Q2 2024 Corpay Inc Earnings Call

August 7, 2024

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Operator: Good day, everyone, and welcome to today's Core Pay second quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question-and-answer session. You may register to ask a question at any time by pressing the star and one on your telephone keypad. You may withdraw yourself from the queue by pressing star and two. Please note, this call is being recorded. I will be standing by if you should need any assistance.

Operator: Good day, everyone, and welcome to today's Corpay second quarter 2024 earnings conference call. At this time, all participants are in a listen only mode. Later, you will have the opportunity to ask questions during the question and answer session. You may register to ask a question at any time by pressing the star and one on your telephone keypad. You may withdraw yourself from the queue by pressing star and two. Please note this call is being recorded. I will be standing by if you should need any assistance. It is now my pleasure to turn the conference over to Jim Eglseder, investor relations. Please go ahead.

Operator: Everyone, and welcome to today's Corpay second quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question and answer session. You may register to ask a question at any time by pressing the star and one on your telephone keypad. You may withdraw yourself from the queue by pressing star and two. Please note this call is being recorded. I will be standing by if you should need any assistance. It is now my pleasure to turn the conference over to Jim Eglseder, Investor Relations. Please go ahead.

Speaker Change: Good day everyone and welcome to today's Corpay second quarter 2024 earnings conference call.

Speaker Change: At this time, all participants are in a listen-only mode.

Speaker Change: Later, you will have the opportunity to ask questions during the question and answer session. You may register to ask a question at any time by pressing the star and one on your telephone keypad.

Speaker Change: You may withdraw yourself from the queue by pressing star and two. Please note, this call is being recorded. I will be standing by if you should need any assistance. It is now my pleasure to turn the conference over to Jim Eglseder, Investor Relations. Please go ahead.

Jim Eglz Sutter: It is now my pleasure to turn the conference over to Jim, Eglz Sutter, investor relations. Please go ahead.

James Eglseder: Good afternoon, and thank you for joining us today for our second quarter 2024 earnings call. With me today are Ron Clarke, our chairman and CEO, and Tom Panther, our CFO. Following their prepared comments, the operator will announce that the queue will open for the Q&A session.

Jim Eglz Sutter: Good afternoon. And thank you for joining us today for our second quarter 2024 earnings call. With me today, are Ron Clark, our chairman and CEO, and Tom Panther, our CFO.

Jim Eglseder: good afternoon and thank you for join us today for our second quarter two thousandandtwenty four earnings call

Speaker Change: With me today are Ron Clarke, our Chairman and CEO , and Tom Panther, our CFO .

Jim Eglz Sutter: Following the prepared comments, the operator will announce the queue will open for the Q&A session. Today's documents, including our earnings release and supplement, can be found under the Investor Relations section on our website at Corpay.com.

Speaker Change: Following the prepared comments, the operator will announce the queue will open for the Q&A session.

James Eglseder: Today's documents, including our earnings release and supplement, can be found under the Investor Relations section on our website at corpay.com. Throughout this call, we will be covering several non-GAAP financial metrics, including revenues, net income, and net income per diluted share, all on an adjusted basis. We will also be covering organic revenue growth, which neutralizes the impact of year-over-year changes in FX rates, fuel prices, and fuel spreads. It also includes pro forma results for acquisitions and divestitures, or scope changes, closed during the two years being compared. However, none of these measures are calculated in accordance with GAAP and may be calculated differently than at other companies.

Speaker Change: Today's documents, including our earnings release and supplement, can be found under the Investor Relations section on our website at corpay.com.

Jim Eglz Sutter: Throughout this call, we will be covering several non-GAAP financial metrics, including revenues, net income, and net income-per-diluted share, all on an adjusted basis. We will also be covering organic revenue growth. This metric neutralizes the impact of year-to-year changes in FX rates, fuel prices, and fuel spreads. It also includes pro-former results for acquisitions and investitures, or scope changes, closed during the two years being compared. None of these measures are calculated in accordance with GAAP and may be calculated differently than other companies.

Speaker Change: Throughout this call, we will be covering several non-GAAP financial metrics, including revenues, net income, and net income per diluted share, all on an adjusted basis. We will also be covering organic revenue growth.

Speaker Change: This metric neutralizes the impact of year-over-year changes in FX rates, fuel prices, and fuel spreads. It also includes pro forma results for acquisitions and divestitures, or scope changes, closed during the two years being compared. None of these measures are calculated in accordance with GAAP and may be calculated differently than at other companies.

James Eglseder: Reconciliations of the Historical Non-Gap to the Most Directly Comparable Gap Information can be found in today's press release and on our website. It's important to understand that part of our discussion today may include forward-looking statements. These statements reflect the best information we have today. All statements about our outlook, new products, and expectations regarding business development and future acquisitions are based on that information. They are not guarantees of future performance, and you should not place undue reliance on them.

Jim Eglz Sutter: Reconciliation of the historical non-GAAP to the most directly comparable GAAP information can be found in today's press release and on our website.

Speaker Change: Reconciliations of the historical non-gap to the most directly comparable gap information can be found in today's press release and on our website.

Jim Eglz Sutter: It's important to understand that part of our discussion today may include forward-looking statements. These statements reflect the best information we have of today. All statements about our outlook, new products, and expectations regarding business development and future acquisitions are based on that information. They are not guarantees of future performance, and you should not put undue reliance upon them. We undertake no obligation to update any of these statements. These expected results are subject to numerous uncertainties and risks, which could cause actual results to differ materially from what we expect. Some of those risks are mentioned in today's press release on Form 8-K and in our annual report on Form 10-K.

Speaker Change: It's important to understand that part of our discussion today may include forward-looking statements.

Speaker Change: These statements reflect the best information we have of today.

Speaker Change: All statements about our outlook, new products, and expectations regarding business development and future acquisitions are based on that information. They are not guarantees of future performance and you should not put undue reliance upon them.

James Eglseder: We undertake no obligation to update any of these statements. These expected results are subject to numerous uncertainties and risks, which could cause actual results to differ materially from what we expect. Some of those risks are mentioned in today's press release on Form 8K and in our annual report on Form 10K. These documents are available on our website and at sec.gov. So now I'll turn the call over to Ron Clarke, our chairman and CEO.

Jim Eglseder: We undertake no obligation to update any of these statements.

Jim Eglseder: These expected results are subject to numerous uncertainties and risks, which could cause actual results to differ materially from what we expect.

Jim Eglseder: Some of those risks are mentioned in today's press release on Form 8K and in our annual report on Form 10K. These documents are available on our website and at sec.gov. So now I'll turn the call over to Ron Clarke, our Chairman and CEO . Ron?

Jim Eglz Sutter: These documents are available on our website and at SEC.gov.

Ron Clarke: So now I'll turn the call over to Ron Clarke, our Chairman and CEO, Ron. Okay, Jim, thanks. Good afternoon, everyone, and welcome to our Q2 2024 earnings call. Up front here, I'll plan to cover three subjects. First, provide my take on Q2 results. Along with an update on our problem children. Second, I'll share updated 2024 full-year guide guidance, including an up-close look at our expected Q4 exit. And then lastly, I'll speak to our portfolio and our commitment to deeper versus wider.

Ronald Clarke: Okay, Jim, thanks. Good afternoon, everyone, and welcome to our Q2 2024 earnings call. Up front here, I'll plan to cover three subjects. First, provide my take on Q2 results, along with an update on our problem children. Second, I'll share updated 2024 full-year guidance, including an up-close look at our expected Q4 exit. And then lastly, I will speak to our portfolio and our commitment to deeper versus wider

Ronald Clarke: Okay, Jim, thanks. Good afternoon, everyone, and welcome to our Q2 2024 earnings call. Up front here, I'll plan to cover three subjects. First, I will provide my take on Q2 results, along with an update on our problem children. Second, I'll share updated 2024 full-year guidance, including an up-close look at our expected Q4 exit, and then lastly, I will speak to our portfolio and our commitment to deeper versus wider. Okay, let me begin with our Q2 results. We reported Q2 revenue of $976 million, up 7% excluding Russia, and cash EPS of $455 million, up 14% excluding Russia.

Ron Clarke: Okay, Jim, thanks. Good afternoon, everyone, and welcome to our Q2 2024 earnings call.

Ron Clarke: Up front here I'll plan to cover three subjects. First, provide my take on Q2 results along with an update on our problem children. Second, I'll share updated 2024 full-year guidance.

Speaker Change: including an up-close look at our expected Q4 exit. And then lastly, our speak to our portfolio and our commitment to deeper versus wider.

Ron Clarke: Okay, let me begin with our Q2 results. We reported Q2 revenue of 976 million, up 7% excluding Russia, and cash EPS of 455, up 14%. Excluding Russia, results really right in line with our expectations, both revenue and earnings finishing on the high side of our guidance range. Most importantly here, the trends in Q2 improving overall retention improved in nearly 92%. That's up 100 basis points from last year. Same store sales improved to flat in the quarter. That's up 2% sequentially, and sales or new bookings strong up 21%. Particular strength in our corporate payments business; sales there up 28%.

Ronald Clarke: Okay, let me begin with our Q2 results. We reported Q2 revenue of $976 million, up 7% excluding Russia, and cash EPS of $455 million, up 14% excluding Russia. Results really are right in line with our expectations, both revenue and earnings finishing on the high side of our guidance. Most importantly here, the trends, in Q2, improved overall retention improved to nearly 92%. That's up 100 basis points from last year, same store sales improved to flat in the quarter, that's up 2% sequentially, and sales or new bookings are up 21%, with particular strength in our corporate payments business, sales there up 28% So, clearly, a noticeable improvement in all three of our key business trends.

Jim Eglseder: okay let me begin with our q two results we reported q two revenue of nine hundred and seventy six million up seven percent excluding russia and cash e pss of four fifty five up fourteen percent excluding russia

Ronald Clarke: Results were really in line with our expectations, both revenue and earnings finishing on the high side of our guidance, and most importantly here, the trends. I'm in Q2 improving overall retention improved by nearly 92%, that's up 100 basis points from last year, same store sales improved to flat in the quarter, that's up 2% sequentially, and sales or new bookings were up 21%, particular strength in our corporate payments business, sales there up 28% So clearly, a noticeable improvement in all three of our key business trends.

Jim Eglseder: Results really right in line with our expectations, both revenue and earnings finishing on the high side of our guidance range.

Jim Eglseder: Most importantly here, the trends in Q2 improving. Overall retention improved to nearly 92 percent. That's up a hundred basis points from last year.

Jim Eglseder: Same-store sales improved to flat in the quarter. That's up 2% sequentially and sales or new bookings strong up 21%

Jim Eglseder: Particular strength in our corporate payments business.

Ron Clarke: So clearly a noticeable improvement in all three of our key business trends. Organic revenue growth for the quarter: 6%. But clearly a tale of two cities, our corporate payments business, Brazil business, and international fleet business performed exceptionally well. While our lodging and North America fleet businesses, not as good, presented a drag on growth, so taken together, averaging out to 6% overall.

Jim Eglseder: sales there up twenty eight percent

Jim Eglseder: So clearly a noticeable improvement in all three of our key business trends.

Ronald Clarke: Organic revenue growth for the quarter was 6%, but clearly a tale of two cities. Our corporate payments business, Brazil business, and international fleet business performed exceptionally well, while our lodging in North America fleet businesses, not as good, presented a drag on growth. So taken together, they averaged out to 6% overall. So let me update you on these two problem children.

Ronald Clarke: Organic revenue growth for the quarter was 6%, but it was clearly a tale of two cities. Our corporate payments business, the Brazil business, and the international fleet business performed exceptionally well, while our lodging and North America fleet businesses, not as good, presented a drag on growth. So taken together, they averaged out to 6% overall. So let me update you on these two problem children.

Jim Eglseder: Organic revenue growth for the quarter six percent, but clearly a tale of two cities. Our corporate payments business, Brazil business, and international fleet business performed exceptionally well.

Ron Clarke: While our lodging and North America fleet businesses not as good presented a drag on growth so taken together averaging out to 6% overall.

Ron Clarke: So let me update you on the two problem children. So first North America fleet performed really in line in Q2 against expectations, but still a drag on growth. We've now mostly lapped the infamous micro pivot and the implications there around late fee revenue and bad debt. Real progress, though, happening in the business on a few fronts; retention is better. 150 basis points better, in fact, than Q2 last year; softness improving 100 basis points better sequentially, and sales growing in the quarter. 80% of all of our digital sales. Now 5 card and plus size account. Counts, so a significant pivot in new business there.

Ronald Clarke: So first, North America Fleet performed really in line in Q2 against expectations, but still a drag on growth. We've now mostly lapped the infamous micro pivot and the implications there around late fee revenue and bad debt. Real progress is happening in the business on a few fronts. Retention is better, 150 basis points better, in fact, than Q2 last year. Softness is improving, 100 basis points better, sequentially, and sales growing. In the quarter, 80% of all of our digital sales, now five card and plus size accounts.

Ron Clarke: So let me update you on the two problem children. So first, North America Fleet.

Ronald Clarke: So first, the North America fleet performed really in line in Q2 against expectations, but still a drag on growth. We've now mostly lapped the infamous micro pivot and the implications there around late fee revenue and bad debt. Real progress, though, is happening in the business on a few fronts. Retention is better, 150 basis points better, in fact, than Q2 last year. Softness is improving, 100 basis points better, sequentially, and sales growing. In the quarter, 80% of all of our digital sales, now five card and plus size accounts.

Ron Clarke: performed really in line in Q2 against expectations but still a drag on growth. We've now mostly lapped the infamous micro pivot.

Jim Eglseder: and the implications there around late fee revenue and bad debt. Real progress though happening in the business.

Jim Eglseder: on a few fronts. Retention is better.

Ron Clarke: 150 basis points better, in fact, than Q2 last year.

Jim Eglseder: Softness improving, a hundred basis points better sequentially, and sales growing. In the quarter, eighty percent of all of our digital sales, now five card and plus size accounts.

Ronald Clarke: So a significant pivot in new business there. A third of our field sales are now booked to our new Corpay One fuel card, business card, and virtual card in one. And 25% of our SMB trucking sales are now on our new Comdata Connect card that has no credit exposure. Additionally, we signed some important new accounts, GasBuddy and AT&T, which are now coming online. So look, the evidence is building that there's demand for our new products and that this larger prospect segment sales can be grown. So that's happening. So on the back of these trends, we're expecting North America's fleet to grow revenue organically in Q4 and get back in the plus column. Okay, over to lodging, our second problem child.

Ron Clarke: So a significant

Ron Clarke: A third of our field sales now being booked to our new Corp A1 fuel card, business card, and virtual card, and one in 25% of our SMB trucking sales now on our new com day to connect card that has no credit exposure. Additionally, we signed some important new accounts, Gas Buddy, and AT&T, which are now coming online. So look, the evidence is building that there's demand for our new products and that this larger prospect segment sales can be grown, so that's happening. So on the back of these trends, we're out looking North America fleet to grow revenue organically in Q4 and get back in the plus column.

Ron Clarke: Pivot, new business there.

Ron Clarke: A third of our field sales now being booked to our new Corpay One fuel card, business card, and virtual card in one, and 25% of our SMB trucking sales.

Ron Clarke: Now on our new Comdata Connect card that has no credit exposure.

James Faucette: [inaudible] Faucette, James Faucette, James Faucette, James Faucette, James Faucette, James Faucette, James Faucette, James Faucette, James Faucette, All statements about our outlook, new products and expectations regarding business development and future acquisitions are based on that information. They are not guarantees of future performance and you should not put undue reliance upon them. We undertake no obligation to update any of these statements. These expected results are subject to numerous uncertainties and risks which could cause actual results to differ materially from what we expect. Some of those risks are mentioned in today's press release on form 8K and in our annual report on form 10K. These documents are available on our website and at sec.gov.

Ron Clarke: Additionally, we signed some important new accounts, GasBuddy and AT&T, which are now coming online.

Ron Clarke: So look, the evidence is building that there's demand for our new products and that this larger prospect.

Ron Clarke: segment sales can be grown. So that's happening. So on the back of these trends we're outlooking North America fleet to grow revenue organically in Q4 and get back in the plus column.

Ron Clarke: Okay, over to lodging our second problem child, lodging finished a bit weaker in Q2 than we expected, mostly the result of lower flight cancellations and fewer homeowner insurance claims. Progress, though, happening on the lodging front, the first IT there, much better uptime and search response time now exceeding our SLAs, big improvement in client softness and client retention in the business. Our new differentiated pricing now in place, increasing our yields, where we've lowered room rates, if you will, to bigger accounts, an increased pricing to walk-in travelers. And then lastly, sales and lodging growing up 36% in Q2, again, evidence to us that there's demand for the solutions.

Ron Clarke: Okay, over to lodging, our second problem child. Lodging finished a bit weaker in Q2 than we expected, mostly the result of lower flight cancellations and fewer homeowner insurance claims.

Ronald Clarke: Lodging finished a bit weaker in Q2 than we expected, mostly as the result of lower flight cancellations and fewer homeowner insurance claims. Progress, though, happening on the lodging front, the first IT there, much better, uptime and search response time now exceeding our SLAs, a big improvement in client softness and client retention in the business, our new differentiated pricing now in place, increasing our yields where we've lowered room rates, if you will, to bigger accounts and increased pricing to walk-in travelers.

Ronald Clarke: Lodging finished a bit weaker in Q2 than we expected, mostly the result of lower flight cancellations and fewer homeowner insurance claims. Progress, though, is happening on the lodging front, the first IT there, much better, with uptime and search response time now exceeding our SLAs.

Ron Clarke: Progress, though, happening on the lodging front. The first IT there, much better. Uptime and search response time now exceeding our SLAs.

Ronald Clarke: Big improvement in client softness and client retention in the business. Our new differentiated pricing is now in place, increasing our yields, where we've lowered room rates, if you will, to bigger accounts and increased pricing to walk-in travelers. And then lastly, sales and lodging growing up 36% in Q2, again, evidence to us that there's demand for the solution. So again, with the progress that we're seeing, we do expect the lodging business to have positive organic growth in Q4.

Ron Clarke: big improvement in client softness and client retention in the business.

Ron Clarke: Our new differentiated pricing now in place, increasing our yields, where we've lowered room rates, if you will, to bigger accounts and increased pricing to walk-in travelers.

Ronald Clarke: And then lastly, sales and lodging growing up 36% in Q2, again, evidence to us that there's demand for the solution. So again, with the progress that we're seeing, we do expect the lodging business to have positive organic growth in Q4. So hopefully, as we exit Q4 this year, problem children no more. So the wrap on the quarter, again, no real surprises in Q2. Results kind of matched expectation. Trends, same store sales, new sales, and retention trends significantly improved across the board. And our two problem children are progressing on a path of growth.

Ron Clarke: and then lastly sales and lodging growing up 36% in Q2. Again evidence to us that there's demand for the solutions.

Ron Clarke: So again, the progress that we're seeing, we do expect the lodging business to turn positive organic growth in Q4. So hopefully, as we execute for this year, problem children no more. So the wrap on the quarter, again, no real surprises in Q2. Results kind of right on expectation. Trends, same store sales, new sales, and retention trends significantly improved across the board, and our two problem children progressing on a path are growing again.

Speaker Change: so again the progress that we're seeing we do expect the ladging business to turn positive organic growth in q four so hopefully as we execute for this year problem childrener no more

Ronald Clarke: So hopefully, as we exit Q4 this year, problem children no more. So the wrap on the quarter, again, no real surprises in Q2. Results kind of right on expectation. Trends, same store sales, new sales, and retention trends significantly improved across the board, and our two problem children are progressing on a path of growth.

Speaker Change: So the wrap on the quarter, again, no real surprises in Q2, results kind of right on expectation.

Ron Clarke: Trends, same store sales, new sales and retention trends significantly improved across the board and our two problem children progressing on a path of growing again.

Ron Clarke: Okay, let me make the turn to our 2024 full year guidance. So today, we're reiterating the full year 2024 guidance at the midpoint that we provided in May. So, as a reminder, 4 billion in revenue, I'm in cash, EPS of $19. For sure, some changes, some puts and takes in this guide. We're out looking weaker, FX. Fox, I hear from the second half that we were 90 days ago and a bit weaker, second half launching revenue. That's offset by Paymarang revenue and some expected synergies that we'll capture there. Along with some expense management actions that we're putting in place to maintain profitability.

Ronald Clarke: Okay, let me make the turn to our 2024 full year guidance. So today we're reiterating the full year 2024 guidance at the midpoint that we provided in May. So as a reminder, $4 billion in revenue and cash EPS of $19, for sure some changes, some puts and takes in this guide, we're out looking for weaker effects. I hear in the second half that we are less in the second half than we were 90 days ago and a bit weaker second half lodging revenue.

Speaker Change: Okay, let me make the turn to our 2024 full year guidance.

Ron Clarke: So today we're reiterating the full year 2024 guidance at the midpoint that we provided in May. So as a reminder four billion in revenue and cash EPS of $19.

Speaker Change: For sure some changes, some puts and takes in this guide. We're out looking weaker FX.

Ronald Clarke: I hear in the second half than we were 90 days ago and a bit weaker second half lodging revenue. That's offset by pay-morang revenue and some expected synergies that we'll capture there, along with some expense management actions that we're putting in place to maintain profitability. I do want to put a special emphasis on our Q4 guide, which you can see in our earnings supplement.

Ron Clarke: I hear in the second half than we were 90 days ago, and a bit weaker second half lodging revenue.

Ronald Clarke: That's offset by pay-morang revenue and some expected synergies that we'll capture there, along with some expense management actions that we're putting in place to maintain profitability. I do want to put a special emphasis on our Q4 guidance, which you can see in our earnings supplement.

Ron Clarke: That's offset by pay-morang revenue and some expected synergies that we'll capture there.

Ron Clarke: along with some expense management actions that we're putting in place to maintain profitability.

Ron Clarke: I do want to put a special emphasis on our Q4 guide, which you can see in our earning supplement. We're out looking for accelerated double-digit print and organic revenue growth and $21 of run rate cash EPS heading into 2025. Additionally, we are expecting to capture some meaningful synergies from our Paymarang and GPS corporate payments acquisitions next year, likely in the 50 cents accretion ballpark. So look, the main message to take away here is that Corpay is headed to a better place. We're leaving behind some challenges: the Russia divestiture, Fed hikes, the fleet pivot, lodging softness, even the strategic review, and heading to a place with accelerating performance driven by problem children improvement, lower interest rates, higher sales, and fewer shares.

Ron Clarke: I do want to put a special emphasis on our Q4 guide, which you can see in our earnings supplement.

Ronald Clarke: We're out looking for accelerated double-digit print and organic revenue growth and $21 of run rate cash EPS heading into 2025. Additionally, we are expecting to capture some meaningful synergies from our PayMarang and GPS corporate payments acquisitions next year, likely in the $0.50 accretion ballpark. So look, the main message to take away here is that Corpay is headed to a better place.

James Faucette: So now I'll turn the call over to Ron Clarke, our chairman and CEO, Ron. Okay, Jim, thanks.

Ron Clarke: We're out looking accelerated double-digit print and organic revenue growth and $21 of run rate cash EPS heading into 2025.

Ron Clarke: Good afternoon, everyone, and welcome to our Q22024 earnings call. Up front here, I'll plan to cover three subjects. First, provide my take on Q2 results. Along with an update on our problem children. Second, I'll share updated 2024 full year guide guidance, including an up close look at our expected Q4 exit. And then lastly, I'll speak to our portfolio and our commitment to deeper versus wider.

Ron Clarke: Additionally, we are expecting to capture some meaningful synergies from our PayMarang and GPS corporate payments acquisitions next year, likely in the $0.50 accretion ballpark.

Ron Clarke: So look, the main message to take away here is that Corpay is headed to a better place.

Ronald Clarke: We're leaving behind some challenges, the Russia divestiture, Fed hikes, the Fleet Pivot, Lodging Softness, even the Strategic Review, and heading to a place with accelerating performance, driven by problem child improvement, lower interest rates, higher sales, and fewer shares. Our expected arrival in the better place is Q4. Okay, last up, let me transition to an update on our portfolio, which again calls for a deeper, not wider, company squarely focused on three segments.

Ronald Clarke: We're leaving behind some challenges, the Russia divestiture, Fed hikes, the fleet pivots, lodging softness, even the strategic review, and heading to a place with accelerating performance driven by problem child improvement, lower interest rates, higher sales, and fewer shares. Our expected arrival in the better place is Q4. Okay, last up, let me transition to an update on our portfolio, which again calls for a deeper, not wider, company squarely focused on three segments.

Ron Clarke: we're leaving behind some challenges the russiher divestiture fed hikes

Ron Clarke: Okay, let me begin with our Q2 results. We reported Q2 revenue of 976 million up 7% excluding Russia and cash EPS of 455 up 14%. Excluding Russia results really right in line with our expectations, both revenue and earnings finishing on the high side of our guidance range. Most importantly here, the trends in Q2 improving overall retention improved in nearly 92%. That's up 100 basis points from last year. Same store sales improved to flat in the quarter.

Ron Clarke: The Fleet Pivot, Lodging Softness, even the Strategic Review, and Heading to a Place with Accelerating Performance, driven by problem children improvement.

Ron Clarke: Lower interest rates, higher sales, and fewer shares.

Ron Clarke: Our expected arrival to the better place is Q4.

Ron Clarke: Okay, last up, let me transition to an update on our portfolio, which again calls for a deeper, not wider company, squarely focused on three segments. We're well underway with our integration and synergy planning for our Paymarang and GPS acquisitions, initial thinking their calls for conversion and shuttering of the acquired IT systems, a significant streamlining of back office operations and GNA, and really leveraging of our broader product line to increase revenues in both businesses. We expect these two deals to add about 15% to our corporate payments business revenue next year, and with corporate payments overall representing about 40% of the overall company.

Ron Clarke: Okay, last up, let me transition to an update on our portfolio, which again calls for a deeper, not wider company, squarely focused on three segments.

Ronald Clarke: We're well underway with our integration and synergy planning for our Pamerang and GPS acquisitions. In initial thinking, there are calls for conversion and shuttering of the acquired IT systems, a significant streamlining of back office operations in G&A, and really a leveraging of our broader product line to increase revenues in both businesses. We expect these two deals to add about 15% to our corporate payments business revenue next year, with corporate payments overall representing about 40% of the overall company.

Ron Clarke: We're well underway with our integration and synergy planning for our PAMERANG and GPS acquisitions. Initial thinking, there are calls for conversion and shuttering of the acquired IT systems.

Ron Clarke: That's up 2% sequentially and sales or new bookings strong up 21% particular strength in our corporate payments business sales there up 28%. So clearly a noticeable improvement in all three of our key business trends. Organic revenue growth for the quarter 6%. But clearly a tale of two cities, our corporate payments business Brazil business and international fleet business performed exceptionally well. While our lodging and North America fleet businesses not as good presented a drag on growth so taken together averaging out to 6% overall.

Ron Clarke: A significant streamlining of back office operations in G&A and really a leveraging of our broader product line to increase revenues in both businesses.

Ron Clarke: We expect these two deals to add about 15% to our corporate payments business revenue next year and with corporate payments overall representing about 40% of the overall company.

Ron Clarke: We're also progressing a couple small vehicle-related divestitures, totaling approximately 400 million of after-tax proceeds. We anticipate using any proceeds from these divestitures to buy back, see pay stock to minimize pollution heading into next year. Lastly, we are working a couple interesting deals in the pipeline where we maintain our target leverage and, frankly, have the liquidity to pull the trigger if, in fact, the deals survive diligence. So in conclusion then today Q2 again finishing in line, but don't miss improving trends, the base, new sales and retention maintaining our full year 24 guide at 4 billion in revenue and 19 and cash EPS.

Ron Clarke: We're also progressing a couple small vehicle-related divestitures.

Ron Clarke: totaling approximately 400 million of after-tax proceeds. We anticipate using any proceeds from these divestitures to buy back CPA stock to minimize dilution heading into next year.

Ron Clarke: So let me update you on the two problem children. So first North America fleet performed really in line in Q2 against expectations, but still a drag on growth. We've now mostly lapped the infamous micro pivot and the implications there around late fee revenue and bad debt. Real progress though happening in the business on a few fronts retention is better. 150 basis points better in fact than Q2 last year softness improving 100 basis points better sequentially and sales growing in the quarter 80% of all of our digital sales.

Ron Clarke: Lastly we are working a couple interesting deals in the pipeline where we'd maintain our target leverage and frankly have the liquidity to pull the trigger if in fact the deals survive diligence.

Ronald Clarke: We're also progressing a couple small vehicle-related divestitures, totaling approximately $400 million of after-tax proceeds. We anticipate using any proceeds from these divestitures to buy back CPAY stock to minimize dilution heading into next year. Lastly, we are working on a couple of interesting deals in the pipeline where we'd maintain our target leverage and frankly have the liquidity to pull the trigger if, in fact, the deals survive diligence. So in conclusion, then today, Q2, again, finishing in line, but don't miss improving trends, the base, new sales, and retention, maintaining our full year 24 guide at $4 billion in revenue and $19 in cash EPS.

Ronald Clarke: We're also progressing a couple small vehicle-related divestitures, totaling approximately $400 million in after-tax proceeds. We anticipate using any proceeds from these divestitures to buy back CPAY stock to minimize dilution heading into next year. Lastly, we are working on a couple of interesting deals in the pipeline where we'd maintain our target leverage and frankly have the liquidity to pull the trigger if, in fact, the deals survive diligence. So in conclusion, then today, Q2, again, finishing in line, but don't miss improving trends, the base, new sales, and retention, maintaining our full year 24 guide at $4 billion in revenue and $19 in cash EPS, tracking to a better place with accelerating revenue and an EPS run rate of $21 exiting Q4, an ongoing simplification of the company, doubling down on corporate payments, and aggressively working the synergies of our Tom said, Thanks, Ron.

Ron Clarke: so in conclusion then today q two again finishing in line but don't miss improving

Speaker Change: Trends, The Base, New Sales and Retention, Maintaining Our Full Year 24 Guide at $4 Billion in Revenue and $19 Billion in Cash EPS.

Ron Clarke: Lewis, tracking to a better place with accelerating revenue and an EPS run rate of $21. Exiting Q4, an ongoing simplification of the company, doubling down on corporate payments and aggressively working the synergies of our two newest deals.

Ronald Clarke: I'm tracking to a better place with accelerating revenue and an EPS run rate of $21 exiting Q4, an ongoing simplification of the company, doubling down on corporate payments, and aggressively working the synergies of our two newest. So with that, uh, let me turn the call back over to Tom to provide some additional detail on the quarter. Thanks.

Ron Clarke: tracking to a better place.

Ron Clarke: Now 5 card and plus size account. Counts, so a significant pivot in new business there. A third of our field sales now being booked to our new Corp A1 fuel card, business card, and virtual card, and one in 25% of our SMB trucking sales now on our new com day to connect card that has no credit exposure. Additionally, we signed some important new accounts, gas buddy, and AT&T, which are now coming online.

Ron Clarke: with accelerating revenue and an EPS run rate of $21 exiting Q4, and ongoing simplification of the company, doubling down on corporate payments.

Ron Clarke: and aggressively working the synergies of our two newest deals.

Tom Panther: So, with that, let me turn the call back over to Tom to provide some additional detail on the quarter.

Ron Clarke: So with that, let me turn the call back over to Tom to provide some additional detail on the quarter.

Tom Panther: Tom, thanks, Ron, and good afternoon, everyone. Here's some additional details related to the quarter. Print revenue was $976 million, which I was pleased to see at the high end of our guide, despite a $3 million macro headwind from both fuel and FX. Organic revenue grew 6% led by 18% growth in corporate payments. Reported revenue growth was 3%; however, excluding the impact from the sale of our Russia business, revenue grew 7%. Strong expense discipline and another quarter of lower bad debt resulted in EBITDA margin expanding to 53.1%. We generated 325 million of free cash flow, which translates into $4.55 per share in cash EPS.

Thomas Panther: Thanks, Ron, and good afternoon, everyone. Here are some additional details related to the quarter. Print revenue was $976 million, which I was pleased to see at the high end of our guide, despite a $3 million macro headwind from both Fuel and FX. Organic revenue grew 6%, led by 18% growth in corporate payments. Reported revenue growth was 3%. However, excluding the impact of the sale of our Russia business, revenue grew 7%. Strong expense discipline and another quarter of lower bad debt resulted in EBITDA margin expanding to 53.1%. We generated $325 million of free cash flow, which translates into $4.55 per share in cash EPS.

Tom Panther: Thanks, Ron, and good afternoon, everyone.

Tom Panther: Here are some additional details related to the quarter.

Tom Panther: Print revenue was $976 million, which I was pleased to see at the high end of our guide, despite a $3 million macro headwind from both Fuel and FX.

Ron Clarke: So look, the evidence is building that there's demand for our new products and that this larger prospect segment sales can be grown, so that's happening. So on the back of these trends, we're out looking North America fleet to grow revenue organically in Q4 and get back in the plus column.

Tom Panther: Organic revenue grew 6% led by 18% growth in corporate payments.

Tom Panther: Reported revenue growth was 3%. However, excluding the impact from the sale of our Russia business, revenue grew 7%. Strong expense discipline and another quarter of lower bad debt resulted in EBITDA margin expanding to 53.1%.

Ron Clarke: Okay, over to lodging our second problem child, lodging finished a bit weaker in Q2 than we expected, mostly the result of lower flight cancellations and fewer homeowner insurance claims. Progress, though, happening on the lodging front, the first IT there, much better uptime and search response time now exceeding our SLAs, big improvement in client softness and client retention in the business, our new differentiated pricing now in place, increasing our yields, where we've lowered room rates, if you will, to bigger accounts, an increased pricing to walk in travelers.

Tom Panther: We generated $325 million of free cash flow, which translates into $4.55 per share in cash EPS.

Tom Panther: 5 cents above the midpoint of our guide, up 8% versus last year, and up 14%, excluding the impact of the sale of our Russia business. Overall solid results for the quarter.

Thomas Panther: $0.05 above the midpoint of our guide, up 8% versus last year, and up 14%, excluding the impact of the sale of our Russia business. Overall, solid results for the quarter. Now, turning to our segment performance and the underlying drivers of our organic revenue growth. Across all of our segments, sales increased 21%, retention improved to nearly 92%, and same store sales were flat compared to down 2% in the first quarter. Corporate payments revenue increased 18% during the quarter, driven by an impressive 19% growth in spend volume.

Thomas Panther: $0.05 above the midpoint of our guide, up 8% versus last year, and up 14%, excluding the impact of the sale of our Russia business. Overall, solid results for the quarter. Now turning to our segment performance and the underlying drivers of our organic revenue growth. Across all of our segments, sales increased 21%, retention improved to nearly 92%, and same store sales were flat compared to down 2% in the first quarter. Corporate payments revenue increased 18% during the quarter, driven by an impressive 19% growth in spend volume.

Tom Panther: $0.05 above the midpoint of our guide, up 8% versus last year, and up 14% excluding the impact of the sale of our Russia business. Overall, solid results for the quarter.

Tom Panther: Now, turning to our segment performance and the underlying drivers of our organic revenue growth. Across all of our segments, sales increased 21%, retention improved to nearly 92%, and same-store sales were flat compared to down 2% in the first quarter. Corporate payments revenue increased 18% during the quarter, driven by impressive 19% growth in spend volume. Our direct businesses revenue grew 22% with sales up 34%, and solid growth across spend volume transactions and customers. Revenue per total spend, sometimes referred to as the take rate, increased during the quarter, and our card penetration, which measures the percentage of total spend processed via virtual card, increased approximately 6% and is now above 11%.

Speaker Change: Now, turning to our segment performance and the underlying drivers of our organic revenue growth.

Speaker Change: across all of our segments sales increased twenty-one percent retention improved to nearly ninety-two percent and same-store sales were flat compared to down two percent in the first quarter

Speaker Change: Corporate payments revenue increased 18% during the quarter, driven by impressive 19% growth in spend volume.

Thomas Panther: Our direct business's revenue grew 22%, with sales up 34%, and solid growth across spend volume, transactions, and customers. Revenue per total spend, sometimes referred to as the take rate, increased during the quarter, and our card penetration, which measures the percentage of total spend processed via virtual card, increased approximately 6% and is now above 11%. Both of these measures reflect the strength of our business relative to recent sector trends. Also, on July 1st, we closed the Paymarine transaction.

Ron Clarke: Our direct business's revenue grew 22%, with sales up 34%, and solid growth across spend volume, transactions, and customers.

Ron Clarke: And then lastly, sales and lodging growing up 36% in Q2, again, evidence to us that there's demand for the solutions. So again, the progress that we're seeing, we do expect the lodging business to turn positive organic growth in Q4. So hopefully, as we execute for this year, problem children no more.

Tom Panther: Revenue per total spend, sometimes referred to as the take rate, increased during the quarter, and our card penetration, which measures the percentage of total spend processed via virtual card, increased approximately 6%, and is now above 11%.

Tom Panther: Both of these measures reflect the strength of our business relative to recent sector trends. Also, on July 1st, we closed the Paymarine transaction, and we are squarely focused on integrating the business. Inclusive of our initial synergies, we expect Paymarine to contribute approximately 25 to 35 million dollars to second half revenue. Cross-border revenue increased 19% and sales grew 25% during the quarter. Client spend volume was robust against all geographies, which reflects our ability to further penetrate our large addressable markets. It's clear from our consistent strong performance that our go-to-market strategies are working. Consequently, we continue to make significant investments in this business through increased sales and marketing resources.

Ron Clarke: So the wrap on the quarter, again, no real surprises in Q2, results kind of right on expectation. Trends, same store sales, new sales and retention trends significantly improved across the board and our two problem children progressing on a path are growing again.

Tom Panther: Both of these measures reflect the strength of our business relative to recent sector trends.

Tom Panther: Also, on July 1st, we closed the Paymorain transaction, and we are squarely focused on integrating the business. Inclusive of our initial synergies, we expect Paymorain to contribute approximately $25 to $35 million to second-half revenue.

Thomas Panther: And we are squarely focused on integrating the business. Inclusive of our initial synergies, we expect PayMarine to contribute approximately $25 to $35 million to second half revenue. Cross-border revenue increased 19% and sales grew 25% during the quarter. Client spend volume was robust across all geographies, which reflects our ability to further penetrate our large addressable market. It's clear from our consistent, strong performance that our go-to-market strategies are

Thomas Panther: And we are squarely focused on integrating the business. Inclusive of our initial synergies, we expect PayMarine to contribute approximately $25 to $35 million to second half revenue. Cross-border revenue increased 19% and sales grew 25% during the quarter. Client spend volume was robust across all geographies, which reflects our ability to further penetrate our large addressable market. It's clear from our consistent strong performance that our go-to-market strategies are working

Ron Clarke: Okay, let me make the turn to our 2024 full year guidance. So today, we're reiterating the full year 2024 guidance at the midpoint that we provided in May. So as a reminder, 4 billion in revenue, I'm in cash, EPS of $19. For sure, some changes, some puts and takes in this guide. We're out looking weaker, FX. Fox, I hear from the second half that we were 90 days ago and a bit weaker, second half launching revenue.

Tom Panther: It's clear from our consistent, strong performance that our go-to-market strategies are working.

Thomas Panther: Consequently, we continue to make significant investments in this business through increased sales and marketing resources. In addition, we announced in June the acquisition of GPS, which will add over $125 million of revenue in 2025 and increase our scale, particularly in the U.S. Currently, corporate payments as a segment contributes 30% of Corpay revenue. But on a pro forma basis, at the end of next year, corporate payments will be approaching 40% of our company. Now, turning to vehicle payment.

Tom Panther: Consequently, we continue to make significant investments in this business through increased sales and marketing resources. In addition, we announced in June the acquisition of GPS, which will add over $125 million of revenue in 2025 and increase our scale, particularly in the U.S.

Tom Panther: In addition, we announced in June the acquisition of GPS, which will add over 125 million dollars of revenue in 2025, and increase our scale, particularly in the US. Currently, corporate payments, as a segment, contribute 30% of Corpay revenue, but on a pro-form basis, at the end of next year, corporate payments will be approaching 40% of our company.

Tom Panther: Currently, corporate payments, as a segment, contributes 30% of Corpay revenue. But on a pro forma basis, at the end of next year, corporate payments will be approaching 40% of our company.

Ron Clarke: That's offset by Paymarang revenue and some expected synergies that we'll capture there. Along with some expense management actions that we're putting in place to maintain profitability. I do want to put a special emphasis on our Q4 guide which you can see in our earning supplement. We're out looking accelerated double digit print and organic revenue growth and $21 of run rate cash EPS heading into 2025. Additionally, we are expecting to capture some meaningful synergies from our Paymarang and GPS corporate payments acquisitions next year, likely in the 50 cents accretion ballpark.

Tom Panther: Now, turning to vehicle payments, organic revenue increased 5% during the quarter, with growth driven by Brazil and international fleet. Our international fleet business continues to perform very well, led by low-double-digit revenue growth in both Australia and our UK maintenance business. In the UK, we've expanded the pay-by-phone parking app into a multi-point-solution consumer vehicle payments app by adding the ability to purchase insurance and search for nearby fuel stations and EV chargers. And we expect to integrate our vehicle maintenance and repair network into the app in the third quarter. It's early days in terms of customers transacting on the app, but we've made good progress, and we are excited about the opportunity.

Thomas Panther: Organic revenue increased 5% during the quarter, with growth driven by Brazil and international fleets. Our international fleet business continues to perform very well, led by low double-digit revenue growth in both Australia and our UK maintenance business. In the UK, we've expanded the pay-by-phone parking app into a multi-point solution consumer vehicle payments app by adding the ability to purchase insurance and search for nearby fuel stations and EV chargers.

Tom Panther: Now, turning to vehicle payments.

Tom Panther: Organic revenue increased 5% during the quarter with growth driven by Brazil and international fleet.

Tom Panther: Our international fleet business continues to perform very well, led by low double-digit revenue growth in both Australia and our UK maintenance business.

Tom Panther: In the UK, we've expanded the pay-by-phone parking app into a multi-point solution consumer vehicle payments app by adding the ability to purchase insurance and search for nearby fuel stations and EV chargers.

Thomas Panther: And we expect to integrate our vehicle maintenance and repair network into the app in the third quarter. It's early days in terms of customers transacting on the app, but we've made good progress, and we're excited about the opportunity. In Brazil, business performance was extremely strong, with revenue growing 20% and sales increasing 27%. The business is clicking on all cylinders. The Anchor toll product grew tags by 9%, and Toll Related Revenue grew 20%. Our product offering now includes nearly 7,000 acceptance locations, including 2,800 gas stations, resulting in fueling transactions being up 24% year-over-year.

Tom Panther: And we expect to integrate our vehicle maintenance and repair network into the app in the third quarter.

Tom Panther: It's early days in terms of customers transacting on the app, but we've made good progress and we're excited about the opportunity.

Ron Clarke: So look, the main message to take away here is that Corpay is headed to a better place. We're leaving behind some challenges, the Russia divastiture, Fed hikes, the fleet pivot, lodging softness, even the strategic review and heading to a place with accelerating performance driven by problem children improvement, lower interest rates, higher sales and fewer shares. Our expected arrival to the better place is Q4.

Tom Panther: In Brazil, business performance was extremely strong, with revenue growing 20% and sales increasing 27%. The business is clicking on all cylinders. The anger toll product grew tags 9%, and toll-related revenue grew 20%. Our product offering now includes nearly 7,000 acceptance locations, including 2,800 gas stations, resulting in fueling transactions being up 24% year-over-year. We have sold nearly 2.5 million insurance policies, up 3X from last year. Additionally, that pay users and revenue are both up approximately 40% compared to last year, which is all organic as we are in the early stages of cross-selling the product. In the US, our local fleet business continues to be a drag on revenue growth. Excluding this business, North American fleet grew 3%.

Speaker Change: In Brazil, business performance was extremely strong, with revenue growing 20% and sales increasing 27%. The business is clicking on all cylinders. The Anchor toll product grew tags 9%.

Tom Panther: and Toll Related Revenue grew 20%.

Tom Panther: Our product offering now includes nearly 7,000 acceptance locations, including 2,800 gas stations, resulting in fueling transactions being up 24% year-over-year.

Thomas Panther: We have sold nearly 2.5 million insurance policies, up 3x from last year. Additionally, ZapPay users and revenue are both up approximately 40% compared to last year, which is all organic as we are in the early stages of cross-selling the product. In the U.S., our local fleet business continues to be a drag on revenue growth. Excluding this business, North American fleet grew 3%.

Thomas Panther: We have sold nearly 2.5 million insurance policies, up 3x from last year. Additionally, pay users and revenue are both up approximately 40% compared to last year, which is all organic as we are in the early stages of cross-selling the product. In the U.S., our local fleet business continues to be a drag on revenue growth. Excluding this business, North American fleet grew 3%.

Tom Panther: We have sold nearly 2.5 million insurance policies, up 3x from last year.

Ron Clarke: Okay, last up, let me transition to an update on our portfolio which again calls for a deeper not wider company, squarely focused on three segments. We're well underway with our integration and synergy planning for our Paymarang and GPS acquisitions, initial thinking their calls for conversion and shuttering of the acquired IT systems, a significant streamlining of back office operations and GNA and really leveraging of our broader product line to increase revenues in both businesses.

Tom Panther: Additionally, ZapPay users and revenue are both up approximately 40%.

Tom Panther: compared to last year, which is all organic as we are in the early stages of cross-selling the product.

Tom Panther: In the U.S., our local fleet business continues to be a drag on revenue growth. Excluding this business, North American fleet grew 3%.

Tom Panther: While the shift away from micro accounts has impacted our sales and revenue, we are beginning to see increased sales from our upmarket digital and field efforts. Sales of our proprietary fuel man products grew 29% in the quarter, and we are seeing signs this trend has momentum. Sales to companies operating five-plus vehicles were the highest they've been in the last three years, which puts us on track to surpass our 2022 revenue from that customer segment. So our plans are working, just taking longer than we would like.

Thomas Panther: While the shift away from micro-accounts has impacted our sales and revenue, we are beginning to see increased sales from our up-market digital and field efforts. Sales of our proprietary Fuelman products grew 29% in the quarter, and we're seeing signs this trend has momentum. Sales to companies operating 5-plus vehicles were the highest they've been in the last three years, which puts us on track to surpass our 2022 revenue target from that customer segment. So our plans are working, just taking longer than we would like.

Thomas Panther: While the shift away from micro-accounts has impacted our sales and revenue, we are beginning to see increased sales from our upmarket digital and field efforts. Sales of our proprietary Fuelman products grew 29% in the quarter, and we're seeing signs this trend has momentum. Sales to companies operating 5-plus vehicles were the highest they've been in the last three years, which puts us on track to surpass our 2022 revenue target from that customer segment. So our plans are working, just taking longer than we would like.

Tom Panther: While the shift away from micro-accounts has impacted our sales and revenue, we are beginning to see increased sales from our up-market digital and field efforts.

Tom Panther: Sales of our proprietary Fuelman products grew 29% in the quarter, and we're seeing signs this trend has momentum.

Ron Clarke: We expect these two deals to add about 15% to our corporate payments business revenue next year and with corporate payments overall representing about 40% of the overall company. We're also progressing a couple small vehicle related divestitures, totaling approximately 400 million of aftertax proceeds. We anticipate using any proceeds from these divestitures to buy back, see pay stock to minimize pollution heading into next year. Lastly, we are working a couple interesting deals in the pipeline where we maintain our target leverage and frankly have the liquidity to pull the trigger if in fact the deals survive diligence.

Tom Panther: Sales to companies operating 5-plus vehicles were the highest they've been in the last three years, which puts us on track to surpass our 2022 revenue from that customer segment.

Tom Panther: So our plans are working.

Tom Panther: Lodging revenue declined 10%, which was a bit worse than we expected due to slightly lower room nights and rate. Sales of our overall lodging product were quite good, up 36% over last year, which gives us confidence that our customers like our advantage product. Digging deeper into the segments' performance, we are encouraged to see same-store sales, which had been the primary source of the business's recent softness, improved 300 basis points compared to Q1. Specifically, workforce showed improvement as we laughed some of the weakness from last year. Insurance was the primary cause of this quarter's weakness in revenue.

Tom Panther: Just taking longer than we would like.

Thomas Panther: Lodging revenue declined 10%, which was a bit worse than we expected due to slightly lower room nights and rates. However, sales of our overall lodging product were quite good, up 36% over last year, which gives us confidence that our customers like our Advantage products. Digging deeper into the segment's performance, we are encouraged to see same-store sales, which had been the primary source of the business's recent softness, improve by 300 basis points compared to Q1.

Tom Panther: Lodging revenue declined 10%, which was a bit worse than we expected due to slightly lower room nights and rate.

Tom Panther: Sales of our overall lodging product were quite good, up 36% over last year, which gives us confidence that our customers like our Advantage product.

Tom Panther: Digging deeper into the segment's performance, we are encouraged to see same-store sales, which had been the primary source of the business's recent softness, improve 300 basis points compared to Q1.

Thomas Panther: Specifically, the workforce showed improvement as we lapped some of the weakness from last year. Insurance was the primary cause of this quarter's weakness in revenue. Insurance results were impacted by the decline in claims activity and some one-time benefits recognized last year that did not recur.

Tom Panther: Specifically, workforce showed improvement as we lapped some of the weakness from last year.

Ron Clarke: So in conclusion then today Q2 again finishing in line but don't miss improving trends, the base, new sales and retention maintaining our full year 24 guide at 4 billion in revenue and 19 and cash EPS. Lewis, Tracking to a better place with accelerating revenue and an EPS run rate of $21, Exiting Q4, an ongoing simplification of the company, doubling down a corporate payments and aggressively working the synergies of our two newest deals.

Speaker Change: Insurance was the primary cause of this quarter's weakness in revenue. Insurance results were impacted by the decline in claims activity and some one-time benefits recognized last year that did not recur.

Tom Panther: Insurance results were impacted by the client and claims activity, and some one-time benefits recognized last year that did not recur. Excluding last year's one-time insurance commissions, revenue would have declined 3%.

Thomas Panther: Excluding last year's one-time insurance commissions, revenue would have declined 3%. Now, looking further down the income statement, Q2 operating expenses of $542 million were up 1% versus Q2 of last year. Sprint's growth from acquisitions and sales investments was essentially offset by lower bad debt expense, a 4% decline in G&A expenses, and the sale of our Russia business. Bad debt expense declined $7 million or 20% from last year to $28 million or 5 basis points of total spend.

Tom Panther: Excluding last year's one-time insurance commissions, revenue would have declined 3%.

Tom Panther: Now, looking further down the income statement, Q2 operating expenses of $542 million were up 1% versus Q2 of last year. Experienced growth from acquisitions and sales investments were essentially offset by lower bad debt expense, a 4% decline in G&A expenses, and the sale of our Russia business. Bad debt expense declined $7 million or 20% from last year to $28 million or 5 basis points of total spend. Substantially, all of the decline was in US vehicle payments as we realized the benefit from our higher quality customer portfolio. EBITDA margin in the quarter was 53.1%, approximately 60 basis points of improvement from last year.

Tom Panther: Now, looking further down the income statement, Q2 operating expenses of $542 million were up 1% versus Q2 of last year.

Tom Panther: Express growth from acquisitions and sales investments were essentially offset by lower bad debt expense, a 4% decline in G&A expenses, and the sale of our Russia business.

Tom Panther: Bad debt expense declined $7 million or 20% from last year to $28 million or 5 basis points of total spend.

Tom Panther: So with that, let me turn the call back over to Tom to provide some additional detail on the quarter. Tom, thanks Ron and good afternoon everyone. Here's some additional details related to the quarter. Print revenue was $976 million which I was pleased to see at the high end of our guide despite a 3 million macro headwind from both fuel and FX. Organic revenue grew 6% led by 18% growth in corporate payments.

Thomas Panther: Substantially all of the decline was in U.S. vehicle payments as we realized the benefit from our higher quality customer portfolio. EBITDA margin in the quarter was 53.1%, approximately 60 basis points of improvement from last year. The Positive Operating Leverage was driven by solid revenue growth, lower bad debt expense, and disciplined expense management. Excluding our Russia business sold in August of 2023, EBITDA margin increased approximately 165 basis points. Interest expenses this quarter increased $6 million year-over-year due to a decline in interest income from the sale of our Russia business and the impact of higher interest rates and debt balances. Our effective tax rate for the quarter was 24.7% versus 26.6% last year, driven primarily by tax benefits from specific tax planning strategies.

Tom Panther: Substantially all of the decline was in U.S. vehicle payments as we realized the benefit from our higher quality customer portfolio.

Tom Panther: EBITDA margin in the quarter was 53.1%, approximately 60 basis points of improvement from last year.

Tom Panther: The positive operating leverage was driven by solid revenue growth, lower bad debt expense, and a disciplined expense management. Excluding our Russia business, sold in August of 2023, EBITDA margin increased approximately 165 basis points. Interest expenses quarter increased $6 million over year due to a decline in interest income from the sale of our Russia business, and the impact of higher interest rates and debt balances. Our effective tax rate for the quarter was 24.7% versus 26.6% last year, driven primarily by tax benefits from specific tax planning strategies.

Tom Panther: The positive operating leverage was driven by solid revenue growth, lower bad debt expense, and a disciplined expense management.

Tom Panther: Reported revenue growth was 3%, however excluding the impact from the sale of our Russia business, revenue grew 7%, strong expense discipline, and another quarter of lower bad debt resulted in EBITDA margin expanding to 53.1%. We generated 325 million of free cash flow which translates into $4.55 per share in cash EPS. 5 cents above the midpoint of our guide, up 8% versus last year, and up 14%, excluding the impact of the sale of our Russia business, overall solid results for the quarter.

Tom Panther: excluding our Russia business, sold in August of 2023, EBITDA margin increased approximately 165 basis points.

Tom Panther: Interest expenses quarter increased $6 million year over year due to a decline in interest income from the sale of our Russia business and the impact of higher interest rates and debt balances.

Thomas Panther: Our effective tax rate for the quarter was 24.7% versus 26.6% last year, driven primarily by tax benefits from specific tax planning strategies. Now, turning to the balance sheet, we ended the quarter with nearly $1.4 billion in unrestricted cash, and we had approximately $850 million available on our revolver. We have $5.9 billion outstanding on our credit facilities, and we had $1.4 billion borrowed under our securitization facilities.

Tom Panther: Our effective tax rate for the quarter was 24.7% versus 26.6% last year, driven primarily by tax benefits from specific tax planning strategies.

Tom Panther: Now, turning to the balance sheet, we ended the quarter with nearly $1.4 billion in unrestricted cash, and we had approximately $850 million available on our revolver. We have $5.9 billion outstanding on our credit facilities, and we had $1.4 billion borrowed under our securitization facility. As at the end of the quarter, our leverage ratio was 2.6 times trailing 12-month EBITDA, which remains within our target range. As previously mentioned, we acquired Paymarine on July 1st, which increased our leverage to 2.8 times. Our ability to generate over $300 million in quarterly free cash flows will increase our capacity on the revolver and cause leverage to decline during the rest of the year.

Thomas Panther: Now, turning to the balance sheet, we ended the quarter with nearly $1.4 billion in unrestricted cash, and we had approximately $850 million available on our revolver. We have $5.9 billion outstanding on our credit facilities, and we had $1.4 billion borrowed under our securitization facilities. As of the end of the quarter, our leverage ratio was 2.6 times trailing 12-month EBITDA, which remains within our target range. As previously mentioned, we acquired Pamerang on July 1st, which increased our leverage to 2.8 times.

Tom Panther: Now, turning to the balance sheet, we ended the quarter with nearly $1.4 billion in unrestricted cash and we had approximately $850 million available on our revolver.

Tom Panther: We have $5.9 billion outstanding on our credit facilities, and we had $1.4 billion borrowed under our securitization facility.

Thomas Panther: As of the end of the quarter, our leverage ratio was 2.6 times trailing 12-month EBITDA, which remains within our target range. As previously mentioned, we acquired Pamerang on July 1st, which increased our leverage to 2.8 times. Our ability to generate over $300 million in quarterly free cash flows will increase our capacity on the revolver and cause leverage to decline during the rest of the year. In the quarter, we repurchased 2.2 million shares, and year-to-date, we've repurchased 3.3 million shares for $949 million.

Tom Panther: As of the end of the quarter, our leverage ratio was 2.6 times trailing 12 month EBITDA, which remains within our target range.

Tom Panther: As previously mentioned, we acquired Pamerang on July 1st, which increased our leverage to 2.8 times.

Tom Panther: Our ability to generate over $300 million in quarterly free cash flows will increase our capacity on the revolver and cause leverage to decline during the rest of the year.

Thomas Panther: Our ability to generate over $300 million in quarterly free cash flows will increase our capacity on the revolver and cause leverage to decline during the rest of the year. In the quarter, we repurchased 2.2 million shares, and year to date, we've repurchased 3.3 million shares for $949 million.

Tom Panther: In the quarter, we repurchased 2.2 million shares, and year-to-date we've repurchased 3.3 million shares for $949 million. We have $610 million remaining under the current board authorization, and we will continue to evaluate additional buybacks over the course of the year, based primarily around the timing of some potential non-core vehicle-related detestitures and the acquisition of GPS, which we expect to close in early 2025.

Tom Panther: Revenue per total spend sometimes referred to as the take rate increased during the quarter and our card penetration, which measures the percentage of total spend processed via virtual card, increased approximately 6%, and is now above 11%. Both of these measures reflect the strength of our business relative to recent sector trends. Also, on July 1st, we closed the Paymarine Transaction, and we are squarely focused on integrating the business. Inclusive of our initial synergies, we expect paymarine to contribute approximately 25 to 35 million dollars to second half revenue.

Tom Panther: In the quarter, we repurchased 2.2 million shares, and year-to-date, we've repurchased 3.3 million shares for $949 million.

Thomas Panther: We have $610 million remaining under the current board authorization, and we will continue to evaluate additional buybacks over the course of the year based primarily on the timing of some potential non-core vehicle-related divestitures and the acquisition of GPS, which we expect to close in early 2025. Now, let me provide some details related to our outlook. As Ron indicated, we are maintaining our guide at the midpoint of $4 billion of revenue and $19 per share. However, we are tightening the range, reflecting increased visibility into our second half performance. However, the unsettled macro environment, particularly of late, increases the possibility of coming in towards the lower end of the range.

Tom Panther: We have $610 million remaining under the current board authorization, and we will continue to evaluate additional buybacks over the course of the year based primarily around the timing of some potential non-core vehicle-related divestitures.

Tom Panther: and the acquisition of GPS, which we expect to close in early 2025.

Thomas Panther: We have $610 million remaining under the current board authorization, and we will continue to evaluate additional buybacks over the course of the year, based primarily on the timing of some potential non-core vehicle-related divestitures and the acquisition of GPS, which we expect to close in early 2025. Now, let me provide some details related to our outlook. As Ron indicated, we are maintaining our guide at the midpoint of $4 billion of revenue and $19 per share. However, we are tightening the range, reflecting increased visibility into our second half performance. However, the unsettled macro environment, particularly of late, increases the possibility of coming in towards the lower end of the range.

Tom Panther: Now, let me provide some details related to our outlook. As Ron indicated, we are maintaining our guide at the midpoint of $4 billion of revenue and $19 per share. We are tightening the range, reflecting increased visibility into our second half performance. However, the unsettled macro-environment, particularly of late, increases the possibility of coming in towards the lower end of the range. For the overall economy, last week's economic data in the U.S. reflected a slowing economy, which triggered significant moves in the equity and fixed income market. Roberts. However, a broader view of economic data continues to point to low single-digit growth in our major markets, giving us confidence that business spending will grow at similar levels.

Tom Panther: Now, let me provide some details related to our Outlook.

Tom Panther: As Ron indicated, we are maintaining our guide at the midpoint of $4 billion of revenue and $19 per share.

Tom Panther: Cross-border revenue increased 19% and sales grew 25% during the quarter. Client spend volume was robust against all geographies, which reflects our ability to further penetrate our large addressable markets. It's clear from our consistent strong performance that our go-to-market strategies are working. Consequently, we continue to make significant investments in this business through increased sales and marketing resources. In addition, we announced in June the acquisition of GPS, which will add over 125 million dollars of revenue in 2025, and increase our scale, particularly in the US. Currently, corporate payments, as a segment, contribute 30% of Corpay revenue, but on a pro-form basis, at the end of next year, corporate payments will be approaching 40% of our company.

Speaker Change: We are tightening the range, reflecting increased visibility into our second half performance. However, the unsettled macro environment, particularly of late, increases the possibility of coming in towards the lower end of the range.

Thomas Panther: For the overall economy, last week's economic data in the U.S. reflected a slowing economy, which triggered significant moves in the equity and fixed income markets. However, a broader view of economic data continues to point to low single-digit growth in our major markets, giving us confidence that business spending will grow at similar levels. We have analyzed recent historical and forward-looking information to inform our fuel and FX projections. Overall, we're estimating a modest macro headwind based on lower fuel prices and weaker effects, namely the Brazilian Haiyai. But financial markets are fluid, causing a degree of variability regarding our macro forecast. Nonetheless, we remain focused on what we can control, which is running the business and optimizing its performance.

Speaker Change: For the overall economy, last week's economic data in the U.S. reflected a slumming economy which triggered significant moves in the equity and fixed income markets.

Speaker Change: However, a broader view of economic data continues to point to low single-digit growth in our major markets, giving us confidence that business spending will grow at similar levels.

Tom Panther: We have analyzed recent historical and forward-looking information to inform our fuel and FX projections. Overall, we're estimating a modest macro headwind based on lower fuel prices and weaker FX, namely the Brazilian AI. But financial markets are fluid, causing a degree of variability regarding our macro forecast. Nonetheless, we remain focused on what we can control, which is running the business and optimizing its performance. Related to our core business, we are maintaining our full-year guide in each of our businesses, except for lodging as we continue to work through the softness. While we see indications of the business improving, we're electing to further de-risk the forecast by assuming room nights to be relatively flat in Q3 and seasonally decline in Q4 compared to Q2.

Speaker Change: We have analyzed recent historical and forward-looking information to inform our fuel and FX projections.

Speaker Change: Overall, we're estimating a modest macro headwind based on lower fuel prices and weaker FX, namely the Brazilian Haiyai. But financial markets are fluid, causing a degree of variability regarding our macro forecast.

Speaker Change: Nonetheless, we remain focused on what we can control, which is running the business and optimizing its performance.

Thomas Panther: Related to our core business, we are maintaining our full-year guide in each of our businesses, except for lodging, as we continue to work through the software. While we see indications of the business improving, we're electing to further de-risk the forecast by assuming room nights to be relatively flat in Q3 and seasonally down in Q4 compared to Q2. The impact from the macro headwind and lodging is offset by $25 to $35 million of revenue from Paymarant.

Speaker Change: Related to our core business, we are maintaining our full year guide in each of our businesses except for lodging as we continue to work through the softness.

Tom Panther: While we see indications of the business improving, we're electing to further de-risk the forecast.

Tom Panther: By assuming room nights to be relatively flat in Q3 and seasonally declined in Q4 compared to Q2.

Tom Panther: It's early days in terms of customers transacting on the app, but we've made good progress, and we are excited about the opportunity. In Brazil, business performance was extremely strong, with revenue growing 20% and sales increasing 27%. The business is clicking on all cylinders. The anger toll product grew tags 9%, and toll-related revenue grew 20%. Our product offering now includes nearly 7,000 acceptance locations, including 2,800 gas stations resulting in fueling transactions being up 24% year-over-year.

Tom Panther: The impact from the macro headwind and lodging is offset by 25 to 35 million dollars of revenue from Pamirang. From a cash EPS perspective, we expect Pamirang to be EPS neutral, and we've taken actions to offset the revenue headwinds through a range of expense initiatives, the flow-through effect from the lower FX rates, and fewer shares. I would also note that there was about $5 million of gift revenue that was pulled forward in Q2 from Q3 based on customer shipment demands, which is simply timing and why we don't flow through this quarter's beat to the full-year guide.

Tom Panther: The impact from the macro headwind and lodging is offset by $25 to $35 million of revenue from Pamerang.

Thomas Panther: From a cash EPS perspective, we expect Pamerain to be EPS neutral, and we've taken actions to offset the revenue headwinds through a range of expense initiatives. The flow-through effect from the lower FX rates and fewer shares.

Thomas Panther: From a cash EPS perspective, we expect pay moray to be EPS neutral, and we've taken actions to offset the revenue headwinds through a range of expense initiatives. The flow-through effect from the lower FX rates and fewer shares.

Tom Panther: From a cash EPS perspective, we expect Pamerain to be EPS neutral, and we've taken actions to offset the revenue headwinds through a range of expense initiatives, the flow-through effect from the lower FX rates, and fewer shares.

Thomas Panther: I would also note that there was about $5 million of gift revenue that was pulled forward in Q2 from Q3 based on customer shipment demands, which is simply timing and why we don't flow through this quarter's beat to the full year guide. So, in total, some minor changes to our full year outlook, but no changes to print. For Q3, we're expecting revenue to grow 5-7% and cash EPS to grow 9-11%, which is supported by our preliminary July results.

Thomas Panther: I would also note that there was about $5 million of gift revenue that was pulled forward in Q2 from Q3 based on customer shipment demands, which is simply timing and why we don't flow through this quarter's beat to the full year guide. So, in total, some minor changes to our full year outlook, but no changes to print. For Q3, we're expecting revenue to grow 5% to 7% and cash EPS to grow 9% to 11%, which is supported by our preliminary July results.

Tom Panther: I would also note that there was about $5 million of gift revenue that was pulled forward in Q2 from Q3 based on customer shipment demands, which is simply timing and why we don't flow through this quarter's beat to the full year guide.

Tom Panther: We have sold nearly 2.5 million insurance policies up 3X from last year. Additionally, that pay users and revenue are both up approximately 40%, compared to last year, which is all organic as we are in the early stages of cross-selling the product. In the US, our local fleet business continues to be a drag on revenue growth, excluding this business North American fleet grew 3%. While the shift away from micro accounts has impacted our sales and revenue, we are beginning to see increased sales from our upmarket digital and field efforts.

Tom Panther: So, in total, some minor changes to our full-year outlook, but no changes to print.

Tom Panther: So in total, some minor changes to our full year outlook, but no changes to print.

Tom Panther: For Q3, we're expecting revenue to grow 5 to 7 percent and cash EPS to grow 9 to 11 percent, which is supported by preliminary July results. This translates into 1.015 billion to 1.035 billion of revenue, and $4.90 to $5 per share of cash EPS. A little over half of the sequential increase in revenues driven by Pamirang and the seasonal lift from our gift business. The remaining sequential increase is driven by the implementation of new sales, same-source sales remaining flat, improved retention, especially in the US vehicle payments business, and specific business initiatives, which are underway. We're projecting to exit the year with organic revenue growing in the low-to-mid teens, led by corporate payments growing in excess of 20 percent.

Tom Panther: For Q3, we're expecting revenue to grow 5-7% and cash EPS to grow 9-11%, which is supported by our preliminary July results.

Thomas Panther: This translates into $1.015 billion to $1.035 billion of revenue and $4.90 to $5 per share of cash EPS. A little over half of the sequential increase in revenue is driven by pay meringue and the seasonal lift from our gift business. The remaining sequential increase is driven by the implementation of new sales, same-store sales remaining flat, improved retention, especially in the U.S. vehicle payments business, and specific business initiatives which are underway. We're projecting to exit the year with organic revenue growing in the low to mid-teens, led by corporate payments growing in excess of 20%.

Thomas Panther: This translates into $1.015 billion to $1.035 billion of revenue and $4.90 to $5 per share of cash EPS. A little over half of the sequential increase in revenue is driven by paymoraying and the seasonal lift from our gift business. The remaining sequential increase is driven by the implementation of new sales, same-store sales remaining flat, improved retention, especially in the U.S. vehicle payments business, and specific business initiatives which are underway. We're projecting to exit the year with organic revenue growing in the low to mid-teens, led by corporate payments growing in excess of 20%.

Tom Panther: This translates into $1.015 billion to $1.035 billion of revenue and $4.90 to $5 per share of cash EPS.

Tom Panther: A little over half of the sequential increase in revenue is driven by paymoraying and the seasonal lift from our gift business.

Tom Panther: Sales of our proprietary fuel man products grew 29% in the quarter, and we are seeing signs this trend has momentum. Sales to companies operating five-plus vehicles were the highest they've been in the last three years, which puts us on track to surpass our 2022 revenue from that customer segment. So our plans are working just taking longer than we would like.

Tom Panther: The remaining sequential increase is driven by the implementation of new sales, same-store sales remaining flat, improved retention, especially in the U.S. vehicle payments business, and specific business initiatives which are underway.

Tom Panther: We're projecting to exit the year with organic revenue growing in the low-to-mid teens, led by corporate payments growing in excess of 20%.

Tom Panther: However, equally important, North America fleet and lodging are projected to have turned to the corner and returned to growth. These estimates exclude the impact from our pending acquisition of GPS that is scheduled to close in early 2025, pending regulatory approval. We expect at least 50 cents of accretion next year from the combination of Pamirang and GPS. However, more importantly, we expect earnings accretion of approximately 2x that amount once we've completed our integration plans in the back half of 2025.

Thomas Panther: However, equally important, North America Fleet and lodging are projected to have turned the corner and returned to gross. These estimates exclude the impact from our pending acquisition of GPS, that is scheduled to close in early 2025 pending regulatory approval. We expect at least 50 cents of accretion next year from the combination of Pamerane and GPS. However, more importantly, we expect earnings accretion of approximately 2x that amount once we've completed our integration plans in the back half of 2025.

Thomas Panther: However, equally important, North America Fleet and lodging are projected to have turned the corner and returned to growth. These estimates exclude the impact from our pending acquisition of GPS, that is scheduled to close in early 2025 pending regulatory approval. We expect at least 50 cents of accretion next year from the combination of Pamerane and GPS. However, more importantly, we expect earnings accretion of approximately 2x that amount once we've completed our integration plans in the back half of 2025.

Tom Panther: However, equally important, North America Fleet and lodging are projected to have turned the corner and returned to growth.

Tom Panther: Lodging revenue declined 10%, which was a bit worse than we expected due to slightly lower room nights and rate. Sales of our overall lodging product were quite good up 36% over last year, which gives us confidence that our customers like our advantage product. Digging deeper into the segments performance, we are encouraged to see same-store sales, which had been the primary source of the business's recent softness, improved 300 basis points compared to Q1.

Tom Panther: These estimates exclude the impact from our pending acquisition of GPS.

Tom Panther: That is scheduled to close in early 2025 pending regulatory approval.

Tom Panther: We expect at least 50 cents of accretion next year from the combination of Paymorain and GPS. However, more importantly, we expect earnings accretion of approximately 2x that amount once we've completed our integration plans in the back half of 2025.

Tom Panther: The rest of our assumptions related to our guide can be found in our press release and supplement.

Tom Panther: Specifically, workforce showed improvement as we laughed some of the weakness from last year. Insurance was the primary cause of this quarter's weakness in revenue. Insurance results were impacted by the client and claims activity, and some one-time benefits recognized last year that did not recur. Excluding last year's one-time insurance commissions, revenue would have declined 3%. Now, looking further down the income statement, Q2 operating expenses of $542 million were up 1% versus Q2 of last year.

Speaker Change: The rest of our assumptions related to our guide can be found in our press release and supplement. With that, thank you for your interest in Corpay and now operator, please open the lines for questions. Thank you.

Thomas Panther: The rest of our assumptions related to our guide can be found in our press release and supplement. With that, thank you for your interest in Corpay, and now, Operator, please open the lines for questions. Thank you.

Operator: With that, thank you for your interest in Corpay, and now operator, please open the lines for questions.

Thomas Panther: The rest of our assumptions related to our guide can be found in our press release and supplement. With that, thank you for your interest in Corpay, and now, operator, please open the lines for questions. Thank you.

Operator: Thank you. And we will pause for a moment to allow questions to queue.

Operator: Thank you, and at this time, if you would like to ask a question, please press the star and 1 on your telephone keypad. You may remove yourself from the queue at any time by pressing star 2. We do ask that you limit your questions to one question and one follow-up, and we will pause for a moment to allow questions to queue. And we will take our first question from Darrin Peller with Wolf Research.

Speaker Change: Thank you.

Speaker Change: And at this time, if you would like to ask a question, please press the star and one on your telephone keypad. You may remove yourself from the queue at any time by pressing star two. We do ask that you limit your questions to one question and one follow-up. And we will pause for a moment to allow questions to queue.

Darren Peller: And we will take our first question from Darren Peller with Wolf Research. Hey guys, thank you. Look, it's great to hear about the confidence and acceleration on both the lodging side and North American fleet. I guess just one quick one on the lodging and then a little more color on fleet also, but on lodging, just the conviction around that is coming from, I think you were saying, just the, there was signing zero. You're already seeing evidence of, and I just want to make sure that the tech side of it is all good now and ready to go in terms of new volume coming on.

Tom Panther: Experienced growth from acquisitions and sales investments were essentially offset by lower bad debt expense, a 4% decline in G&A expenses, and the sale of our Russia business. Bad debt expense declined $7 million or 20% from last year to $28 million or 5 basis points of total spend. Substantially, all of the decline was in US vehicle payments as we realized the benefit from our higher quality customer portfolio. EBITDA margin in the quarter was 53.1%, approximately 60 basis points of improvement from last year.

Speaker Change: And we will take our first question from Darren Peller with Wolf Research.

Darrin Peller: Hey, guys. Look, it's great to hear about the confidence and reacceleration on both the lodging side and the North American fleet. I guess, just one quick one on the lodging and then a little more color on fleet also, but on lodging, just the conviction around that is coming from, I think you were saying just the resignings you're already seeing evidence of and just want to make sure that the tech side of it is all good now and ready to go in terms of new volume coming on. And then really, on fleet, if you could just reiterate a little more of what But it's great to hear, given the

Darrin Peller: Hey guys, thank you. Look, it's great to hear about the confidence and reacceleration on both the lodging side and the North American fleet. I guess, just one quick one on the lodging and then a little more color on fleet also, but on lodging, just the conviction around that is coming from, I think you were saying just that there were signings you're already seeing evidence of and just want to make sure that the tech side of it is all good now and ready to go in terms of new volume coming on. And then really, on fleet, if you could just reiterate a little more of what you But it's great to hear, given the

Darren Peller: Hey guys, thank you. Look, it's great to hear about the confidence and reacceleration on both the lodging side and

Darren Peller: North American Fleet, I guess.

Darren Peller: Just one quick one on the lodging and then a little more color on fleet also, but on lodging, just the conviction around that is coming from, I think you were saying, just the signings you're already seeing evidence of, and I just want to make sure that the tech side of it is all good now and ready to go in terms of new volume coming on.

Darren Peller: And then really on fleet, if you could just reiterate a little more of what you're saying around conviction on that, just why you see the confidence there, but it's crazy here given the trends.

Speaker Change: And then really on fleet, if you could just reiterate a little more of what you were saying around conviction on that, just why you see the confidence there, but it's great to hear given the trends.

Ronald Clarke: Yeah, Darren, hey, it's Ron. I mean, the short answer, let me start with the logic thing, is really the base. Right. The client base was let down all about a year ago, starting in Q2 last year, both from the IT issues, and I kind of just saw this macro in those areas. And so it's really less about the lodging business accelerating and more basically that the base went down and it's stabilized. So effectively, if you look sequentially, if I said to you, which I guess we have, hey, our print for lodging in Q2 is X. Think of it being mostly stable or flat sequentially.

Ronald Clarke: Yeah, Darren, hey, it's Ron. I mean, the short answer, let me start with the logic thing is really the pace. Right, the client base let down all about a year ago, starting in Q2 last year, both from the IT issue and kind of just saw this macro in those areas. And so it's really less about the lodging business accelerating and more basically that the base went down, and it's stabilized. So effectively, if you look sequentially, if I said to you, which I guess we have, pay our print for lodging in Q2 is X. Think of it being mostly stable or flat.

Ron Clarke: Darren, hey, it's, it's wrong. I mean, the, the short answer, let me start with the lodging thing is really the base, right? The client base left down all about a year ago, starting in Q2 last year, both the IT issue and kind of just softest macro in those areas. And so it's really less about the lodging business accelerating and more basically that the base went down and it stabilized. So effectively, if you look sequentially, if I said to you, which I guess we have, pay our print for lodging in Q2 is X, think of it being mostly stable or flat sequentially.

Darren Peller: Yeah, Darren, hey, it's Ron. I mean, the short answer, let me start with the logic thing, is really the base, right? The client base flexed down about a year ago, starting in Q2 last year.

Speaker Change: Vote for the IGs.

Speaker Change: issue and kind of just saw this backroom in those areas. And so

Speaker Change: It's really less about...

Speaker Change: the lodging business accelerating and more basically that the base went down and it stabilized. So effectively, if you look...

Tom Panther: Now, turning to the balance sheet, we ended the quarter with nearly $1.4 billion in unrestricted cash, and we had approximately $850 million available on our revolver. We have $5.9 billion outstanding on our credit facilities, and we had $1.4 billion borrowed under our securitization facility. As at the end of the quarter, our leverage ratio was 2.6 times trailing 12-month EBITDA, which remains within our target range. As previously mentioned, we acquired paymarine on July 1st, which increased our leverage to 2.8 times.

Speaker Change: sequentially if I said to you

Speaker Change: which I guess we have, pay our print for lodging in Q2 is X. Think of it being mostly stable or flat sequentially.

Ron Clarke: Okay, and so what that does is it takes the decline out, right, which was whatever nine or 10 in first couple quarters that list obviously the whole company. And it's really the same story for NAF, right? That the business was in decline when we made the ticket. We kicked out all that micro business revenue in that debt. So effectively, we took the revenue down. And fortunately, we've refilled the bucket with more stable revenue. So the same thing, the better to for performance is not a function of lodging or NAF really growing. Think of them as honestly just flat and mostly just not declining anymore.

Ronald Clarke: And so what that does is it takes the decline out, right, which was whatever, nine or ten in the first couple quarters, and that lifts the whole company. And it's really the same story for NAF, right, that the business was in decline when we made the pivot. We kicked out all of that micro business revenue and mad debt. So effectively, we took the revenue down, and fortunately, we've refilled the bucket with more stable revenue. So it is the same thing.

Speaker Change: Okay. And so what that does is it takes the decline out, right, which was whatever, nine or ten in the first couple quarters.

Speaker Change: that lifts, obviously, the whole company.

Tom Panther: And it's really the same story for NAF.

Tom Panther: Right that the business was in decline when we made the pivot. We kicked out all that micro business revenue and mad debt so effectively we took the revenue down and Fortunately, we've refilled the bucket with more stable revenue. So the same thing

Tom Panther: Our ability to generate over $300 million in quarterly free cash flows will increase our capacity on the revolver and cause leverage to decline during the rest of the year. In the quarter, we repurchased 2.2 million shares, and year-to-date we've repurchased 3.3 million shares for $949 million. We have $610 million remaining under the current board authorization, and we will continue to evaluate additional buybacks over the course of the year, based primarily around the timing of some potential non-core vehicle-related detestitures, and the acquisition of GPS, which we expect to close in early 2025.

Ronald Clarke: So the same thing. The better Q4 performance is not a function of lodging or NAF really growing. Think of them as honestly just flat and mostly just not declining anymore. And again, the main, main thing is really just that we've lapped the bases of declining, and both businesses have stabilized.

Ronald Clarke: The better Q4 performance is not a function of lodging or NAF really growing. Think of them as honestly just flat and mostly just not declining anymore. And again, the main, main thing is really just we've lapped the bases of going down, and both businesses have stabilized. Okay, that's really helpful, Ron.

Tom Panther: The better Q4 performance is not a function of lodging or NAF really growing. Think of them as honestly just flat and mostly just not declining anymore.

Ron Clarke: And again, the main thing is really just we've laughed the bases going down, and both businesses have stabilized. Okay, that's really awful, Ron.

Tom Panther: And again, the main, main thing is really just we've lapped the bases going down and both businesses have stabilized themselves.

Darrin Peller: Okay, that's really helpful, Ron. Guys, just one more follow-up on the corporate payment side. The growth has continued to be strong. I just want to make sure, and we've had good feedback on the deals, especially Paymoreng and the accretion that is coming, but Ron, how do you feel about your positioning now? I mean, given the number of deals you've done, where the assets are all placed, you know, do you think, strategically, we're where you want to be?

Darrin Peller: Guys, just one more follow-up question is on the corporate payment side, the growth has continued to be strong. I just want to make sure, and we've had good feedback on the deals, especially Paymoreng and the accretion coming. But Ron, how do you feel about your positioning now?

Darren Peller: Guys, just one more follow-up is on the corporate payment side. The growth has continued to be strong. I just want to make sure, and we've had good feedback on the deals, especially Paymerang and the accretion coming.

Tom Panther: Okay, that's really awful, Ron.

Speaker Change: Guys, just one more follow up is on the corporate payment side. The growth has continued to be strong. I just want to make sure.

Ron Clarke: And we've had good feedback on the deals, especially PayMarang and the accretion coming. But, Ron, how do you feel about your positioning now? I mean, given the number of deals you've done, where the assets are all placed, you know, do you think strategically we're where you want to be or do you anticipate more?

Ron Clarke: But, Ron, how do you feel about your positioning now? I mean, given the number of deals you've done, where the assets are all placed. Do you think strategically where you want to be, or do you anticipate? and more. Yeah, Darren, good question. We talked about it before. I would say I feel like the Humpty Dumpty work, you know, is mostly over. We have a pretty bright product line now. We've got card products. I think the new tech guys like Divi and Ramp and Brex, and so we have those products. We've obviously got the full AD, AD automation products.

Darrin Peller: I mean, given the number of deals you've done, where are the assets all placed? You know, do you think strategically about where you want to be? Or do you anticipate more?

Tom Panther: Now, let me provide some details related to our outlook. As Ron indicated, we are maintaining our guide at the midpoint of $4 billion of revenue and $19 per share. We are tightening the range, reflecting increased visibility into our second half performance. However, the unsettled macro-environment, particularly of late, increases the possibility of coming in towards the lower end of the range. For the overall economy, last week's economic data in the U.S, reflected a slowing economy which triggered significant moves in the equity and fixed income market.

Ronald Clarke: Yeah, Darin, good question. We've talked about it before. I would say I feel like the Humpty Dumpty work, you know, is mostly over. We have a pretty broad product line now. We've got card products. Think the new tech guys like Divi and Ramp and Brex and stuff. So we have those products. We've obviously got the full AD automation products.

Ronald Clarke: Yeah, Darin, good question. We've talked about it before.

Ron Clarke: Yeah, Darren, good question. We've talked about it before. I would say I feel like the Humpty Dumpty work,

Speaker Change: You know, it's mostly over. We have a pretty, you know, broad product line now. We've got card products, ink.

Ronald Clarke: I would say I feel like the Humpty Dumpty work, you know, is mostly over. We have a pretty broad product line now. We've got card products. Think the new tech guys like Divi and Ramp and Brex and stuff. So we have those products. We've obviously got the full AP automation products.

Tom Panther: The new tech guys like Dibby and Ramp and Brex and stuff. So we have those products.

Tom Panther: We've obviously got the quote, full AD, AD automation products. I think from the product perspective, we spent lots of time and money assembling a pretty broad set of products in this middle market, so the game now is really selling.

Ronald Clarke: I think from the product perspective, we spend lots of time and money assembling a pretty broad set of products in this middle market. So the game now is really selling. So when we say to you guys, hey, Jim, I think up 28% or something like that for the quarter. So that's the game out there.

Ron Clarke: I think from the product perspective, we spend lots of time and money assembling a pretty broad set of products in this mental market. So the game now is really selling. So when we say you guys, hey, Jim, I think up 28% or something like the quarter. So that's the game that there's a game that has shifted from assembling a competitive in a good business to now really just selling a lot of it. And I think the numbers show that we're not only selling it, but the business is compounding too. So we're in a spot. That's great.

Tom Panther: Roberts. However, a broader view of economic data continues to point to low single-digit growth in our major markets, giving us confidence that business spending will grow at similar levels. We have analyzed recent historical and forward-looking information to inform our fuel and FX projections. Overall, we're estimating a modest macro headwind based on lower fuel prices and weaker FX, namely the Brazilian AI. But financial markets are fluid causing a degree of variability regarding our macro forecast.

Ronald Clarke: The game has shifted from assembling a competitive and a good business to now really just selling a lot of it. And I think the numbers show that we're not only selling it, but the business is growing too. So we're in a good spot. That's great. And we expect it to continue to become a bigger piece of the portfolio. Just its growth rate will cause it to continue to be a bigger portion of it. We said 30% now and 40% by the end of next year. And certainly from a capital allocation perspective, we would still view them as attractive ways to deploy capital. That's great. It makes sense.

Jim Eglseder: So when we say to you guys, hey, Jim, I think up 28% since I'm running for the quarter. So that's the game out there. The game has shifted from assembling a competitive and a good business.

Ronald Clarke: The game has shifted from assembling a competitive and a good business to now really just selling a lot of it. And I think the numbers show that we're not only selling it, but the business is growing too. So we're in a good spot. That's great. And Darren, we expect it to continue to become a bigger piece of the portfolio. What I'm saying is that just its growth rate will cause it to continue to be a bigger portion of it. We said 30% now and 40% by the end of next year. And certainly from a capital allocation perspective, we would still view them as attractive ways to deploy capital. That's great. It makes sense.

Tom Panther: to now really just selling a lot of it and I think the numbers show that we're not only selling it but but the business is compounding too so we're we're in a good spot.

Darrin Peller: That's great. It makes sense, guys. Thank you.

Darren Peller: And Darren, we expect it to continue to come up. Darren, I'd say, as we expected to continue to become a bigger piece of the overall Corpay portfolio, what long distance growth rate will cause it to continue to be a bigger portion. I think we said 30% now and 40% by the end of next year. And sort of from a capital allocation perspective, we would still view it as attractive ways to deploy capital. That's great. Make sense, guys. Thank you. Good to talk to you. Thank you.

Tom Panther: Nonetheless, we remain focused on what we can control, which is running the business and optimizing its performance. Related to our core business, we are maintaining our full-year guide in each of our businesses, except for lodging as we continue to work through the softness. While we see indications of the business improving, we're electing to further de-risk the forecast, by assuming room nights to be relatively flat in Q3 and seasonally decline in Q4 compared to Q2.

Tom Panther: We expect it to continue to become a bigger piece of the overall...

Speaker Change: Portfolio, what long-distance growth rate will cause it to continue to be a bigger portion of it. We said 30% now and 40% by the end of next year, and certainly from a capital allocation perspective, we would still view it as attractive ways to deploy capital.

Darrin Peller: That's great. It makes sense, guys. Thank you.

Speaker Change: That's great. Make sense, guys. Thank you.

Operator: Thank you. And our next question comes from Tinson Huang with JP Morgan.

Speaker Change: Good to talk to you.

Tencent Huang: And our next question comes from Tencent Huang with JP Morgana. Hey, Ron Tom. Good to talk to you guys. Just to follow up on Darren's last question there, just on the corporate payment side, the acceleration to the 20%. What's feeling that? I know there's a slightly easier comp. I just want to make sure there's anything else in there. And I think Tom, you talked about take rates and trends there being positive. Maybe just to hone in on that with the direct business. And I know there's some concerns out there on virtual card monetization and adverse payment selection, that kind of thing.

Speaker Change: Thank you. And our next question comes from Tinson Huang with J.P. Morgan.

Tom Panther: The impact from the macro headwind and lodging is offset by 25 to 35 million dollars of revenue from Pamirang. From a cash EPS perspective, we expect Pamirang to be EPS neutral, and we've taken actions to offset the revenue headwinds through a range of expense initiatives, the flow through effect from the lower FX rates and fewer shares. I would also note that there was about $5 million of gift revenue that was pulled forward in Q2 from Q3 based on customer shipment demands, which is simply timing and why we don't flow through this quarter's beat to the full-year guide. So in total, some minor changes to our full-year outlook, but no changes to print.

Tinson Huang: Hey Ron and Tom, good to talk to you guys. Just to follow up on Darrin's last question there, just on the corporate payment side, the acceleration to the 20%, what's fueling that? I know there's a slightly easier comp, just want to make sure if there's anything else in there.

Tinson Huang: Hey Ron and Tom, good to talk to you guys. Just to follow up on Darren's last question there, just on the corporate payment side, the acceleration to the 20%, what's fueling that?

Tinson Huang: I know there's a slightly easier comp, just want to make sure if there's anything else in there. And I think, Tom, you talked about take rates and trends there being positive. Maybe just to hone in on that with the direct business, and I know there's some concerns out there around virtual card.

Ronald Clarke: And I think, Tom, you talked about take rates and trends there being positive. Maybe just to hone in on that with the direct business, and I know there are some concerns out there around virtual card monetization and adverse payment selection, that kind of thing. What's your view on that?

Ronald Clarke: I think, Tom, you talked about take rates and trends there being positive. Maybe just to hone in on that with the direct business, and I know there are some concerns out there around virtual card monetization and adverse payment selection, that kind of thing. What's your view on that?

Speaker Change: monetization and adverse, you know, payment selection, that kind of thing.

Tencent Huang: What's your view on that?

Ronald Clarke: Hey, Tingen, it's Ron. So on the first part, the acceleration is mostly sales, right, which I think you know this well, but in that business, the revenue is driven by sales literally from a year before. And so when we step up sales, like we did in that business in twenty-three, we get the benefit here really throughout twenty-three, twenty-four, and the business basically had record sales last year. And then the second one is, you know, we're out, we're really out of the box in terms of synergies with the paying ranks. You know, we're back to the old fleet Corpay wheelhouse deals, right?

Tinson Huang: Hey, Tingen, it's Ron. So on the first part, the acceleration is mostly sales, right, which I think you know this well, but in that business, revenue is driven by sales literally from a year before. And so when we step up sales, like we did in that business in 23, we get the benefit here really throughout 2024. And the business basically had record sales last year. And then the second one is, you know, we're out, we're really out of the box in terms of synergies with the paying rank. We're back to the old fleet Corpay wheelhouse deals, right?

Ron Clarke: Hey, Tencent and Ron. So, on the first part, the acceleration is mostly sales, right? That I think you know this well, but in that business, the revenue was driven by sales literally from the year before. And so when we step up sales like we did in that business, it's a 23, we get the benefit here really throughout, you know, 2024. And the business basically had record sales last year.

Tom Panther: What's your view on that?

Speaker Change: Hey Tenjin, it's Ron. So on the first part, the acceleration is mostly sales, right, that I think you know this well, but in that business, the revenue is driven by sales literally from a year before.

Speaker Change: And so, when we step up sales like we did in that business in 23, we get the benefit here really throughout 2024.

Ron Clarke: And then the second one is, you know, we're out, we're really out of the blocks in terms of synergies with the payment rank. You know, we're back to the old league or corporate wheelhouse deals, right? We buy stuff right in the space that we're in. And, you know, we know where profit pools are and revenue pools. So we're able to basically get at improving businesses like that, like super quickly. So I'd say those are obviously retention and state super good at those business. So it's just the model of the sales relative to the base. In this case, a little bit extra from the synergies.

Speaker Change: and the business basically had record sales last year and then the second one is you know we're we're out of the clocks in terms of synergies with the pay rank you know we're back to the old le ort corre pay wheel house deals r we buy stuff

Ronald Clarke: We buy stuff right in the space that we're in and, you know, we know where profit pools are and revenue pools. So we're able to basically get at improving businesses like that, like super quickly. So I'd say obviously retention is staying super good at those businesses. So it's just the model of the sales relevant to the base, in this case, a little bit extra from the synergies.

Tinson Huang: When we buy stuff, right in the space that we're in, and, you know, we know where profit pools are and revenue pools. So we're able to basically get at improving businesses like that, like super quickly. So I'd say obviously retention is staying super good in those businesses. So it's just the model of the sales relevant to the base, in this case, a little bit extra from the synergies.

Speaker Change: Right in the space that we're in. And, you know, we know where profit pools are and revenue pools that we're able to basically get at.

Tom Panther: improving businesses like that, like super quickly. So I'd say those, obviously, retention has stayed super good in those businesses. So it's just the model of the sales relevant to the base, in this case, a little bit extra from the synergies. Well, let me let Tom pick up, because I know there was,

Tom Panther: We're projecting to exit the year with organic revenue growing in the low-to-mid teens led by corporate payments growing in excess of 20 percent. However, equally important, North America fleet and lodging are projected to have turned to the corner and returned to growth. These estimates exclude the impact from our pending acquisition of GPS that is scheduled to close in early 2025 pending regulatory approval. We expect at least 50 cents of accretion next year from the combination of Pamirang and GPS.

Ronald Clarke: Well, let me pick up because I know there was some question about part of our business with one of the other guys. You want to go to the table? Yeah, sure. So Tingen, what I say is the health really...

Thomas Panther: But let me pick up where Tom left off because I know there was some question about part of our business with one of the other guys. You want to go to the table? Sure. So, Tingen, do what I say.

Tom Panther: Well, let me let Tom pick up, because I know there was some question in part of our business with one of the other guys. You want to go to the table? Yeah, sure. So tell you what I'd say is the health related to the health of the network. We feel like our network related to the merchant portfolio really stands out. It's differentiated relative, but we see others having what want is its sheer size. It crosses multiple industries and verticals are not wet as any particular one. Obviously, we have a fair amount of focus on construction and field services of transportation.

Tom Panther: However, more importantly, we expect earnings accretion of approximately 2x that amount, once we've completed our integration plans in the back half of 2025. The rest of our assumptions related to our guide can be found in our press release and supplement.

Tom Panther: Some question in part of our business with one of the other guys. You want to go to the table? Yeah, sure. So, Tenjin, what I'd say is the health related to the health of the network. We feel like our network related to the merchant portfolio really stands out. It's differentiated relative to what we see others having. One, just its sheer size.

Thomas Panther: I'd say it's the health related to the health of the network. We feel like our network, related to the merchant portfolio, really stands out. It's differentiated relative to what we see others having. One, just its sheer size.

Thomas Panther: say is the health related to the health of the network. We feel like our network related to the merchant portfolio really stands out. It's differentiated relative to what we see others having. One, just its sheer size.

Thomas Panther: It crosses multiple industries and verticals, so we're not wedded to any particular one. Obviously, we have a fair amount of focus on construction and field services and transportation, but it's wider than that as we've built it over the years. Our customer segment is much larger than what we would say are some of our peers in the marketplace, where we're dealing with customers that are 100 to 200 to 500 million in revenue. So that gives them the ability to really influence the merchants on the other end.

Tom Panther: It crosses multiple industries and verticals. We're not wedded to any particular one. Obviously, we have a fair amount of focus on construction and field services and transportation, but it's wider than that as we've built it over the years.

Tom Panther: It's wider than that, as we've built it over the years. Our customer segment is much larger than what we would say is the, you know, some of our peers in the marketplace. What we're doing is customers that you are 100 to 200 to 500 million in revenue. So that gives them the ability to really influence the merchants on the other end. We also offer merchants a much more customized acceptance program where we can do things for them in terms of the levels of acceptance that they're willing to have and what expenses they'll accept versus what they won't accept.

Unknown Executive: With that, thank you for your interest in Corpay and now operator, please open the lines for questions. Thank you. And we will pause for a moment to allow questions to queue.

Tinson Huang: Our customer segment is much larger than what we would say is the, you know, some of our peers in the marketplace where we're dealing with customers that, you know, are 100 to 200 to 500 million in revenue, so that gives them the ability to really influence the merchants on the other end.

Thomas Panther: We also offer merchants a much more customized acceptance program where we can do things for them in terms of the levels of acceptance that they're willing to have and what expenses they'll accept versus what they won't accept. So it's not a one-size-fits-all model with us.

Tinson Huang: We also offer merchants a much more customized acceptance program where we can, you know, do things for them in terms of the levels of...

Tinson Huang: of acceptance that they're willing to have and what expenses they'll accept versus what they won't accept. So it's not a one-size-fits-all model with us. So we just think we've got a healthy merchant portfolio and the numbers that we reference in terms of seeing take rates on the...

Thomas Panther: So we just think we've got a healthy merchant portfolio and the numbers that we reference in terms of seeing take rates on the move up and cart penetration gradually moving up. That's not something you would expect to see rates go up. That's going to move gradually. It all kind of points to a healthy merchant portfolio. The acquisition we did with Paint Moraine will only make that larger, so we feel good about what we're seeing from an overall network perspective.

Ron Clarke: And we will take our first question from Darren Peller with Wolf Research. Hey guys, thank you. Look, it's great to hear about the confidence and acceleration on both the lodging side and North American fleet. I guess just one quick one on the lodging and then a little more color on fleet also, but on lodging, just the conviction around that is coming from, I think you were saying, just the, there was signing zero.

Tom Panther: So it's not a one-size-fits-all model with us. So we just think we've got a healthy merchant portfolio, and the numbers that we reference in terms of seeing take rates on the, on move up and car penetration gradually moving up. That's not the thing you expect to see race up. That's going to move gradually all kind of points to a healthy merchant portfolio. The acquisition we did with Paymarang will only make that larger. So we feel good about what we're seeing from the overall network perspective. Thank you.

Thomas Panther: So we just think we've got a healthy merchant portfolio and the numbers that we reference in terms of seeing take rates on the move up and cart penetration gradually moving up. That's not something you would expect to see rates go up. That's going to move gradually, and all kinds of points to a healthy merchant portfolio. The acquisition we did with Paint Moraine will only make that larger, so we feel good about what we're seeing from an overall network perspective.

Ron Clarke: You're already seeing evidence of and I just want to make sure that the tech side of it is all good now and ready to go in terms of new volume coming on. And then really on fleet, if you could just reiterate a little more of what you're saying around conviction on that, just why you see the confidence there, but it's crazy here given the trends. Darren, hey, it's, it's wrong. I mean, the, the short answer, let me start with the lodging thing is really the base, right?

Speaker Change: on the move up and carpenetration gradually moving up. That's not something you would expect to see race up. That's going to move gradually.

Tinson Huang: All kind of points to a healthy merchant portfolio. The acquisition we did with Pay Moran will only, you know, make that larger. So we feel good about what we're seeing from an overall network perspective.

Tinson Huang: Great. Thanks for going through that. Just my quick follow-up on the MNA front. I know...uh... you've got some divestitures you're going to buy back stock with those proceeds. You're going to close GPS later early twenty-five. Can you how quickly can you replenish the uh... acquisition pipeline with similar type deals?

Tencent Huang: Great. Thanks for going through that.

Tencent Huang: Just my quick follow-up on the M&A front.

Tinson Huang: Great, thanks for going through that. Just my quick follow-up on the MNA front. I know, uh... you've got some divestitures you're going to buy back stock with those proceeds, you're going to close GPS later early twenty-five, can you how quickly can you replenish the uh... acquisition pipeline with similar type deals?

Speaker Change: Great. Thanks for going through that.

Tencent Huang: I know you got some the best of yours. You're going to buy back stock with those proceeds. You're going to close GPS later, I mean, early '25.

Speaker Change: Just my quick follow-up on the M&A front, I know...

Speaker Change: You've got some divestitures. You're going to buy back stock with those proceeds. You're going to close GPS later, early 2025. How quickly can you replenish the acquisition pipeline with similar type deals?

Ron Clarke: Can you, how quickly can you replenish the acquisition pipeline with similar type deals?

Ron Clarke: The client base left down all about a year ago, starting in Q2 last year, both the IT issue and kind of just softest macro in those areas. And so it's really less about the lodging business accelerating and more basically that the base went down and it stabilized. So effectively, if you look sequentially, if I said to you, which I guess we have, pay our print for lodging in Q2 is X, think of it being mostly stable or flat sequentially.

Ronald Clarke: It is replenished, and my opener, we've got a couple of deals active that we're sitting, you know, looking to pull the trigger on now. So I think, you know, we're kind of never out of that business. It's really just a question of whether, you know, the prices that sellers are looking for are, you know, something we can meet.

Ron Clarke: It is replenished engine. In my opener, we've got a couple of deals active that we're sitting, you know, looking to pull the trigger on now. So I think you know, we're kind of mostly never out of that business. It's really just a question of whether, you know, the prices that sellers are looking for is, you know, something we can do to meet. So yeah, we're in the game. We're going to buy stuff, as we said, in the spaces that we're in. And I think digging into these two most recent ones run when we sign and when we close, it helps your confidence, you know, playing the game again and going after the synergies.

Speaker Change: and Infrablunt Extended invite

Speaker Change: Opener, we've got a couple of deals.

Tinson Huang: Actives.

Tinson Huang: that we're sitting, you know, looking to pull the trigger on now. So I think, you know, we're kind of.

Speaker Change: I cousin is a taterial guy and mostly never out of that business. It's just a question of if the prices that sellers are looking for is something we can meet. So, yeah, we're in the game. We're going to buy stuff as we said in the spaces that we're at.

Ronald Clarke: So, yeah, we're in the game. We're going to buy stuff, as we said, in the spaces that we're in. And I think digging into these two most recent ones, one we signed and one we closed, it helps your confidence, you know, playing the game again and going after the synergy. So I'd say we're full speed ahead on that. And I'd say confidence in the divestitures is much higher than when I spoke to you the last time. I'd say 100% we'll exit one and probably 75% we'll exit two by Christmas. Good. We like this.

Ron Clarke: Okay, and so what that does is it takes the decline out, right, which was whatever nine or 10 and first couple quarters that list obviously the whole company. And it's really the same story for NAF, right, that the business was in decline when we made the ticket. We kicked out all that micro business revenue in that debt. So effectively, we took the revenue down. And fortunately, we've refilled the bucket with more stable revenue.

Speaker Change: Digging into these two most recent ones, one we've signed and one we've closed, it helps your confidence.

Tinson Huang: you know, playing the game again and going after the synergy.

Ron Clarke: So I'd say we're full speed ahead on that. And I'd say the confidence in the advantages is much higher than when I spoke to you last time. I'd say 100% will exit one, and probably 75% will exit two by Christmas. Good. We like those deals.

Tinson Huang: We're full speed ahead on that, and I'd say the confidence in the divestitures is much higher than when I spoke to you the last time. I'd say 100% will exit one and probably 75% will exit two by Christmas.

Tinson Huang: Good. We like those deals. Thank you, Ron. Thank you, Tom.

Ron Clarke: Thank you, Ron. Thank you, Tom. Good to talk to you. Thank you.

Tinson Huang: Good. We like those deals. Thank you, Ron. Thank you, Tom.

Ron Clarke: So the same thing, the better to for performance is not a function of lodging or NAF really growing. Think of them as honestly just flat and mostly just not declining anymore. And again, the main thing is really just we've laughed the bases going down and both businesses have stabilized.

Speaker Change: Good. We like those deals. Thank you, Ron. Thank you, Tom.

Operator: Thank you. And our next question comes from Sanjay Sakhrani with KBW.

Speaker Change: were the targets.

Sanjay Sakhrani: And our next question comes from Salon J. Sakurani with KBW. Thank you. I wanted to dig in to the commentary on North America. I think Tom talked about the growth being 3% ex-micro pivot.

Speaker Change: Thank you. And our next question comes from Sanjay Sakhrani with KBW.

Sanjay Sakhrani: Thank you. I wanted to dig in to the commentary on North America, please. I think Tom talked about the growth being 3% X the micro pivot. I'm just curious, what should we expect is embedded in the guide for the second half growth? And then maybe just elaborate on what's driving the weakness there. Are there any macro headwinds? I'm just trying to think through what we should think about the normalized growth rate on a go-forward basis.

Sanjay Sakhrani: Thank you. I wanted to dig in to the commentary on North America.

Sanjay Sakhrani: Thank you. I wanted to dig in to the commentary on North America. I think Tom talked about the growth being 3% ex micro pivot.

Sanjay Sakhrani: I think Tom talked about the growth being 3% X the micro pivot. I'm just curious, what should we expect is embedded in the guide for the second half growth? And then maybe just elaborate on what's driving the weakness there. Are there any macro headwinds? I'm just trying to think through what we should think about the normalized growth rate on a go forward basis.

Sanjay Sakhrani: I'm just curious, so what should we expect is embedded in the guide for the second half growth? And then maybe you can just elaborate on what's driving the weakness there? Is there any macro headwinds? I'm just trying to think through what we should think about, you know, the normalized growth beyond and go forward, basically.

Ron Clarke: Okay, that's really awful, Ron. Guys, just one more follow up is on the corporate payment side. The growth has continued to be strong. I just want to make sure, and we've had good feedback on the deals, especially Paymerang and the accretion coming. But Ron, how do you feel about your positioning now? I mean, given the number of deals you've done, where the assets are all placed. Do you think strategically where you want to be or do you anticipate?

Sanjay Sakhrani: I'm just curious, what should we expect?

Sanjay Sakhrani: is embedded in the guide for the second half growth. And then maybe you can just elaborate on what's driving the weakness there. Is there any macro headwinds? I'm just trying to think through what we should think about, you know, the normalized growth rate on a go-forward basis.

Ron Clarke: Yeah, hey, Sanjay is Ron. So I'd say the best way to think about it is flat. Forget, you know, plus or minus a percent or two. If you look at the things sequentially, the goal in this year, exiting this year, is to have our North America fleet business revenue flat, be a hundred percent past the pivot, let higher quality revenue sitting in there, that's obviously got better retention rates, which I call out, has better same-store sales rates and stuff like that. So the real question is, next year, okay, hey, you made the pivot, you done on that speech, you got better revenue, better trends and stuff.

Ronald Clarke: Yeah. Hey, Sanjay, it's Ron.

Sanjay Sakhrani: Yeah, hey, Sanjay, it's Ron. So I'd say that the best way to think about it is flat. Forget, you know, plus or minus a percent or two that the...

Ronald Clarke: So, I'd say the best way to think about it is flat. Forget, you know, plus or minus a percent or two. If you look at the things sequentially, the goal for this year, ending this year, is to have our North America fleet business revenue flat. Be 100% past the pivot.

Ron Clarke: and more. Yeah, Darren, good question. We talked about it before. I would say I feel like the Humpty Dumpty work, you know, is mostly over. We have a pretty bright product line now. We've got card products. I think the new tech guys like Divi and Ramp and Brex and so we have those products. We've obviously got the full AD, AD automation products. I think from the product perspective, we spend lots of time and money assembling a pretty broad set of products in this mental market.

Speaker Change: If you look at the things sequentially, the goal in this year, exiting this year, is to have our North America Fleet Business Revenue flap. Be 100% past the pivot. We'll have higher quality.

Ronald Clarke: We'll have higher quality revenue sitting in there that's obviously got better retention rates, which I called out, and has better same-store sales rates and stuff like that. So, the real question is, next year, okay, hey, you made the pivot, you're done with that speech, you got better revenue, better trends, and stuff like that. So, what's going on? It's just sales. The million-dollar question is, these couple new products and this new channel investment, will we sell enough business relative to the phase so that that business can be a single or high, you know, mid-digit grower again?

Sanjay Sakhrani: Revenue sitting in there that's obviously got better retention rates, which I called out, has better same-store sales rates and stuff like that.

Speaker Change: So the real question is next year. Okay. Hey, you've made the pivot. You're done with that speech. You got better revenue, better trends and stuff. So what's going on? It's just sales.

Ron Clarke: So what's going on? It's just sales. The million dollar question is, these couple of new products in this new channel investment, will we sell a not-business relative to the phase that that business can be a single or high, you know, mid-digit grow or again? So that's the question. It'll be acceptance of the two new products that I call one of them, so will those two products as a build in the field and the pivot digital, which I call that, will those things create enough absolute amount of sales that that base grows decently next year? That's the call.

Ron Clarke: So the game now is really selling. So when we say you guys, hey, Jim, I think up 28% or something like the quarter. So that's the game that there's a game that has shifted from assembling a competitive in a good business to now really just selling a lot of it. And I think the numbers show that we're not only selling it, but the business is compounding too. So we're in a spot.

Speaker Change: The million-dollar question is, these couple of new products and this new channel investment, will we sell enough business relative to the base that that business can be a single or high?

Ronald Clarke: So, that's the question. It will be the acceptance of the two new products that I called out. We call one of them Corpay One, which is kind of a three-in-one product, and the other one called Condata Connect, which is for trucking.

Ronald Clarke: So, that's the question. It will be the acceptance of the two products that I called out. We call one of them Corpay One, which is kind of a three-in-one product, and the other one called Condata Connect, which is for trucking.

Tinson Huang: you know, mid-digit grower again. So that's the question. It'll be acceptance of the two new products that I call, we call one of them Corpay One, which is kind of a three-in-one product, and the other one called Comdata Connect, which is for trucking.

Ron Clarke: That's great. And Darren, we expect it to continue to come up. Darren, I'd say as we expected to continue to become a bigger piece of the overall Corpay portfolio, what long distance growth rate will cause it to continue to be a bigger portion. I think we said 30% now and 40% by the end of next year. And sort of from a capital allocation perspective, we would still view it as attractive ways to deploy capital. That's great. Make sense, guys. Thank you. Good to talk to you.

Unknown Executive: Thank you.

Ronald Clarke: So, will those two products, the build and the field, and the pivot and digital, which I called out, will those things create enough absolute amounts of sales that that base grows decently next year? That's the call. And obviously, 90 days will give you our answer about what we're planning and what we think we can do, but look, the early returns, which is why I called it out, are good. When you launch new products, the question is always, does the market like them?

Ronald Clarke: So, will those two products, the build and the field and the pivot and digital, which I called out, will those things create enough absolute amounts of sales that that base grows decently next year? That's the call. And obviously, in 90 days, we'll give you our answer on what we're planning and what we think we could do, but look, the early returns, which is why I called it out, are good. When you launch new products, the question is always, does the market like them?

Tinson Huang: So will those two products, the build and the field, and the pivot and digital, which I called out, will those things create enough absolute amount of sales that that base grows decently next year? That's the call. And obviously, in 90 days, we'll give you our answer.

Ron Clarke: And obviously, 90 days will give you our answer of what we're planning and what we think we can do. But, look, the early returns, which is why I called it out, are good. When you launch new products, the question is always: does the market like them? You know, what's the acceptance? And as you can see in the quarter, which is leaving, you know, a third or a quarter of the sales in the channels are these new products, which is quite... And so we're optimistic that we've got the right things, and we'll give you a better outlook in 90 days.

Tinson Huang: What we're planning and what we think we can do. But look, the early returns, which is why I called it out, are good. When you launch new products, the question is always, does the market like them? You know, what's the acceptance?

Ronald Clarke: You know, what's the acceptance rate? And as you can see in the quarter we're just leaving, a third to a quarter of the sales of the channels are these new products, which is quite good. So, we're optimistic that we've got the right things, and we'll give you a better outlook than that.

Ron Clarke: And our next question comes from Tencent Huang with JP Morgana. Hey, Ron Tom. Good to talk to you guys. Just to follow up on Darren's last question there, just on the corporate payment side, the acceleration to the 20%. What's feeling that? I know there's a slightly easier comp. I just want to make sure there's anything else in there. And I think Tom, you talked about take rates and trends there being positive.

Ronald Clarke: You know, what's the acceptance? And as you can see in the quarter we're just leaving, a third to a quarter of the sales of the channels are these new products, which is quite good. So, we're optimistic that we've got the right things, and we'll give you a better outlook on that.

Tinson Huang: And as you can see, in the quarter we're just leaving, you know, a third to a quarter of the sales of the channels are these new products, which is quite good. So we're optimistic that we've got the right things, and we'll give you a better outlook in 90 days.

Thomas Panther: And Sanjay, related to your second question, nothing material from a macro perspective in the second half. There's a, you know, call it zero to five million, depending on where fuel price lands, of where that could be, but nothing that would be overly significant to the overall, give or take, billion dollar business.

Tom Panther: And Sanjay, related to your second question, nothing material from a macro perspective in the second half.

Speaker Change: And Sanjay, related to your second question, nothing material from a macro perspective in the second half. There's a call of zero to five million, depending on where fuel price lands, of where that could be, but nothing that would be overly significant to the overall, give or take, billion dollar business.

Tom Panther: There's a, you know, called zero to five million feet on where fuel prized lands of where that could be, but nothing, nothing that would be overly significant to the overall give or take billion dollar business.

Ron Clarke: Maybe just to hone in on that with the direct business. And I know there's some concerns out there on virtual card monetization and adverse payment selection, that kind of thing. What's your view on that? Hey, Tencent and Ron. So on the first part, the acceleration is mostly sales, right, that I think you know this well, but in that business, the revenue was driven by sales literally from the year before. And so when we step up sales like we did in that business, it's a 23, we get the benefit here really throughout, you know, 2024.

Sanjay Sakhrani: Okay, I'm just to follow up on the contingent sort of alluded in terms of the virtual card businesses out there. I mean, it just seems like there's been a little bit of disappointing growth there. I guess, like, is that creating an opportunity for you guys to go in and buy companies that are in that field? I'm just trying to think about how you guys look at, you know, some of the data around that and how it affects you. I think the good news, Sanjay, is it hasn't. I mean, I think, you know, it's always something to look at what other people are doing, but I think Tom said it earlier, all of our setups are different.

Sanjay Sakhrani: Okay, and just to follow up on what you sort of alluded to. In terms of the virtual card businesses out there, I mean, it just seems like there's been a little bit of disappointing growth there. I guess, like, is that creating an opportunity for you guys to go in and buy companies that are in that field? I'm just trying to think about how you guys look at, you know, some of the data around that and how it affects you.

Sanjay Sakhrani: Okay, and just to follow up on what Cajun sort of alluded to. In terms of the virtual card businesses out there, I mean, it just seems like there's been a little bit of disappointing growth there. I guess, like, is that creating an opportunity for you guys to go in and buy companies that are, you know, that are in that field? I'm just trying to think about how you guys look at, you know, some of the data around that and how it affects you.

Cajun: Okay, and just to follow up on what Cajun sort of alluded to...

Speaker Change: In terms of the virtual card businesses out there, I mean, it just seems like

Speaker Change: There's you know, there's been a little bit of disappointing growth there I guess like is that creating an opportunity for you guys to go in and buy companies that You know that are in that field. I'm just trying to think about how you guys look at you know Some of the data around that

Ron Clarke: And the business basically had record sales last year. And then the second one is, you know, we're out, we're really out of the blocks in terms of synergies with the payment rank. You know, we're back to the old league or corporate wheelhouse deals, right? We buy stuff right in the space that we're in. And, you know, we know where profit pools are and revenue pools. So we're able to basically get at improving businesses like that, like super quickly. So I'd say those are obviously retention and state super good at those business. So it's just the model of the sales relative to the base. In this case, a little bit extra from the synergies.

Ronald Clarke: I think the good news, Sanjay, is it hasn't. I mean, I think, you know, it's always something to look at what other people are doing, but I think Tom said it earlier, all of our setups are different, right? Some guys have super low rates and an inability to influence the merchants; other people are more highly monetized. You know, we have a different business than other people, right, in terms of the amount of cards, pure card business versus full AP.

Ronald Clarke: I think the good news, Sanjay, is that it hasn't. I mean, I think, you know, it's always something to look at what other people are doing. But I think Tom said it earlier, all of our setups are different, right? Some guys have super low ratings and an inability to influence the merchants; other people are more highly monetized. You know, we have a different business than other people, right, in terms of the amount of cards, pure card business, full AP.

Speaker Change: and How It Affects You.

Tinson Huang: I think the good news, Sanjay, is it happened.

Speaker Change: You know, it's always something to look at what other people are doing, but I think Tom said it earlier, all of our setups are different.

Ron Clarke: Right, some guys have super low and an inability to influence the merchants; other people are more highly monetized. You know, we have a different business than other people, right, in terms of the amount of card to our card business. So the first thing that I'd say is you got to be a little careful swarring conclusions across the businesses, but look, it's working for us. You know, we're calling out that higher monetization is growing into Tom's point. We have a couple of things going on with both a partner and with the Pamirang deal that will increase our monetization as we go here, go through the second half.

Speaker Change: Right some guys have super low and inability to influence the merchants other people are more highly monetized

Speaker Change: You know, we have a different business than other people, right, in terms of the amount of card, fewer card business versus full AP. So the first thing that I'd say is.

Ronald Clarke: So the first thing that I'd say is that you got to be a little careful drawing conclusions across businesses, but look, it's working for us. You know, we're calling out that our monetization is growing. And to Tom's point, we have a couple of things going on with both a partner and the Pamerang deal that will increase our monetization as we go through the second half. Right now, we're kind of outside of the problem, if you will, of people experiencing, you know, less car penetration.

Ronald Clarke: So the first thing that I'd say is that you got to be a little careful drawing conclusions across businesses, but look, it's working for us. You know, we're calling out that our monetization is growing. And to Tom's point, we have a couple things going on with both a partner and with the pay meringue deal that will increase our monetization as we go here and go through the second half. So right now, we're kind of outside of the problem, if you will, of people experiencing, you know, less car penetration.

Speaker Change: You've got to be a little careful drawing conclusions across the businesses, but.

Speaker Change: Look, it's working for us. You know, we're calling out that our monetization is growing.

Tinson Huang: And to Tom's point, we have a couple things going on with both a partner and with the Pamerang deal that will increase our monetization as we go through the second half. So

Ron Clarke: So right now, we're kind of, you know, outside of the problem, as you will, of people experiencing, you know, less card penetration.

Tom Panther: We're right now, we're kind of, you know, outside of the problem, if you will, of people experiencing, you know, less car penetration.

Tom Panther: It crosses multiple industries and verticals are not wet as any particular one. Obviously, we have a fair amount of focus on construction and field services of transportation. It's wider than that as we've built it over the years. Our customer segment is much larger than what we would say is the, you know, some of our peers in the marketplace. What we're doing is customers that you are 100 to 200 to 500 million in revenue.

Nate Spenson: Thank you.

Ronald Clark: and Ronald Clark.

Ronald Clark: Thank you.

Operator: Thank you. And our next question comes from Nate Svensson with Deutsche Bank.

Nate Spenson: And our next question comes from Nate Spenson with Deutsche Bank. Hey guys, thanks for the question. I guess on margins, you know, really nice to see another quarter of solid margin expansion. You've got margins of 60 basis points, even even more x Russia.

Speaker Change: Thank you. And our next question comes from Nate Svensson with Deutsche Bank.

Nate Svensson: Hey guys, thanks for the question. Um, I guess on margins. You know, really nice to see another quarter.

Nate Svensson: Hey guys, thanks for the question. Um, I guess on margins, you know, really nice to see another quarter of solid.

Speaker Change: Hey guys, thanks for the question. I guess on margins, you know, really nice to see another quarter of solid margin expansion. You've got margins up 60 basis points, even more ex-Russia.

Nate Svensson: of Solid Margin Expansion, you've got margins of 60 basis points, even even

Nate Svensson: Even more ex-Russian, kind of just wondering your thoughts on the ability to continue expanding margins in the back half of the year, particularly given

Unknown Executive: Unknown Executive, Daniel Krebs, Rufus Hone, Corpay, James Faucette, Thomas Panther, Rufus Hone, Corpay, Daniel Krebs, Rufus Hone, Corpay, Daniel Krebs,

Tom Panther: So that gives them the ability to really influence the merchants on the other end. We also offer merchants a much more customized acceptance program where we can do things for them in terms of the levels of acceptance that they're willing to have and what expenses they'll accept versus what they won't accept. So it's not a one size fits all model with us. So we just think we've got a healthy merchant portfolio and the numbers that that we reference in terms of seeing take rates on the, on move up and car penetration gradually moving up.

Tom Panther: Kind of just wondering your thoughts on the ability to continue expanding margins in the back half of the year, particularly given you'll be lapping some really strong margin expansion in the back half of 23 and then you start to layer of Pamirang in there. So anything we should keep in mind for our malls with regard to cadence or magnitude of margin expansion and what that X array might look like heading into next year.

Nate Svensson: Kind of just wondering your thoughts on the ability to continue expanding margins in the back half of the year, particularly given you'll be lapping some really strong margin expansion in the back half of 23 and then you start to layer pay meringue.

Unknown Executive: And then you start to layer PEMA-Rang on top of it. So anything we should keep in mind for our models with regard to cadence or magnitude?

Nate Svensson: and then you start to layer Pemering in there. So anything we should keep in mind for our models with regard to?

Nate Svensson: with regard to the cadence or magnitude of margin expansion and what that exit rate might look like heading into next year.

Unknown Executive: The cadence or magnitude of margin expansion and what that XRA might look like heading into next year.

Speaker Change: in there. So anything we should keep in mind for our models with regard to cadence or magnitude of margin expansion and what that exit rate might look like heading into next year.

Ronald Clarke: I am the headline. Nate, hi, right?

Ronald Clarke: High is the headline, Nate. High, right?

Tom Panther: Hi, is the headline Nate High, right? I think we've said repeatedly that we've got significant operating leverage in this business. So I think our friend was what's on low 53, 53 and change, let's say for Q2. We're looking sequentially, Nate, for revenue to go up 50 here in Q3, 975, call it the 1025, and then I think another 40 as we head into Q4. So the flow through the margin flow through of that incremental revenue is, you know, 80 or 90% in our business. So margins will expand another two to 250 basis points between Q2 and Q4.

Speaker Change: I is the headline, Nate. Hi, right? I think we've...

Ronald Clarke: I think we've said repeatedly that we've got, you know, significant operating leverage in this business. So I think our print was what's on the low 53, 53 and change, let's say for Q2. We're looking sequentially, they expect revenue to go up 50. Here in Q3, 975, call it 1025. And then up, I think another 40, as we head into Q4. So the flow through the margin flow through of that incremental revenue is, you know, 80 or 90% in our business.

Nate: said repeatedly that we've got

Tom Panther: That's not the thing you expect to see race up. That's going to move gradually all kind of points to a healthy merchant portfolio. The acquisition we did with Paymarang will only make that larger. So we feel good about what we're seeing from from the overall network perspective.

Speaker Change: you know significant operating

Unknown Executive: Thank you. Great. Thanks for going through that.

Nate Svensson: Leveraging this business. So I think our friend was what's on low 53 53 and change let's say for q2

Speaker Change: We're looking sequentially for revenue to go up 50.

Ronald Clarke: And then up, I think another 40 as we head into Q4. So the flow through the margin flow through of that incremental revenue is, you know, 80 or 90% in our business. So margins will expand another two to 250 basis points between Q2 and Q4. So this is the model. The model is if you get, you know, sequential incremental revenue on the books, you'll have significantly good flow through.

Speaker Change: Here in Q3, 975, call it to 1025, and then up, I think, another 40.

Unknown Executive: Just my quick follow up on the M&A front. I know you got some the best of yours. You're going to buy back stock with those proceeds.

Speaker Change: as we head into into Q4.

Tinson Huang: So the flow-through, the margin flow-through of that incremental revenue is, you know, 80 or 90% in our business, so margins will expand another 2 to 250 basis points between Q2 and Q4.

Ron Clarke: You're going to close GPS later, I mean, early 25. Can you, how quickly can you replenish the acquisition pipeline with similar type deals? It is replenished engine. In my opener, we've got a couple of deals active that we're sitting, you know, looking to pull the trigger on now. So I think you know, we're kind of mostly never out of that business. It's really just a question of whether, you know, the prices that sellers are looking for is, you know, something we can do to meet.

Ronald Clarke: So margins will expand another two to 250 basis points between Q2 and Q4. So this is the model. The model is if you get, you know, sequential incremental revenue on the books, you'll have significantly good flow.

Tom Panther: So this is the model. The model is, if you get, you know, sequential incremental revenue on the books that you'll have significantly good flow. That's great to hear.

Tinson Huang: So this is the model. The model is if you get, you know, sequential incremental revenue on the books, that you'll have significantly good flow through.

Nate Svensson: That's great to hear. I guess for the fall, I kind of want to talk about retention. So obviously, really nice to see the step up in retention, both sequentially and year over year. So I was hoping you could unpack a little more what's driving that, and how much of this is kind of the external environment getting a little better? How much of it is explicit actions taken by you at Corpay? And then, for the growth algorithm in the back half of the year, you talked about a number of different factors, retention, same sort.

Nate Svensson: That's, that's great to hear.

Nate Spenson: I guess for the fall, I kind of want to talk about retention. So obviously, really nice to see the step up in retention, both sequentially and year over years. So it's hoping you can unpack a little more what's driving that. How much of this is kind of the external environment, getting a little better. How much is it is explicit actions taken by you at Corpay. And then I know for the growth algorithm in the back of the year, you talked about a number of different factors: retention, import sales, new products, et cetera. So I guess just anyway to help size each of those metrics and their contribution to growth for the remainder of the year with the focus on retention there.

Nate Svensson: I guess for the fall, I kind of want to talk about retention. So obviously, it's really nice to see the step up in retention, both sequentially and year over year. So I was hoping you could unpack a little more what's driving that; how much of this is kind of the external environment getting a little better? How much is explicit actions taken by you at Corpay? And then, for the growth algorithm in the back half of the year, you talked about a number of different factors, retention, and same store sales.

Speaker Change: That's great to hear. I guess for the fall, I kind of want to talk about retention, so obviously really nice to see the step up in retention both

Nate Svensson: like help size each of those metrics.

Speaker Change: Sequentially and year over year so it's hoping you could unpack a little more what's driving that how much of this

Ron Clarke: So yeah, we're in the game. We're going to buy stuff, as we said, in the spaces that we're in. And I think digging into these two most recent ones run when we sign and when we close, it helps your confidence, you know, playing the game again and going after the synergies. So I'd say we're full speed ahead on that. And I'd say the confidence in the advantages is much higher than when I spoke to you last time. I'd say 100% will exit one and probably 75% will exit two by by Christmas. Good. We like those deals. Thank you, Ron. Thank you, Tom. Good to talk to you.

Speaker Change: is kind of the external environment getting a little better? How much is it explicit actions taken by you at Corpay? And then I know for the growth algorithm in the back half of the year, you talked about a number of different factors. Retention, same store sales, new products, etc. So I guess just any way to like help size each of those metrics and their contribution to growth for the remainder of the year with a focus on retention there.

Unknown Executive: Thank you.

Nate Svensson: Sales, New Products, etc.

Nate Svensson: I guess just any way to help size each of those metrics and their contribution to growth for the remainder of the year with a focus on retention.

Nate Svensson: Each of those metrics and their contribution to growth for the remainder of the year with a focus on retention.

Ron Clarke: Yeah, let me take the first part, Nate. It's Ron, and then Tom come pick up, just on the hay retention. We've called out the retention trend was good, nearly 92%, which is the best in a while. It's really mostly next. And what I mean by that is implicitly the retention of a company like ours is really both fundamentally based on the size and the health of the clients. Remember, we provide credit, and we probably kick out half the people. So for 92% retention, so 8% loss, it's probably closing in on half of that is us not liking the client enough anymore right to extend credit.

Ronald Clarke: Yeah, let me take the first part, Nate, it's Ron, and then Tom can pick up just on the hay retention. We already called out that the retention trend was good, nearly at 92%, which is the best in a while. It's really mostly net. And what I mean by that is, simplistically, the retention of a company like ours is really most fundamentally based on the size and the health of the clients.

Ronald Clarke: Yeah, let me take the first part, Nate, it's Ron, and then Tom can pick up just on the hay retention. We've called out the retention trend was good, nearly hitting 92%, which is the best in a while. It's really mostly net. And what I mean by that is, simplistically, retention of a company like ours is really most fundamentally based on the size and the health of the clients.

Tinson Huang: Yeah, let me take the first part. Nate, it's Ron, and then Tom can pick up. Just on the hay retention, we've called out that retention trend was good, nearly hitting 92%, which is the best in a while.

Nick: It's really mostly Nick's.

Ron Clarke: And our next question comes from Salon J. Sakurani with KBW. Thank you. I wanted to dig in to the commentary on North America. I think Tom talked about the growth being 3% ex-micro pivot. I'm just curious, so what should we expect is embedded in the guide for the second half growth? And then maybe you can just elaborate on what's driving the weakness there? Is there any macro headwinds? I'm just trying to think through what we should think about, you know, the normalized growth beyond and go forward, basically.

Speaker Change: And what I mean by that is simplistically the retention of a company like ours is really most fundamentally based on the size and the health of the clients. Remember, we provide credit and we probably kick out

Ronald Clarke: Remember, we provide credit, and we probably kick out half the people. So for 92% retention, so 8% loss, you know, probably closing in on half of that is us not liking the client enough anymore, right, to extend credit. So the mix, like we talked about in the quote infamous North America Fleet pivot, we're pivoting to higher quality, better credit-worthy accounts, and more stable accounts. So that, structurally, will create retention improvement. And then corporate payments as a business are bigger accounts.

Ronald Clarke: Remember, we provide credit, and we probably kick out half the people. So for 92% retention, so 8% loss, you know, probably closing in on half of that is us not liking the client enough anymore, right, to extend credit. So the mix, like we talked about in the, quote, infamous North America fleet pivot, we're pivoting to higher quality, better credit-worthy accounts, more stable accounts. So that, structurally, will create retention improvement.

Tom Panther: half the people. So for 92% retention, so 8% loss, you know, probably closing in on half of that is us not liking the client enough anymore, right, to extend credit. So the mix like we talked about in the in the quote infamous

Ron Clarke: So the mix, like we talked about in the quote infamous North America fleet pivot, we're pivoting to higher quality, better credit worthy accounts, more stable accounts. So that structurally will create retention improvement. And then corporate payments as a business is bigger accounts. Tom said that earlier, call the average account of two or three hundred million dollar a company, you know, and it's all right. And so when you have clients like that, they're way stable and generally decent credit worthy. So it's corporate payments grows from whatever it was 20s to call it 30% now on the way to 40.

Nick: North America Fleet Pivot, we're pivoting to higher quality, better credit worthy accounts, more stable accounts, so that structurally will create retention improvement. And then corporate payments as a business is bigger accounts.

Ron Clarke: Yeah, hey, Sanjay is Ron. So I'd say the best way to think about it is flat. Forget, you know, plus or minus a percent or two. If you look at the things sequentially, the goal in this year, exiting this year is to have our North America fleet business revenue flat, be a hundred percent past the pivot, let higher quality revenue sitting in there, that's obviously got better retention rates, which I call out, has better same-store sales rates and stuff like that.

Ronald Clarke: And then corporate payments as a business are bigger accounts. Tom said it earlier, call the average account two or $300 million a company in its own right. And so when you have clients like that, they're way stable and generally decent credit worthy. So as corporate payments grow from whatever it was, the 20s to call it 30% now on the way to 40, that's another part of the mix that will improve our attention. So I would say that we'd be out looking for ways of improving retention, certainly as we run through the next.

Ronald Clarke: Tom said it earlier, call the average account a two or three hundred million dollar company in its own right. And so when you have clients like that, they're way stable and generally decent and credit worthy. So as corporate payments grow from whatever it was, the 20s to call it 30% now on the way to 40, that's another part of the mix that will improve our attention. So I would say that we should be out looking, improving.

Nick: Tom said it earlier, call the average account at two or three hundred million dollars.

Tom Panther: a company, you know, and it's all right.

Tom Panther: and so when you have clients like that their way stable and generally decent credit thly so it's corporate payments grows from whatever it was twenty s to call it thirty percent now on the way to forty

Ron Clarke: So the real question is, next year, okay, hey, you made the pivot, you done on that speech, you got better revenue, better trends and stuff. So what's going on? It's just sales. The million dollar question is, these couple of new products in this new channel investment, will we sell a not-business relative to the phase that that business can be a single or high, you know, mid-digit grow or again? So that's the question.

Ron Clarke: That's another part of the mix that will improve our attention. So I would say that we be out looking and proving retention certainly as we run through the next, you know, 48 quarters.

Speaker Change: That's another part of the mix that will improve our attention. So I would say that we'd be out looking improving retention certainly as we run through the next, you know, four to eight quarters.

Ron Clarke: It'll be acceptance of the two new products that I call one of them, so will those two products as a build in the field and the pivot digital, which I call that, will those things create enough absolute amount of sales that that base grows decently next year? That's the call. And obviously, 90 days will give you our answer of what we're planning and what we think we can do. But, look, the early returns, which is why I called it out, are good.

Tom Panther: And Nate, let me kind of walk you through the sequential quarter from Q2 through Q4. I think it's important for you to have understand the pieces. So if we print in 975 and Q2 and are guiding toward a midpoint of 1025, that 50 million increase of that little over half of that is related to payment or incoming on board, which drives that have a lot of visibility into. And the seasonal uplift that we have seen from gift, that's over half of the 50 million dollar increase. The other increase is really the snowballing of what we would call, you know, really outperforming companies.

Thomas Panther: Yeah, and Nate, let me kind of walk you through the sequential quarters from Q2 through Q4, because I think it's important for you to kind of understand the pieces. So, if we printed 975 in Q2 and are guiding toward a midpoint of 1025, that $50 million increase, half of that, a little over half of that, is related to Panghoran coming on board, which obviously has a lot of visibility into And the seasonal uplift that we have seen from GIFT is over half of the $50 million increase.

Thomas Panther: And Nate, let me kind of walk you through the sequential quarter.

Thomas Panther: I'm going to walk you through the sequential quarter from here.

Tom Panther: Yeah, and Nate, let me kind of walk you through the sequential quarter from Q2 through Q4, because I think it's important for...

Thomas Panther: for you to kind of understand the pieces. So if we printed 975 in Q2 and are guiding toward a midpoint of 1025, that 50 million increase, half of that, a little over half of that is related to Panghorain coming on board, which obviously we have a lot of visibility into, and the seasonal uplift that we have seen from GIFT. That's over half of the 50 million dollar increase. The other increase is really the snowballing of what we would call, you know, really our outperforming companies, Brazil, the cross-border, and the payables.

Nate Svensson: You've got to understand the pieces. So if we printed 975 in Q2 and are guiding toward a midpoint of 1025,

Tom Panther: That $50 million increase, half of that, a little over half of that, is related to Panghorain coming on board, which obviously has a lot of visibility into, and the seasonal uplift that we have seen from KIFT.

Thomas Panther: The other increase is really the snowballing of what we would call, you know, really our outperforming companies, the Brazil, the cross-border, the payables, that makes up the lion's share of the remaining sequential increase. We'll be getting some lift from some of the other businesses, but not meaningful. That's more back to your question about a pretty similar retention-based sales kind of model.

Tinson Huang: That's over half of the $50 million increase.

Tom Panther: The other increase is really the snowballing of what we would call, you know, really our outperforming companies, the Brazil, the cross-border, the payables.

Tom Panther: The Brazil, the cross order, the payables, that makes up the line share of remaining sequential increase. We'll be getting some lift from some of the other businesses, but not meaningful. That's more back to your question about a pretty similar retention base, sales kind of model, but the snowballing of cross order payables and Brazil is what's coupled with the paymoring and the gift gets you to the 1025. And then Q4 is more of the same; it's both the growth of paymoring, because we'll then start harvesting some of the synergies. So that gets you of the 40 million dollar growth between Q3 and Q4.

Thomas Panther: That makes up the lion's share of the remaining sequential increase. We'll be getting some lift from some of the other businesses, but not meaningful. That's more back to your question about a pretty similar retention-based sales kind of model, but the snowballing of cross-border payables and Brazil is what, coupled with the Panghorain and the GIFT, gets you to the 1025.

Tom Panther: That makes up the lion's share of the remaining sequential entries. We'll be getting some lift from some of the other businesses, but not meaningful. That's more back to your question about a pretty similar.

Thomas Panther: But the snowballing of cross-border payables in Brazil is what, coupled with the Panghoran and the GIFT, gets you to 1025. And then Q4 is more of the same. It's both the growth of Panghoran because we'll then start harvesting some of the synergies, so that gets you, of the $40 million growth between Q3 and Q4, half again is Panghoran and GIFT. GIFT typically has a high seasonal second half. I mentioned the third quarter already.

Ron Clarke: When you launch new products, the question is always does the market like them? You know, what's the acceptance? And as you can see in the quarter, which is leaving, you know, a third or a quarter of the sales in the channels are these new products, which is quite.., and so we're optimistic that we've got the right things and we'll give you a better outlook in 90 days.

Tom Panther: retention-based sales kind of model. But the snowballing of cross-border payables in Brazil is what, coupled with the PayMarine and the gift, gets you to the 1025.

Thomas Panther: And then Q4 is more of the same. It's both the growth of Panghorain because we'll then start harvesting some of the synergies, so that gets you, of the 40 million dollar growth between Q3 and Q4, half again is Panghorain and GIFT. GIFT typically has a high seasonal second half. I mentioned the third quarter already.

Tom Panther: And then Q4 is more of the same, it's both.

Ron Clarke: And Sanjay, related to your second question, nothing material from a macro perspective in the second half. There's a, you know, called zero to five million feet on where fuel prized lands of where that could be, but nothing, nothing that would be overly significant to the overall give or take billion dollar business. Okay, I'm just to follow up on the contingent sort of alluded in terms of the virtual card businesses out there.

Tinson Huang: The growth of pain ring because we'll then start harvesting some of the synergy so that gets you of the 40 million dollar growth between q3 and q4 half again is

Tom Panther: Half again is paymoring and gift. A gift typically has a high seasonal second half. I've mentioned the third quarter already. It also typically has a strong fourth quarter for the obvious reasons of the holiday season, vendors wanting to refill their virtual shelves, if you will, gift cards. And then the rest of that increase, call it another, you know, 20 million dollars, is the snowballing again of our growing businesses and the sales that we've been talking about. Cross order and payables growing almost 30 percent, Brazil growing 27 percent, those just pouring into the second half that didn't drive the revenue.

Thomas Panther: It also typically has a strong fourth quarter for the obvious reasons of the holiday season and vendors wanting to refill their virtual shelves, if you will, with gift cards. And then the rest of that increase, call it another $20 million, is the snowballing again of our growing businesses and the sales that we've been talking about. Cross-border and payables grew almost 30%, and Brazil growing 27%. Those just pour into the second half, which then drives the revenue.

Speaker Change: Hey Meringue and Gift. A gift typically has a high seasonal second half. I mentioned the third quarter already. It also typically has a strong fourth quarter for the obvious reasons of the holiday season and vendors wanting to refill their

Thomas Panther: It also typically has a strong fourth quarter for the obvious reasons of the holiday season and vendors wanting to refill their virtual shelves, if you will, with GIFT cards. And then the rest of that increase, call it another 20 million dollars, is the snowballing again of our growing businesses and the sales that we've been talking about. Cross-border and payables growing almost 30 percent, Brazil growing 27 percent; those just pour into the second half, which then drives revenue.

Tinson Huang: Virtual Shells, if you will, gift cards.

Ron Clarke: I mean, it just seems like there's been a little bit of disappointing growth there. I guess like, is that creating an opportunity for you guys to go in and buy companies that are in that field? I'm just trying to think about how you guys look at, you know, some of the data around that and how it affects you. I think the good news, Sanjay is it hasn't. I mean, I think, you know, it's always something to look at what other people are doing, but I think Tom said it earlier, all of our setups are different.

Tinson Huang: And then the rest of that increase, call it another $20 million, is the snowballing again of our growing businesses and the sales that we've been talking about, cross-border and payables growing almost 30%, Brazil growing 27%. Those just pour into the second half that then drives the revenue.

Thomas Panther: Now, it's certainly not without some risks. I mean, clearly, we've got to execute, and we've got to deliver. You don't look at those numbers and say, oh, well, that's a laydown forecast for the second half of the year, but it's something that we do have discrete plans up against, and the plans are up against things that we've got a fair amount of visibility in and things that are performing today. That's how I would describe them, the way we get from here to there.

Tom Panther: Now, it's certainly not without some risks. I mean, clearly we've got to execute, and we've got to deliver. You don't look at those numbers and say, oh, well, that's a laydown forecast for the second half of the year, but it's something that we do have discrete plans up against, and the plans are up against things that we've got payment visibility in and things that are performing today. It's how I describe them: the way we get from here.

Thomas Panther: Now, it's certainly not without some risks. I mean, clearly, we've got to execute, and we've got to deliver. You don't look at those numbers and say, oh, well, that's a laid-down forecast for the second half of the year. But it's something that we do have discrete plans up against, and the plans are up against things that we've got a fair amount of visibility in, and things that are performing today. That's how I would describe the way we get from here to there.

Tom Panther: it's certainly not without some risks clearly we got to execute we've gotto delivery don't look those numbersand say oh that

Tom Panther: A lay down forecast for the second half of the year, but it's.

Tom Panther: It's something that we do have.

Ron Clarke: Right, some guys have super low and an inability to influence the merchants, other people are more highly monetized. You know, we have a different business than other people, right, in terms of the amount of card to our card business. So the first thing that I'd say is you got to be a little careful swarring conclusions across the businesses, but look, it's working for us. You know, we're calling out that higher monetization is growing into Tom's point.

Tom Panther: Discrete plans up against, and the plans are up against things that we've got a fair amount of visibility in, and things that are performing today, is how I would describe the way we get from here to there.

Nate Spenson: Ron Tom, I appreciate the color. Thank you.

Nate Svensson: Ron, Tom, I appreciate the color. Thank you.

Tom Panther: Ron, Tom, appreciate the color. Thank you.

Operator: Thank you. And our next question comes from Peter Christiansen with Citibank.

Peter Christiansen: And our next question comes from Peter Christiansen with Citibank.

Speaker Change: Thank you. And our next question comes from Peter Christiansen with Citibank.

Peter Christiansen: Good evening. Thank you, gentlemen, for the question. I wanted to dig into the transactional momentum we're still seeing in the Brazil business. It looks fantastic. As we think about parking, fueling stations, that kind of growth that you've seen there, I was wondering if you can attribute that more on footprint expansion versus same sort of growth or more user engagement. And on the footprint expansion kind of story, can you just remind us where we are and see more opportunities to expand those two networks?

Peter Christiansen: Good evening. Thank you, gentlemen, for the question. I wanted to dig into the transaction momentum we're still seeing in the Brazil business. It looks fantastic.

Peter Christiansen: Good evening. Thank you, gentlemen, for the question. I wanted to dig into the transaction momentum we're still seeing in the Brazil business. It looks fantastic. As we think about like parking, fueling stations, that kind of growth that you're seeing there, I was wondering if you can attribute that more to the footprint expansion versus kind of like same store growth or more user engagement and on the footprint expansion kind of story. Can you just remind us where we are and do you see more opportunities to expand those two networks?

Speaker Change: Good evening. Thank you, gentlemen, for the question. I wanted to dig into the transaction momentum we're still seeing in the Brazil business. It looks fantastic. As we think about like parking, fueling stations, that kind of growth that you've seen there,

Ron Clarke: We have a couple of things going on with both a partner and with the Pamirang deal that will increase our monetization as we go here, go through the second half. So right now, we're kind of, you know, outside of the problem, as you will, of people experiencing, you know, less card penetration. Thank you.

Peter Christiansen: As we think about like parking, fueling stations, that kind of growth that you're seeing there, I was wondering if you can attribute that more to the footprint expansion versus kind of like same store growth or more user engagement and on the footprint expansion kind of story. Can you just remind us where we are? And do you see more opportunities to expand those two networks?

Speaker Change: I was wondering if you can attribute that more on the footprint expansion versus kind of like same sort of growth of more user engagement and And on the footprint expansion kind of story. Can you just remind us where we are and do you see more opportunities to expand that those two networks?

Ron Clarke: Hey, AP Ron. Good question. Yes.

Ronald Clarke: Hey, Pete, Ron, good question. Yes, the headline is that the Brazil business is doing great. So if you divide it between kind of the core total business or tags, which I think we said the tag volume, tag count grew 9% in the quarter. The reason again for that is, you know, we're Koch.

Ronald Clarke: Hey, Pete, and Ron, good question. Yes, the headline is that the Brazil business is doing great.

Ron Clarke: The headline is the Brazil businesses is doing great. So if you divide it between kind of the core toll business or tags, which I think we said the tag volume tag count grew 9% in the quarter. The reason again for that is, you know, we're Coke. We have every distribution channel known demand to buy a tag. We're at toll booths, we're in malls, we're in retail stores, we're in digital, we're at all the new cars they make on the windshield coming out. So if you've got a vehicle, you can buy our tag. And so there's just nobody with 2,000 people in those various places helping sell these tags.

Speaker Change: Hey Pete, Ron, good question. Yes, the headline is the Brazil business is doing great. So, if you divide it between kind of the core toll business or TAGs,

Ronald Clarke: So if you divide it between kind of the core total business or tags, which I think we said the tag volume, tag count grew 9% in the quarter. The reason, again, for that is, you know, we're Coke. We have every distribution channel known to man to buy a tag. We're in toll booths. We're in malls. We're in retail stores. We're in digital.

Nate Spenson: Kind of just wondering your thoughts on the ability to continue expanding margins in the back half of the year, particularly given you'll be lapping some really strong margin expansion in the back half of 23 and then you start to layer of Pamirang in there. So anything we should keep in mind for our malls with regard to cadence or magnitude of margin expansion and what that X array might look like heading into next year.

Tinson Huang: which I think we said the tag volume, tag count grew 9%.

Speaker Change: in the quarter. The reason, again, for that is, you know, we're Polk. We have every...

Ronald Clarke: We have every distribution channel known to buy a tag. We're in toll booths, we're in malls, we're in retail stores, we're in digital, we're in all the new cars they make on the windshield coming out. So if you've got a vehicle, you can buy our tag. And so there's just nobody, 2,000 people in those various, you know, places helping sell these tags.

Tom Panther: Distribution.

Tom Panther: Channel, known to man to buy a tag. We're at Tollbooth's, we're in malls, we're in retail stores, we're in digital, we're in all the new cars they make on the windshield coming out.

Nate Spenson: Hi, is the headline Nate high, right? I think we've said repeatedly that we've got significant operating leverage in this business. So I think our friend was what's on low 53, 53 and change, let's say for Q2. We're looking sequentially, Nate, for revenue to go up 50 here in Q3, 975 call it the 1025 and then I think another 40 as we head into into Q4. So the flow through the margin flow through of that incremental revenue is, you know, 80 or 90% in our business.

Ronald Clarke: We're in all the new cars they make on the windshield coming out. So if you've got a vehicle, you can buy our tag. And so there's just nobody, 2,000 people in those various, you know, places helping sell these tags.

Speaker Change: If you've got a vehicle, you can buy our tag, and so there's just nobody, 2,000 people in those various, you know, places helping sell these tags.

Ronald Clarke: And then second, we told you, and it's come true, that the cross sell, when you have 6 or 7 billion active users, including more than half of them come into your app every month, you can sell other vehicle-related stuff than we are. We're selling a pile of it, fueling, compounding, I think at 25 or 30%. The funniest one, we bought this, we call it car debt, Pete.

Ron Clarke: And then second, we told you and it's come true that the cross, when you have 6 or 7 billion active users, including more than half of them come into your app every month, you can sell on the vehicle-related stuff. And we are. We're selling a pile of it. It's fueling, farm piling; I think it's 25 or 30%. The funniest one we thought is we call car debt speed. It's like tickets and registration for your car. And so that thing's compounding. I think it's 40% in the quarter. But literally, we're up like 5X selling that to our own user base because when users now come on their phone to the home page, you know, we know who you are, you're Pete Christensen, you're, you know, kind of 1.020, we know your registration.

Ronald Clarke: And then second, we told you, and it's come true, that the cross-sell when you have six or 7 billion active users, including more than half of them coming into your app every month, you can sell other vehicle-related stuff, and we are, we're selling a pile of it. Fueling compounding, I think, at 25 or 30 percent. The funniest one we bought, we call it car debt speed. It's it' But literally, we're up like 5x, selling that to our own user base.

Speaker Change: And then second, we told you, and it's come true, that the cross-sell, when you have six or seven billion active users, including more than half of them come into your app every month, you can

Speaker Change: Sell other vehicle related stuff and we are we're selling a pile of it fueling compounding. I think it's 25 or 30 percent The the funniest one we bought this Cut up we call it car debt speed. It's like tickets and registration for your car

Nate Spenson: So margins will expand another two to 250 basis points between Q2 and Q4. So this is the model. The model is, if you get, you know, sequential incremental revenue on the books that you'll have significantly good flow.

Ronald Clarke: It's like tickets and registration for your car. And so that thing's compounding, I think, at 40% in the quarter. But literally, we're up, like, 5x selling that to our own user base because when users now come on their phone to the home page, you know, we know who you are. You're Pete Christiansen, you're, you know, Count 1020. We know your registration. We literally put it up on the home page, hey, you've got two tickets, Pete. They're outstanding, partner. And they're due on Friday.

Speaker Change: And so that thing's compounding, I think it's 40%.

Speaker Change: in the quarter, but literally we're up like 5x.

Nate Spenson: That's great to hear. I guess for the fall, I kind of want to talk about retention. So obviously really nice to see the step up in retention, both sequentially and year over years. So it's hoping you can unpack a little more what's driving that. How much of this is kind of the external environment, getting a little better. How much is it is explicit actions taken by you at Corpay. And then I know for the growth algorithm in the back of the year, you talked about a number of different factors, retention, import sales, new products, et cetera.

Ronald Clarke: Because when users now come on their phone to the home page, you know, we know who you are, you're Pete Christiansen, you're, you know, Count 1020, we know your registration. We literally put up on the home page, "Hey, you've got two tickets, Pete. They're outstanding, partner. And they're due on Friday."

Speaker Change: Selling that to our own user base because when

Peter Christiansen: Users now come on their phone to the home page, you know, we know who you are, you're Peter Christiansen, you're, you know, Count 1020, we know your registration, we literally put up on the home page, hey, you've got two tickets Pete, they're outstanding, partner.

Ron Clarke: We literally put up on the home page, hey, you've got two tickets for their outstanding partner. And then they do on Friday. And so the power of, I hope people aren't missing this, the math, the size of the base, and the number of, you know, new users we add. And the broadening line of vehicle things that we're selling now, we've got the model working. I don't know people can see it, but we're, we're growing the, you know, the platform of the flagship product of our distribution. And we're broadening the add-on things. And your relating question is, yes, the footprints of those related things are growing.

Ronald Clarke: And so the power of, I hope people aren't missing this, the math, the size of the days, and the number of, you know, new users we add and the broadening line of vehicle things that we're selling now. We've got the model working. I don't know if people can see it, but we're growing the platform of the flagship product because of our distribution. And we're broadening the add-on things. And your related question is yes.

Ronald Clarke: And so the power of, I hope people aren't missing this, the math, the size of the days. And the number of, you know, new users we add and the broadening line of vehicle things that we're selling now. We've got the model working. I don't know if people can see it, but we're growing the platform of the flagship product because of our distribution, and we're broadening the add-on things.

Peter Christiansen: And they're due on Friday. And so the power of...

Nate Spenson: So I guess just anyway to help size each of those metrics and their contribution to growth for the remainder of the year with the focus on retention there. Yeah, let me take the first part, Nate, it's Ron, and then Tom come pick up, just on the hay retention, we've called out the retention trend was good, nearly 92%, which is the best in a while. It's really mostly next. And what I mean by that is implicitly the retention of a company like ours is really both fundamentally based on the size and the health of the clients.

Speaker Change: I hope people aren't missing this, the math, the size of the base.

Ronald Clarke: And your related question is, yes. The footprints of those related things are growing. So we've added another, I think, 400, 500 fueling stations this year or next year. We've added thousands and thousands of incremental parking locations, you know, through a deal. We've added this car debt thing from one of the largest companies in the country doing it. So we are doing that, widening where the users can use these add-on services, which helps us reach more of the base. So the model's working. It's incrementally profitable, obviously, because we're cross-selling, right, versus just getting new accounts. So I'm hoping that the model that we articulated a few years ago, people can see that it's working.

Peter Christiansen: and the number of new users we add and the broadening line of vehicle things that we're selling now.

Nate Spenson: Remember, we provide credit and we probably kick out half the people. So for 92% retention, so 8% loss, it's probably closing it on half of that is us not liking the client enough anymore right to extend credit. So the mix, like we talked about in the quote infamous North America fleet pivot, we're pivoting to higher quality, better credit worthy accounts, more stable accounts. So that structurally will create retention improvement. And then corporate payments as a business is bigger accounts.

Speaker Change: We've got the model working. I don't know if people can see it, but we're, we're growing the, you know, the platform of the flagship product because of our distribution, and we're broadening the add-on things. And, and your relating question is, yes.

Ronald Clarke: The footprints of those related things are growing. So we've added another, I think, 400, 500 fueling stations this year or next year. We've added thousands and thousands of incremental parking locations, you know, through a deal. We've added this car debt thing from one of the largest companies in the country doing it. So we are doing that, widening where the users can use these add-on services, which helps us reach more of the base. So the model's working. It's incrementally profitable, obviously, because we're cross-selling, right, versus just getting new accounts. So I'm hoping that the model that we articulated a few years ago, people can see that it's working.

Ron Clarke: So we've added another, I think, 400, 500 fueling stations this year and more next year. We've added thousands and thousands of incremental parking locations, you know, through a deal. We've added this card debt thing from one of the largest companies, you know, in the country doing it. So we are doing that widening where the users can use these add-on services, which helps us reach more of the base. So the model's working. It's, it's incrementally profitable, obviously, because we're cross-selling ripers. It's just getting new accounts. So I'm hoping that the model that we articulated a few years ago, people can see that it's working.

Speaker Change: The footprints of those related things are broke, so we've added another, I think, 400, 500 fueling stations.

Peter Christiansen: This year or next year, we've added thousands and thousands of incremental parking locations, you know, through a deal. We've added this car debt thing from one of the largest companies, you know, in the country doing it.

Peter Christiansen: We are doing that, widening...

Speaker Change: where the users can use these add-on services, which helps us reach more of the base.

Speaker Change: The model's working. It's incrementally profitable, obviously, because we're cross-selling, right, versus just getting new accounts. So I'm hoping that the model that we articulated a few years ago, people can see that it's working.

Peter Christiansen: That's really encouraging, and I hate to beat the dead horse on virtual cards, and it's really encouraging about the mix being really healthy there as part of overall payment files, but just curious if you could give any color on rebate levels and how you're seeing those trends, at least in your business.

Peter Christiansen: That's really encouraging.

Nate Spenson: Tom said that earlier, call the average account of two or three hundred million dollar a company, you know, and it's all right. And so when you have clients like that, they're way stable and generally decent credit worthy. So it's corporate payments grows from whatever it was 20s to call it 30% now on the way to 40. That's another part of the mix that will improve our attention. So I would say that we be out looking and proving retention certainly as we run through the next, you know, 48 quarters.

Nate Spenson: And I hate to beat the dead horse on virtual cards, and it's really encouraging about the mix being really healthy there as part of overall payment files.

Speaker Change: That's really encouraging. And I hate to beat the dead horse on virtual cards,

Speaker Change: It's really encouraging about the mix being really healthy there as part of overall payment files. I'm just curious if you could give any color on rebate levels and how you're seeing those trend at least in your business.

Tom Panther: Just curious if you could give any color on rebate levels and how you're seeing those trend, at least in your business. Yeah, I'd say they're stable.

Thomas Panther: Yeah, I'd say they're stable. And we're not going to get into those details. And they can vary dramatically based on customer base, and size of the transaction. But there's nothing from a rebate standpoint that's noisy enough, the numbers. I'd say the trends there are, you know, how they've been over the last several quarters.

Thomas Panther: Yeah, Pete, I'd say they're stable. And we're not going to get into those details. And they can vary dramatically based on the customer base and the size of the transaction. But there's nothing from a rebate standpoint that's noisy enough, the numbers. I'd say the trends there are, are, are, you know, how they've been over the last several quarters.

Tom Panther: And we're not going to get into those details. And they can vary dramatically based on customer base sides of transaction. But there's nothing from a rebate standpoint that's annoying the numbers. I'd say the trends there are, are, you know, how they've been over the last several quarters. That that that's helpful.

Speaker Change: Yeah, I'd say they're stable, and we're not going to get into those details, and they can vary dramatically based on customer base, size of the transaction, but there's nothing from a rebate standpoint that's noising up the numbers. I'd say the trends there are

Nate Spenson: And Nate, let me kind of walk you through the sequential quarter from Q2 through Q4. I think it's important for you to have understand the pieces. So if we print in 975 and Q2 and are guiding toward a midpoint of 1025, that 50 million increase of that little over half of that is related to payment or incoming on board, which drives that have a lot of visibility into. And the seasonal uplift that we have seen from gift, that's over half of the 50 million dollar increase.

Speaker Change: are, you know, how they've been over the last several quarters.

Thomas Panther: That's helpful. I appreciate that, Tom. Thank you, Ramsey.

Peter Christiansen: That's helpful. I appreciate that, Tom. Thank you, Ron.

Tom Panther: I appreciate that, Tom.

Unknown Executive: Thank you.

Speaker Change: That's helpful. I appreciate that, Tom. Thank you very much.

Operator: Thank you. And our next question comes from Ramsey Ellisol with Barclays.

Peter Christiansen: Thank you. And our next question comes from Ramsey Ellisol with Barclays.

Speaker Change: Thank you. And our next question comes from Ramsey Ellisol with Barclays.

Ramsey El: Hi, thanks for taking my questions. Ron, I wanted to ask about Lodging's contribution to your longer-term growth algorithm. I mean, the segment is undoubtedly recovering. What's your confidence level that lodging will eventually get back to its kind of historic growth rate?

Ramsey El: Hi, thanks for taking my questions. Ron, I wanted to ask about lodging's contribution to your longer-term growth algorithm. I mean, the segment is undoubtedly recovering. What's your confidence level that lodging will eventually get back to its kind of historical growth watermark?

Ramsey Ellisol: Hi, thanks for taking my question this evening.

Ramsey Ellisol: Ron, I wanted to ask about lodging's contribution to your longer term growth algorithm. I mean, this segment is undoubtedly recovering.

Nate Spenson: The other increase is really the snowballing of what we would call, you know, really outperforming companies. The Brazil, the cross order, the payables, that makes up the line share of remaining sequential increase. We'll be getting some lift from some of the other businesses, but not meaningful. That's more back to your question about a pretty similar retention base, sales kind of model, but the snowballing of cross order payables and Brazil is what's coupled with the paymoring and the gift gets you to the 1025.

Ramsey Ellisol: What's your confidence level that lodging will eventually get back to its kind of historical growth watermark?

Ron Clarke: Hi, Ransey. Hi, and the reason again, I think if you go back to the very beginning of the thing is, if you think about travel and US travel in the different pockets of it, you know, white call or blue call or big companies, little companies, this area that we go after is just completely uncertain. The word they use is kind of unmanage. So, us people that are on the call have been, you know, students that have managed for travel forever and ever. But a group of guys going to fix wires doing, you know, in Tampa after a storm.

Ronald Clarke: I, Ramsey. And the reason, again, I think, if you go back to the very beginning of the thing, if you think about travel in the US, travel and the different pockets of it, you know, white collar, blue collar, big companies, little companies. This area that we go after is just completely unserved. The word they use is kind of unmanaged. So us people that are on the call have been, you know, spoon fed and managed for travel forever and ever.

Ronald Clarke: I, Ramsey. And the reason, again, I think, if you go back to the very beginning of the thing is, if you think about travel and US travel and the different pockets of it, you know, white collar, blue collar, big companies, little companies. This, this area that we go after is just completely uncertain. The word they use is kind of unmanaged. So us people that are on the call have been, you know, spoon fed and managed for travel forever and ever. But a group of guys going to fix wires, you know, in Tampa after a storm do not have very good travel help and stuff.

Ron Clarke: Hi. Ramsey. Hi. And the reason again, I think, if you go back to the very beginning of the thing is

Speaker Change: If you think about travel in the U.S., travel and the different pockets of it, you know, white collar, blue collar, big companies, little companies.

Speaker Change: This area that we go after is just completely unserved. The word they use is kind of unmanaged.

Nate Spenson: And then Q4 is more of the same, it's both the growth of paymoring, because we'll then start harvesting some of the synergies. So that gets you of the 40 million dollar growth between Q3 and Q4. Half again is paymoring and gift. A gift typically has a high seasonal second half, I've mentioned the third quarter already. It also typically has a strong fourth quarter for the obvious reasons of the holiday season, vendors wanting to refill their virtual shelves, if you will, gift cards.

Speaker Change: So us people that are on the call have been, you know, spoon-fed and managed for travel for forever and ever.

Ronald Clarke: But, but a group of guys going to fix wires, you know, in Tampa after a storm do not have very good travel help and stuff. And so I think that the, the, niche and the product line and the network that we've got serve this incredibly underserved market segment of which we've got a decent share. I don't have it in front of me.

Speaker Change: But a group of guys going to fix wires, you know, in Tampa after a storm.

Ron Clarke: Do not have very good, you know, travel, health stuff. And so, I think that the niche in the product line and the network that we've got serves this incredibly underserved market segment, of which we've got a decent share. I don't know that part of me made me call it 20% something like that. So there's plenty of time, and there's really not many good alternatives to help those companies. And so, you know, this isn't as bad as the IT thing we did, whatever, six or seven years ago. But, but obviously we, we created some of the problem, and the fact that the base is stabilizing tells me that we've contained it, that the people that didn't like what we did do in the year ago, that we were not doing that kind of the rest of the client base.

Speaker Change: Do not have very good, you know, travel help and stuff. And so I think that the niche and the product line and the network that we've got.

Ronald Clarke: And so I think that the, the, niche, and the product line and the network that we've got serve this incredibly underserved market segment of which we've got a decent share. I don't know if it's in front of me, maybe call it 20%, something like that. So there's plenty of TAM, and there are really not many good alternatives to help those companies. And so, this isn't as bad as the IT thing we did, whatever, six or seven years ago, but obviously, we created some of the problem, and the fact that the base is stabilizing tells me that we've contained it, that the people that didn't like what we did to them a year ago, that we were not doing that to kind of the rest of the client base.

Nate Spenson: And then the rest of that increase, call it another, you know, 20 million dollars, is the snowballing again of our growing businesses and the sales that we've been talking about cross order and payables growing almost 30 percent, Brazil growing 27 percent, those just pouring into the second half that didn't drive the revenue. Now, it's certainly not without some risks. I mean, clearly we've got to execute and we've got to deliver. You don't look at those numbers and say, oh, well, that's a laydown forecast for the second half of the year, but it's something that we do have discrete plans up against and the plans are up against things that we've got payment visibility in and things that are performing today. It's how I describe them the way we get from here.

Speaker Change: serves this incredibly underserved community.

Ronald Clarke: Maybe call it 20%, something like that. So there's plenty of cameras, and there's really not many good alternatives to help those companies. And so, you know, this isn't as bad as the IT thing we did, whatever, six or seven years ago, but, but obviously, we created some of the problem. And the fact that the base is stabilizing tells me that we've contained it, that the people that didn't like what we did to them a year ago, that we were not doing that to kind of the rest of the client base.

Speaker Change: Markets segment of which we've got a decent share. I don't know that in front of me maybe call it 20% Something like that

Speaker Change: So there's there's plenty of cam and there's really not.

Speaker Change: Many good alternatives to help those companies and so

Speaker Change: This isn't as bad as the IT thing we did six or seven years ago, but obviously we created some of the problem.

Tinson Huang: The basis stabilizing tells me that we've contained it, that the people that didn't like what we did to them a year ago, that we were not doing that to kind of the rest of the client base.

Ron Clarke: So, as long as the client sitting on our books, you know, in July, are happy. And we can keep selling like we said. Well, we grew up 36%. Then, then the answer is, what will be back on the other side? I mean, the value. You know, Ramsey, too, a customer, I think the spreads, which is our cost versus retailed, hit $50 a weeknight in June or July, $50. I think we turned over $25 of that back to the company.

Ronald Clarke: So as long as the clients sitting on our books, you know, in July are happy and we can keep selling, like we said, when we grew up 36%, then, then the answer is we'll be back on the other side. I mean, the value of Ramsey to a customer, I think the spreads, which is our cost versus retail, hit $50 a room. In June or July, $50. I think we turned over $25 of that back to the company.

Ronald Clarke: So as long as the clients sitting on our books, you know, in July are happy and we can keep selling, like we said, when we grew up 36%, then the answer is, we'll be back on the other side. I mean, the value, Ramsey, to a customer, I think the spreads, which is our cost versus retail, hit $50 a room. In June or July, $50. I think we turned over $25 of that back to the company.

Tinson Huang: So, as long as the clients sitting on our books, you know, in July are happy.

Tinson Huang: And we can keep selling, like we said, we grew what, 36%?

Ron Clarke: Ron Tom, I appreciate the color.

Ron Clarke: Thank you.

Tinson Huang: then the answer is we'll be back on the other side. I mean, the value, Ramsey, to a customer, I think the spreads, which is our cost versus retail, hits $50 a room night.

Peter Christiansen: And our next question comes from Peter Christiansen with Citibank.

Ron Clarke: Good evening. Thank you gentlemen for the question. I wanted to dig into the transactional momentum we're still seeing in the Brazil business. It looks fantastic. As we think about parking, fueling stations, that kind of growth that you've seen there, I was wondering if you can attribute that more on footprint expansion versus same sort of growth or more user engagement. And on the footprint expansion kind of story, can you just remind us where we are and see more opportunities to expand those two networks?

Ramsey: In June or July , $50. I think we turned over $25 of that back to the company. So, you know, your ability to have a simple way to book, you know,

Ron Clarke: Kennedy. So, you know, your ability to have a simple way to book, you know, save, and then pay for all that stuff in an organized way and control it. So, the people are going where you want, not spending other stuff. The combination of those things is just, it's just such a great value prop. It's probably the best value prop we have in the company. And so, we just have to, we just have to execute well, not like we did a year ago. So, so confidence is high to do better again. Super helpful.

Ronald Clarke: So, you know, your ability to have a simple way to book, you know, save and then and then pay for all that stuff in an organized way and control it so the people are going where you want not spending other stuff the combination of those things is just it's just such a great value prop it's probably the best value prop we have in the company and so we just have to we just have to execute well not like we did a year ago so so confidence is high to do better again.

Tinson Huang: Save and then pay for all that stuff in an organized way and control it so the people are going where you want and not spending other stuff. The combination of those things is just such a great value prop. It's probably the best value prop we have in the company.

Ron Clarke: Hey, AP Ron. Good question. Yes. The headline is the Brazil businesses is doing great. So if you divide it between kind of the core toll business or tags, which I think we said the tag volume tag count grew 9% in the quarter. The reason again for that is, you know, we're coke. We have every distribution channel known demand to buy a tag. We're at toll booths, we're in malls, we're in retail stores, we're in digital, we're at all the new cars they make on the windshield coming out.

Tinson Huang: We just have to execute well, not like we did a year ago. So confidence is high to do better again.

Ronald Clarke: Super helpful, Ron. Thanks. And one more from me.

Ramsey El: Thanks. And one more for me. Can you unpack the same store sales improvement, which was really meaningful in the quarter? Where was that localized in terms of industry verticals, products kind of across the business. I think throughout your remarks, you've addressed that a little bit, but maybe just kind of roll it up for us. Where are you seeing the best improvement there on the same store sales?

Tinson Huang: Super helpful, Ron. Thanks. And one more from me.

Ramsey El: Can you unpack the same-store sales improvement, which was really meaningful in the quarter? Where was that localized in terms of industry verticals, products kind of across the business? I think throughout your remarks, you've addressed that a little bit, but maybe just kind of roll it up for us. Where are you seeing the best improvement there on Salesforce sales?

Ramsey El: Can you unpack the same store sales improvement, which was really meaningful in the quarter? Where was that localized in terms of industry verticals, products kind of across the business? I think throughout your remarks, you've addressed that a little bit, but maybe just kind of roll it up for us. Where are you seeing the best improvement there on Salesforce sales?

Speaker Change: Can you unpack the Sam's Store sales improvement, which was really meaningful in the quarter? Where was that localized in terms of industry verticals, products kind of across the business? I think throughout your remarks you've addressed that a little bit, but maybe just kind of roll it up for us. Where are you seeing the best improvement there on Sam's Store sales?

Ronald Clarke: Yeah, the two big ones would be North America Fleet and, again, that's structural, right? We, whatever, a year and a half ago, stopped the micro thing.

Ron Clarke: Yeah, the two good ones would be North America fleet. And again, that's structural, right? We, whatever year and a half ago, stops the micro thing. And so, your base gets way more stable when you have, you know, better clients in it, right? More sturdy kind of clients in it. And, and you don't kick them out again for credit. And then the other one is Logic. Because, again, that base started to erode in Q2, you know, last year. And so, the customers that we didn't do good for, again, we kind of, we kind of contain that.

Speaker Change: Yeah, the two big ones would be North America Fleet.

Speaker Change: And again, that's structural, right? We, whatever, a year and a half ago...

Ron Clarke: So if you've got a vehicle, you can buy our tag. And so there's just nobody with 2,000 people in those various places helping sell these tags. And then second, we told you and it's come true that the cross, when you have 6 or 7 billion active users, including more than half of them come into your app every month, you can sell on the vehicle related stuff. And we are. We're selling a pile of it.

Speaker Change: Stop the micro thing. And so your base gets way more stable when you have, you know, better Clients in it right more sturdy kind of clients in it and in and you don't kick them out again for credit And then the other one is logic

Ronald Clarke: And so your base gets way more stable when you have, you know, better clients in it, right? More sturdy kind of clients in it, and you don't kick them out again for credit. And then the other one is because, again, that base started to erode in Q2, you know, of last year. And so the customers that we didn't do so well for, again, we kind of contained that. So those would be, sequentially, the two businesses that showed the most improvement into Q2.

Speaker Change: Because again, that phase started to erode in Q2 of last year, and so the customers that we didn't do good for, again, we kind of contained that. So those would be...

Ron Clarke: So, those would be sequentially the, the two businesses that had the carry the most improvement in the Q2.

Ron Clarke: It's fueling, farm piling, I think it's 25 or 30%. The funniest one we thought is we call car debt speed. It's like tickets and registration for your car. And so that thing's compounding. I think it's 40% in the quarter. But literally, we're up like 5X selling that to our own user base because when users now come on their phone to the home page, you know, we know who you are, you're Pete Christensen, you're, you know, kind of 1.020, we know your registration.

Speaker Change: Sequentially, the two businesses that carried the most improvement in the Q2.

Ron Clarke: And that was an inflection point that we were, that was the inflection point that we were looking for and anticipating to make sure that it didn't widen. And this was, you know, the corner where we were able to see that, in fact, it didn't widen and it's coming back. So, so that's, you know, gives us that element of optimism in terms of how they're going to perform. And you guys ran, it's running on a good, good, you know, models and good math guys. So, when I say to you, hey, I've got two problems. Oh, and something home to the two problems. Oh, here.

Ronald Clarke: And that was the inflection point that we were looking for and anticipating to make sure that it didn't widen, and this was, you know, the quarter we were able to see that, in fact, it didn't widen, and it's coming back. So, that gives us that element of optimism in terms of how they're going to perform going forward. And you guys, Ramsey, it's Ron again. A good, good, you know, model is a good math guy.

Thomas Panther: And that was the inflection point that we were looking for and anticipating to make sure that it didn't widen, and this was, you know, the quarter we were able to see that, in fact, it didn't widen, and it's coming back. So, that gives us that element of optimism in terms of how they're going to perform going forward.

Speaker Change: And that was the inflection point that we were, that was the inflection point that we were looking for and anticipating to make sure that it didn't widen and this was, you know, the corner where we were able to see that, in fact, it didn't widen and it's coming back. So, so that's.

Ron Clarke: You know, it gives us that element of optimism in terms of how they're going to perform going forward. And you guys, Ramsey, it's Ron again, a good, good, you know, model is a good math guy. So when I say to you, hey, I've got to do...

Ronald Clarke: And you guys, Ramsey, it's Ron again. A good, good, you know, model is a good math guy. So when I say to you, hey, I've got two problem children, I have some at home too, two problem children here. Hey, they're going to go from declining to stable. Hey, trust me, pal. What I'm trying to say to you is, don't miss.

Ronald Clarke: So when I say to you, hey, I've got two problem children. I have some at home too, two problem children here. Hey, they're going to go from declining to stable. Hey, trust me, pal. What I'm trying to say to you is don't miss The Tran. Won't go near-

Ron Clarke: Hey, they're going to go from declining to stable. Hey, trust me, pal.

Ramsey: Problem children, I have some at home too, but two problem children here, hey, they're going to go from declining to stable. Hey, trust me, pal, what I'm trying to say to you is don't miss the trends.

Ron Clarke: What I'm trying to say is, don't miss the trends. What, what are the, you know, what are the two businesses who say store sales approved most sequentially? The two problem children whose retention was better, the problem children. And so, we're seeing already in the trends, those businesses getting better. So, when we run the models forward, that's, that's a big part of what creates the improvement of these back to stable in those businesses.

Ronald Clarke: The Draft. What are the two businesses whose same store sales improved the most sequentially? The two problem children, whose retention was better, the problem children. And so we're already seeing in the trends, those businesses getting better. So when we run the models forward, that's a big part of what creates the improvement, at least back to stable in those businesses.

Ronald Clarke: What are the, you know, what are the two businesses whose same store sales improved the most sequentially? The two problem children, whose retention was better, the problem children. And so we're already seeing in the trends, those businesses getting better. So when we run the models forward, that's a big part of what creates the improvement, at least back to stable in those businesses.

Speaker Change: What are the two businesses whose same-store sales improve the most sequentially?

Speaker Change: The two problem children.

Speaker Change: whose retention was better, the problem children. And so we're seeing already in the trends, those businesses getting better. So when we run the models forward, that's a big part of what creates the improvement, at least back to stable in those businesses.

Ron Clarke: And we're broadening the add on things. And your relating question is, yes, the footprints of those related things are growing. So we've added another, I think, 400, 500 fueling stations this year and more next year. We've added thousands and thousands of incremental parking locations, you know, through a deal, we've added this card debt thing from one of the largest companies, you know, in the country doing it. So we are doing that widening where the users can use these add on services, which helps us reach more of the base. So the model's working. It's, it's incrementally profitable, obviously, because we're cross selling ripers. It's just getting new accounts.

Unknown Executive: God, thanks so much. Thank you.

Speaker Change: Got it. Thanks so much.

Operator: Thank you. And our next question comes from John Davis with Raymond James.

John Davis: And our next question comes from John Davis with Raymond James. Hey, guys, you guys. Well, I think if we go back to 4Q of 22, there was a lot of travel disruption, and the lodging business benefited. So, just curious. Did you see any benefit from the Crown Strike outage and the trial of the associated trouble disruption there? Hey, John, I hate to admit, yes, which we saw kind of in our, in our July flash. So, I don't, they're like to, you know, wish, wish problems on people. But yes, remember that if you took our entire lodging business and you looked at the pieces out of right, we, we sell the three or four different verticals there. We sell to what we call kind of workforce of blue call, we sell the airlines and we sell the insurance and stuff in the, in a couple of those businesses, we have either what we call emergency, like a hurricane, or distressed, which is like the airlines, not being able to get the flights across.

Speaker Change: Thank you. And our next question comes from John Davis with Raymond James.

John Davis: Hey, good afternoon, guys. Well, I think if we go back to 4Q of 22, there was a lot of travel disruption, and the lodging business benefited. So just curious, did you see any benefit from the Crown Strike outage and the associated travel disruption there?

John Davis: Good afternoon, guys. Well, I think if we go back to 4Q of 22, there was a lot of travel disruption, and the lodging business benefitted. So I'm just curious, did you see any benefit from the Crown Strike outage and the associated travel disruption there?

John Davis: Hey, good afternoon, guys. Well, I think if we go back to 4Q22, there was a lot of travel disruption, and the lodging business benefited. So just curious, did you see any benefit from the CrowdStrike outage and the associated travel disruption there?

Ronald Clarke: Hey, John, I hate to admit, yes, we did, which we saw kind of in our July flash. So I don't necessarily like to, you know, wish problems on people. But yes, remember that if you took our entire lodging business and you looked at the pieces of it, right? We sell the like, three or four different verticals there, we sell the what we call kind of workforce, blue collar, we sell the airlines, and we sell the insurers and stuff.

Ronald Clarke: Hey, John, I hate to admit, yes, we did, which we saw kind of in our July flash. So I don't necessarily like to, you know, wish problems on people. But yes, remember that if you took our entire lodging business and you looked at the pieces of it, right, we sell the like, three or four different verticals there, we sell the what we call kind of blue-collar workforce, we sell the airlines, and we sell the insurers and stuff.

Speaker Change: Hey John , I hate to admit, yes, we did.

Speaker Change: which we saw kind of in our July .

Speaker Change: Flash, so I don't necessarily like to, you know, wish problems on people, but yes, remember that if you took our entire...

Ron Clarke: So I'm hoping that the model that we articulated a few years ago, people can see that it's working. That's really encouraging.

Ronald Clarke: In a couple of those businesses, we have either what we call an emergency, like a hurricane, or distressed, which is like the airlines not being able to get the flights across. That stuff probably is, I don't know, 10 or 15% of the entire business. So, even if it's, you know, 50% better for a whole year, it seems like the world was, you know, upside down. So I wouldn't say that it's super duper meaningful to the overall thing, but it's certainly helpful. It's certainly our numbers in that segment will be better in this.

Tinson Huang: lodging business and you and you looked at the pieces out of right we we sell the like three or four different verticals there we sell the what we call kind of workforce blue collar we sell the airlines and we sell the

Tom Panther: And I hate to beat the dead horse on virtual cards, and it's really encouraging about the mix being really healthy there as part of overall payment files. Just curious if you could give any color on rebate levels and how you're seeing those trend at least in your business. Yeah, I'd say they're stable. And we're not going to get into those details. And they can vary dramatically based on customer base sides of transaction. But there's nothing from a rebate standpoint that's annoying the numbers. I'd say the trends there are, are, you know, how they've been over the last several quarters. That that that's helpful. I appreciate that Tom.

Ronald Clarke: In a couple of those businesses, we have either what we call an emergency, like a hurricane, or distressed, which is like the airlines not being able to get the flights across. That stuff probably is, I don't know, 10 or 15% of the entire business. So even if it's, you know, 50% better for a whole year, like the world was, you know, upside down, so I wouldn't say that it's super duper meaningful to the overall thing. But it's certainly helpful. Certainly, our numbers in that segment will be better in this.

Tinson Huang: Insurance and stuff. In a couple of those businesses we have either what we call an emergency like a hurricane or a fire.

Unknown Executive: Thank you.

Tinson Huang: Distressed.

Ron Clarke: That stuff probably is, I don't know, 10 or 15% of the entire business. So, even if it's, you know, 50% better for all year, like the world was, you know, upside down. So, I wouldn't say that it's super duper being full to the overall thing, but it's certainly helpful. Certainly, our numbers in that segment will be better.

Tinson Huang: which is like the airlines not being able to get the flights across. That stuff probably is, I don't know.

Tinson Huang: 10 or 15 percent.

Tinson Huang: of the entire business. So even if it's, you know, 50% better for a whole year, like the world was, you know, upside down. So I wouldn't say that it's super duper meaningful to the overall thing, but it's certainly helpful. Certainly our numbers in that segment will be better in this quarter.

Tom Panther: James Faucette. Okay, no, that's helpful. And then, Ron's to dig in a little bit. He saw a nice acceleration. Sales growth, I think he called out corporate payments up 21% versus overall up to 21. And I think Tom called out North America Fleet, you know, five card plus new sales being really strong, but maybe overall, like what does North America Fleet new sales look like and the other segment to call out of the corporate payments driving that 21% as a nice sequential improvement. Do you have that top? Yeah, North America fleet, John is kind of mis-single digits, but it's really kind of tailored to cities in there because there's some segments within there that you were just kind of deemphasizing.

John Davis: Okay, no, that's helpful. And then, Ron, just to dig in a little bit, you saw a nice acceleration in sales growth. I think you called out corporate payments up 21% versus overall up 21%, and I think Tom called out North America Fleet, you know, five card plus new sales being really strong, but maybe overall, like, what does North America Fleet new sales look like in the other segment of the call, other than corporate payments driving that 21% and a nice sequential improvement.

John Davis: Okay, no, that's helpful. And then, Ron, just to dig in a little bit, you saw a nice acceleration in sales growth. I think you called out corporate payments up 21% versus overall up 21%, and I think Tom called out North America Fleet, you know, five card plus new sales being really strong, but maybe overall, like, what does North America Fleet new sales look like in the other segment to call out other than corporate payments driving that 21% and a nice sequential improvement.

Tinson Huang: Okay. No, that's helpful. And then, Ron, just to dig in a little bit, you saw a nice acceleration in sales growth. I think you called out corporate payments up 21% versus overall up.

Ramsey El: So, and our next question comes from Ransey, Ella Solk with Barkley. Hi, thanks for taking my question this evening. Ron, I wanted to ask about lodging's contribution to your longer term growth algorithm. I mean, the segment is undoubtedly recovering. What's your confidence level that lodging will eventually get back to its kind of historical growth watermark? Hi, Ransey. Hi, and the reason again, I think if you go back to the very beginning of the thing is, if you think about travel and US travel in the different pockets of it, you know, white call or blue call or big companies, little companies, this area that we go after is just completely uncertain.

Speaker Change: And I think Tom called out North America Fleet, you know, five card plus, new sales being really strong. But maybe overall, like, what is North America Fleet new sales look like and the other segments to call out other than corporate payments driving that 21% and a nice sequential improvement.

Thomas Panther: You have that, Tom, if I may? Yeah, North American Fleet is kind of mid-single digits, but it's really kind of a tale of two cities in there because there's some segments that are in there that, you know, we're just kind of de-emphasizing. If you look at our proprietary fuel product, it's actually up 30%, so that just gives you the range of variability that's going on within the North American Fleet business. So I think you really have to kind of decompose it to get to, you know, what's going on there.

Thomas Panther: You have that, Tom, if I may? Yeah, North American Fleet is kind of mid-single digits, but it's really kind of a tale of two cities in there, because there are some segments within there that we're just kind of de-emphasizing. If you look at our proprietary fuel product, it's actually up 30%, so that just gives you the range of variability that's going on within the North American Fleet business. So I think you really have to kind of decompose it to get to, you know, what's going on there.

Tom Panther: Do you have that, Tom, if I may? Yeah, North America Flayed, John , is kind of mid-single digits, but it's really kind of a tale of two cities in there, because there's some segments within there that we're just kind of de-emphasizing.

Tom Panther: If you look at our proprietary, if you will, product, it's actually up 30%. So it just gives you the range of variability that's going on in the North America fleet business. So I think you really have to kind of decompose it to get what's going on there. Then, as you said, you down the page in terms of lodging, we reference that payments all 30%. So it's where we're focusing our sales efforts. We're seeing the results. I think it's the message we leave you with. Okay, pretty sure.

Tom Panther: If you look at our proprietary fuel product, it's actually up 30%, so that just gives you the range of variability that's going on within the North American Fleet business.

Tom Panther: So I think you really have to kind of decompose it to get to.

Thomas Panther: And then, as you said, you work down the page in terms of lodging, we reference that, payments, almost 30%. So it's where we're focusing our sales efforts, and we're seeing the result, I think, is the message we leave.

John Davis: And then, as you said, you've worked down the page in terms of lodging. We referenced that, corporate payments, almost 30%. So it's, you know, where we're focusing our sales efforts, and we're seeing results. I think that's the message we should leave.

Ramsey El: The word they use is kind of unmanage. So, us people that are on the call have been, you know, students that have managed for travel forever and ever. But a group of guys going to fix wires doing, you know, in Tampa after a storm. Do not have very good, you know, travel, health stuff. And so, I think that the, the niche in the product line and the network that we've got serves this incredibly underserved market segment of which we've got a decent share.

Tinson Huang: You know, what's what's going on there. And then, as you said, you work down the page in terms of lodging. We reference that payments almost 30%. So it's where we're focusing our sales efforts. We're seeing the results. I think that the message we leave you with.

Operator: Okay, I appreciate all the color. Thanks, guys.

John Davis: Okay, I appreciate all the color. Thanks, guys.

Tom Panther: Thank you.

Speaker Change: Okay, appreciate all the color. Thanks, guys.

Operator: Thank you. And our next question comes from Andrew Jeffrey with William Blair.

Andrew Jeffrey: Thank you. And our next question comes from Andrew Jeffrey with William Blair.

Andrew Jeffery: And our next question comes from Andrew Jeffery with William Blair. Thank you very much. Good afternoon. Appreciate taking the question. I know that the calls got on the long.

Speaker Change: Thank you. And our next question comes from Andrew Jeffrey with William Blair.

Andrew Jeffrey: Thank you very much. Good afternoon.

Andrew Jeffrey: Thank you very much. Good afternoon. I appreciate you taking the time.

Andrew Jeffrey: I know the call's gotten a little long, so I'm going to ask you one, Ron, just big picture. When I think about corporate payments and the two big deals you've announced recently, the profile of the business has really meaningfully shifted and will continue to do so next year. And I know you did an exhaustive corporate review last year, but does there come a point where you kind of look at the merits of being a pure play, call it a 20% scale public B2B company, and what that might mean for, you know, some of the parts of Fleet Corps? This is just because it's such a distinctive, unique business where I think there could be scarcity value. And I wonder if you would revisit some of that.

Andrew Jeffrey: Thank you very much. Good afternoon. Appreciate you taking the question. I know that the call has gotten a little long, so I'm going to ask you one, Ron, just big picture, and when I think about corporate payments and the two big deals you've announced recently, the profile of the business is

Andrew Jeffery: So I'm going to ask you one, Ron, just big picture. And when I think about corporate payments and the two big deals you've announced recently, the profile of the business has really pretty meaningfully shifted and will continue to do so next year. And I know you did an exhaustive corporate review last year, but does there come a point where you kind of look at the merits of being a pure play, call it 20% scale public B to B company. And what that might mean for some of the parts for free core, this is just it's such a distinctive unique business where I think there could be scarcity value.

Ramsey El: I don't know that part of me made me call it 20% something like that. So there's plenty of time and there's really not many good alternatives to help those companies. And so, you know, this isn't as bad as the IT thing we did, whatever, six or seven years ago. But, but obviously we, we created some of the problem and the fact that the base is stabilizing tells me that we've contained it, that the people that didn't like what we did do in the year ago, that we were not doing that kind of the rest of the client base.

Andrew Jeffrey: Appreciate you taking the question. I know that the call's gotten a little long, so I'm going to ask you one, Ron, just big picture. And when I think about corporate payments and the two big deals you've announced recently, the profile of the business has really meaningfully shifted and will continue to do so next year. And I know you did an exhaustive corporate review last year, but does there come a point where you kind of look at the merits of being a pure play, call it a 20% scale public B2B company, and what that might mean for some of the parts for Fleet Corps? This is just, it's such a distinctive, unique business where I think there could be scarcity value. I wonder if you would revisit some of that potential.

Speaker Change: has really pretty meaningfully shifted and will continue to do so next year. And I know you did an exhaustive corporate review last year, but does there come a point where you kind of look at the merits of being a pure play, call it 20%?

Speaker Change: scale public B2B company, and what that might mean for, you know, some of the parts for Fleet Corps. This is just

Ramsey El: So, as long as the client sitting on our books, you know, in July are happy. And we can keep selling like we said, well, we grew up 36%. Then, then the answer is, what will be back on the other side? I mean, the value. You know, Ramsey, too, a customer, I think the spreads, which is our cost versus retailed, hit $50 a weeknight in June or July $50. I think we turned over $25 of that back to the company.

Speaker Change: It's such a distinctive, unique business where I think there could be scarcity value. I wonder if you revisit some of that potential shift in corporate structure.

Ron Clarke: I wonder if you revisit some of that about potential shift in corporate structure.

Ronald Clarke: That that potential shift in corporate structure.

Andrew Jeffrey: The Potential Shift in Corporate Structure

Ron Clarke: Yeah, not not now, right? We spent the last year studying that I think reference our conclusion that the greatest value creation the company has two things. One, keeping corporate payments going, which we're doing, compounding organically 20% and buying creative deals into accelerating the vehicle business. And so that, that's what we're on.

Ronald Clarke: Yeah, not now, right? We spent the last year studying that, and I think we concluded that the greatest value creation of the company is two things. One, keeping corporate payments going, which we're doing, compounding organically by 20% and buying accretive deals. And two, accelerating the vehicle business.

Ronald Clarke: Yeah, not now, right? We spent the last year studying that, I think, referencing our conclusion that the greatest value creation of the company is two things. One, keeping corporate payments going, which we're doing, compounding organically by 20% and buying accretive deals. And two, accelerating the vehicle business. And so that's what we're on. With that said, there's always a different day, you know; wake us up on a different day, and we'll see where we are.

Speaker Change: Yeah, not now, right? Hey, we spent the last year.

Speaker Change: Study that I think

Speaker Change: referenced our conclusion that the greatest value creation of the company is two things. One,

Speaker Change: Keeping corporate payments going, which we're doing, compounding organically 20% and buying accretive deals, and two, accelerating the vehicle business. And so that's what we're on.

Ronald Clarke: And so that's what we're on. With that said, there's always a different day, you know; wake us up on a different day, and we'll see where we are. And, you know, six, 12 months, but, you know, I think we said that we liked the company we have, we like the fact that we're in three payment lines, and we've obviously got some fix it work to do with a couple of businesses. So I'd say we're not revisiting the three segments today, period. Again, our eyes are always open to suggestions from our ears, but it's not today.

Ron Clarke: With that said, there's always a different day. You know, wake us up a different day and we'll see where we are in six, 12 months. But, you know, I think we said that we like the company we have. We like the fact that we're in three payment lines, and we've obviously got some fixed it work to do with a couple of businesses. So I'd say we're not on a revisiting the three segments today.

Ramsey El: Kennedy. So, you know, your ability to have a simple way to book, you know, save and then pay for all that stuff in an organized way and control it. So, the people are going where you want not spending other stuff. The combination of those things is just, it's just such a great value prop. It's probably the best value prop we have in the company. And so, we just have to, we just have to execute well, not like we did a year ago.

Speaker Change: With that said, there's always a different day, you know, wake us up a different day and we'll see where we are in, you know, 6-12 months.

Ronald Clarke: And, you know, six, 12 months, but, you know, I think we said that we liked the company we have, and we like the fact that we're in three payment lines. And we've obviously got some fix it work to do with a couple of businesses. So I'd say we're not revisiting the three segments today, period. Again, our eyes are always open in our ears, but

Speaker Change: You know, I think we've said it, we like the company we have, we like the fact that we're

Speaker Change: In three payment lines and we've obviously got some fix it work to do with a couple of businesses. So I'd say we're not on revisiting the three segments today, period. Again, our eyes are always open and our ears, but it's not today.

Andrew Jeffery: Again, where eyes are always open in our ears, but it's not today. Okay, so it's helpful. Glad that it's not off the table completely in the future, though. Thank you.

Andrew Jeffrey: Okay, that's helpful. Glad it's not completely off the table in the future, though.

Andrew Jeffrey: Okay, that's helpful. Glad it's not completely off the table in the future, though. Thank you.

Ramsey El: So, so confidence is high to do better again. Super helpful. Thanks. And one more for me. Can you unpack the same store sales improvement, which was really meaningful in the quarter? Where was that localized in terms of industry verticals, products kind of across the business. I think throughout your remarks, you've addressed that a little bit, but maybe just kind of roll it up for us. Where are you seeing the best improvement there on the same store sales?

Andrew Jeffrey: Glad it's not off the table completely in the future though. Thank you.

Speaker Change: Okay, that's helpful. Glad it's not off the table completely in the future though. Thank you.

Operator: Thank you.

David Koning: And we will take our next question from Dave Cohning with Baird. Yeah, hey guys, thanks. And just one question for me. So Q4, you've guided the 14% growth. Just the math around that. I mean, it's pretty outstanding. Like, is that corporate 20% and everything else kind of over 10%? And then, is that sustainable? Is there anything in Q4 that's really good that falls off in 25%? Well, I'm glad that you said that. Yes. My word is that's arriving at a better place than a nice place. And so, yeah, 14% organic revenue grows and 14% print growth is attractive.

Operator: And we will take our next question from Dave Koning with Baird.

Dave Koning: And we will take our next question from Dave Koning with Baird.

Tinson Huang: Thank you.

Tinson Huang: And we will take our next question from Dave Koning with Baird.

Dave Koning: Yeah, hey guys, thanks. And I have just one question for you.

Dave Koning: Yeah, hey guys, thanks. And just one question for me. So Q4, you've guided the 14% growth.

Dave Koning: So in Q4, you guided 14% growth. Just the math around that, I mean, it's pretty outstanding. Like, is that corporate 20% and everything else kind of over 10%? And then is that sustainable? Is there anything in Q4 that's really good that falls off in 25?

Dave Koning: Just the math around that. I mean, it's pretty outstanding. Like, is that corporate 20% and everything else kind of over 10%? And then is that sustainable? Is there anything in Q4 that's really good that that falls off in 25?

Ramsey El: Yeah, the two good ones would be North America Fleet. And again, that's structural, right? We, whatever year and a half ago, stops the micro thing. And so, your base gets way more stable when you have, you know, better clients in it, right? More sturdy kind of clients in it. And, and you don't kick them out again for credit. And then the other one is logic. Because, again, that base started to erode in Q2, you know, last year.

Dave Koning: 25. One.

Dave Koning: and Nat 25. Well, I'm

Ronald Clarke: Well, I'm glad that you said that. Yes, my word is that he's arriving at a better place, a nice place. And so yeah, 14% organic revenue growth and 14% print growth is attractive. So on the first part of your question, yes, obviously, virtually every business is performing. Tom mentioned before, obviously, the other category with gifts would go way into the positive column, and corporate payments would go well into the 20s because we're picking up some planned synergies on the pay meringue side. And again, just the snowball of the sales there and then continued great performance in Brazil. And then the two problem children, as we said, are kind of stabilizing. So that's what the thing looks like.

Speaker Change: Well, I'm glad.

Speaker Change: that you said that, yes, we, I.

Tinson Huang: My word is that's arriving at a better place, at a nice place, and so yeah, 14.

Speaker Change: 14% Organic Revenue Growth and 14% Print Growth is attractive.

Ron Clarke: So, on the first party question, yes, obviously, virtually every business is performing. Tom mentioned before, obviously, the other category with gifts would go way into the positive column. And corporate payments would go well into the 20s because we're picking up some planned synergies on the Paymarang side. And again, just the snowball of the sales there and then continued, you know, great performance in Brazil. And then the two problem children, as we said, kind of stabilizing. So that's what that’s what the thing looks like. So as soon as you get the problem children from declining to stable, the high performing businesses pull up, obviously the average growth rate, you know, quite a bit.

Ramsey El: And so, the customers that we didn't do good for, again, we kind of, we kind of contain that. So, those would be sequentially the, the two businesses that had the carry the most improvement in the Q2. And that was an inflection point that we were, that was the inflection point that we were looking for and anticipating to make sure that it didn't widen. And this was, you know, the corner where we were able to see that in fact it didn't widen and it's coming back.

Speaker Change: On the first part of your question, yes, obviously virtually every business is performing.

Tinson Huang: Tom mentioned before, obviously, the other category with gifts would go way into the positive column.

Tom Panther: and Corporate Payments would go well into the 20s.

Speaker Change: because we're picking up some planned synergies on the pay morale side and again just the snowball of the sales there.

Ramsey El: So, so that's, you know, gives us that element of optimism in terms of how they're going to perform. And you guys ran, it's running on a good, good, you know, models and good math guys. So, when I say to you, hey, I've got two problems. Oh, and something home to the two problems. Oh, here. Hey, they're going to go from declining to stable. Hey, trust me, pal. What I'm trying to say is don't miss the trends.

Speaker Change: and then continued, you know, great performance in Brazil and then the two problem children, as we said, kind of stabilizing so that that that's what the

Ronald Clarke: So as soon as you get the problem children from declining to stable, the high performing businesses pull up the average growth rate quite a bit. In terms of, hey, does that mean if we're at 14%, hey, we're at 14% forever? No.

Tinson Huang: So as soon as you get the problem children from declining to stable, the high performing businesses pull up obviously the average growth rate quite a bit.

Ron Clarke: In terms of, hey, does that mean that we're at 14%? Hey, we're at 14% forever. No. What I'd say is so much of the terms on the early question of, what can we sell next year, particularly in North America fleet and lodging? Are those bases and have stabilized? Can we sell enough to grow those businesses, you know, attractively again? But I would say it certainly bodes for double-digit growth, right, which will certainly back you guys in 90 days with a view of 25. But yeah, it's, it'll be a great outcome to get there. And I think it sets us up well to be north of 10% in 2025.

Tinson Huang: In terms of...

Tinson Huang: Hey, does that mean if we're at 14%? Hey, we're at 14% forever. No.

Ronald Clarke: What I'd say is so much of it turns on the earlier question of what can we sell next year, particularly in the North America fleet in lodging, if those bases have stabilized, can we sell enough to grow those businesses attractively again? But I would say it certainly bodes well for double-digit growth, right? Which will certainly back you guys in 90 days with a view of 25. But yeah, it'll be a great outcome to get there. And I think it sets us up well to be north of 10% in 2025.

Ronald Clarke: What I'd say is so much of it turns on the earlier question of what can we sell next year, particularly in North America fleet and lodging, if those bases and operations have stabilized, can we sell enough to grow those businesses attractively again? But I would say it certainly bodes for double-digit growth, right? Which will certainly back you guys at 90 days with a view of 25. But yeah, it'll be a great outcome to get there. And I think it sets us up well to be north of 10% in 2025.

Ramsey El: What, what are the, you know, what are the two businesses who say store sales approved most sequentially? The two problem children whose retention was better, the problem children. And so, we're seeing already in the trends, those businesses getting better. So, when we run the models forward, that's, that's a big part of what creates the improvement of these back to stable in those businesses. God, thanks so much. Thank you.

Tinson Huang: What I'd say is...

Tinson Huang: So much of it turns on the earlier question of what can we sell next year, particularly in North America fleet and lodging, if those bases have stabilized, can we sell enough to grow those businesses attractively again?

Speaker Change: But I would say it certainly bodes for double-digit growth, right, which will certainly back you guys in 90 days with a view of 25. But yeah, it'll be a great outcome to get there, and I think it sets us up well to be north of 10% in 2025.

John Davis: And our next question comes from John Davis with Raymond James. Hey, guys, you guys. Well, I think if we go back to 4Q of 22, there was a lot of travel disruption and the lodging business benefited. So, just curious. Did you see any benefit from the Crown Strike outage and the trial of the associated trouble disruption there? Hey, John, I hate to admit, yes, which we saw kind of in our, in our July flash.

Unknown Executive: Great, thank you.

Operator: Thank you. We have reached our allotted time for questions.

Operator: Thank you. We have reached our allotted time for questions. This does conclude today's Corpay second quarter 2024 earnings conference call. Thank you for your participation. You may disconnect at any time.

Operator: Thank you.

Speaker Change: Great, thank you.

Operator: We have reached our allotted time for questions.

Speaker Change: Thank you. We have reached our allotted time for questions. This does conclude today's Corpay second quarter 2024 earnings conference call. Thank you for your participation. You may disconnect at any time.

This does conclude today's core pay second quarter, 2024, earnings conference call. Thank you for your participation. You may disconnect at any time. Thank you.

John Davis: So, I don't, they're like to, you know, wish, wish problems on people. But yes, remember that if you took our entire lodging business and you looked at the pieces out of right, we, we sell the three or four different verticals there, we sell to what we call kind of workforce of blue call, we sell the airlines and we sell the insurance and stuff in the, in a couple of those businesses, we have either what we call emergency, like a hurricane or distressed, which is like the airlines, not being able to get the flights across.

John Davis: That stuff probably is, I don't know, 10 or 15% of the entire business. So, even if it's, you know, 50% better for all year like the world was, you know, upside down. So, I wouldn't say that it's super duper being full to the overall thing, but it's certainly helpful. Certainly our numbers in that segment will be better. James Faucette. Okay, no, that's helpful. And then, Ron's to dig in a little bit.

John Davis: He saw a nice acceleration. Sales growth, I think he called out corporate payments up 21% versus overall up to 21. And I think Tom called out North America Fleet, you know, five card plus new sales being really strong, but maybe overall, like what does North America Fleet new sales look like and the other segment to call out of the corporate payments driving that 21% as a nice sequential improvement. Do you have that top?

John Davis: Yeah, North America Fleet, John is kind of mis-single digits, but it's really kind of tailored to cities in there because there's some segments within there that you were just kind of deemphasizing. If you look at our proprietary, if you will product, it's actually up 30%. So it just gives you the range of variability that's going on in the North America Fleet business. So I think you really have to kind of decompose it to get what's going on there.

John Davis: Then as you said, you down the page in terms of lodging, we reference that payments all 30%. So it's where we're focusing our sales efforts. We're seeing the results. I think it's the message we leave you with. Okay, pretty sure. Thank you.

John Davis: And our next question comes from Andrew Jeffery with William Blair.

Andrew Jeffery: Thank you very much.

Ron Clarke: Good afternoon. Appreciate taking the question. I know that the calls got on the long. So I'm going to ask you one, Ron, just big picture. And when I think about corporate payments and the two big deals you've announced recently, the profile of the business has really pretty meaningfully shifted and will continue to do so next year. And I know you did an exhaustive corporate review last year, but does there come a point where you kind of look at the merits of being a pure play, call it 20% scale public B to B company.

Ron Clarke: And what that might mean for some of the parts for free core, this is just it's such a distinctive unique business where I think there could be scarcity value. I wonder if you revisit some of that about potential shift in corporate structure. Yeah, not not now, right? We spent the last year studying that I think reference our conclusion that the greatest value creation the company has two things. One, keeping corporate payments going, which we're doing compounding organically 20% and buying creative deals into accelerating the vehicle business.

Ron Clarke: And so that that's what we're on. With that said, there's always a different day, you know, wake us up a different day and we'll see where we are in six, 12 months. But, you know, I think we said that we like the company we have we like the fact that we're in three payment lines and we've obviously got some fixed it work to do with a couple of businesses. So I'd say we're not on a revisiting the three segments today. Again, where eyes are always open in our ears, but it's not today. Okay, so it's helpful. Glad that it's not off the table completely in the future, though. Thank you.

Dave Koning: and we will take our next question from Dave Koning with Baird. Yeah, hey guys, thanks and just one question for me. So Q4, you've guided the 14% growth. Just the math around that, I mean, it's pretty outstanding. Like, is that corporate 20% and everything else kind of over 10% and then is that sustainable? Is there anything in Q4 that's really good that that falls off in 25? Well, I'm glad[inaudible] down and down and down and down and down and down and down[inaudible]

Q2 2024 Corpay Inc Earnings Call

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