Q2 2025 WEX Inc Earnings Call

Conference call all lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question. During this time simply press Star then the number one on your telephone keypad to withdraw your question Press Star one again.

Speaker Change: I only ask you. Please limit your questions to one and one follow up I would now like to turn the conference over to Steve Elder S. V. P of Investor Relations. Please go ahead.

Steve Elder: Thank you operator, and good morning, everyone with me today is Melissa Smith, our chairman and CEO, John <unk> our CFO.

Steve Elder: The press release and supplemental materials issued yesterday and a slide deck to walk through prepared remarks have been posted to the Investor Relations section of the website at <unk> Dot com.

Steve Elder: A copy of the press release and supplemental materials have included in an 8-K filed with the SEC yesterday afternoon.

Steve Elder: As a reminder, we will be discussing non-GAAP metrics, specifically adjusted net income, which we sometimes refer to as Eni is.

Steve Elder: Adjusted net income per diluted share.

Steve Elder: <unk> operating income and related margin as well as adjusted free cash flow during our call.

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

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

Steve Elder: I would also like to remind you that we will discuss forward looking statements under the private Securities Litigation Reform Act of 1095 actual results may differ materially from those forward looking statements as a result of various factors, including those discussed in the press release, the supplemental materials and the risk factors identified in the most recent.

Steve Elder: We filed annual report on Form 10-K.

Steve Elder: And subsequent quarterly reports on Form 10-Q, and other subsequent SEC filings.

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

Steve Elder: Should not place undue reliance on these forward looking statements all of which speak only as of today.

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

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

Melissa Smith: We delivered stronger financial results in the second quarter than anticipated with revenue at the top end of our guidance and adjusted EPS exceeding guidance.

Melissa Smith: I'm excited to preview some of the underlying positives that we're seeing from our investments.

Melissa Smith: We had several meaningful customer wins this quarter across each of our segments, including VP and mobility, the United Auto workers comp and benefits and a large new corporate payments customer.

Melissa Smith: I will go over these in more detail when I discuss the segment.

Melissa Smith: These important wins come alongside what is shaping up to be a strong pipeline of new business. It has been amplified by our increased sales and marketing investments.

Melissa Smith: Our continued ability to win top tier customers underscores the strength of our offerings that together enable us to deliver on our purpose of simplifying the business of running a business.

Melissa Smith: Looking ahead, we remain optimistic that each of our segments continue to operate in markets with strong growth potential.

Melissa Smith: We believe that disciplined investment in these opportunities will continue to generate attractive returns for our investors.

Melissa Smith: Now turning to second quarter results.

Melissa Smith: We reported revenue of $659 $6 million for the quarter, a decrease of two 1% year over year, excluding the impact of fluctuations in fuel prices and foreign exchange rates revenue was flat compared to the prior year adjusted.

Melissa Smith: Adjusted net income per diluted share was $3 95.

Melissa Smith: An increase of 1% compared to the same quarter last year.

Melissa Smith: Excluding the impact of fluctuations in fuel prices and foreign exchange rates Q2, adjusted EPS grew 8%.

Melissa Smith: Operationally revenue performance with consistent with our expectations across all segments.

Melissa Smith: We also benefited from higher than anticipated fuel prices.

Melissa Smith: From an earnings perspective, we realized additional benefits by tightly managing our cost structure, including overall head count.

Melissa Smith: We remain laser focused on the factors within our control we continue to execute a focused strategy designed to drive durable revenue growth margin expansion and long term shareholder value through intelligent payment of workflow solutions.

We believe that disciplined investment in these opportunities will continue to generate attractive returns for our investors.

Melissa Smith: Our customer first approach continues to drive value by helping us win new customers support our existing ones and build integrated intuitive solutions that drive their success.

Now turning to second quarter results, we reported revenue of $659 6 million for the quarter, a decrease of two 1% year over year.

Melissa Smith: Next let's turn to an overview of our segments and how they performed in Q2.

Excluding the impact of fluctuations in fuel prices and foreign exchange rates revenue was flat compared to the prior year adjusted.

Melissa Smith: <unk> operates in three large and growing market mobility benefits and corporate payments.

Adjusted net income per diluted share was $3.95, an increase of 1% compared to the same quarter last year.

Melissa Smith: Each of which we believe offers significant long term secular growth opportunities, where we hold distinct competitive advantages.

Excluding the impact of fluctuations in fuel prices and foreign exchange rates Q2, adjusted EPS grew 8%.

Melissa Smith: Mobility, our largest segment at approximately 50% of total revenue delivered fleet payment solutions transaction processing and data driven insights to fleet operators and managers globally are.

Operationally revenue performance was consistent with our expectations across all segments we.

Melissa Smith: Our proprietary closed loop payments network provides customers with enhanced data capture custom controls and tailored economics and covers approximately 90% of fuel stations in 80% of EV charging locations in the U S.

We also benefited from higher than anticipated fuel prices.

From an earnings perspective, we realized additional benefits by tightly managing our cost structure, including overall head count.

We remain laser focused on the factors within our control we continue to execute a focused strategy designed to drive durable revenue growth margin expansion and long term shareholder value through intelligent payment of workflow solutions.

Melissa Smith: These capabilities help fleet managers optimized cost detect misuse improve operational efficiency and support the complexity of operating a mixed energy fleet.

Melissa Smith: This segment has two primary categories. The first category comprising roughly 70% of segment revenue as local fleet.

Our customer first approach continues to drive value by helping us win new customers support our existing ones and build integrated intuitive solutions that drive their success.

Melissa Smith: The remaining 30% is driven by our over the road or OTR trucking customers.

Melissa Smith: With more than 600000 fleet customers globally, our competitive mode is build upon being data rich capital efficient and deeply embedded in our customers' daily operations, delivering both functional value and long term stickiness.

Next let's turn to an overview of our segments and how they performed in Q2.

<unk> operates in three large and growing market mobility benefits and corporate payments each of which we believe offers significant long term secular growth opportunities, where we hold distinct competitive advantages.

Melissa Smith: Q2 results from the mobility segment were in line with our expectations, excluding the benefit from higher fuel prices transaction levels were down slightly from the prior year similar to Q1 and within our range of expectations.

Mobility, our largest segment at approximately 50% of total revenue delivered fleet payment solutions transaction processing and data driven insights to fleet operators and managers globally.

Melissa Smith: Same store sales growth for local fleets in the U S declined in line with Q1 results while the over the road customers saw a modest decline of less than 1%.

Our proprietary closed loop payments network provides customers with enhanced data capture custom controls and tailored economics and covers approximately 90% of fuel stations in 80% of EV charging locations in the U S.

Melissa Smith: We continue to believe that this measure reflects underlying economic activity across our customer base when evaluating short term changes.

Melissa Smith: As a reminder of the same store sales metric represents approximately 75% of the payment processing volumes and is calculated on a gallons purchased basis not revenue earned.

These capabilities help fleet managers optimized cough detect misuse improve operational efficiency and support the complexity of operating a mixed energy fleet.

Melissa Smith: We noted in Q1 that there had been some tariff related pull forward of volume with our OTR customers, which appears to have normalized for now.

This segment has two primary categories. The first category comprising roughly 70% of segment revenue as local fleet. The remaining 30% is driven by our over the road, our OTR trucking customers with more than 600000 fleet customers globally, our competitive moat is built upon being data.

Melissa Smith: We're pleased with our continued momentum in new sales and renewals in this segment the.

Melissa Smith: The investments, we're making in digital marketing targeted at small businesses are bearing the fruit we expected we.

Rich capital efficient and deeply embedded in our customers' daily operations, delivering both functional value and long term stickiness.

Melissa Smith: We have high confidence in our ability to close new sales based on the results seen year to date as we are tracking ahead of our new sales expectations and Q2, we successfully extended long standing relationships with several of the most respected names in the industry and signed new relationships, including a large <unk>.

Q2 results from the mobility segment were in line with our expectations, excluding the benefit from higher fuel prices.

<unk> levels were down slightly from the prior year similar to Q1 and within our range of expectations.

Melissa Smith: Quickly traded construction company.

Melissa Smith: As I mentioned earlier, we're also very pleased to announce that we have signed BP to a long term agreement for their U S business.

Same store sales growth for local fleets in the U S declined in line with Q1 results while the over the road customers saw a modest decline of less than 1%.

Melissa Smith: <unk> is one of the few remaining major fuel retailers not utilizing <unk> commercial fleet platform.

We continue to believe that this measure reflects underlying economic activity across our customer base when evaluating short term changes.

Melissa Smith: By choosing wax, they're now able to offer a card solution that will serve the entire BP family of brands linked with their loyalty program.

As a reminder, the same store sales metric represents approximately 75% of the payment processing volumes and is calculated on a gallons purchased basis not revenue earned.

Melissa Smith: This exemplifies <unk> purpose of simplifying the business of doing business for our customers.

Melissa Smith: We're able to provide this important feature to BP because of the product investments we've made to expand the reach of our network to support both closed and open loop solution.

We noted in Q1 that there had been some tariff related pull forward of volume where their OTR customers, which appears to have normalized for now.

Melissa Smith: This integrated solution provides BP with the tools to enhance control elevate the customer experience and expand our reach across key fueling segment.

We're pleased with our continued momentum in new sales and renewals in this segment the investments, we're making in digital marketing targeted at small businesses are bearing the fruit we expected.

Melissa Smith: The addition of BP cement our place as the most trusted brand within this segment driven by our industry, leading capabilities and proven track record of growth.

We have high confidence in our ability to close new sales based on the results seen year to date as we are tracking ahead of our new sales expectations and Q2, we successfully extended long standing relationships with several of the most respected names in the industry and signed new relationships, including a large pulp.

Melissa Smith: There will be two phases to this implementation.

Melissa Smith: In the first phase, we will sell a BP branded cards to new customers and then the second phase we will convert the existing BP portfolio to the west platform.

Quickly traded construction company.

Melissa Smith: We expect to begin new sales to customers of the BP branded product in the fourth quarter.

As I mentioned earlier, we're also very pleased to announce that we have signed BP to a long term agreement for their U S business.

Melissa Smith: We're finalizing our purchase agreement for the existing customer base and we currently anticipate converting this book of business at some point in 2026.

<unk> was one of the few remaining major fuel retailers not utilizing waxes commercial fleet platform.

By choosing wax, they're now able to offer a card solution that will serve the entire BP family of brands linked with their loyalty program.

Melissa Smith: We expect it will add between a half to 1% of company revenue in the first full year after conversion.

Melissa Smith: We look forward to working with BP for many years to come.

This exemplifies Brexit purpose of simplifying the business of doing business for our customers. We're able to provide this important feature to BP because of the product investments we've made to expand the reach of our network to support both closed and open loop solution.

Speaker Change: Turning now to our benefit segment, which simplifies the complex world of employee benefits administration and represents approximately 30% of total company revenue here, we offer a comprehensive platform that stands HSA FSA, HRA Cobra and benefit enrollment administration, enabling both <unk>.

This integrated solution provides <unk> with the tools to enhance control.

<unk>, the customer experience and expand our reach across key fueling segment.

Speaker Change: Lawyers and partners to help their employees make more informed benefit decisions and facilitate benefit payments.

The addition of BP cement our place as the most trusted brand within this segment driven by our industry, leading capabilities and proven track record of growth.

Speaker Change: As in our mobility business, our benefits business involves processing hundreds of thousands of transactions across thousands of endpoints every day in real time verifying eligibility for purchase and authenticating the customer while preventing fraud and providing detailed records of usage to our customers for comply.

There will be two phases to this implementation.

In the first phase, we will sell a BP branded cards to new customers and then the second phase will convert the existing BP portfolio to the west platform.

Speaker Change: <unk> and operational purposes.

We expect to begin new sales to customers of the BP branded product in the fourth quarter.

Speaker Change: <unk> serves nearly 60% of the Fortune 1000 in this segment and works technologies powers over 20% of the total HSA market through both our direct and partner offerings in total we managed more than $21 million fast accounts.

We're finalizing our purchase agreement for the existing customer base and we currently anticipate converting this book of business at some point in 2026.

We expect it will add between a half to 1% company revenue in the first full year after conversion.

Speaker Change: The customer base in this segment is sticky due to the deeply embedded nature of our offering for our partners is integrated into their platforms for direct.

We look forward to working with BP for many years to come.

Speaker Change: <unk> it serves as a critical employee benefit solutions for both customer sets switching.

Turning now to our benefits segment, which simplifies the complex world of employee benefits administration and represents approximately 30% of total company revenue here, we offer a comprehensive platform that spans HSA FSA, HRA Cobra and benefit enrollment administration, enabling both <unk>.

Speaker Change: Switching providers is complex time consuming and disruptive.

Speaker Change: The embedded nature of the platform combined with high retention and predictable fast and custodial revenue streams leads to attractive margins and long term customer value.

Speaker Change: Overall SaaS account growth was 6% for the quarter within this we grew HSA accounts on the works benefits platform by 7% in Q2.

Players in partners to help their employees make more informed benefit decisions and facilitate benefit payments.

As in our mobility business, our benefits business involves processing hundreds of thousands of transactions across thousands of endpoints every day in real time verifying eligibility for purchase and authenticating the customer while preventing fraud and providing detailed records of usage to our customers for comply.

Speaker Change: Bringing us to more than $8 7 million HSA accounts.

Speaker Change: The breadth of product and integration capabilities of our technology platform combined with our multi account expertise supporting a wide range of account types on a single Tech stack continues to resonate strongly with both direct customers and channel partners.

Once an operational purposes.

Speaker Change: Following up on a successful open enrollment season, we're very pleased to announce the UAW retiree medical benefits trust as new HRA customer starting in Q2.

<unk> serves nearly 60% of the Fortune 1000 in this segment and works technologies powers over 20% of the total HSA market through both our direct and partner offerings in total we manage more than 21 million SaaS accounts.

Speaker Change: The UAW Trust provides healthcare coverage for United Auto workers retirees, our extensive experience with spending accounts put us in a position to successfully win the trust.

The customer base in this segment is sticky due to the deeply embedded nature of our offering for our partners is integrated into their platforms for direct customers insurers as a critical employee benefit solution for.

Speaker Change: We also have some encouraging developments on the legislative front.

For both customer steps switching providers is complex time consuming and disruptive.

Speaker Change: Legislation that passed in July will increase the number of people eligible for health savings account.

The embedded nature of the platform combined with high retention and predictable SaaS and custodial revenue streams leads to attractive margins and long term customer value.

Speaker Change: Again in next year certain plans offered on the public healthcare exchanges will be classified as high deductible plans, making them HSA qualified.

Speaker Change: This equates to an increase in the Tam of more than 7 million people or three to 4 million accounts using our existing product functionality.

Overall SaaS account growth was 6% for the quarter within this we grew HSA accounts on the web benefits platform by 7% in Q2.

Speaker Change: While this is a positive development with the potential for increased awareness and adoption.

Bringing us to more than $8 7 million HSA accounts.

The breadth of product and integration capabilities of our technology platform combined with our multi account expertise supporting a wide range of account types on a single Tech stack continues to resonate strongly with both direct customers and channel partners.

Speaker Change: Taking a thoughtful approach to how we address this opportunity.

Speaker Change: We look forward to sharing more on its contribution to our benefit segment results.

Speaker Change: The custodial cash balances that are part of HSA or meaningful revenue source for the segment.

Speaker Change: As a reminder, the interest income we earned in this segment is less sensitive to changes in interest rates as it is invested predominantly and fixed rate products with maturities that vary and extend over several years.

Following up on a successful open enrollment season, we're very pleased to announce the UAW retiree medical benefits trust as new HRA customer starting in Q2.

The UAW Trust provides healthcare coverage for United Auto worker retirees, our extensive experience with spending accounts, but it's in a position to successfully win the trust.

Speaker Change: One of the strengths of the company is how we're able to leverage the core value proposition of west bank across multiple segments.

Speaker Change: This segment is able to achieve returns on HSA assets the far exceed those of our peers, because we can leverage works banks to invest HSA funds into stable high grade investments that deliver meaningful returns across interest rate cycles.

We also had some encouraging developments on the legislative front.

Legislation that passed in July will increase the number of people eligible for a health savings account beginning next year certain plans offered on the public health care exchanges will be classified as high deductible plans, making them HSA qualified.

Speaker Change: From a product perspective, we continued investing in smarter customer centric solutions with the launch of <unk> and higher claims experience that dramatically simplifies FSA reimbursements, reducing processing time from days to minutes, improving accuracy and easing the burden on HR teams.

This equates to an increase in the Tam of more than 7 million people or $3 million to $4 million accounts using our existing product functionality.

While this is a positive development with the potential for increased awareness and adoption.

Speaker Change: During peak enrollment this new technology lowers our cost to serve and increases customer satisfaction.

Taking a thoughtful approach to how we address this opportunity.

We look forward to sharing more on its contribution to our benefit segment results.

Speaker Change: Moving now to our corporate payments segment, which represents approximately 20% of our revenue and includes two major offerings embedded payments and direct accounts payable.

The custodial cash balances that are part of HSA or meaningful revenue source for the segment.

Speaker Change: Embedded payments represents the majority of revenue in the corporate payment segment, including all of our travel related customers with this solution, we integrate virtual card payment capabilities into our customer's existing workflows, we combined highly customizable reconciliation benefits with a wide range of hard products and currencies.

As a reminder, the interest income we earned in this segment is less sensitive to changes in interest rates as it is invested predominantly and fixed rate products with maturities that vary and extend over several years.

One of the strengths of the company is how we're able to leverage the core value proposition of West bank across multiple segments are benefits segment is able to achieve returns on HSA assets.

Speaker Change: More than 180 possible combination, which is an order of magnitude larger than most competitors.

Far exceed those of our peers, because we can leverage <unk> to invest HSA funds into stable high grade investments that deliver meaningful returns across interest rate cycle.

Speaker Change: These capabilities are coupled with deep industry specific knowledge and experience as well as the best in class service approach.

Speaker Change: Our embedded payments offering has high operating leverage because the investment in the technology platform and our global compliance infrastructure represents the majority of cost it's a largely fixed cost business and most incremental volume is accretive to our margins and cash flow our.

From a product perspective, we continued investing in smarter customer centric solutions with the launch of an AI powered claims experience that dramatically simplifies FSA reimbursements, reducing processing time from days to minutes, improving accuracy and easing the burden on HR teams during.

Speaker Change: Our ability to compete and win here is built on our technical and domain expertise strength in our economic spread that stems from scale.

Peak enrollment this new technology lowers our cost to serve and increases customer satisfaction.

Speaker Change: Within our embedded payments offering Q2 purchase volume was down in line with our expectations. The large travel customer. We've mentioned in recent quarters has completed their transition to a new operating model with us.

Moving now to our corporate payments segment, which represents approximately 20% of our revenue and includes two major offerings embedded payments and direct accounts payable.

Speaker Change: We will lap this headwind in large degree in Q3, we will fully lap this headwind in Q4 and continue to expect to return to revenue growth in the second half of 2025.

Embedded payments represents the majority of revenue in the corporate payment segment, including all of our travel related customers with this solution, we integrate virtual card payment capabilities into our customer's existing workflows, we combined highly customizable reconciliation benefits with a wide range of hard products and currencies.

Speaker Change: The platform investments, we're making to diversify from travel have started to bear fruit, we're seeing strength in our new customer pipeline and new customer signings and embedded payments.

More than 180 possible combination, which is an order of magnitude larger than most competitors.

Speaker Change: We expect this healthy pipeline will continue to broaden out the customer base and we look forward to them contributing to growth in the back half of the year. We're pleased to note that we have implemented a large publicly traded fintech to use our virtual card issuing technology.

These capabilities are coupled with deep industry specific knowledge and experience as well as the best in class service approach.

Our embedded payments offering has high operating leverage.

Speaker Change: Switching gears to talk about the direct AP product within our corporate payments segment, which accounts for approximately 20% of segment revenue. This solution to automate accounts payable by integrating our enterprise resource planning systems, and accounting workflows to maximize virtual payment usage.

The investment in the technology platform and our global compliance infrastructure represents the majority of cost, it's a largely fixed cost business and most incremental volume is accretive to our margins and cash flow.

To compete and win here is built on our technical and domain expertise strength in our economic spread that stems from scale.

Speaker Change: During the quarter direct AP volume grew more than 25% compared to last year.

Speaker Change: We're feeling very good about the outlook as we currently have the best New business pipeline, we've ever had for this product.

Within our embedded payments offering Q2 purchase volume was down in line with our expectations.

Large travel customer we've mentioned in recent quarters. This completed their transition to a new operating model with us when we will lap this headwind and large through free in Q3, we will fully lap. This headwind in Q4 and continue to expect to return to revenue growth in the second half of 2025.

Speaker Change: Our new account growth included more than a 140, new customers year to date, which only bolsters our confidence that additional sales marketing and product investments. We discussed last quarter, that's starting to bear fruit and will lead to strong returns in the future.

Speaker Change: Increase the size of the sales force by more than 50% since the beginning of the year and our new sales resources are ramping as expected.

Our platform investments, we're making to diversify from travel have started to bear fruit, we're seeing strength in our new customer pipeline and new customer signings and embedded payments.

Speaker Change: Product side, we continue to invest in expanding our embedded payments offerings beyond our core problem vertical launching new funding capabilities now live in three geographies in 10 currencies and.

We expect this healthy pipeline will continue to broaden out the customer base and we look forward to them contributing to growth in the back half of the year.

Speaker Change: In our direct channel, we've extended our mobile wallet capabilities and enabling broader customer spend on our market leading processing platform.

Pleased to note that we have implemented a large publicly traded fintech to use our virtual card issuing technology.

Speaker Change: Enhancements will be paired with deeper data integration and automation.

Switching gears to talk about the direct AP products within our corporate payments segment, which accounts for approximately 20% of segment revenue. This solution to automate accounts payable by integrating our enterprise resource planning system, and accounting workflows to maximize virtual payment usage.

Speaker Change: Across all three of our segments the incremental investments, we're making in product capabilities in sales and marketing resources are working we.

Speaker Change: We believe that the investments will deliver strong rois and contribute to a reacceleration of growth.

During the quarter direct AP volume grew more than 25% compared to last year.

Speaker Change: The majority of our incremental sales and marketing investment continues to be in the mobility segment, where we are deploying a multichannel marketing strategy targeted at small business customers and seeing encouraging results.

We're feeling very good about the outlook as we currently have the best New business pipeline, we've ever had for this product.

Our new account growth included more than 140, new customers year to date, which only bolsters our confidence that additional sales marketing and product investments. We discussed last quarter have started to bear fruit and will lead to strong returns in the future.

Speaker Change: Historically every dollar we spend on marketing earned a return of $4 and revenue over the first two years following the customer acquisition date.

Speaker Change: These results build on the confidence we have in our investment thesis and I am excited about how they position us to accelerate growth going forward.

Increase the size of the sales force by more than 50% since the beginning of the year and our new sales resources are ramping as expected on.

Speaker Change: The remaining investments we're making in other segments are also showing early signs of success.

On the product side, we continue to invest in expanding our embedded payments offerings beyond our core travel vertical launching new funding capabilities now live in three geographies and 10 currencies.

As I noted earlier the pipeline of new customers in the corporate payments segment has never been better and we expect this segment to reaccelerate growth in the back half of this year.

Speaker Change: This growth is in part driven by the product investments, we've been making that strengthen our offerings outside of travel many of which have recently come online with additional features in the pipeline.

In our direct channel, we've extended our mobile wallet capabilities and enabling broader customer spend on our market leading processing platform.

Enhancements will be paired with deeper data integration and automation.

Speaker Change: It is exciting to see the fruits of our product investments deliver not only in corporate payments, but also in mobility and benefits.

Across all three of our segments the incremental investments, we're making in product capabilities in sales and marketing resources are working we believe that the investments will deliver strong rois and contribute to a reacceleration of growth.

Speaker Change: In closing I am most excited about the momentum we're building by actively investing and accelerating growth for the business our industry, leading products service and reliability drive our ability to win customers of all sizes across each of our segments.

The majority of our incremental sales and marketing investment continues to be in the mobility segment.

We are deploying a multichannel marketing strategy targeted at small business customers and seeing encouraging results. Historically every dollar we spend on marketing earned a return of $4 and revenue over the first two years following the customer acquisition date.

Speaker Change: As we enter the second half of the year, our robust new customer pipeline gives me confidence that the investments, we're making in sales and marketing are paying off we're also seeing our investments to innovate and enhance our product offerings directly deliver meaningful new customers like BP.

These results build on the confidence we have in our investment thesis and I am excited about how they position us to accelerate growth going forward.

Speaker Change: We're in a great position to continue to win in the market across each of our segments and I want to thank our teams for their hard work and commitment there is more to do and we're entering the second half of the year with momentum and clear focus.

The remaining investments we're making in other segments are also showing early signs of success.

As I noted earlier the pipeline of new customers in the corporate payments segment has never been better and we expect this segment to reaccelerate growth in the back half of this year.

Speaker Change: With that I'll turn it over to Jack card to walk you through our financial performance in more detail <unk>.

Jack: Thank you Melissa and good morning, everyone.

This growth is in part driven by the product investments, we've been making that strengthen our offerings outside of travel many of which have recently come online with additional features in the pipeline.

Jack: And in effort to shift the focus of these earnings calls where most strategic items.

Jack: Have published a supplemental information deck with commentary that would historically have been included during my prepared remarks.

It is exciting to see the fruits of our product investments delivered not only in corporate payments, but also in mobility and benefits.

Jack: So since the details already available on our website I will keep my remarks brief.

In closing I am most excited about the momentum we're building by actively investing and accelerating growth for the business our industry, leading products service and reliability drive our ability to win customers of all sizes across each of our segments as we enter the second half of the year are robust.

Jack: Total revenue in the quarter was $659 6 million, which was down 2% versus last year.

Jack: The impact of foreign exchange rates and lower fuel prices decreased revenue growth by two 1% year over year.

Jack: Revenue was at the top end of the guidance range, we provided last quarter.

New customer pipeline gives me confidence that the investments, we're making in sales and marketing are paying off.

Jack: Adjusted earnings per share of $3 95.

Jack: Increase of 1% year over year.

Jack: A decrease of six 7% due to lower fuel prices and foreign exchange rates.

We're also seeing our investments to innovate and enhance our product offerings directly delivered meaningful new customers like BP.

Jack: Adjusted EPS was above the high end of the guidance range, we provided in April due to harder than expected fuel prices.

We're in a great position to continue to win in the market across each of our segments and I want to thank our teams for their hard work and commitment there is more to do and we're entering the second half of the year with momentum and clear focus with that I'll turn it over to Jack <unk> to walk you through our financial performance in more detail <unk>.

Jack: Contribution from lower expenses, including tightly managing our head count.

Jack: In our mobility segment revenue declined three 7% during Q2 compared to last year.

Jack: This includes a drag of four 2% due to lower fuel prices and foreign exchange rates.

Jack: Thank you Melissa and good morning, everyone.

Jack: In an effort to shift the focus of these earnings calls to our most strategic items we are.

Jack: Our payment processing rate of 131% increased two basis points year over year.

Jack: Published a supplemental information deck with commentary that would historically have been included during my prepared remarks.

Jack: And our benefit segment total revenue of $195 1 million rose eight 5% on a year over year basis.

Jack: Since the details already available on our website I will keep my remarks brief.

Jack: SaaS <unk> growth of 6% was in line with our expectations.

Jack: Total revenue in the quarter was $659 6 million, which is down 2% versus last year.

Jack: Custodial investment revenue, which represents the interest we earn on custodial cash balances, we hold rose 11, 4% and was $57 8 million.

Jack: The impact of foreign exchange rates and lower fuel prices decreased revenue growth by two 1% year over year.

Jack: Revenue was at the top end of the guidance range, we provided last quarter.

Jack: This interest rate. We earned has remained fairly steady with the yield growth through one basis points from Q2 last year.

Jack: Adjusted earnings per share of $3 95 was an increase of 1% year over year.

Jack: Turning to our corporate payments segment <unk>.

Jack: Including a decrease of six 7% due to lower fuel prices and foreign exchange rates.

Jack: Revenues of $118 3 million.

Jack: Decreased 11, 8% year over year, which was in line with our expectations.

Jack: Adjusted EPS was above the high end of the guidance range. We provided in April due to higher than expected fuel prices the contribution from lower expenses, including tightly managing our head count.

Jack: Purchase volume and corporate payments declined on a year over year basis, primarily due to the large customer transition we've been discussing in recent quarters.

Jack: In our mobility segment.

Jack: The transition to a new operating model is complete.

Jack: Revenue declined three 7% during Q2 compared to last year. This.

Jack: Most of this headwind next quarter we.

Jack: This includes a drag of four 2% due to lower fuel prices and foreign exchange rates.

Jack: We will fully lap this headwind in Q4.

Jack: There are a number of positive trends in this segment this quarter that give us optimism as we enter the second half of the year.

Jack: Our payment processing rate of 131% increased two basis points year over year.

Jack: First our direct <unk> volume grew more than 25% versus last year.

Jack: And our benefits segment total revenue of $195 1 million rose eight 5% on a year over year basis.

Jack: This is the third consecutive quarter of 25% growth rates.

Jack: SaaS account growth of 6% was in line with our expectations.

Jack: This is one of our key investment areas and provides a less volatile revenue stream compared towards embedded offerings.

Jack: Custodial investment revenue, which represents the interest we earn on custodial cash balances, we hold rose 11, 4% and was $57 8 million.

Jack: Since the beginning of this year, we have increased the size of the sales force by more than 50% with plans to continue growing.

Melissa Smith: Second as Melissa mentioned, we are encouraged by the strengthening pipeline and our embedded payments offered driven in part by prior product investments that are helping us further diversify our customer base beyond trouble.

Jack: This interest rate. We earned has remained fairly steady with the yield rose two one basis point from Q2 last year.

Jack: Turning to our corporate payments segment.

Jack: Revenues of $118 3 million.

Melissa Smith: For the remainder of the year, we expect to see the continuation of significant volume growth for direct accounts payable customers.

Jack: Decreased 11, 8% year over year, which was in line with our expectations.

Jack: Purchase volume and corporate payments declined on a year over year basis, primarily due to the large customer transition we've been discussing in recent quarters.

Melissa Smith: Ramp up in volume from a new publicly traded fintech wins that has already been implemented.

Melissa Smith: Lapping that negative comparisons for the large otas customer transition.

Jack: The transition to a new operating model is complete.

Jack: We will lap most of this headwind next quarter we.

Melissa Smith: Easing of temporary spending timing from two other large customers over the back half of the year.

Jack: We will fully lap this headwind in Q4.

Jack: There are a number of positive trends in this segment this quarter that give us optimism as we enter the second half of the year.

Melissa Smith: Tissue all of these factors into consideration we are.

Melissa Smith: Confident that the revenue in this segment will turn to growth in the second half of the year, starting in Q3 and accelerated in Q4.

Jack: First our direct AP volume grew more than 25% versus last year.

Melissa Smith: Let me transition now to the balance sheet.

Jack: This is the third consecutive quarter of 25% growth rates.

Melissa Smith: Our balance sheet.

Melissa Smith: The ability to generate cash flow reliably remained a source of strength for us, especially in periods of economic uncertainty.

Jack: This is one of our key investment areas and provides a less volatile revenue stream with compared to our embedded offerings.

Jack: Since the beginning of this year, we have increased the size of the sales force by more than 50% with plans to continue growing.

Melissa Smith: Our leverage ratio ended the quarter at three four times, which is the high end of our long term range of two and a half to three times, primarily due to our share repurchase activity in Q1.

Jack: Second as Melissa mentioned, we are encouraged by the strength of the pipeline and our embedded payments offered driven in part by prior product investments that are helping us further diversify our customer base beyond travel.

Melissa Smith: For the remainder of this year, we will prioritize using available cash flow to pay down debt and reduce leverage.

Melissa Smith: As a result, you shouldnt expect any additional share repurchases for material M&A in the near term.

Jack: For the remainder of the year, we expect to see the continuation of significant volume growth for direct accounts payable customers.

Melissa Smith: Historically, we have been able to de lever about a half a turn per year based on cash generated earnings growth.

Jack: Ramp up in volume from a new publicly traded fintech with that has already been implemented.

Melissa Smith: No.

Jack: Lapping that negative comparisons for the large otas customer transition.

Melissa Smith: Move to earnings guidance for the third quarter and full year.

Melissa Smith: It is important to note that we are updating our full year 2025 guidance to account for the Q2 results and the macro related impacts of fuel prices.

Jack: The easing of temporary spending timing from two other large customers over the back half of the year.

Jack: Taking all these factors into consideration we are confident that the revenue in this segment will turn to growth in the second half of the year, starting in Q3 and accelerated in Q4.

Melissa Smith: FX and interest rates with all other changes minor in nature.

Melissa Smith: To be clear.

Melissa Smith: We've only included revenue related to new sales from the BP contract and guns.

Jack: Let me transition now to the balance sheet.

Jack: Our balance sheet.

Jack: The ability to generate cash flow reliably remains a source of strength for us, especially in periods of economic uncertainty.

Melissa Smith: One related to the accounts once converted we.

Melissa Smith: We have included the costs, we expect to incur this year as part of the conversion.

Melissa Smith: In Q3, we expect to report revenue in the range of $669 million to $689 million.

Jack: Our leverage ratio ended the quarter at three four times, which is the high end of our long term range of two and a half to three to five times, primarily due to our share repurchase activity in Q1.

Melissa Smith: We expect adjusted net income EPS to be between $4 30 and.

Jack: For the remainder of this year, we will prioritize using available cash flow to pay down debt and reduce leverage.

Melissa Smith: $4 from 50 cents per diluted share.

Melissa Smith: For the full year, we expect to report revenue in the range of 261 billion to $2 65 billion.

Jack: As a result, you shouldnt expect any additional share repurchases for material M&A in the near term here.

Melissa Smith: We expect adjusted net income EPS to be between $15 37.

Jack: Historically, we have been able to de lever about a half a turn per year based on cash generated earnings growth.

Melissa Smith: And fifth $2 77 per diluted share.

Jack: Now, let's move to earnings guidance for the third quarter and full year.

Melissa Smith: In closing we remain focused on what we can control during a period of elevated macro uncertainty.

Jack: It is important to note that we are updating our full year 2025 guidance to account for the Q2 results and the macro related impacts of fuel prices.

Melissa Smith: Susie up think about the progress we've already made this year in helping <unk> realize its full potential to drive long term returns and accelerated growth.

Jack: FX and interest rates with all other changes minor in nature.

Speaker Change: With that operator, please open the line to questions.

Jack: To be clear.

Jack: We've only included revenue related to new sales from the BP contract and guidance.

Speaker Change: At this time I would like to remind everyone in order to ask a question press star followed by the number one on your telephone keypad, we kindly ask that you. Please limit your questions to one and one follow up our first question comes from the line of Ramsey El <unk> with Barclays. Please go ahead.

Jack: One related to the accounts once converted we.

Jack: We have included the costs, we expect to incur this year as part of the conversion.

Jack: In Q3, we expect to report revenue in the range of $669 million to $689 million.

Speaker Change: Alright. This is trey on for Ramsey, Thanks for taking my questions.

Speaker Change: Starting off in corporate payments, you mentioned that works was investing in new product capabilities and additional sales and marketing.

Jack: We expect adjusted net income EPS to be between $4 30.

Speaker Change: Specifically also within the direct VIP business I was wondering if you could talk about the initiatives within direct AP.

Jack: $4 from 50 cents per diluted share.

Jack: For the full year, we expect to report revenue in the range of 261 billion to $2 65 billion.

Speaker Change: And any early traction or trends that youre seeing.

Speaker Change: Sure happy to.

Speaker Change: Actually when we think about the investments we're making in product we last year, what kind of products that we've rolled out at the beginning of this year, which allowed our customers to move money much more efficiently.

Jack: We expect adjusted net income EPS to be between $15 37.

Jack: And $15 77 per diluted share.

Jack: In closing we remain focused on what we can control during a period of elevated macro uncertainty.

Speaker Change: Across the globe, we did that to support not just our travel customers that it extended our tam into some new markets outside of travel.

Jack: Susie uptick about the progress we've already made this year and healthy works.

Speaker Change: A lot of that functionality is a base of what we're doing with our customers as well and so with those customers. We're focused on increasing mobile capability and just making it more seamless for them to use but theres a lot of synergy across both the embedded payments products and the AP products and in the places we're making <unk>.

Jack: <unk> full potential to drive long term returns and accelerated growth.

Jack: With that operator, please open the line to questions.

Speaker Change: At this time I would like to remind everyone in order to ask a question press star followed by the number one on your telephone keypad, we kindly ask that you. Please limit your questions to one and one follow up our first question comes from the line of Ramsey El <unk> with Barclays. Please go ahead.

Speaker Change: <unk>.

Speaker Change: Let's say like on the payment side, there is a real hunger sort of seeing in the marketplace right now for someone who can do that end to end processing and so the fact that we actually own a bank can provide all of the services with our strong technology stack the deep integration.

Trey: Hi, This is trey on for Randy Thanks for taking my questions.

Trey: Starting off in corporate payments, you mentioned that works was investing in new product capabilities and additional sales and marketing spend.

Trey: Specifically also within the direct VIP business I was wondering if you could talk about the initiatives within direct AP.

Speaker Change: Ability that we have.

Speaker Change: Experience, we have managing complex transactions is playing really well in the marketplace and we're seeing that result in a bigger and bigger pipeline each quarter that we look at it and and conversion starting to happen.

Trey: And any early traction or trends that youre seeing.

Trey: Sure happy to.

Trey: Actually when we think about the investments we're making in products. We last year worked on the products that we've rolled out at the beginning of this year, which allowed our customers to move money much more efficiently.

Speaker Change: Got it thanks, and then as a follow up from me looking towards the back half of the year.

Speaker Change: Should we think about the Reacceleration timeline and mobility and was just wondering if you could provide if youre seeing any early signs of traction.

Trey: Across the globe, we did that to support not just our travel customers that it extended our tam into some new markets outside of travel.

Speaker Change: Does that indicate that inflection.

Trey: A lot of that functionality is a base of what we're doing with our customers as well and so with those customers. We are focused on increasing mobile capability and just making it more seamless for them to use but theres a lot of synergy across both the embedded payments products and the AP products in the places that we're making.

Speaker Change: Okay.

Speaker Change: Yes, if you look at the first half of this year, we have had some headwinds associated with same store sales.

Speaker Change: We're assuming that the macro environment that we saw in Q2 will continue through the course of this year.

Speaker Change: So that.

Speaker Change: The same store sales negative has been pretty consistent this year and our local fleet business. When we talk to those customers. What we hear is it's a combination of the fact that they're really clamping down on costs within the organization, particularly in the mid market as well as some fuel efficiency and so we're assuming that's going to continue in the over the road marketplace.

Trey: <unk>, let's say on the embedded payment side, there is a real hunger. So we're seeing in the marketplace right now for someone who can do that end to end processing and so the fact that we actually own a bank can provide all of the services with our strong technology stack.

Speaker Change: We did see the step down.

Trey: Deep integration capabilities that we have.

Speaker Change: Which we had anticipated we knew that there was a pull forward because of the tariff activity. So we saw same store sales go from a positive two six in the first quarter to just a little under negative one and.

Trey: The experience we have managing complex transactions is playing really well in the marketplace and we're seeing that result in a bigger and bigger pipeline each quarter that we look at it and in conversion starting to happen.

Speaker Change: We're assuming that that's going to continue with what we've seen so far and the trends throughout this month.

Trey: Got it thanks, and then as a follow up from me looking towards the back half of the year.

Speaker Change: Got it thank you.

Speaker Change: How should we think about the <unk>.

Speaker Change: Our next question comes from the line of Nick <unk> with UBS. Please go ahead.

Speaker Change: <unk> celebration timeline and mobility and was just wondering if you could provide.

Speaker Change: Hey, good morning, Congrats on the <unk> portfolio in the U S.

Speaker Change: You're seeing any early signs of traction.

Speaker Change: Does that indicate that inflection.

Speaker Change: First I just wanted to go back to the mobility segment, just because I think there's a few moving pieces I wanted to go back to.

Speaker Change: Yes, if you look at the first half of this year, we have had some headwinds.

Speaker Change: So first I mean, just to understand the underlying trajectory of that business I understand that the same store sales weakness that you saw in North America begins to lap next month in August.

Speaker Change: Associated with same store sales.

Speaker Change: We're assuming that the macro environment that we saw in Q2 will continue through the course of this year and so that.

Speaker Change: The same store sales negative has been pretty consistent this year and our local fleet business. When we talk to those customers will be here is it's a combination of the fact that they are really clamping down on costs within the organization, particularly in the mid market as well as some fuel efficiency and so we're assuming that's going to continue in the over the <unk>.

Speaker Change: It's like two months of Q3, effectively as you start to lap that broad based like negative 3% to 5% same store sales so that should be a relative benefit in Q3, and Q4 or would the same store weakness. Thanks for sales weakness compound on the weakness over the last year.

Speaker Change: And then I believe there was like a $10 million late fee reversal in Q3 of last year or so I think it was like a three point hit to gross so.

Speaker Change: We did see the step down.

Speaker Change: Which we had anticipated we knew that there was a pull forward because of the tariff activity. So we saw same store sales go from a positive two six in the first quarter, just a little under negative one.

Speaker Change: So those things all else equal.

Speaker Change: Report an acceleration in the mobility segment in the back half or should we still kind of expect this business to be in the 1%.

Speaker Change: And we're assuming that that's going to continue with what we've seen so far and the trends throughout this month.

Speaker Change: Macro neutral yes. Thank you, yes, Nick so a couple of things on that so we did start to see some of those same store sales weakness in Q3 last year, but remember it was a little balance at the end of last year. So we saw some papa John's going into Q3 and Q4.

Speaker Change: Got it thank you.

Speaker Change: Our next question comes from the line of Nick <unk> with UBS. Please go ahead.

Nick: Hey, good morning, Congrats on the <unk> portfolio in the U S.

Speaker Change: So there will be some pluses and minuses to that but I don't think it was all kind of one trend line.

Nick: First I just wanted to go back to the mobility segment, just because I think there's a few moving pieces.

Speaker Change: The second piece of that is.

Nick: I'd go back to.

Speaker Change: You're correct on the reverse of what we saw last year $10 million I think what we're seeing right now as you know we've had kind of the incremental headwinds in most of the talk about in terms of tariffs.

Nick: So first I mean, just to understand the underlying trajectory of that business I understand that the same store sales weakness that you saw in <unk>.

Nick: America begins to lap next month in August so like.

Speaker Change: In the OTR.

Nick: The next like two months of Q3, effectively you should start to lap that broad base like negative 3% to 5% same store sales.

Speaker Change: From positive to more flattish or slightly negative during the second quarter, we're expecting those trends to continue given the uncertainty around tariffs and things like that so we're expecting the second half of the year from a growth perspective coastal outlet as the first half of the year in the mobility sector.

Nick: That should be a relative benefit in Q3 and Q4 or what.

Nick: Same store weakness.

Nick: Thanks for sales weakness compound on the weakness over the last year.

Speaker Change: Understood. Thanks for the color there and then Exxon BP portfolio I mean can.

Nick: And then I believe there was like a $10 million late fee reversal in Q3 of last year. So I think there was like a three point hit to gross so.

Speaker Change: Can you just help us think through how long it will take to convert the portfolio. Once you actually complete the purchase agreement.

Nick: Those things all else equal.

Nick: Support an acceleration in the mobility segment in the back half or should we still kind of expect this business to be in the 1%.

Speaker Change: Also just provide any color on the level of costs involved in implementing and converting that portfolio. Thanks.

Macro Mitchell: Macro Mitchell, yes. Thank you, yes, Nick so a couple of things on that so we did start to see some of those same store sales weakness in Q3 last year, but remember it was a little balance at the end of last year. So we saw some ups and downs going into Q3 and Q4.

Speaker Change: Sure, let me start with it on the.

Speaker Change: On the timing of that so remember there's two pieces. There's the first part where we're going to start selling the program that's going to happen in the fourth quarter of this year.

Speaker Change: And so that activity is well underway the second part where we're actually purchase in the portfolio and going through a conversion at this point in time.

Macro Mitchell: So there will be some pluses and minuses for that but I don't think it was all kind of one trend line.

Macro Mitchell: The second piece of that is.

Macro Mitchell: <unk>.

Speaker Change: What we would say is we.

Macro Mitchell: You are correct on the reverse of what we saw last year $10 million I think what we're seeing right. Now is that we've had kind of the incremental headwinds that mostly talked about in terms of tariffs.

Speaker Change: Believe it will happen at some point in 2026.

Speaker Change: It is less clear in terms of the exact date of when it's going to happen. We are working on that obviously.

Macro Mitchell: The OTR.

Speaker Change: It is important and as we know more we'll make sure that you're aware of it and.

Macro Mitchell: Positive to more flattish or slightly negative in the second quarter, we're expecting those trends to continue given the uncertainty around tariffs and things like that so we're expecting the second half of the year from a growth perspective political out like the first half of the year in the mobility sector.

Speaker Change: And then on the cost side. So we are expecting some costs this year Nick.

Speaker Change: That's been embedded in the guide so that's reflected in the guide we've got out there.

Speaker Change: And the only other thing I'd say on your first question on mobility, we are seeing benefit and the investments, we're making in sales and marketing.

Macro Mitchell: Understood. Thanks for the color there and then next on the BP portfolio.

Macro Mitchell: Can you just help us think through how long it will take tuck in versus the portfolio. Once you actually complete the purchase agreement and also just provide any color on the level of costs involved in implementing and converting that portfolio. Thanks.

Speaker Change: And so as we think about as we go through a period of time, it's really important to us to reaccelerate. The growth of that segment. We think it's going to take some time for that to happen because there's so much revenue and that comes from the annuity in the base.

Speaker Change: And at the same time, we're seeing actually good momentum, particularly in the small into the marketplace.

Macro Mitchell: Let me start with it.

Macro Mitchell: The timing of that so remember there's two pieces. There's the first part where we're going to start selling the program that's going to happen in the fourth quarter of this year.

Speaker Change: Within that country moniker.

Speaker Change: Got it thank you very much.

Speaker Change: Our next question comes from the line of Nathan <unk> with Deutsche Bank. Please go ahead.

Macro Mitchell: And so that activity is well underway.

Macro Mitchell: The second part where were actually purchasing the portfolio and going through a conversion at this point in time, what we would say is.

Nathan: Hi, guys nice results.

Nathan: Wanted to ask about the outlook for corporate payments, it's going to be nice that we're finally lapping the OTA client impact here in <unk> Jaguar was good to hear sort of the return to growth in <unk> on a revenue basis, a little acceleration in <unk>, but any more color on the puts and takes we should be incorporating across some of the other key kpis whether that's.

Macro Mitchell: Believe it will happen at some point in 2026.

Macro Mitchell: It is less clear in terms of the exact date of when that's going to happen. We are working on that obviously.

Macro Mitchell: It's important.

Macro Mitchell: And as we know more we'll make sure that you're aware of it and.

Nathan: Purchase volume take rate et cetera, and then I think you can think about that sort of back half run rate as we move into a more normalized growth profile or is that kind of a right place to start as we think about growth going forward or anything else. We should keep in mind as we model of that segment.

Macro Mitchell: And then on the cost side so.

Macro Mitchell: So we are expecting some costs this year Nick.

Macro Mitchell: That's been embedded in the guide so that's reflected in the guidance we've put out there.

Macro Mitchell: The only other thing I'd say on your first question on mobility, we are seeing benefit and the investments, we're making in sales and marketing.

Speaker Change: I'm going to start for Dr. Carole jump in here, but when we think about the second half of the year, we had a negative comp in that segment in the first half of the year remember we have one travel customer that we've migrated to more equal spend volume per quarter. This year and that was.

Macro Mitchell: And so as we think about as we go through a period of time, it's really important to us to reaccelerate. The growth of that segment. We think it's going to take some time for that to happen because there's so much revenue that comes from the annuity in the base.

Macro Mitchell: And at the same time, we're seeing actually good momentum, particularly in the small into the marketplace.

Nathan: True last year.

Speaker Change: And it's been that's been.

Speaker Change: Negative.

Speaker Change: For us in the first half of the year, but become a positive for us in the second half of the year. We also as we go through the process of lapping this migration in sourcing.

Macro Mitchell: The investments we're making.

Macro Mitchell: Got it thank you very much.

Speaker Change: Our next question comes from the line of Nathan <unk> with Deutsche Bank. Please go ahead.

Speaker Change: Half the impact in Q3 than it was in Q2, So and then it starts to clean up in the fourth quarter should we start to see a more normalized.

Nathan: Hi, guys nice results wanted to ask about the outlook for corporate payments, it's going to be nice that we're start finally lapping the OTA client impact here at <unk>.

Speaker Change: Quarter in the fourth quarter with the exception of the factories got some benefit and spend trends with that other OTI.

Speaker Change: <unk> was good to hear sort of the return to growth in <unk> on a revenue basis, a little acceleration in <unk>, but any more color on the puts and takes we should be incorporating across some of the other key kpis, whether that's purchase volume take rate et cetera, and then I think thinking about that sort of back half run rate as we move into a more normalized growth profile.

Speaker Change: We also have customers that we're bringing online and inject or talked about one of them that we've already implemented which is a larger one and so that will continue to grow in the course of the year and then we've got more in pipeline both from AP and our embedded payments products that we are in the process of converting right now so we've got.

Speaker Change: That kind of the right place to start as we think about growth going forward or anything else, we should keep in mind as we model of that segment.

Speaker Change: A bunch of different things that are accumulating that go from negative in the first half there to positive in the second half.

Speaker Change: Yes, I'm going to start and I'm sure Dr. Carole jump in here, but when we think about the second half of the year, we had a negative comp in that segment in the first half of the year remember we have one travel customer that we've migrated to more equal spend volume per quarter. This year and that was not.

And then David I think you asked a question about Kpis. So when you think about purchase volume, we're expecting kind of.

Speaker Change: Low mid single digits third quarter accelerating to.

Speaker Change: Through last year.

Speaker Change: Call it 20% in the fourth quarter, but keep in mind a lot of that is the.

Speaker Change: And it's been that's been a negative.

Speaker Change: For us in the first half of the year, but become a positive for us in the second half of the year.

Speaker Change: The OTI migration, where it flips from.

Speaker Change: Purchase volume to total volume. So if you look at it sorry purchase volume to unfunded volume. So when you look at it on a total volume basis, we're expecting kind of low single or low double digits, both Q3 and Q4.

Speaker Change: So as we go through the process of blocking this migration the in sourcing it's about half the impact in Q3 than it was in Q2, So and then it starts to clean up in the fourth quarter, you start to see a more normalized.

Speaker Change: That's super helpful detail and nice to see the momentum in that segment. The other thing I wanted to ask on it was nice to see the HSA account growth of 7% I know, we've talked about some slowdown in the over all market, but youre still outpacing the market at 5%. So could you talk about what specific strategies or investments are driving this outperform.

Speaker Change: Quarter in the fourth quarter with the exception of the factories got some benefit and spend trends with that other OTI.

Speaker Change: We also have customers that we're bringing online and <unk> talked about one of them that we've already implemented which is a larger one and so that will continue to grow in the course of the year.

Speaker Change: <unk> is it some of this investment in sales and marketing into the strength of the partner channel anything else and then I guess moving forward are there any barriers or is there anything that might prevent or slow you down from continuing to capture even more market share of the interest rates on the business.

Speaker Change: And then we've got more in pipeline, both from AP and our embedded payments products that we are in the process of converting right. Now so we've got a bunch of different things that are accumulating that.

Speaker Change: Go from negative in the first half there to positive in the second half.

Speaker Change: So the second quarter, we did get the benefit of the United Auto workers Prost getting implemented so that had a full quarter.

Nathan: And then Nathan.

Nathan: Thank you asked a question about <unk>.

Nathan: So when you think about purchase volume.

Speaker Change: Quarter of revenue associated with another full quarter of accounts.

Nathan: Expecting kind of.

Nathan: Low mid single digits third quarter accelerating too.

Speaker Change: So that was certainly a benefit and one that will continue.

Speaker Change: Through the rest of the year.

Nathan: Call it 20% in the fourth quarter.

Speaker Change: What we're hearing in the marketplace is that deep expertise that we have in managing the complex reimbursement accounts the scale of our platform. The fact that you can have multiple account types set across the portfolio. All of those things are playing well in the marketplace and had less to do with the sales and marketing investments those in that case.

Nathan: Keep in mind, a lot of that is the.

Nathan: Still the OTI migration, where it flips from.

Nathan: Purchase volume to total volume. So if you look at it sorry purchase volume tube unfunded volumes. So when you look at it on a total volume basis, we're expecting kind of low single or low double digits, both Q3 and Q4.

Speaker Change: Some of our benefits business, we have seen a win in the marketing category pretty early in the year, but most of those investments have been ramping.

Nathan: That's super helpful detail and just nice to see the momentum in that segment. The other thing I wanted to ask on it was nice to see the HSA account growth of 7% I know, we've talked about some slowdown in the over all market, but you are still outpacing the market at 5%. So could you talk about what specific strategies or investments are driving this.

Speaker Change: Throughout the course of the year. So we expect to see more of that benefit of that into next year's open enrollment cycle.

Melissa Smith: Thanks Melissa.

Speaker Change: Our next question comes from the line of Sanjay <unk> with K B W. Please go ahead.

Speaker Change: <unk> is it some of this investment in sales and marketing into the strength of the partner channel anything else and then I guess moving forward are there any barriers or is there anything that might prevent or slow you down from continuing to capture even more market share on the HSA side of the business.

Sanjay: Thank you good morning, and congratulations on all these deals.

Sanjay: My question is sort of a combination of some of the questions that were asked before.

Sanjay: A lot of these new wins and such and the lapping of.

Nathan: Thanks.

Nathan: The second quarter, we did get the benefit of the United Auto workers Cross getting implemented so that had a full quarter of revenue associated with that not another full quarter of accounts.

Sanjay: <unk>.

Sanjay: Relationships.

Sanjay: Further feed or fuel next year. So I'm just trying to think about what the revenue growth potential is as we exit 2025 into 2026, if I'm doing the math right Youre forecasting about 4% revenue growth in the back half of the year ex fuel.

Nathan: So that was certainly a benefit and one that will continue.

Nathan: Through the rest of the year.

Nathan: We're hearing in the marketplace is that deep expertise that we have in managing the complex reimbursement accounts the scale of our platform. The fact that you can have multiyear account types to sit across the portfolio all of those things are playing well in the marketplace and.

Sanjay: How do we think about the starting point in 2026.

Sanjay: Yes.

Sanjay: So.

Sanjay: First starting point.

Sanjay: We're not giving 2026 guidance, yet, but what I would say is mobility.

Nathan: So it has less to do with the sales and marketing investments those in that case in our benefits business. We have seen a win in the marketing category pretty early in the year, but most of those investments have been ramping.

Sanjay: The trends have been the trends, we'll see more as we go through the rest of the year.

Sanjay: On the just the impact of some of the weakness in the economy continue what's the impact of tariffs.

Nathan: Throughout the course of the year. So we expect to see more than the benefit of that into next year's open enrollment cycle.

Sanjay: I think kind of where we are today is a good starting point I think same thing for benefits.

Speaker Change: Thanks Melissa.

Sanjay: Yes.

Speaker Change: Our next question comes from the line of Sanjay <unk> with K B W. Please go ahead.

Sanjay: What we're seeing is good outpacing the market in terms of the HSA account growth I think will.

Sanjay: Thank you good morning, and congratulation on all these deals.

Sanjay: Again, I'm, not giving a 2026 outlook, but I would think we would still continue to kind of outpace the market if I, if I turn to corporate payments.

Sanjay: My question is sort of a combination of some of the questions that were asked before.

Sanjay: A lot of these new wins and such and the lapping of.

Speaker Change: So youre right Sanjay.

Sanjay: As a company, we're kind of going from call it flattish growth.

Sanjay: Relationships.

Sanjay: Further feed or fuel next year. So I'm just trying to think about what the revenue growth potential is as we exit 2025 into 2026.

Sanjay: In the first half of the year to 4% growth second half of the year a lot of that is coming in the corporate payments segment, where we call. It declined 15% first half that or.

Speaker Change: Im doing the math right Youre forecasting about 4% revenue growth in the back half of the year ex fuel.

Sanjay: We're expecting kind of flat for the year, so that kind of implies a 30 point swing.

Sanjay: I would say there is a couple of pieces in that we've talked about the OTA transition, we've talked about timing differences for certain spending patterns with certain customers.

Sanjay: How do we think about the starting point in 2026.

Speaker Change: Yes.

Speaker Change: So.

Speaker Change: First starting point.

Sanjay: Yes.

Speaker Change: We're not giving 2026 guidance yet.

Sanjay: 70% of what we're seeing in terms of that $30 swing. The other 30% is the things that Melissa has talked about the new fintech.

Speaker Change: But what I would say is mobility.

Speaker Change: The trends have been the trends, we'll see more as we go through the rest of the year.

Sanjay: Since our customer we've won great pipeline and fundings were seeing in the.

Speaker Change: On the.

Sanjay: The corporate payments business, especially in non travel.

Speaker Change: The impact of some of the weakness in the economy continue what's the impact of tariffs.

Sanjay: The backlog of implementations we have.

Speaker Change: Think kind of where we are today is a good starting point I think same thing for benefits.

Sanjay: And the great pipeline, we have so I think.

Sanjay: That's the piece that we feel good about and as a result, we feel good about kind of a long term guidance numbers that are out there and our ability to achieve them.

Speaker Change: Yes.

Speaker Change: What we're seeing is good outpacing the market in terms of the HSA account growth I think.

Sanjay: And maybe just to dig a little bit deeper on.

Speaker Change: Again, not giving a 2026 outlook, but I would think we would still continue to kind of outpace the market if I, if I turn to corporate payments.

Mike: BP and Mike.

Mike: Tam in HSA.

Speaker Change: D. P. You guys said look at that 5% to 1%.

Sanjay: So youre right Sanjay.

Sanjay: Company, we're kind of going from call. It flattish growth in the first half of the year to 4% growth second half of the year a lot of that is coming into corporate payments segment, where we call. It declined 15% first half that or.

Speaker Change: Time, but is that an annualized number or is it is it just your best guess based on the timing you were using and maybe midpoint of the year I'm, just curious sort of how to think about that number and then just when when you could actually start monetizing on some of the <unk>.

Sanjay: We're expecting kind of flat for the year, so that kind of implies a $30 swing.

Speaker Change: Increased Tam and the HSA program.

Speaker Change: Yes.

Speaker Change: Two different questions. The first question on BP the half a point to 1% is the first 12 months after implementation.

Sanjay: I'd say theres a couple of pieces in that we've talked about the OTA transition, we've talked about timing differences for certain spending patterns with certain customers.

Speaker Change: So think of that in the way that these implantation works that it happened actually pretty quickly you typically are moving the portfolio and one or two tranches.

Sanjay: Say.

Sanjay: 70% of what we're seeing in terms of that $30 swing.

Sanjay: The other 30% is the things that Melissa has talked about right. So it's a <unk> customer we've won the great pipeline and signings were seeing in the.

Speaker Change: And so.

Speaker Change: The question. That's outstanding is when does that implementation start and what they've said is that we expect it to be at some point in 2026, right now, but we don't know exactly one once it influenced after the first full year.

Sanjay: Corporate payments business, especially the non travel.

Sanjay: The backlog of implementations we have.

Sanjay: And the great pipeline, we have so I think.

Speaker Change: We expect it to be that.

Speaker Change: Half a point to a point of growth to the company set clear.

Sanjay: That's the piece that we feel good about and as a result, we feel good about kind of a long term guidance numbers that are out there and our ability to achieve them.

Speaker Change: Yes.

Speaker Change: I know in our model, but that's but that's those are the specific of it.

Sanjay: And maybe just to dig a little bit deeper on.

Speaker Change: And then.

Sanjay: BP and Mike.

Speaker Change: To your second question was on.

Sanjay: New Tam in HSA.

Speaker Change: Yes, the market, Okay interesting market.

Sanjay: BP you guys said look at that 5% to 1% is there a time, but is that an annualized number or is it is it just your best guess based on the timing you are using and maybe mid point of the year I'm, just curious sort of how to think about that number and then just when when you could actually start monetizing on some of the increased Tam.

It's interesting with the HSA market expansion because with this rollout.

Speaker Change: People to do that.

Speaker Change: Plans that are on the public exchanges. They now have access to HSA account.

Speaker Change: Whether they didn't before.

Speaker Change: That is the biggest part of the market expansion that there are a couple of other things as well that allow things that weren't allowed in the past like some of the telemedicine and expenses.

Sanjay: And the HSA program.

Sanjay: Yes.

Sanjay: Two different questions. The first question on BP the half a point to 1% is the first 12 months after implementation.

Speaker Change: So theres nothing we have to do from a product perspective, so really what we're focused on right now and thoughtfully working through the plan to most effectively address this and during this next open enrollment season, because it's making sure that the people who now have access understand that and then.

Sanjay: So think of that and the way these implementation of workday happened actually pretty quickly you typically are moving the portfolio and one or two tranches.

Sanjay: And so and.

Sanjay: So the question that's outstanding is when does that implementation start and what they've said is that we.

Speaker Change: They can get into these programs. So we know that will be a net benefactor of that.

Sanjay: Expect it to be at some point in 2026, right now, but we don't know exactly when once it influenced after the first full year.

Speaker Change: Amount that we are is less clear at this point in time, and we're really focused around making sure that we maximize this expansion.

Sanjay: We expect it to be that half.

Sanjay: Half a point to a point of growth to the company is that clear.

Speaker Change: Got it thank you.

Speaker Change: Our next question comes from the line of Irina Kumar with Oppenheimer. Please go ahead.

Sanjay: Yes got it.

Sanjay: And our model it but thats, but thats those are the specific of it and then.

Irina Kumar: Good morning for all the details on congrats on a great quarter.

Sanjay: Your second question was on.

Speaker Change: Our corporate payments business can you talk about what travel trends youre seeing so far and what your expectations are for the third quarter.

Speaker Change: Yes, the market, Okay interesting market.

Speaker Change: It's interesting on the HSA market expansion, because with this allowing people to do that.

Speaker Change: Sure travel actually came in very consistently with what we expected it to.

Speaker Change: Plans that are on the public exchanges. They now have access to HSA accounts and whether they didn't before.

Speaker Change: There continues to be growth in volume overall.

Speaker Change: That portfolio, we've seen a change in the quarter.

Speaker Change: That is the biggest part of the market expansion that there are a couple of other things as well, but allow things that werent allowed in the past like some of the telemedicine and expenses.

Speaker Change: Which hasn't had a huge impact on us because just as a reminder, two thirds of our spend originates and is settled outside of the United States.

Speaker Change: So theres nothing we'd have to do from a product perspective, so really what we're focused on right now and thoughtfully working through the plan to most effectively address this and during this next open enrollment season, because it's making sure that the people who now have access understand that and then.

Speaker Change: So we have less exposure to the us, but we have seen a shift of less travel in.

Speaker Change: Bound into the U S and more that's happening in other corridors, both in Europe and in Asia. So from a net perspective.

Speaker Change: It hasn't really had an impact on us.

Speaker Change: Average rate ticket rate went up a little bit.

Speaker Change: They can get into these programs. So we know that will be a net benefactor.

Speaker Change: About 4%.

Speaker Change: So then.

Speaker Change: Overall, what we're finding is that the environment continues to be quite stable.

Speaker Change: <unk>, who we are is less clear at this point in time, and we're really focused around making sure that we maximize this expansion.

Speaker Change: Which is what we have projected for it in our guidance through the end of the year.

Speaker Change: Got it thank you.

Speaker Change: Got it very helpful and just as a follow up is there any color you can provide her expectations for adjusted operating margin for rest of the year you saw some great cost discipline during the quarter should we anticipate that to continue through rest of the year.

Speaker Change: Our next question comes from the line of Reena Kumar with Oppenheimer. Please go ahead.

Reena Kumar: Good morning, Thanks for all the details on congrats on a great quarter.

Reena Kumar: Corporate payments business can you talk about what travel trends youre seeing so far and what your expectations are for the third quarter.

Speaker Change: So I would say.

Speaker Change: Adjusted operating margin, we kind of expect to be in line with what we saw in the second quarter I wouldn't assume that.

Reena Kumar: Sure travel actually came in very consistently with what we expected it to.

Speaker Change: The costs will remain where they were in the second quarter. We got some good news in the second quarter. So we've been working on a number of efficiency items that was baked into our second half guidance.

Reena Kumar: There continues to be a growth in volume overall.

Reena Kumar: That portfolio, we've seen a change in some of the core demand.

Reena Kumar: Which hasn't had a huge impact on us because just as a reminder, two thirds of our spend originates and settled outside of the United States.

Speaker Change: We actually benefited from getting those some of those efficiency items early earlier than we expected.

Speaker Change: Hence the good news in the second quarter. We also as we've talked about in previous calls we are making investments into the business. So we've been using some of those cost efficiency savings.

Reena Kumar: So we have less exposure to the us, but we have seen a shift of less travel.

Reena Kumar: Bound into the U S and more that's happening in other corridors, both in Europe and Asia, So from a net perspective.

Speaker Change: To make some of the investments we've talked about whether it's products or sales and marketing and.

Speaker Change: In a few areas.

Reena Kumar: It hasn't really had an impact on us.

Speaker Change: The ramp in headcount has been a little slower than we planned for so that provided a double benefit in Q2, we got the efficiency that was ahead of plan. While some of this spending was behind plan right now within our guide.

Reena Kumar: Right ticket rate went up a little bit.

Reena Kumar: About 4%.

Reena Kumar: So overall, what we're finding is that the environment continues to be quite stable.

Reena Kumar: What we have projected for it in our guidance through the end of the year.

Speaker Change: Expecting a catch up on some of those investments savings or investments.

Speaker Change: Got it very helpful and just as a follow up is there any color you can provide for expectations for adjusted operating margin for the rest of the year you showed some great cost discipline during the quarter should we anticipate that to continue through rest of the year.

Speaker Change: So I don't think that the Opex savings that you saw in Q2 will continue.

Speaker Change: But we should have margins that are.

Speaker Change: Pretty comparable to what we saw in the second quarter.

Speaker Change: Makes sense thanks for the color.

Reena Kumar: So I would say.

Speaker Change: Our next question comes from the line of Dave Koning with Baird. Please go ahead.

Reena Kumar: Adjusted operating margin, we kind of expect to be in line with what we saw in the second quarter.

Dave Koning: Hey, guys, Thank you and nice job.

Reena Kumar: Assume that.

Reena Kumar: The costs will remain where they were in the second quarter. We got some good news in the second quarter. So we've been working on.

Dave Koning: I guess a couple of questions first of all the processing rate within mobility.

Dave Koning: Very consistent with last year. So the first half of last year about one 3% yield the first half of this year, one 3%, but the back half of last year I think some of the pricing move.

Reena Kumar: On a number of efficiency items that was baked into our second half guidance.

Reena Kumar: We actually benefited from getting those some of those efficiency items early earlier than we expected. So hence the good news in the second quarter. We also as we've talked about in previous calls we are making investments into the business. So we've been using some of those cost efficiency savings.

Dave Koning: Move that up to the higher one three to $1 37, something like that in the back half do you think youll see the same is it seasonality or was that something pricing.

Dave Koning: Will that happen again, I guess the second half.

Reena Kumar: To make some of the investments we've talked about whether it's products or sales and marketing and.

Speaker Change: Yes, we had we had a couple of items that hit the processing rate. This quarter that were kind of onetime in nature. So I think you should expect that to tick up over the over the course of the year.

Reena Kumar: In a few areas.

Reena Kumar: The ramp in headcount has been a little slower than we planned for so that provided a double benefit in Q2, we got the efficiency that was ahead of plan well some of the spending was behind plan right now within our guidance.

Dave Koning: We also have.

Dave Koning: The other thing to think about as interest rates with our within our.

Reena Kumar: Expected to catch up on some of those investments savings or investments.

Dave Koning: Mobility segment within the total plan, we're expecting kind of $2 25 basis point cuts in the back half of the year that impacts revenue and mobility and I've given some numbers in the past.

So I don't think that the Opex savings that you saw in Q2 will continue.

Reena Kumar: But we should have margins that are pretty comparable to what we saw in the second quarter.

Dave Koning: 100 basis points. It was about $15 million of revenue impacts of the mobility segments. So that will impact rates will go into the back half of the year.

Reena Kumar: Makes sense thanks for the color.

Speaker Change: Our next question comes from the line of Dave Koning with Baird. Please go ahead, Yeah, Hey, guys. Thank you nice job.

Dave Koning: Gotcha.

Dave Koning: Okay, and then secondly in the benefits segment.

Speaker Change: I guess a couple of questions first of all the processing rate within mobility.

Dave Koning: We look at it ex kind of X. The other just if we just look at their processing and account servicing revenue.

Speaker Change: Very consistent with last year. So the first half of last year about one 3% yield the first half of this year, one 3%, but the back half of last year I think some of the pricing.

Dave Koning: It was about 3% growth the best in I think three or four or five quarters.

Speaker Change: I guess a is this sort of acceleration sustainable and maybe I guess be should that really over time be 5% plus and what kind of gets it gets it there.

Speaker Change: That up to the higher 13137, something like that in the back half do you think youll see the same is that seasonality or was that something pricing and will that happen again I guess this this second half.

Speaker Change: So when we're looking at the growth of that we actually would say the custodian account.

Speaker Change: Yes, we had we had a couple of items that hit the processing rates. This quarter that were kind of onetime in nature. So I think you should expect that to tick up over the course of the year.

Speaker Change: Our piece of that growth it doesn't have to be interest rate related but the size of the custodial balances tend to increase after you add a customer on and we saw that in in this quarter.

Speaker Change: We also have.

Speaker Change: The other thing to think about as interest rates with.

Speaker Change: And over time.

Speaker Change: So we're getting a benefit not taken in account servicing and payment processing revenue, but we also get some of the custodial revenue that is not interest rate adjusted.

Speaker Change: Our within our.

Speaker Change: Mobility segments within the total plan, we're expecting kind of 225 basis point cuts in the back half of the year that impacts revenue and mobility and I've given some numbers in the past.

Speaker Change: And if you accumulate all those things we would be in that range.

Speaker Change: Gotcha, Okay. Thanks.

Speaker Change: 100 basis points is about $15 million of revenue impacts of the mobility segments. So that will impact rate as we'll go into the back half of the year.

Speaker Change: If interest rates right.

Speaker Change: Yes.

Speaker Change: Thank you.

Speaker Change: Yeah.

Speaker Change: Our next question comes from the line of Trevor Williams with Jefferies. Please go ahead.

Speaker Change: Gotcha.

Speaker Change: Okay, and then secondly in the benefits segment.

Speaker Change: We look at it.

Trevor Williams: Thanks, Good morning for Melissa I was just hoping to get your latest thinking on the portfolio of assets that you have today that it's come across on the call. Just how are you guys are on the outlooks for each of the three segments I'm just curious how that feeds into your appetite to potentially explore any strategic action within the portfolio.

Speaker Change: <unk> kind of X. The other just if we just look at their processing and account servicing revenue.

Speaker Change: It was about 3% growth the best in I think three or four or five quarters.

Speaker Change: I guess a is this sort of acceleration sustainable and maybe I guess be should that really over time be 5% plus and what kind of gets it gets it there.

Speaker Change: Yes.

Speaker Change: Yeah, I talked about this last quarter, but just reiterate it.

Speaker Change: And it looks at the composition of our business portfolio regularly.

Speaker Change: So when we're looking at the growth of that we actually would say the custodian account.

Speaker Change: Do these reviews with a lot of subjectivity they bring in outside bankers to support that process and the things that we're looking at as part of that is what are the strategic advantages of applying our knowledge. The diverse end market across all those diverse end markets that were part of.

Speaker Change: Our piece of that growth it doesn't have to be interest rate related but the size of the custodial balances tend to increase after you add a customer on and we saw that in this quarter for us.

Speaker Change: Sure.

Speaker Change: Over time.

Speaker Change: So we're getting a benefit not Houston account servicing and payment processing revenue, but we also get to some of the custodial revenue that is not interest rate adjusted.

Speaker Change: Where theres common IP, but theres efficiencies around shared infrastructure technology talent things like that.

Speaker Change: And then they look at what are the opportunities in order to acquire or just those businesses and what are the valuations of the hard costs associated with it. So there's a really in depth view.

Speaker Change: And if you accumulate all those things we would be in that range.

Speaker Change: Gotcha. Thank you alright. Thanks.

Speaker Change: With interest rates right.

Speaker Change: Yes.

Speaker Change: And.

Speaker Change: Along that way, where they are really making sure of is the reason.

Speaker Change: Thank you.

Speaker Change: Yes.

Speaker Change: Our next question comes from the line of Trevor Williams with Jefferies. Please go ahead.

Speaker Change: Our best judgment in order to.

Speaker Change: <unk> delivers the best returns for our shareholders. So yes, we're very upbeat right now and at the same time I'd say our board.

Trevor Williams: Thanks, Good morning for Melissa I was just hoping to get your latest thinking on the portfolio of assets that you have today and it's come across on the call. Just how are you guys are on the outlooks for each of the three segments I'm just curious how that feeds into your appetite to potentially explore any strategic action within the portfolio.

Speaker Change: And it is very much engaged in making sure that we're <unk>.

Speaker Change: Thinking about that as well.

Speaker Change: Okay, Thanks, and going back to corporate payments. The total volume growth improved quite a bit from <unk> I don't know if you guys could unpack where that improvement came from and then just any update on how you're expecting wallet share with some of your biggest customers to trend from here. It sounds like theres been some improved visibility with some of the other big Otas.

Trevor Williams: Yeah.

Trevor Williams: <unk> talked about this last quarter, but just reiterate it.

Trevor Williams: Board looks at the composition of our business portfolio regularly.

Trevor Williams: Do these reviews with a lot of subjectivity they bring in outside bankers to support that process and the things that we're looking at as part of that is what are the strategic advantages of our <unk>.

Speaker Change: But any more color there would be helpful. Thank you.

Speaker Change: Okay.

Speaker Change: So you're talking about total volume growth in corporate payments.

Trevor Williams: Our knowledge the diverse end market across all those diverse end markets that we're part of.

Speaker Change: Exactly.

Speaker Change: 3% in the quarter it was a slight improvement from the first quarter.

Trevor Williams: Where theres common IP, but theres efficiencies around shared infrastructure technology talent and things like that.

Speaker Change: Predominantly in the travel segment.

Trevor Williams: And then they look at what are the opportunities in order to acquire or just those businesses and what are the valuations of the hard costs associated with it. So there's a really in depth you.

Speaker Change: We've now had kind of a summer travel season, we're seeing strong growth in travel.

Trevor Williams: And.

Trevor Williams: Along that way, where they are really making sure of is reason.

Speaker Change: Was there a follow up on the.

Trevor Williams: Our best judgment in order to.

Speaker Change: So I ask the question would you sorry, yes, sorry, the other part of the question was just around wallet share trends with some of your biggest customers. It sounds like you've improved some of the visibility with the other big Otas I'm. Just curious if you have any more color to share there. Thanks.

Trevor Williams: <unk> delivers the best returns for our shareholders. So yes, we're very upbeat right now and at the same time I'd say our board.

Trevor Williams: Is very much engaged in making sure that we're <unk>.

Trevor Williams: Thinking about that as well.

Speaker Change: Yes, actually I wouldn't describe it as wallet share trends.

Speaker Change: Okay, Thanks, and going back to corporate payments. The total volume growth improved quite a bit from <unk> I don't know if you guys could unpack where that improvement came from and then just any update on how you're expecting wallet share with some of your biggest customers to trend from here. It sounds like theres been some improved visibility with some of the other big Otas.

Speaker Change: We have done this work with them to have a more consistent pattern of the spend volume. So that there is always going to be some seasonality in travel, but what had happened last year.

Speaker Change: A large front loading and then.

Speaker Change: Not as much spend in the second half of the year and that this has created some comp issues for us have been working.

Trevor Williams: But any more color there would be helpful. Thank you.

Speaker Change: Okay.

Speaker Change: So youre talking about total volume growth in corporate payments.

Speaker Change: With that customer to have it become much more normalized which will create competition.

Speaker Change: Exactly.

Speaker Change: 3% in the quarter it was a slight improvement from the first quarter.

Speaker Change: The course of this year, but should then make it much more predictable in the future.

Speaker Change: Was predominantly in the travel segment.

Speaker Change: Okay.

Speaker Change: We've now hit kind of the summer travel season, we're seeing strong growth in travel.

Speaker Change: So another question.

Speaker Change: Your next question comes from the line of Andrew Jeffrey with William Blair. Please go ahead.

Speaker Change: Was there a follow up on the.

Speaker Change: As I answered the question sorry, yes, sorry, the other part of the question was just around wallet share trends with some of your biggest customers. It sounds like you've improved some of the visibility with the other big Otas I'm. Just curious if you have any more color to share there. Thanks.

Andrew Jeffrey: Hi, Good morning, Thank you for taking the question.

Andrew Jeffrey: Lisa I wanted to drill down a little bit in mobility, obviously, good new signings momentum which is encouraging.

Andrew Jeffrey: Talk a little bit about some of the secular trends and I don't mean.

Speaker Change: Yes, actually I wouldn't describe it as wallet share trends.

Andrew Jeffrey: Yes.

Andrew Jeffrey: Necessarily short term demand I'm thinking about sort of fuel efficiency and.

Speaker Change: We had done is work with them to have a more consistent pattern of the spend volume. So that there is always going to be some seasonality in travel, but what had happened last year.

Andrew Jeffrey: And things like that and maybe update on EV mix, and whether or not that's something that sort of materially can move the needle here over the next year or two.

Speaker Change: A large front loading and then.

Speaker Change: Yes, great question on the <unk>, let me start with AAV <unk> DB.

Speaker Change: Not as much spend in the second half of the year and that has created some comp issues for us that we've been working.

Speaker Change: Our products are resonating in the marketplace. We continue to have a really good pipeline most of the customers in that pipeline continues to be government related.

Speaker Change: With that customer to have it become much more normalized which will create competition.

Speaker Change: The course of this year, but should then make it much more predictable in the future.

Speaker Change: There are other people in the space that continues to be interested but I would say in most cases, what they're trying to do is test and really understand the total cost of ownership.

Speaker Change: And so.

Speaker Change: That is still happening it is happening at a slower pace.

Speaker Change: Then what we had originally anticipated because the market is moving but we feel really well positioned with products that we have in the offering we have to that customer base.

Speaker Change: So another question.

Speaker Change: Okay.

Andrew Jeffrey: Your next question comes from the line of Andrew Jeffrey with William Blair. Please go ahead.

Speaker Change: Laos them to take all of the different types of activity. They have whether they are charging at a depot, where they're charging at home where they are charging on the road and as they have consolidated.

Andrew Jeffrey: Hi, Good morning, Thank you for taking the question.

Andrew Jeffrey: Melissa I wanted to drill down a little bit in mobility, obviously, good new signings momentum which is encouraging.

Andrew Jeffrey: Talk a little bit about some of the secular trends and I don't mean.

Speaker Change: <unk> offering which includes their ice vehicles, they have all of that information together.

Andrew Jeffrey: Yes.

Andrew Jeffrey: Necessarily short term demand I'm thinking about sort of fuel efficiency and.

Speaker Change: And so we feel.

Speaker Change: Really good about that and in addition to that some of the offerings that we have with.

Andrew Jeffrey: And things like that and maybe update on EV mix, and whether or not that's something that sort of materially can move the needle here over the next year or two.

Speaker Change: The fleet leasing companies that we have partnerships with we're exposing them to our <unk> offerings as well so.

Andrew Jeffrey: Yes, great question on the <unk>, let me start with <unk>.

Speaker Change: You got about that we do think this is a great long term play the economics are holding up.

Andrew Jeffrey: Our products are resonating in the marketplace. We continue to have a really good pipeline most of the customers in that pipeline continued to be government related.

Speaker Change: It's going to take a slower migration path in terms of the secular trends within mobility over time.

Speaker Change: We've done this for a while.

Andrew Jeffrey: There are other people in the space that continued to be interested but I would say in most cases, what they are trying to do is test and really understand the total cost of ownership.

Speaker Change: There's always assume that there's going to be some headwind associated with fuel efficiency now that's been that's played out over the years.

Speaker Change: Regardless of what's happening with easy migration vehicles that come out and production tend to be more efficient than the ones that are getting replaced.

Andrew Jeffrey: And so.

Andrew Jeffrey: That is still happening it is happening at a slower pace.

Speaker Change: And so we embedded that in our view of growth within that segment. The second part the macro tends to be a little bit bumpier.

Andrew Jeffrey: Then what we had originally anticipated because the market is moving but we feel really well positioned with the products that we have in the offering we have to that customer base.

Speaker Change: Times square, a benefactor of sometimes that's.

Andrew Jeffrey: <unk> them to take all of the different types of activity. They have whether they are charging at a depot, where they're charging at home, where they're charging on the road and as they have consolidated fleet.

Speaker Change: Against Us and what we're really focused on is making sure that we retain the customer.

Speaker Change: And.

Speaker Change: So that as you go through these cycles statistic question is when you see that volume come back on.

Andrew Jeffrey: Fleet offering which includes their ice vehicles, they have all of that information together and so we feel.

Speaker Change: So that when we think about that part of the business. It is a part we continue to be.

Andrew Jeffrey: Really good about that and in addition to that some of the offerings that we have with <unk>.

Speaker Change: Really excited about it throws off a tremendous amount of cash off which allows us to invest in other areas of the business as well.

Andrew Jeffrey: The fleet leasing companies that we have partnerships with we're exposing them to our <unk> offerings as well so feel good about that we do think this is a great long term play the economics are holding up.

Speaker Change: Okay I appreciate that and then just as a quick follow up.

Speaker Change: In embedded finance you mentioned <unk>.

Speaker Change: Virtual card offering for a fintech can you just sort of describe a little bit the competitive environment and what you think you are right to win in that space, but thats, a relatively new business for <unk>.

Andrew Jeffrey: It's going to take a slower migration path in terms of the secular trends within mobility over time.

Andrew Jeffrey: We've done this for a while.

Andrew Jeffrey: Theres always assume that there's going to be some headwind associated with fuel efficiency now that's been that's played out over the years.

Speaker Change: Yeah. So it is a similar product offering to what we're doing in travel we just had.

Speaker Change: Added functionality that made it more applicable outside of travel in the places that we're having success is AP automation media tax expense management e-commerce areas like that where we're finding you've got often new fintech players that are in this space that want to extend their capabilities to include payments.

Andrew Jeffrey: Regardless of what's happening with TV migration vehicles that come out and production tend to be more efficient than the ones that are getting replaced.

Andrew Jeffrey: And so we embedded that in our view of growth within that segment. The second part the macro tends to be a little bit bump here.

Andrew Jeffrey: Times square benefactor of sometimes that's working against us and what we're really focused on is making sure that we retain the customer.

Speaker Change: Similar to our travel product is it's an API enabled payment stream. So you embedded in the workflow of the customer and it gives them another tool for them to be able to compete in the marketplace. What we're finding in the market and I would say, yes, we had this great.

Andrew Jeffrey: And.

Andrew Jeffrey: And so that as you go through these cycles statistic question when you see that volume come back on.

Andrew Jeffrey: So net net when we think about that this part of the business. It is a part we continue to be.

Speaker Change: And we're really excited about it and a lot of what's in our pipeline or what I call the singles.

Andrew Jeffrey: Really excited about it.

Andrew Jeffrey: A tremendous amount of cash off which allows us to invest in other areas of the business as well.

Speaker Change: There are a large number of customers that are sending there and every time that we've looked at the pipeline and again. These products are new this year is it expanded.

Andrew Jeffrey: Okay I appreciate that and then just this is.

Andrew Jeffrey: A quick follow up.

Speaker Change: Smaller in size and in a way I like that because it creates that much more diversification across the portfolio that we have it in corporate payments.

Andrew Jeffrey: In embedded finance you mentioned.

Speaker Change: Virtual card offering for a fintech can you just describe a little bit the competitive environment and what you think you are right to win in that space or is that is a relatively new business for <unk>.

Speaker Change: Part of why is.

Speaker Change: Because we have such a strong history managing these complex transactions and travel on the <unk> side that gives us a lot of market credibility, we have a really strong virtual card technology stack.

Speaker Change: Yeah. So it is a similar product offering to what we're doing in travel we just had.

Speaker Change: Added functionality that made it more applicable outside of travel in the places that we're having success is AP automation Mediatek expense management e-commerce areas like that where we're finding you've got often new fintech players that are in this space that want to expand their capabilities to include payments.

Speaker Change: <unk>.

Speaker Change: And we have a lot of experience with these deep integrations through API automation within that part of our business.

Speaker Change: We're also hearing.

Speaker Change: A lot of interest and providers right now in the marketplace.

Speaker Change: That can turn execute end to end. So this is where owning a bank in this particular moment is even more important to our customers and all of those things combined.

Speaker Change: And so this similarly to our <unk> product is it's an API enabled payment stream so you're.

Speaker Change: Embedded in the workflow of the customer and it gives them another tool for them to be able to compete in the marketplace. What we're finding in the market and I would say, yes. We had this great win and we're really excited about it.

Speaker Change: <unk>.

Speaker Change: It is a very strong pipeline a lot of interest and we continue to add features and this product is a place we are excited about and we.

Speaker Change: And a lot of what's in the pipeline for what I'd call singles.

Speaker Change: We do think that that will help create momentum.

Speaker Change: Neither.

Speaker Change: Within our corporate payments segment, which is important to us obviously.

Speaker Change: A large number of customers that are sending there and every time that we've looked at this pipeline and again. These are new this year is it expanded.

Speaker Change: Okay. So it sounds like a Tam expansion expansion initiatives, yes, tightening okay awesome. Thank you.

Speaker Change: Smaller in size and in a way I like that because it creates that much more diversification across the portfolio that we have it in corporate payments.

Speaker Change: Yes, I would say Tam expansion, where we've already expanded it and as we add into the product we will continue to expand that Tam.

Speaker Change: Part of why off is because we have such a strong history managing these complex transactions and travel on the <unk> side that gives us a lot of market credibility, we have a really strong virtual card technology stack.

Steve Elder: And that will conclude our question and answer session I'll turn the call back over to Steve elder for any closing comments.

Steve Elder: Thank you Regina.

Steve Elder: Like usual just wanted to say thank you to everyone for listening in and we'll look forward to speaking with you at the end of the third quarter.

Speaker Change: <unk>.

Steve Elder: This concludes today's call. Thank you all for joining.

Speaker Change: And we have a lot of experience with these deep integrations through API automation within that part of our business.

Speaker Change: We're also hearing.

Speaker Change: A lot of interest and providers right now in the marketplace.

Speaker Change: That can execute end to end. So this is where owning a bank in this particular moment.

Speaker Change: Even more important to our customers and all of those things combined.

Speaker Change: <unk>.

Speaker Change: It is a very strong pipeline a lot of interest and we continue to add features and this product is a place we are excited about and we.

Speaker Change: We do think that that will help create momentum.

Speaker Change: Within our corporate payments segment, which is important to us obviously.

Speaker Change: Okay. So it sounds like the Tam expansion expansion initiatives, yes tightening okay. Thank you.

Speaker Change: Yes, I would say Tam expansion, where we've already expanded it and as we add into the product we will continue to expand that Tam.

Speaker Change: And that will conclude our question and answer session I'll turn the call back over to Steve elder for any closing comments.

Speaker Change: Thank you Regina.

Speaker Change: Like usual just wanted to say thank you to everyone for listening in and we'll look forward to speaking with you at the end of the third quarter.

Speaker Change: This concludes today's call. Thank you all for joining you may now disconnect.

Speaker Change: Please wait the conference will begin shortly.

Speaker Change: Okay.

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Speaker Change: [music].

Speaker Change: No.

Speaker Change: Yes.

Speaker Change: Thanks.

Speaker Change: [music].

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Speaker Change: Okay.

Speaker Change: Okay.