in Q2 versus the prior year.

Benefits segment purchase volume increased 13%, leading to an 11% increase in payment processing revenue.

We also realized approximately $42 million in revenue from the custodial HSA cash deposits that were invested by <unk> Bank and funds held at third party banks compared to $10 $2 million last year.

Proximately $27 million of the revenue increase in this segment is due to the average interest rate earned her these balances increasing from 1.57% last year to 433% this year.

Approximately $27 million of the revenue increase in this segment is due to the average interest rates earned on these balances increasing from one 5% to 7% last year to 433% this year.

As I mentioned at the beginning to apply remarks, this income mix us less sensitive to interest rates as a company is the revenue offsets higher interest expense in other parts of our business and serves as a natural hedge.

As I mentioned at the beginning of fiber marks this income makes us less sensitive to interest rates as a company as the revenue offsets higher interest expense and other parts of our business and serves as a natural hedge.

The revenue is highly accretive to earnings.

Labeling us to perform well across a range of interest rate environments, and providing some stability to navigate economic cycles.

The benefits segment adjusted operating income margin was 37.2% compared to 23.9% in 2022.

The revenue is highly accretive to earnings enabling us to perform well across a range of interest rate environments, and providing some stability to navigate economic cycles.

The custodial revenue from the invested HSA cash deposits as the primary driver of the increase in margin.

The benefits segment adjusted operating income margin was 37, 2% compared to 23, 9% in 2022.

But if this is excluded from both periods. The core operating margin would still have increased 1%.

The custodial revenue from the invested HSA cash deposits as the primary driver of the increase in margin, but if this is excluded from both periods. The core operating margin would still have increased 1%.

Shifting gears, though I will provide an update on the balance sheet and our liquidity position.

We remain in a healthy financial position and ended the quarter with $901 million in cash.

We have $893 million of available borrowing capacity.

Shifting gears now I will provide an update on the balance sheet and our liquidity position.

Corporate cash of $194 million as defined under the company's credit agreement at quarter end.

We remain in a healthy financial position and ended the quarter with $901 million in cash.

At the end of the quarter the total outstanding balance on a revolving line of credit.

We had $893 million.

Of available borrowing capacity and corporate cash of $194 million as defined under the company's credit agreement at quarter end.

Loans and convertible notes was $2.6 billion.

During Q2, we begin assessing the federal Reserve Bank term funding program is part of our accounts receivable funding strategy.

At the end of the quarter. The total outstanding balance on our revolving line of credit term loans and convertible notes was $2 6 billion.

The flexibility and low cost of the funds available to us.

During Q2, we began assessing the federal Reserve's Bank term funding program as part of our accounts receivable funding strategy due to the flexibility and low cost of the funds available to us.

You will see this on the balance sheet is the 500 million dollar increase in short term debt.

It is included in our leverage ratio, but it is effectively being used as a replacement for brokered deposits as part of our funding strategy.

You will see this on the balance sheet as the $500 million increase in short term debt.

The leverage ratio is defined as a credit agreement stands at 2.8 times, which is within our long term target of two and a half to three and a half times.

And it is included in our leverage ratio because it is effectively being used as a replacement for broker deposits as part of our funding strategy.

Are increased in leveraged from Q1 is due to the use of the third term funding program, but this increased leverage is not expected to have any impact on our cost of or access to capital in the future because of our ability to quickly unwind. The program is Roberta brokered deposits.

The leverage ratio as defined in the credit agreement stands at two eight times, which is within our long term target of two five to three five times.

Our increase in leverage from Q1 is due to the use of the fed bank term funding program, but this increased leverage is not expected to have any impact on our cost of our access to capital in the future because of our ability to quickly unwind. The program has referred to brokered deposits.

Next I would like to turn to cash flow.

<unk> generates a significant amount of tests each year.

Using our desk.

Just to the free cash flow was at $131 million through Q, too, which is an increase of $265 million compared to 2022.

Next I would like to turn to cash flow.

<unk> generates a significant amount of cash each year using our destiny.

Are primarily used to free cash flow. So far this year has been to repurchase shares.

Adjusted free cash flow was at $131 million through Q2, which is an increase of $265 million compared to 2022.

When the transaction closes.

We would expect to use some of our available borrowing capacity to close the deal we.

We will continue to manage capital allocations between organic investment and M&A is returning capital to shareholders.

Our primary use of free cash flow. So far this year has been to repurchase shares.

The <unk> transaction closes we would expect to use some of our available borrowing capacity to close the deal.

Finally, let's move to revenue and earnings guidance for the third quarter and full year the.

Second quarter was a very good quarter for us and as a result.

We will continue to manage capital allocation between organic investment M&A and returning capital to shareholders.

Pleased to share that we are raising our guidance for 2023 to reflect those results.

Finally, let's move to revenue and earnings guidance for the third quarter and full year.

Starting with the third quarter, we expect to report revenue in the range of $629 million to $639 million.

The second quarter was a very good quarter for us and as a result, I am pleased to share that we are raising our guidance for 2023 to reflect those results.

We expect a EPS to be between $3.65.

$3.75 per diluted share.

Starting with the third quarter, we expect to report revenue in the range of 629% to $639 million.

For the full year, we expect to report revenue in the range of $2.5 billion to $2.52 billion.

We expect Eni EPS to be between $3 65 and.

We expect a EPS to be between $14.15.

And $3 75 per diluted share.

For the full year, we expect to report revenue in the range of two 5% to 252 billion.

$14.35 per diluted share.

For the full year.

Updated rages represent an increase of $35 million in revenue and 20 cents of EPS compared to the mid point of our previous guidance.

We expect EPS to be between $14 15.

$14 35 per diluted share.

Major moving pieces compared to our prior guidance are increasing our expectations around travel volumes to match the environment, we are seeing including the assumption of reaching higher incentive tears at the end of the year and further improvements inspected credit loss rates as a result of the actions we take.

For the full year. These updated ranges represent an increase of $35 million in revenue and 20 of EPS compared to the midpoint of our previous guidance.

The major moving pieces compared to our prior guidance are increasing our expectations around travel volumes to match the environment, we are seeing including the assumption of reaching higher incentive tiers at the end of the year and further improvements are expected credit loss rates as a result of the actions we've taken.

Over the last several quarters.

We are providing this improved outlook, despite our expectations of lower fuel prices, which we expect to result in the 5 million to $10 million lower revenue and 15 cents of EPS in the back half of the year versus our priority fuel prices assumption.

Taken over the last several quarters.

We are providing this improved outlook, despite our expectations of lower fuel prices.

As I complete my prepared remarks.

We expect to result in a $5 million to $10 million lower revenue and 15 cents of EPS in the back half of the year versus our prior fuel price assumption.

I would like to emphasize how pleased we were with our queue to results.

We're also very pleased to be able to increase guidance. Despite a significant drop in fuel prices.

As I complete my prepared remarks, I would like to emphasize how pleased we were with our Q2 results.

We continue to execute well on both growing revenue.

More efficient serving our customers.

We are also very pleased to be able to increase guidance. Despite a significant drop in fuel prices.

With that operator, please open the lines for questions.

Thank you.

We continued to execute well on both growing revenue and becoming more efficient serving our customers.

As a reminder, if you would like to ask a question press star followed by the number one on your telephone keypad.

Your first question comes from the line of my here Bhatia Bank of America. Your line is open.

With that operator, please open the line for questions.

Thank you.

As a reminder, if you would like to ask a question press star followed by the number one on your telephone keypad.

Hi, good morning, so and thank you for taking my questions maybe.

Maybe to stop and start to start with the increase in guidance, obviously, a nice step up.

Your first question comes from the line of Mihir Bhatia with Bank of America.

And like you mentioned you know even despite the.

Your line is open.

Down taken fuel prices or the phone plus headwind.

Hi, Good morning, and thank you for taking my questions maybe to start I just wanted to start with the increase in guidance, obviously, a nice step up.

Could you could you just talk about more on that I think you mentioned travel is that the only place where like you are seeing better momentum, if there's something else going on and like the other side wins, maybe talking holding up better than you expected.

And like you mentioned you know even despite the.

Up down taken fuel prices fuel price headwinds.

To get a sense of that and maybe just also alongside that if you want to give us an update on July .

Just talk about more on that I think you mentioned travel is that the only place where.

Youre seeing better momentum, if theres something else going on.

<unk>.

Yeah sure Mahir happy to happy to address that so we were very pleased to raise our guidance I think the businesses performing well and our results show that when we looked out through the second half of the year clearly travel is doing well for us.

It looks like wins, maybe trucking holding up better than you expected I was just trying to get a sense of that and maybe just also alongside that if you want to give us an update on July quarter to date trend.

Yeah Sherman here happy to happy to address that so we were very pleased to raise our guidance I think the business is performing well and our results show that when we looked out through the second half of the year clearly travel is doing well for us.

We saw that both can coupon and Q2.

And continue to see that as we go through July .

So that that's reflected in our guidance.

For for the other segments were continuing the trends that we've seen so.

We saw that both in Q1 and Q2.

The guidance of the other segments were largely the same as what we the twins, we've seen going into the first and the first half of the year I will say a couple other areas that we saw improvements in the guide so with a higher volumes that we're seeing we expect to hit some of the pricing tiers related towards network contracts. So that's <unk>.

And continue to see that as we go through July .

So that's reflected in our guidance.

For for the other segments were continuing the trends that we've seen.

So.

The guidance in the other segments were largely the same as what we.

The trends, we've seen going into the first and the first half of the year I will say a couple of other areas that we saw improvements in the guide so with the higher volumes that we're seeing we expect to hit some of the pricing tiers related toward network contracts. So that's reflected in our guide as well as well as the improved credit losses.

Selected an archive as well as well as the improve credit losses.

So that that summarizes what we're seeing of the guide and I will say just to address the second point to your questions are July .

We're now through most of the July seeing where we're performing and were largely on track to the guys would put up there.

So that's.

Great and then just switching gears up wanted to talk about the acquisition you can just add a little bit more color on what that brings to wax.

That summarizes what we're seeing in the guide and I will say just to address the second part of your question in July .

We're now through most of the July seeing where we're performing and we're largely on track to the guidance we put out there.

Just.

You're also going to get the deposits associated with some of those <unk> moved over.

Great and then.

Just switching gears I wanted to talk about the acquisition. If you could just add a little bit more color on what that brings to <unk>.

Just the capabilities that you're adding how soon is that you know unimportant.

Yes.

Customizing it should we think will be boys a bolt on should we think of it last year when you'll get benefits espresso property is at a loss highlighted how much it increases the dam and things like that so what about this one how should we think of that more like just just mark a low on this one thank you.

Yes.

You're also going to get the deposits associated with some of those local accounts.

<unk>.

Just the capabilities that you're adding how soon.

Unimportant.

Customers should we think of it more as a bolt on should we think of it last year when you'll get benefits expressly company as <unk> highlighted how much it increases the Tam and things like that so what about this one how should we think of that mall I'll just just more color on this one thank you.

Sure just plays into what we talked about in our benefit day now we're really excited about the benefits segment of our business and the ability to continue to grow our Tam.

Two primary things that we we're focused on with a census, the first is the expansion of our footprint. The majority of their revenue that they will be bringing on our staff sees until extend.

Sure just plays into what we talked about in our benefit day no. We're really excited about the benefits segment of our business and the ability to continue to grow our Tam.

The numbers have things that we have in total for the company Uhm, Let me put that reliable revenue stream that has been it really.

Thanks.

We're focused on with Ascension.

Is the expansion of our footprint the majority of their revenue that A&P, bringing on our SaaS fee will extend.

Instrumental in all economic environment. So far we've seen that business continues to grow and the second thing is rounding out some of the offerings that we have on the compliance side and a particularly affordable care Act compliance and verification products.

The number of SaaS seats.

And in total for the company.

Reliable revenue stream that has been really.

Instrumental in all economic environments and fire, we've seen that business continue to grow and the second thing is rounding out the offerings that we have on the compliance side and particularly their affordable care Act compliance and verification products.

Is something that we will be able to offer to her existing customers.

And we see that as an added benefit as well and so if we look at this business.

Give guidance longterm, we said that with 15.

It is something that we will be able to offer to our existing customers.

To 20% this year, 295% to 30%. So you know obviously avenue really strong year and it says place we want to continue to enough.

And so we see that as an added benefit as well and so if we look at this business.

Got it thank you for taking my questions.

<unk> guidance long term, we said that with 15.

20% this year to 95% to 30% now obviously have been a strong year and it has placed we willing to continue to invest.

Your next question comes from the line of Darren Keller with Wolf Research your.

Your line is open.

Hey, guys can we just touch on the mobility organic revenue growth rate for a moment for that segment and just thinking about it. So we notice the obvious there was a about a three point DSL from Q1 Q2, So just thinking about the moving parts there and how we should think about that for the second half of the year and maybe just.

Got it thank you for taking my questions.

Your next question comes from the line of Darrin Peller with Wolfe Research your.

Your line is open.

Hey, guys can we just touch on the mobility organic revenue growth rate for a moment for that segment and just thinking about that we notice the obvious there is a.

Higher level, what you see driving the different moving towards right now will be helpful. Thanks, guys.

About a three D cell from Q1 to Q2, so just thinking about the moving parts there and how we should think about that for the second half of the year and maybe just higher level, what you see driving the different moving parts right now it would be helpful. Thanks, guys.

Sure. If you look at the segment or mobility segment, excluding sale prices in the quarter group, 4%.

Centering the backdrop of what's happening within the freight market place and you know we felt good about the fact for within.

Longterm guidance range payment.

Alright, So if you look at the segment, our mobility segment, excluding sale prices in the quarter grew 4% considering the backdrop of what's happening within the freight marketplace and we felt good about the backburner within.

Payment processing transactions as you mentioned for down 1% and there's really two primary reasons for that the first we talked about and are prepared remarks actually both of these things, but the the attrition increased about 2% across mobility, which was driven by the decision that we made.

Long term guidance range payment.

Payment processing transactions as you mentioned were down 1% and Theres really two primary reasons for that one.

To pull back on some of our credit standards and seen the benefit of that and the guy that we're giving with private lofton lease on this quarter. So.

We talked about in our prepared remarks actually both of these things but the.

The attrition increased about 2% across mobility, which is driven by the decision that we need to pull back on some of our credit standards and seeing the benefit of that in the guide that we're giving with pay off at least on this quarter.

Believe that these are really strong decisions are going to have a little bit of a headwind lapping that for.

For the next couple of quarters and the second thing was in our over the roads segment. You saw this next change where we.

We had more volume coming through with larger fleet.

Believe that these are really strong decisions are going to have a little bit of a headwind lapping that.

They're seeing this next shift within the marketplace and and kind of as a whole and as a result that volume came through his transaction processing transactions that just came through in a different line.

The next couple of quarters and the second thing was.

Our over the road segment. He said this mix change where.

We had more volume coming through with larger fleet.

Two things where their primary.

Drivers and this quarter's number.

They are seeing this mix shift within the marketplace.

Overall, if you look at our sales pipeline, it's really strong.

And kind of as a whole and as a result that volume came through a transaction processing transactions that just came through many different line those two things with their primary.

Think of that as a bit of a machine for us.

Out there in the marketplace, we continued to bring on both large customers and smaller customers and we've made and continue to make enhancements and our marketing capability, which has allowed us to be even more refined about the type of customers that we're bringing in.

Drivers in this quarter's number.

Overall, if you look at our sales pipeline is really strong.

That isn't better than machine for us.

They're in the marketplace for continuing to bring on both large customers and smaller customers and we have made and continue to make enhancements in our marketing capability, which has allowed us to be even more refined about the type of customers that we're bringing in.

And so Melissa banking about the <unk> for the second half of the year mobility I mean, I don't know if there's anything you can give us now, but I may have missed it earlier if he did.

Well <unk> mentioned, the fact that we're assuming similar trends.

In our business, particularly.

And so Melissa thinking about the cadence for the second half of the year and mobility I mean, I don't know if theres anything you can give us now, but I may have missed it earlier if you did.

Particularly in mobility through the back part of the year as we'd lap credit Decisioning.

So we expect to see the frayed environment continuing to be challenged through the second half of the year you know what we're hearing from our customers and what we're seeing playing out in our trend will continue to bring on new business, which will offset.

Well, Jason I had mentioned the fact that we're assuming similar trends.

In our business and in.

Particularly in mobility traded the back part of the year as we lap the credit Decisioning and so we expect to see the freight environment continues to be challenged.

You know some that's what's happening within the existing marketplace and then we expect to have a little bit less volume coming in because of the heat and credit standards, but again, we're seeing the benefit that coming through with credit losses.

Through the second half of the year and what we're hearing from our customers and what we're seeing playing out in our trend while continuing to bring on new business, which will offset.

Okay, and then just very quickly on the jets are just on the corporate payments yields.

In terms of what's happening within the existing marketplace.

And then we expect to have a little bit less volume coming in because as that heightened credit standards, but again, we're seeing the benefit of that coming through with credit losses. Okay. And then just very quickly on the jacks are just on the corporate payments yields.

Would you say you were more we're actually we're stabilizing on that front now I think there was about a tube amp sequential downtick from probably travel.

The grow over a avid exchange volume brand complete or any other inputs are moving parts or should I.

Thanks to or the the avid avid devaluing, we've we've basically left.

Would you say, we're more we're actually we're stabilizing on that front now I think there was about a two bps sequential downtick from probably travel.

Whereas kind of stable volumes for them. So really the downtick. This quarter was trailer related travel was up I think 30% quarter over quarter sequentially and so because problems at a lower lower take right that that naturally compresses the the.

As the grow over of avid exchange volume brand completed or any other inputs are moving hard tissue like yes.

<unk>.

Thanks, Darrin the avid the avid to volume we basically lapped.

Where it kind of stable volumes for them. So really the downtick. This quarter was travel related travel was up I think 30% quarter over quarter sequentially.

The take rate overall slightly.

So that that'll be the primary dynamic going through the through the rest of the year.

With the ups and downs of travel as you know Q2, and Q3 idea of their highest scores for trouble.

So because travel is at a lower a lower take rate that that naturally compresses.

Great. Thanks, guys.

The take.

The take rate overall slightly.

Yep.

And so that will be the primary dynamic going through the through the rest of the year.

Your next question comes from the line of neck cream out with credit Suisse.

As with the ups and downs of travel as you know Q2, and Q3 to be our highest quarters for travel.

Your line is open.

Good morning, and congrats on the strong results I wanted to just ask about the corporate payments.

Great. Thanks, guys.

Yes.

Your next question comes from the line of Nick <unk> with Credit Suisse.

So it looks like the volume grows to celebrate a little bit quarter over quarter.

Your line is open.

Sounds like something that might be related to avid laughing, but any.

Good morning, and congrats on the strong results I wanted to just ask about the corporate payments.

Any teller what drove the deceleration.

What you guys are expecting for the remainder of the year with regards to this business. Thank you.

So it looks like the volume growth decelerated, a little bit quarter over quarter and it sounds like some of that might be related to avid lapping but.

Do you feel like at the segment overall.

Again really strong growth.

Any color on what drove the deceleration in.

Recognizing that would be 21 21 per cent growth for the segment from a volume perspective.

What you guys are expecting for the remainder of the year with regards to that business. Thank you.

Did see some deceleration and growth within particular travel customer.

If you look at the segment overall.

Again really strong growth. Thank you for recognizing that in 2021% growth.

Customer segment and still great gross.

But you are starting to see it normalize a bit more and if you look and we are within the travel customers itself. They America peace and was really strong and continues to be strong we started to see some of the flattening and froze in Europe .

The segment from a volume perspective.

<unk> seen some deceleration in growth.

And then, particularly our travel customer segment and it's still great.

Great for us.

Yes.

But you are starting to see it normalize a bit more and if you look and we then and the travel customers itself.

I'll just add to that.

Talk about sequential deceleration remember if we go back to last year, we were still in Covid to one last year, but I travelled really hadn't come back Q2, you had a very strong travel rebound so you're basically lapping tougher compare so.

<unk> America piece in the really strong and continues to be strong and starting to see some flattening in price in Europe .

I'll just add to that just.

Talk about sequential deceleration remember if we go back to last year, we were still in Covid Q1 last year by travel really hadn't come back at Q2, you had a very strong travel rebound so youre basically lapping tougher compare so.

Having grown volume.

So significantly over a tougher compare we we're pretty pleased with it.

Alright, thank you.

Your next question comes from the line of Dave Coning with bird.

Having grown volume.

Your lineup.

Hey, guys. Thanks, so much nice job.

Significantly over a tougher compare we were pretty pleased with that.

I guess my first question you know travel being so strong I think relative to expectations yourself a lot sequentially that clearly drove a margin up a lot in the segment is margin sustainable here as long as travel keeps growing sequentially would margins stay in that 54% or so range.

Thank you.

Your next question comes from the line of Dave Koning with Baird.

Your line of yes.

Hey, guys. Thanks, so much nice job.

And I guess my first question travel being so strong I think relative to expectations just up a lot sequentially that clearly drove margin up a lot in the segment is margin sustainable here as long as travel keeps growing sequentially with margins stay in that 54% or so range.

Hey, Dan Yes, so we've talked about this a bit in previous calls right. So we view that business is having a fairly fixed cost base.

So with with travel where it is and and to the extent of the travel continues at these volumes you would expect margins to stay that stay in that range.

Hey, Dan Yes, so we've talked about this a bit in previous calls right. So we view that business as having a fairly fixed cost base and so with travel where it is and to the extent of the travel continues at these volumes you would expect margins to stay that stay in that range.

Yeah, Okay, that's great and then and then an unbeaten b I mean, the last question to that.

<unk> looked a little a little weaker was revenue actually down a little bit euro for a year and maybe can you just give up the grocer decline in revenues volumes were in that I mean, we can kinda back into them, but not precisely.

Okay, that's great and then.

And then on <unk> and the last question to that.

It looked a little a little weaker was revenue actually down a little bit year over year, and maybe can you just give what the growth or decline in revenues and volumes were in that.

Yeah. If you look at the quarterly premium to talk to a lot of about travel the corporate payments. Excluding travel was down the biggest driver of that was a year ago. If you recall it had a bunch of ships that were setting offshore and our customers were using our corporate payments products and order.

I mean, we can kind of back into them, but not precisely.

Yes, if you look at the quarter, we even talked a lot about travel.

The corporate payments, excluding travel was down the biggest driver of that was a year ago. If you recall and a bunch of ships that were sitting offshore and our customers were using our corporate payments products in order to hit pay demurrage fees.

Pay to marriage fees and so we had some benefit a year ago related to that that word lapping then that was it.

The biggest impact.

Year over year, a bill pay business with a little bit later.

Then it was in Q1, but that was more timing related so.

And so we had some benefit a year ago related to that that we're lapping that.

Nothing nothing.

Nothing significant and again, if you look at those.

The biggest impact year over year, our bill pay business was a little bit later.

Let me think about this segment of the segment grew 21%.

Then it was in Q1 that that more timing related.

In the area that we're saying the longterm guidance range is 10 to 15.

So nothing nothing.

Yeah that makes sense. So normalized growth was pretty it was about right. This quarter, excluding that one timer and Q2.

Nothing significant and again, if you look at those.

Let me think about this segment in the segment grew 21%.

Yeah, when we say 10 to 15, it's for the segment, which would include both travel and corporate payments and I've said that we expect corporate payments outside of travel to grow in the single digits. This year and I think I said that last quarter notes.

And the area that we're saying the long term guidance range of 10% to 15.

Yes that may so normalized growth was pretty was about right. This quarter, excluding that one timer in Q2.

Yes, when we say 10 to 15 minutes for this segment, which would include both travel and corporate payments and I've said that we expect corporate payments outside of travel to grow in the single digits. This year and I think I said that last quarter now, let's say that again right now.

Again, yeah, right now, it's because of the timing and size of the customers that were ramping right now we're out in the marketplace for winning business and or a beach direct products those customers are in boarding.

And that is going to take some time to accumulate and so now as a result of that where we are in that cycle expect that this year will be more of a single digit growth.

Because of the timing and size of the customers that we're ramping right now we are out in the marketplace and we're winning business in our <unk> products. These customers are importing.

In corporate payments excluding travel.

Gotcha, great. Thanks, great jobs.

And that is going to take some time to accumulate and so as a result of that where we are in that cycle expects that this year will be more of a single digit growth.

Your next question comes from the line of tension hung with J P. Morgan.

In corporate payments excluding travel.

Your line is open.

Got you great. Thanks, great job.

Hi, Good morning sure. Good results here just on the benefit side.

Okay.

Decomposed to 34% growth first nicely across.

Your next question comes from the line of Tien Tsin Huang of Jpmorgan.

The accounts and the right stuff, but just Tony enemy account growth peace in the volume growth I think 11, and 13 per cent is there a way to break that down as well across.

Your line is open.

Hey, good morning, good results here just on the benefit side I know <unk>.

Sales same so close.

Decomposed at 34% growth for us nicely across.

<unk> and utilization pricing that kind of thing just trying to better understand that is it.

Accounts and the right stuff, but just honing in on the account growth piece and the volume growth I think 11% and 13.

If you build a better model for it.

Yeah that does Luis model. It obviously, they have more insight into this and then sell.

Is there a way to break that down as well across.

New sales same store growth and higher inflation and utilization pricing.

We're looking at all of those components. So we're looking at the buggy that we have outdoor salesperson, what we're bringing in net of attrition when we.

And I think just trying to better understand that is it.

As we build a bit of a follow up for it.

Yes, the lease model that obviously, they have more insight into that and then.

Late that up to our long term guidance range, we say that can be 3% to 5% across the business and so each of the business units are gearing towards that and then we have some growth that's inherent within our existing customer base and then the product revenues is coming you can look at that segment and see a little bit of all.

We're looking at all as a component and we are looking at the bogey that we have out to our sales force and what we're bringing in net of attrition when.

When we accumulate that up to our long term guidance range, we set that can be 3% to 5% across the business.

So each of the business units are gearing towards that.

That and so our Salesforce continues to brand new account.

And then we had some growth that's inherent within our existing customer base.

You look at the between Q1 and Q2, sometimes we get questions about that often.

And then new product revenue is coming you can look at that segment and see a little bit of all of that.

Normal trend down because we end up with customers and think of this if you have an FSA account.

And so our Salesforce continues to bring in new accounts.

The expiring.

If you look at the between Q1 and Q2, sometimes we get questions about that often.

Fully utilize it through the first quarter and then terminate that account and so we normally see a bit of a depth and from Q1 Q2 related to that but from a sales perspective, we continued to bring on new business <unk> partners.

Our normal trend down because we end up with customers and think of that as if you have an FSA account.

Debt expiring, we will fully utilize that through the first quarter and then terminate that account and so we normally see.

And it looks like a pretty normal your fries.

Bit of a depth and from Q1 to <unk> related to that that from a sales perspective, we continue to bring on new business, both directly and through our partners.

It's a good outcome for sure and then just like quick follow up on the works venture capital P. C guys enough. This morning just.

Very very smart way ticket.

And.

Close to us.

I think it looks like a pretty normally a fraud.

On the ground in terms of development is the mandate or the mission there to.

It's a good outcome for sure and then just my quick follow up on the West venture capital piece that you guys announced this morning just.

You know.

[noise] ideas and potentially have that be a source of of M&A I I'm just trying to.

Very very smart way to kit.

Think about it.

Okay close to us.

Return, you're expecting beyond you know.

Is happening on the ground in terms of development.

Mandate with the mission there too.

Natural returns.

Is it the way that we thought about that.

No.

Thank you Peter ideas and potentially have that would be a source of of M&A I'm just trying to.

It's up to $100 million it from the over several years who were investing.

And mostly series Amcs's fee Browns with smaller companies a lot of the companies that are out there are free revenue or early stage from a revenue perspective.

Think about it.

What return you're expecting beyond financial returns.

Yes, the way that we thought about that.

It's up to $100 million it can be over several years and we are investing.

And there's.

Alot globally.

And Leslie series, a and series B rounds with smaller companies a lot of the companies that are out there are pre revenue or early stage from a revenue perspective.

Globally and so this gave us an opportunity to as you said get closer to what's happening in the marketplace get a front row seat.

And then and be able to expose these customers to these.

And there's.

These.

Allot and globally and so this gave us an opportunity to as you said get closer to what's happening in the marketplace.

And products to our existing customers and one of the things that we think our job is is to create the fabric where people can connect into and we've got these initial products that we're rolling out into the marketplace, which is very focused around.

Let's see.

And then be able to expose these customers too.

<unk>.

One <unk> one set of data, where you can integrate a nice vehicle with an E D vehicle.

And products to our existing customers and one of the things that we think our job is is to create the fabric where people can connect into and we've got these initial products that we're rolling out into the marketplace, which is very focused around <unk>.

The initial set of offerings, which is really important to our existing customers. But then there is a lot of innovation is happening within the space and this enables us to expose that innovation to our customers in a way that we get to learn.

One bill one set of data where you can integrate.

This vehicle with an EV vehicle.

And some of those may end up with ultimately being acquisitions, but I think from our perspective being able to learn.

The initial set of offerings, such as really important to our existing customers. But then there is a lot of innovation that's happening within the space and this enables us to expose that innovation to our customers in a way that we get to learn.

Allow our customers to benefit from this innovation is a really bandage.

Yeah that makes losses.

And some of those may end up with ultimately being acquisitions, but I think from our perspective being able to learn and allow our customers to benefit from this innovation is a real advantage.

Your next question comes from the line of Sanjay Sax, Ronnie was K E W.

Is open.

Thanks, Good morning.

Yes that makes a lot of six months.

I've got a follow up on the strong travel volumes I guess, we'd look through the remainder of the year. What's the baseline you guys are using in terms of the growth there cause it seems quite strong I'm just seeing some of the decelerating trends elsewhere in cross border in TNA growth or just trying to figure out sort of how you guys think about it.

Your next question comes from the line of Sanjay Saks, Ronnie with K B W. Your line is open.

Thanks, Good morning.

I've got a follow up on the strong travel volumes I guess as we look through the remainder of the year.

Understanding their strength there also has their opportunity to take share inside of the <unk> relationships you have or are those contributing as well.

Whats the baseline you guys are using in terms of the growth there because it seems quite strong I'm just seeing some of the decelerating trends elsewhere in cross border and T&D growth. So just trying to figure out sort of how you guys think about it.

Based on J I'll I'll address the first part of the question and then turn it to most of the second part so.

Understanding the strength. There also is there opportunity to take share inside of the OTT relationships you have or are those contributing as well.

<unk> our travel forecast.

Triangulating through a few different data points, obviously in conversations with our customers and.

Hey, Sanjay I'll address the first part of the question and then turn it to most of the second part so we're basing our travel forecast.

And what they're seeing from a bookings perspective for the rest of the year.

After that into our travel forecasts. We also look at what did we see on obviously Q2 Q3 tend to be the highest quarters for travel. So we look a bit what did we see in 2019 from Q1 Q2, Q2, Q3 Q3 Q for sequentially.

Regulating through a few different data points, obviously in conversations with our customers.

And what they're seeing from a bookings perspective for the rest of the year and factor that into our travel forecast. We also look at.

What did we see on obviously Q2 Q3 tend to be the highest quarters for travel. So we look a bit to what did we see in 2019 from Q1 to Q2 Q2 to Q3 Q3 to Q4 sequentially and factor that into what have we seen so far this year.

Lee.

And factor that into what would it be seen so far this year, what would that imply for the rest of the year, we use those both customer data and that analysis to triangulate to what we expect for for the back half of the year and like I mentioned earlier, we I didn't look at July results and see that were pretty on track to what we think is going to happen. So that's how we.

Or what would that imply for the rest of the year, we use those both customer data and data analysis to triangulate to what we expect for for the back half of the year and like I mentioned earlier, we I didn't look at July results and see that we're we're pretty on track to what we think is going to happen. So that's how we're getting to the volume forecast I'll, let Melissa.

The the volume forecast all what Melissa talk about the second part of your question.

Terms of share gain our team to actively or working with our customers.

Giller basis to look for volume that we can.

Pick up and it may be something that their processing internally or something that's on a competitive platform.

Talk about your the second part of your question.

In terms of share gain our teams actively are working with our customers on a regular basis to look for volume that we can.

That's an active part of how we manage.

Relationships with our customers when did the.

I'd say this is one of the longest sales cycles ever but the the sales cycle around expanding from where we're focused primarily on hotels into other areas within the online travel agencies, particularly I'm looking at are.

Pick up and maybe something that they're processing internally or something thats on a competitive platform and.

And Thats, an active hardest how we manage our relationships with our customers one is as I always.

So this is one of the longer sales cycles ever, but the sales cycle around expanding from where we are focused primarily on hotels.

Is something that we have seen.

Some elevated interest in so.

It would be an opportunity for us if we could pick up more of that volume, we have a little bit new particularly in Europe .

Into other areas within the online travel agencies, and particularly looking at air.

And so.

Active part of how we manage the relationship and.

Something that we have seen.

<unk>.

When you think about these relationships longterm, we want to make sure that we're the trusted partner that they have and that we are working with them actively to move more volume two on our platform.

Elevated interest and so and that would be an opportunity for us if we could pick up more of that volume, we have a little bit and in particularly in Europe .

And so with an active part of how we manage the relationship and we think about these relationships long term, we want to make sure that we are the trusted partner that they have and that we are working with them actively to move more volume to our platform.

And it's not is it significantly contributing to the growth at this point the share gain or or not not as much as just the rebound and travel.

It is helping certainly in the.

The rebound and travel is in is the bigger number of what we're seeing from a volume perspective, but it's certainly part of what we're seeing in and when we look at our longterm guidance range. We factored in the fact that this marketplace itself. It's typically growing in a normal environment at a high <unk>.

And it's not is it significantly contributing to the growth at this point the share gain or not not as much as just the rebound and travel.

It is helping.

Certainly in <unk>.

The rebound in travel.

In the bigger number of what we're seeing from a volume perspective, but it's certainly part of what we're seeing in <unk>.

Angle digit right.

So with our objective would be.

And when we look at our long term.

Always has tried to outgrow what's happening from a market perspective in any of the segment ran.

And guidance range.

We factored in the fact that this marketplace itself is typically growing in a normal environment at a high single digit rate and so what our objective would be.

Okay. Just just one quick follow up call a question on the on the acquisition I I noticed that the essential offers some products that you may not be offering presently so should we expect those would be extended to your existing customers and over what time and then is there any client overlap here.

Always is trying to outgrow what's happening from a market perspective, many of the segments ran.

Okay.

Just one quick follow up question on the of the acquisition I noticed that the ascension offer some products that you may not be offering presently so should we expect that those would be extended to your existing customers and over what time and then is there any client overlap here.

So uhm incentives is largely using our platform right now and so they're distributing using not just our attack, but like I would say largely artek.

So we have the ability to.

So.

And incentives is largely using our platform right now.

To continue to build upon the products that they have with our existing customer base.

So they're distributing using not just <unk>, but I would say largely our tech.

Her time, so I don't think that that's going to happen.

Immediately, but they do have product offerings, new particularly compliance product offerings, which will be incremental to what we're offering in the marketplace wind provide incremental revenue.

One is the so we have the ability.

<unk> two.

To continue to build upon the products that they have with our existing customer base over time. So I don't think that thats going to happen immediately but they do have product offerings, particularly in compliance product offerings, which will be incremental to what we're offering in the marketplace that will provide incremental revenue incentives also.

Incentives also this year is growing within our longterm guidance range and and to start with and so instead, 15% to 20% so.

It would be helpful to us as we think about how we want to grow longterm.

Okay. Thank you.

So this year is growing within our long term guidance range and our engine start with <unk>.

Your next question comes from the line of dental <expletive>, which means that.

1% to 20% so it should be helpful to us as we think about how we want to grow long term.

Your line is open.

Hey, guys Great results I really only have one question I was going to ask a question about the guys, but I think it's kind of fully addressed but just long term strategic as we think about the value proposition of E V. Like what are your clients.

Okay. Thank you.

Your next question comes from the line of Dan <unk> with Mizuho.

Your line is open.

Hey, guys Great results I really only have one question I was going to ask a question about the guidance, but I think it's kind of fully addressed but just long term strategic as we think about the value proposition of EV like what are your clients.

What are the needs for your clients and like how it goes conversations because we're getting a lot of push back for more clients or investors about sort of like assessing the value proposition of August .

<unk> and your competitor.

What are the needs for your clients and like how are those conversations because we're getting a lot of pushback from our clients our investors about sort of like assessing the value proposition.

E V World. So I was wondering how those conversations are coin. Thank you.

It's a really interesting question because a year ago. We would've said you know as we're going through that we're hopeful.

Yes.

<unk> in your competitor in the EV World. So I was wondering how those conversations are going thank you.

Now in the conversation that we're having with our customers. It's very clear that what they want is one integrated source of data and so they want to be able to have the convenience of understanding how much are they spending on their vehicles integrated with their gas powered vehicles, which puts us in a really great position in order to be.

It's a really interesting question because a year ago, we would have said.

You know as we're going through that we're hopeful.

Now in the conversations that we're having with our customers. It's very clear that what they want is one integrated source of data.

<unk> into the marketplace and so we feel even more strongly now that this creates an opportunity for us.

And so they want to be able to have the convenience of understanding how much are they spending on their EV vehicles integrated with their gas powered vehicles, which puts us in a really great position in order to build into the marketplace and so we feel even more strongly now that this creates an opportunity for us.

Also with a limited amount of product that we have in the marketplace, which allows people now to <unk>.

Charge on route and we have prototypes in the marketplace that are allowing people to do at home charging.

That in itself is putting us and we said we would we believe that we were going to be able to earn $5 to $20 per month per vehicle or in that range now and that's with.

Also with the limited amount of products that we have in the marketplace, which allows people now to charge on route.

And we have prototypes in the marketplace that are allowing people to do at home charging.

Really limited offering as we continue to build upon that we see just more opportunity and when you think about the complexity that gets created by introducing nev vehicle. We think that we have an opportunity to continue to provide products into the marketplace.

That in itself is putting us and we had said we would.

We believe that we were going to be able to earn $5 to $20 per month per vehicle or in that range now and Thats what day.

Limited offering as we continue to build upon that we see just more opportunity.

And so we are pretty bullish about not only the opportunity that this creates but how we can help our customers through this transition. There's a lot of unknowns. It is they're starting their journey and they're still our customers are still having trouble getting access to vehicles, even when there is interest.

When you think about the complexity that gets created by introducing an EV vehicle. We think that we have an opportunity to continue to provide products into the marketplace.

And so we're pretty bullish about not only the opportunity that this creates but how we can help our customers through this transition there is a lot of unknowns.

Being able to actually get that interest fulfilled is taking quite a long time. So we do think this is going to be alone conversion cycle.

It is they're starting their journeys and there still are customers are still having trouble getting access to vehicles, even when there is interest being able to actually get that interest fulfilled is taking quite a long time. So we do think this is going to be a long conversion cycle.

Super helpful. Thank you and we also need to transfer Sir.

Okay.

Your next question comes from the line of Trevor Williams with Jeffries. Your line is open.

Great. Thanks, Jack-tar on the guide if you could just put a finer point on the network incentive I'm, assuming it's a travel that you are now building in I think last year in queue for you had about a 10 million dollar benefits. So just looking for how much of the raise to the full years coming from.

Super helpful. Thank you and great results again, thanks a lot.

Okay.

Your next question comes from the line of Trevor Williams with Jefferies. Your line is open.

Great. Thanks, Jack on the guide if you could just put a finer point on the network incentive I'm, assuming it's a travel that you are now building in I think last year. In Q4, you had about a $10 million benefit. So just looking for how much of the raise to the full years coming from incentives in particular and if all of that we should expect to come in the fourth quarter.

In particular and and all of that we should expect to come in the fourth quarter. Thanks.

Yeah. So it's in the trouble in corporate payments segment broadly.

It'll be it'll be comparable slightly larger than what we saw last year last year wasn't quite $10 million, but we did see a cue for benefit and so we're expecting we're expecting that benefit as we as we had our volumes of this year. So that will all come in Q4.

Yes, so it's in the travel and corporate payments segment broadly.

It'll be it'll be comparable slightly larger than what we saw last year last year wasn't quite $10 million, but we did see a Q4 benefit and so we're expecting we're expecting that benefit as we as we hit our volumes this year.

Okay, Great and then maybe just as a follow up to Darren question on.

And the ability segment and growth for the rest of the year. I think you guys had been talking about for the full year being kind of around 4% level on the X fuel growth rate, obviously are above that in.

I will come in Q4.

Okay, Great and then maybe just as a follow up to <unk> question on.

The first couple of quarters for at least for the first half of the year.

The mobility segment and growth for the rest of the year I think you guys had been talking about for the full year being kind of around the 4% level on the ex fuel growth rate. Obviously, you are above that in.

Thompson, the dock have get tougher tougher, especially on the late fee right kind of where you are gallon volumes are now. So just maybe you could give us a sense for the 4% still a reasonable level to kind of act.

The first couple of quarters for at least for the first half of the year.

Two four years, and we kind of back into what makes sense that for free coupon for queue. So long as we're still gonna have that 4%.

Comps in the back half get tougher tougher, especially on the late fee rate kind of where youre gallon volumes are now. So just maybe if you could give us a sense for the 4% still a reasonable level.

Yeah, I think we're in the ballpark of what we've previously go to like I said I'm not guidance, mostly what we've we've raised his trouble volumes and scheme fees. The rest of it is Florida, what we've previously.

Or two full years, we kind of back into what makes sense, then for <unk> and <unk>. So long as we're still going to have that 4%, yes, I think we're in the ballpark of what we've previously guided to.

Okay perfect. Thank you.

Setting that guidance, mostly what we've what we've raised as travel volumes in scheme fees. The rest of it is largely what we've previously guided to.

Your next question comes from the line of <unk> <unk> Deutsche Bank. Your line is open.

Hi, Thanks for taking my question the following up on something kitchen asked about earlier in.

Okay perfect. Thank you.

And the benefits segment. So he asked about accounts and so I think maybe in the benefits I mean can you talk about growth and the H S. HSA custodial cash assets. So I think it's a few quarters now consecutively growing in the mid 20 per cent. So I guess just directionally, how should we think about growth and HSA custodial cash assets going forward is that gonna do.

Your next.

Question comes from the line of Nathan Hudson.

Deutsche Bank your line is open.

Hi, Thanks for taking my question just following up on something Tien Tsin asked about earlier in.

And the benefits segment, so we asked about accounts.

And so I think maybe in the benefits segment can you talk about growth and the HSA HSA custodial cash assets. So I think it's a few quarters now consecutively growing in the mid 20%. So I guess just directionally, how should we think about growth in HSA custodial cash assets going forward is that going to decelerate or are we going to lap anything specific any color that would be.

Celebrate are we going to lap anything specific any color that won't be very helpful.

Yeah, I would say for the balance of the year of our guys and we don't we don't typically expect cash assets to increase a lot. During the course of the year, we tend to see the late in the year and going into into next year. So will provide more guidance about 2024 and beyond once we get into our queue for earnings called <unk>.

Very helpful.

Yes, I would say for the balance of the year in our guidance, we don't we don't.

We expect cash assets to increase a lot during the course of the year, we tend to see that late in the year and going into into next year. So we'll provide more guidance about 2002.

Next year, but I would say for the balance of the year.

We don't we don't expect big increases in that state into our guide.

Got it that makes sense and then I guess just a follow up.

24, and beyond once we get into our Q4 earnings call next year, but I would say for the balance of the year.

Dan's question earlier, so he asked about electric vehicles, and I guess, maybe just thinking about the broader opportunity with it mobility.

We don't we don't expect big increases and Thats baked into our guide.

X electric vehicles. So maybe you can talk about potential market share gain opportunities or international growth opportunities within mobility that can help drive organic revenue going forward beyond a sort of strategic stature taken on the heavy side. Thank you.

Got it that makes sense and then I guess just a follow up on Dan's question earlier. So he asked about electric vehicles and I guess, maybe just thinking about the broader opportunity within mobility ex electric vehicles. So maybe you can talk about potential market share gain opportunities or international grew.

Yeah, I would say, that's our bread and butter.

I have a history of continuing to take market share and and we take it from my several places when or what you would perceive as traditional competitors, but it's also coming from the cash market still continues to be a place that we're pulling customers in as well as general purpose credit cards.

Opportunities within mobility that can help drive organic revenue going forward beyond the sort of strategic steps youre, taking on the EV side. Thank you.

Yes, I'd say thats, our bread and butter right.

The history of continuing to take market share.

And and we take it from a <unk>.

And increasingly are getting more sophisticated in how we market too.

Several places.

What you would perceive as traditional competitors, but it's also coming from the cash market still continues to be a place that we're pulling customers and as well as general purpose credit cards.

To those customers. So we feel good about our continued ability to feed our sales engine, which is highly predictable about closing those leads.

And increasingly in our.

Are getting more sophisticated in how we market.

So if you look at how our business.

To those customers. So we feel good about our continued ability to feed our sales engine, which is highly predictable about closing those leads.

Is structured the.

The majority of small customers.

While we have products that work really well with very large mobility customers and we weren't Simpson the largest ones in the world. We also have products that we're offering to smaller customers, which might be a local landscaper contractor and and we're gearing our sales engines to both of those things.

And so if you look at how our business.

As structured the.

The majority of small customers.

While we have products that work really well with very large mobility customers and we work since then the largest ones in the world.

We feel really good and very bullish about our ability to continue to take market share.

We also.

Have products that we're offering to smaller customers, which might be a local landscaper contractor and and we're gearing our sales engine to both of those things.

Both.

In the over the road business and our local businesses.

Thanks also appreciate your color.

So we feel really good and very bullish about our ability to continue to take market share.

This concludes our Q&A for today I now turn the call back to Steve Elder for closing remarks.

Both.

In the over the road business and our local businesses.

Thank you ma'am I appreciate everyone hopping on the call with US today and another interesting lesson will look forward to sharing a results again and.

Thanks, a lot so I appreciate the color.

This concludes our Q&A for today I now turn the call back to Steve Elder for closing remarks.

Mmm, probably late October for the third quarter. Thank you.

This concludes today's conference call.

Thank you Emma appreciate everyone hopping on the call with us today and all the interest in <unk> and we'll look forward to sharing our results again.

Please wait the conference will begin shortly.

[music].

Probably late October for the third quarter. Thank you.

This concludes today's conference call.

Okay.

Yeah.

[music].

Okay.

Yeah.

[music].

Yeah.