Q3 2025 Element Fleet Management Corp Earnings Call
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Operator: This call is being recorded. Following the prepared remarks, there will be an opportunity for analysts to ask questions. To join the question queue, press star then one on your telephone keypad. In the event you need assistance during the call, you may signal an operator by pressing star then zero. Element wishes to caution listeners that today's information contains forward-looking statements. The assumptions on which they are based and the material risks and uncertainties that could cause them to differ are outlined in the company's year-end and most recent MD&A and annual information form. Although management believes that the expectations expressed in the statements are reasonable, actual results could differ materially. The company also reminds listeners that today's call references certain non-GAAP and supplemental financial measures.
In the event you need assistance during the call you may signal, an operator by pressing Star then zero.
Element wishes to caution listeners that todays information contains forward looking statements.
Assumptions on which they are based in the material risks and uncertainties that could cause them to differ are outlined in the company's year end and most recent MD&A and annual information form.
Although management believes that the expectations expressed in the statements are reasonable actual results could differ materially.
The company also reminds listeners that todays call references certain non-GAAP and supplemental financial measures management measures performance on a reported and adjusted basis and considers both to be useful in providing readers with a better understanding of how it assesses results a reconciliation.
Operator: Management measures performance on a reported and adjusted basis and considers both to be useful in providing readers with a better understanding of how it assesses results. A reconciliation of these non-GAAP financial measures to IFRS measures can be found at the company's most recent MD&A. I would now like to turn the call over to Laura Dottori-Attanasio, Chief Executive Officer. Please go ahead.
<unk> of these non-GAAP financial measures to I F. R. S measures can be found at the company's most recent MD&A.
I would now like to turn the call over to Laura Detore anti nausea, Chief Executive Officer. Please go ahead.
Good morning, everyone and thank you for joining us.
Laura Dottori-Attanasio: Good morning, everyone, and thank you for joining us. Q3 was another strong quarter for Element, with double-digit net revenue growth year-over-year and record financial performance across key metrics. This outcome underscores the ongoing success of our strategy and the commitment of our team to deliver meaningful outcomes for our clients and shareholders. We deepened relationships with existing clients and won new mandates across all regions, adding 38 new clients in the third quarter and expanding share of wallet with 278 new service enrollments. As more clients turn to Element to unlock efficiencies, our Strategic Advisory Services team delivered by identifying CAD 349 million in fleet cost savings opportunities this quarter, 46% of which were actioned, demonstrating the tangible value that strengthens client loyalty. We continue to accelerate our digital transformation and deliver a more connected client experience.
Q3 was another strong quarter for element with double digit net revenue growth year over year and record financial performance across key metrics.
Hum underscores the ongoing success of our strategy and the commitment of our team to deliver meaningful outcomes for our clients and shareholders.
We deepened relationships with existing clients and won new mandates across all regions added 38, new clients in the third quarter and expanding share of wallet with 278, New service in a moment.
As more clients turn to elements unlock efficiencies our strategic advisory services team delivered by identifying $349 million in fleet cost savings opportunities this quarter.
46% of which were actions.
Straining the tangible value that strengthens client loyalty.
We continue to accelerate our digital transformation and deliver a more connected client experience.
Earlier this year, we launched a new element mobile app simple.
Laura Dottori-Attanasio: Earlier this year, we launched a new Element mobile app, simplifying fleet operations and enhancing the driver experience. Pilot feedback has been extremely positive and we're preparing for a broader rollout in the coming months. Our new digital ordering platform is also progressing well, marking an important step in automating key client processes. Since establishing Element Mobility, our division focused on next-gen fleet solutions, we've advanced partnerships that showcase our technology leadership. For example, we announced a new partnership with inDrive, one of the world's fastest-growing ride-hailing companies, to help optimize their fleet operations globally. This collaboration demonstrates how Element's digital capabilities and partnerships are shaping the future of intelligent mobility. Additionally, our technology platform, Autofleet, earned industry recognition as Fleet Management Solution of the Year in the 2025 AutoTech Breakthrough Awards, a well-deserved honor highlighting our team's innovation and impact.
Simplifying fleet operations and enhancing the driver experience.
Feedback has been extremely positive and we're preparing for a broader rollout in the coming months.
Our new digital ordering platform is also progressing well, marking an important step in automating the client processes.
Since establishing element mobility, our division focused on Nextgen sleep solutions, we've advanced partnerships that showcase our technology leadership.
For example, we announced a new partnership with enjoyed one of the world's fastest growing ride hailing companies to help optimize their fleet operations globally.
Collaboration demonstrates how elements digital capabilities and partnerships are shaping the future of intelligent mobility.
Additionally, our technology plot for modestly earned industry recognition as fleet management solution of the year into 2025 Auto Tech breakthrough awards, a well deserved honor if highlighting our team's innovation in impact.
We passed the one year milestone of our Dublin leasing center that was launched in August of 2024, and the results have been strong by streamlining processes and automation, we've achieved greater efficiency and scalability in our leasing operations enhancing the client experience and contributing to strong.
Laura Dottori-Attanasio: We passed the one-year milestone of our Dublin Leasing Center that was launched in August 2024, and the results have been strong. By streamlining processes and automation, we've achieved greater efficiency and scalability in our leasing operations, enhancing the client experience, and contributing to strong net financing revenue in recent quarters. This is a clear example of how our strategic initiatives, like Dublin and Autofleet, are driving financial benefits and service improvements. In summary, we made exciting progress on the digital front, improving client experience and financial performance, all thanks to the dedication and collective effort of our global Element team. Our Q3 achievements put us on solid footing to close out 2025 with continued strength. I'll now turn the call over to Heath to cover our financial results.
Net financing revenue in recent quarters.
This is a clear example of how our strategic initiatives like Dublin, and novelty are driving financial benefits and service improvements.
In summary, we made exciting progress on the digital front, improving client experience and financial performance.
Thanks to the dedication and collective effort of our global element team.
Our third quarter achievements put us on solid footing to closeout 2025 with continued strength in <unk>.
With that I'll now turn the call over to Heath to cover our financial results.
Thank you Laura and good morning, everyone Q3 marked another quarter of strong performance for element and highlight the solid progress made on our strategic priorities in 2025.
Heath Valkenburg: Thank you, Laura. Good morning, everyone. Q3 marked another quarter of strong performance for Element and highlights the solid progress we've made on our strategic priorities in 2025. Notably in the quarter, we delivered double-digit growth in net revenue, adjusted operating income, earnings per share, and free cash flow per share, and once again produced record results in each of these important metrics. With that, let's turn to our Q3 financials, which I will speak to on an adjusted basis. Net revenue reached CAD 306 million, up 10% from last year, supported by strong contributions across all revenue categories. Services revenue was up 6% year-over-year, reaching CAD 156 million. This growth is attributable to higher utilization from new and existing clients and solid growth in all of our geographies.
Notably in the quarter, we delivered double digit growth in net revenue adjusted operating income earnings per share free cash flow per share.
Once again produced record results in each of these important metrics.
With that let's turn to our Q3 financials, which I'll speak to on an adjusted basis.
Net revenue rates $306 million up 10% from last year supported by strong contributions across all revenue categories.
Services revenue was up 6% year over year, reaching $156 million. This growth is attributable to higher utilization from new and existing funds and solid growth in all of our geographies.
Net financing revenue grew 12% year over year to $130 million due to the combination of higher net earning assets in the U S and Mexico and a solid performance about leasing portfolio.
Heath Valkenburg: Net financing revenue grew 12% year-over-year to CAD 130 million due to the combination of higher net earning assets in the US and Mexico and the solid performance of our leasing portfolio. Results were further bolstered by funding efficiencies in the quarter, which absorbed the higher costs associated with our preferred share redemptions and Autofleet acquisition. Continuing the momentum that has been demonstrated in 2025, our core NFR yield, which excludes gain on sale, expanded to 4.85% in Q3, up a further 8 basis points quarter over quarter and 41 basis points year over year, highlighting the strong execution of our leasing business and funding initiatives. We syndicated CAD 632 million of assets this quarter, down 37% from last year.
Results were further bolstered by finding efficiencies in the quarter, which absorbed the higher costs associated with our preferred share redemption and order fleet acquisition.
Continuing the momentum that has been demonstrated in 2025 core <unk>, which excludes gain on sale expanded to a full 0.85% in Q3 episode eight basis points quarter over quarter, and 41 basis points year over year, highlighting the strong execution of our leasing business and funding initially.
It is.
We've seen the CAD $632 million of assets this quarter down 37% from last year.
The reduction in volume syndication revenue totaled $20 million, an increase of 20% year over year, all syndication yield of three 2% expanded more than 150 basis points versus last year, a reflection of the demand for our syndication products favorable mix and the benefits from the reinstatement of a 100% bonus.
Net financing revenue grew 12% year over year to $130 million due to the combination of higher net earning assets in the U S and Mexico, and a solid performance, while making portfolio.
Heath Valkenburg: Despite the reduction in volume, syndication revenue totaled CAD 20 million, an increase of 20% year-over-year. Our syndication yield of 3.2% expanded more than 150 basis points versus last year, a reflection of the demand for our syndication products, favorable mix, and the benefits from the reinstatement of 100% bonus depreciation in July. We originated CAD 1.7 billion of assets in the quarter, in line with the results from Q3 2024. The sequential dip in originations reflects normal seasonality tied to OEM retooling ahead of a new model year production in the US and Canada. Importantly, originations in Mexico were at a record level of CAD 342 million in the quarter, a clear reflection of the strength of our franchise in the country.
Results were further bolstered by finding efficiencies in the quarter, which absorbed the higher costs associated with our preferred share redemption and order isolate acquisition.
You guys had in July.
We originated $1 $7 billion of assets in the quarter in line with the results from Q3 2020 full the sequential dip in originations reflects normal seasonality tied to OEM retooling ahead of a new model year production in the U S and Canada.
Continuing the momentum that has been demonstrated in 2025 of core <unk>, which excludes gain on sale expanded to $4 eight 5% in Q3.
Eight basis points quarter over quarter, and 41 basis points year over year, highlighting the strong execution of our leasing business and funding initiatives.
Importantly, originations in Mexico were at a record level of $342 million in the quarter.
We've seen the CAD $632 million of assets this quarter down 37% from last year. Despite the reduction in volume syndication revenue totaled $20 million, an increase of 20% year over year, all syndication yield of three 2% expanded more than 150 basis points versus loss.
Clear reflection of the strength of our franchisee in the country.
Our momentum in vehicles under management resumed in Q3 with volume, increasing 1% quarter over quarter and 2% year over year led by growth in service on the category.
Heath Valkenburg: Our momentum in vehicles under management resumed in Q3, with VUM increasing 1% quarter over quarter and 2% year over year, led by growth in service-only category. This increase is expected to further support services revenue in the coming quarters. As Laura mentioned, new client acquisitions in the quarter were steady to last year, reflecting stable underlying demand that we expect will translate into higher order volumes ahead. Adjusted operating expenses remained well contained at CAD 129 million, flat quarter over quarter and up 9% year over year, or 6% excluding Autofleet. The year over year increase reflects continued investment into our business to advance our intelligent mobility ecosystem, enhance digital capabilities, and maintain our leadership position in the industry.
This increase is expected to further support services revenue in the coming quarters.
Last year, a reflection of the demand for our syndication products favorable mix and the benefits from the reinstatement of a 100% bonus depreciation in July.
As Laura mentioned, new client acquisitions in the quarter was steady to last year, reflecting stable underlying demand that we expect will translate into higher order volumes ahead.
We originated $1 $7 billion of assets in the quarter in line with the results in Q3 2020 full the sequential dip in originations reflects normal seasonality tied to OEM retooling it hit a new model year production in the U S and Canada.
Adjusted operating expenses remained well contained at $129 million flat quarter over quarter, and up 9% year over year or 6% excluding <unk>.
The year over year increase reflects continued investment into our business to advance our intelligent mobility ecosystem enhanced digital capabilities and maintain our leadership position in the industry.
Ultimately originations in Mexico were at a record level of $342 million in the quarter, a clear reflection of the strength of our franchise in the country.
This resulted in an adjusted operating margin of 58% and earnings per share or 33 cents with face K metrics, expanding by 30 basis points and 14% year over year, respectively.
Our momentum in vehicles out of management resumed in Q3, with Bom, increasing 1% quarter over quarter and 2% year over year led by growth in service on the category. This.
Heath Valkenburg: This resulted in an adjusted operating margin of 58% and earnings per share of CAD 0.33, with these key metrics expanding by 30 basis points and 14% year over year, respectively. We remain focused on driving internal efficiencies and sustaining positive operating leverage as our business continues to scale. In Q3, we generated an adjusted return on equity of 18.8%, up from 16.9% in 2024, demonstrating the continued progress of our capital-light strategy. With respect to capital management, we returned CAD 61 million to shareholders through dividends and share repurchases during Q3. Year to date, we have repurchased 4.1 million common shares, representing CAD 87 million of capital deployed. Looking ahead, we intend to renew our normal course issue of bid in 2026, reaffirming our commitment to returning capital to shareholders.
This increase is expected to further support services revenue in the coming quarters.
We remain focused on driving internal efficiencies and sustaining positive operating leverage as our business continues to scale.
As Laura mentioned, new client acquisitions in the quarter was steady to last year, reflecting stable underlying demand that we expect will translate into higher order volumes ahead.
In Q3, we generated an adjusted return on equity of 18, 8% up from 16, 9% in 2020 for demonstrating the continued progress of our capital light strategy.
Adjusted operating expenses remained well contained at $129 million flat quarter over quarter, and up 9% year over year or 6% excluding auto fleet.
With respect to capital management, we returned $61 million to shareholders through dividends and share repurchases during Q3.
The year over year increase reflects continued investment into our business to advance our intelligent mobility ecosystem enhanced digital capabilities and maintain our leadership position in the industry.
Year to date, we have repurchased $4 1 million common shares representing $87 million of capital deployed.
Looking ahead, we intend to renew our normal course issuer bid in 2026, reaffirming our commitment to returning capital to shareholders.
This resulted in an adjusted operating margin of 58% and earnings per share or 33 cents with these key metrics expanding by 30 basis points and 14% year over year, respectively.
These actions were underpinned by continued strong free cash flow generation with adjusted free cash flow per share of <unk> 42 cents off a road about 17% year over year, our ability to consistently generate growing free cash flow continues to support our reinvestment into the business and the ability to deliver meaningful return.
Heath Valkenburg: These actions were underpinned by continued strong free cash flow generation with adjusted free cash flow per share of CAD 0.42, up a robust 17% year-over-year. Our ability to consistently generate growing free cash flow continues to support our reinvestment into the business and the ability to deliver meaningful return of capital to shareholders. As of 30 September, our debt-to-capital ratio stood at 75.7%, well within our target range of 73% to 77%. In summary, we delivered strong financial results this quarter, consisting of robust revenue growth, positive operating leverage, and record profitability. We are entering Q4 with positive momentum and a clear line of sight to finish 2025 at or above the high end of our guidance ranges in all metrics, with the exception of originations, as was communicated last quarter.
We remain focused on driving internal efficiencies and sustaining positive operating leverage as our business continues to Scott.
In Q3, we generated an adjusted return on equity of 18, 8% up from 16, 9% in 2020 full demonstrating the continued progress of our capital light strategy.
Of capital to shareholders.
As of September 30, our debt to capital ratio stood at 75, 7% well within our target range of 73% to 77%.
With respect to capital management, we returned $61 million to shareholders through dividends and share repurchases during Q3.
In summary, we delivered strong financial results this quarter, consisting of robust revenue growth positive operating leverage and record profitability.
Year to date, we have repurchased one 1 million common shares representing $97 million of capital deployed looking ahead, we intend to renew our normal course issuer bid in 2026, reaffirming our commitment to returning capital to shareholders.
We are entering Q4 with positive momentum and a clear line of sight to see these 2025 at or above the high end of our guidance ranges on all metrics with the exception of originations as was communicated last quarter.
These actions were underpinned by continued strong free cash flow generation with adjusted free cash flow per share of <unk> 42 cents off a robust 17% year over year, our ability to consistently generate growing free cash flow continues to support our reinvestment needs of the business and the ability to deliver meaningful return.
We look forward to providing our 2026 financial guidance and dividend outlook alongside our Q4 results released in February.
Heath Valkenburg: We look forward to providing our 2026 financial guidance and dividend outlook alongside our Q4 results release in February. Thank you. Operator, we are now ready to take questions.
Thank you operator, we are now ready to take questions.
Analysts who wish to join the question queue. You May Press Star then one on your telephone keypad, you will hear a tone acknowledging your request.
And on capital to shareholders.
As of September 30, our debt to capital ratio stood at 75, 7% well within our target range of 73% to 77%.
Operator: Analysts who wish to join the question queue, you may press star 1 on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star 2. We ask that you please limit yourself to 2 questions and then re-queue. We will pause for a moment as callers join the queue. Your first question comes from Stephen Boland with Raymond James. Please go ahead.
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In summary, we delivered strong financial results this quarter, consisting of robust revenue growth positive operating leverage and record profitability. We are entering Q4 with positive momentum and a clear line of sight to finish 2025 at or above the high end of our guidance ranges and all that.
And your first question comes from Stephen Boland with Raymond James. Please go ahead.
With the exception of originations as was communicated last quarter.
So there's a couple of times I guess, no Geoff Kwan, sorry people move up the lift or a little bit so.
We look forward to providing our 2026 financial guidance and dividend outlook alongside our Q4 results release in February.
Stephen Boland: Thanks. I've said this a couple times, I guess no Jeff Kwan, so I, people move up the list here a little bit. Good morning. Just the first question is, Laura, you're usually pretty good about giving new client wins. You mentioned in the, I think it's in the deck, the conversions of self-administered fleets. I'm just wondering if you can give a little more details.
Good morning, just the first question is usually pretty good about giving new client wins you mentioned in the.
Operator, we are now ready to take questions.
I think some of that the conversions of sulfur sulfur administered fleets I'm. Just wondering if you can give a little more details.
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Yeah, absolutely Steve Thanks, as I mentioned this quarter, we did see some great commercial traction once again with 38, new clients share of wallet, we had 278 new enrollments.
Youre using a speakerphone please pick up your handset before pressing any keys to withdraw your question. Please press Star then two we ask that you. Please limit yourself to two questions and then re queue, we'll pause for a moment as callers join the queue.
Laura Dottori-Attanasio: Absolutely, Steve. Thanks. As I mentioned, this quarter, we did see some great commercial traction once again with 38 new clients and share of wallet. We had 278 new enrollments. We continue to go after the various segments that are in the self-managed space and winning market share. I'd say once again this quarter it's pretty evenly mixed where we're winning market share. It's about 50/50 again this quarter.
We continue to go after the various segments that are.
And your first question comes from Stephen Boland with Raymond James. Please go ahead.
In the self managed space and winning market share and I'd say once again this quarter its pretty evenly mixed where we're.
Oh. Thanks, So there's a couple of times the guests know Geoff Kwan for Ya people move up the list here a little bit. So good morning, just the first question is Laura you, usually pretty good about giving new client wins, you mentioned and the ethics.
Winning market share. So it's about 50 50 again this quarter from winning market share and self managed fleets. So we're feeling good about not just what we've learned about the opportunities that are before us as well.
Laura Dottori-Attanasio: From winning market share and self-managed fleets. We're feeling good about not just what we've won, but the opportunities that are before us as well.
I think some of that the conversions of self self administered fleets I'm. Just wondering if you can give a little more details.
Okay, Great and second question is really on syndications.
Stephen Boland: Okay, great. The second question is really on syndications. You know, a great return on the yield. I'm just curious about how you managed the syndication volumes this quarter. I mean, in the H1, you talked about the deferring for the bonus depreciation to kick in. Could more have been done this quarter? I mean, are you managing the amount that you're doing right now? Should we expect, you know, the similar yield in Q4 and maybe volumes?
A great return on the yield I'm just curious about how you managed this.
Yeah, absolutely Steve Thanks, as I mentioned this quarter, we did see some great commercial traction once again with 30, new clients share of wallet, we had 278 new enrollments.
Syndication volumes this quarter I mean in the first half you talked about deferring.
For the bonus depreciation to kick in so could more have been done this quarter or I mean are you managing.
We continue to go after the various segments that are.
The amount that Youre doing right now and should we expect.
The similar yield in Q4 and maybe volumes.
In the south now space and winning market share and I'd say once again this quarter its pretty evenly mixed where were.
Yes, good morning States sorry.
Our approach to see the cash remains unchanged, primarily we use syndication as a tool to manage our balance sheet.
Heath Valkenburg: Good morning, Stephen. Our approach to syndication remains unchanged. Primarily, we use syndication as a tool to manage our balance sheet. With our debt-to-capital metric coming in at 75.7%, which is well right in the middle of our targeted range, we've syndicated enough to manage our balance sheet. What we do is we look to focus on optimizing economic value. You can see that with an increase in the yields in the assets that we hold on book, with the core yield being up 8% this quarter. Also, as you said, really strong syndication yields on the assets that we have syndicated.
Winning market share. So it's about 50 50 again this quarter from winning market share and self managed fleets. So we're feeling good about not just what we've learnt that the opportunities that are before us as well.
And without that capital metrics coming in at 75, 7%, which is well right in the middle of our targeted range.
Syndicated enough to manage our balance sheet.
Okay, Great and second question is really on syndications.
And then what we do is we look to focus on optimizing economic value and you can say that with an increase in the yields in the in the assets that we hold on book, we see the core yield being up 8% this quarter.
You know a great return on the yield I'm just curious about how you managed this through.
Vacation volumes this quarter being in the first half you talked about the differing.
And then also as you said really strong syndication yields on the assets that we have seen the guidance.
For the bonus depreciation to kick in so could more had been done this quarter.
In terms of what's driven the higher yield.
Are you managing.
Heath Valkenburg: In terms of what is driven this, the higher yield, the demand for our product is still very, very strong. The return of the bonus depreciation coming in clearly gave us an uptick on the yield, which we expect will continue on. There was also some product mix benefit that we had in the quarter.
The amount that Youre doing right now and should we expect.
The the demand for our product is still very very strong and and return of the bonus depreciation coming in clearly gave us an uptick on the yield which we expect will continue on and then there was also some product mix benefit that we had in the quarter.
It was a similar yield in Q4 and maybe volumes.
Yeah. Good morning stage. So we are our approach to see the cash remains unchanged primarily be used syndication as a tool to manage our balance sheet.
Yes.
And with our debt capital metrics coming in at 75, 7% and she's well right in the middle of our targeted range.
And your next question comes from Jamie <unk> with National Bank Financial. Please go ahead.
Operator: Your next question comes from Jaeme Gloyn with National Bank Financial. Please go ahead.
Syndicated enough to manage our balance sheet and then what we do is we look to focus on optimizing economic value and you can say that with an increase in the yields in the in the assets that we hold on book.
Yeah. Thanks.
Good good results on the on the net financing revenue yields.
Jaeme Gloyn: Yeah, thanks. You know, good result on the, on the net financing revenue yield. Just wanted to get maybe some of your perspectives on the sustainability. Can it continue to tick higher from here? You know, this is, I think, almost, if not the all-time high for this, for this, you know, net interest margin effectively. Just trying to get a sense as to where that could potentially go with some of the moving parts.
Just wanted to get maybe some of your perspectives on the sustainability can it continue to tick higher from here or I.
The core yield being up 8% this quarter.
And then also as you said really strong syndication yields on the assets that we have seen you guided.
I think almost if not the all time high for this for this net interest margin effectively.
In terms of what's driven this.
I'm, just trying to get a sense as to where that could potentially go with some of the moving parts.
Uh huh.
The the demand for our product is still very very strong.
Yes, good morning, Jami, so you're correct in that the the net financing revenue we delivered for the quarter was a record and the yield is X X on the core yield is is is a record.
And and the return of the bonus depreciation coming in clearly guidance, an uptick on the year, which we expect will continue on and then there was also some product mix benefit that we had in the quarter.
Heath Valkenburg: Good morning, Jaeme. You're correct in that the net financing revenue we delivered for the quarter was a record, and on the core yield is a record. Excluding the impact of any gain on sale, we do see that there is further increase that we can drive through that number. The leasing business that we set up to maximize our returns continue to perform well. On the financing side of things, we continue to see opportunity for us to decrease our cost of funding as we continue to mature our platform.
Excluding the impact of any gain on sale.
Okay.
And your next question comes from Jamie <unk> with National Bank Financial. Please go ahead.
We do say that there is further increase so that we can draw through that number.
The leasing business that we set up to maximize.
Yeah. Thanks.
Yes, good good results on the on the net financing revenue yields.
Our returns continued to perform well and then on the financing sort of things we continue to see opportunity for us to decrease our cost of funding as we continue to mature.
Just wanted to get maybe some of your perspectives on the sustainability can it continue to tick higher from here or this was I think almost if not the all time high for this for this unit net interest margin effectively.
All our platform.
And then the Mexico business that grew strongly in the quarter.
Heath Valkenburg: The Mexico business that grew strongly in the quarter had some strong yield as well, which drove that up. Really pleased with the result. We expect that there is more to do on that line.
At <unk> and strong yield as well.
Just trying to get a sense as to where that could potentially go with some of the moving parts.
Which drive that up so it really plays with the result.
Yeah. Good morning, Jamie So you're correct in that the the net financing revenue we delivered for the quarter was a record in the U S.
And we expect that there is more to do on that one.
Okay, Great and then in terms of.
Thanks <unk>.
<unk> is.
Jaeme Gloyn: Okay, great. In terms of the order backlog shrinking this quarter, your commentary in the press release, you know, suggesting that you have pretty high confidence in client momentum coming back. What are some of the underlying, I don't know, metrics or drivers or conversations you're having that gives you that confidence that we'll see order volumes pick up in the upcoming quarters? Is it, is that sort of timing like a 2026 event, or are you already seeing that flowing through today?
The order backlog shrink in this quarter your commentary in.
He is a record.
Excluding the impact of any gain on sale.
In the press release.
We do see that there is further increase so that we can draw through that number.
Suggesting that you have pretty high confidence and client momentum coming back what what are some of the underlying metrics or drivers or conversations you're having that gives you that confidence that we will see.
The leasing business that we set up to maximize.
Our turns continued to perform well and then on the financing side of things, we continue to see opportunity for us to decrease our cost of funding as we continue to mature.
Order volumes pick up in the upcoming quarters and is it.
Is it is.
Is that sort of timing like a 2026 event or are you are you already seeing that.
Our platform.
And then the Mexico business that grew strongly in the quarter had strong yield as well.
Flowing through today.
Yes, so in terms of the decline order backlog the reduction in Q3 is cyclical. So we always see a reduction in Q3 with strong originations higher than orders and that's with the OEM model changeover. So we always see a drop in order volume during that period in Q3, and then it does.
Drive that up so it really plays with the result.
Heath Valkenburg: In terms of the client order backlog, the reduction in Q3 is cyclical. We always see a reduction in Q3 with strong originations higher than orders, and that's with the OEM model changeover. We always see a drop in the order volume during that period in Q3, and then it does pick up in Q4. In terms of why we're confident of that to continue to expand, it's the comments from Laura at the top in terms of the new client wins. We saw VUM return to growth this quarter with a 1% increase in the quarter, 2% increase year over year.
And we expect that there is more to do on that one.
Okay, Great and then in terms of.
The the order backlog shrinking this quarter your commentary in the.
Pick up in Q4.
The press release.
In terms of water confident of that too to continue to expand.
Suggesting that you have pretty high confidence and client momentum coming back what what are some of the underlying metrics or drivers are conversations youre, having that gives you that confidence that we will see.
It's it's the the comments from Laura that's off in terms of the new client wins, we saw a return to growth this quarter with a 1% increase in the quarter Super setting price year over year.
Order volumes pick up in the upcoming quarters and is it.
And the.
Is it.
Is that sort of timing like a 2026 event or are you are you already seeing that.
Those things will combined to drive higher orders or let's say that order pick up in Q4.
Heath Valkenburg: Those things will combine to drive higher orders or see that order pick up in Q4.
Flowing through today.
Yeah. So in terms of the decline order backlog the reduction in Q3 is cyclical so we always see a reduction in Q3.
Once again analysts with any further questions May press the star key than one.
Operator: Once again, analysts with any further questions may press the star key, then one. Your next question comes from Graham Ryding with TD Securities. Please go ahead.
Your next question comes from Graham Ryding with TD Securities. Please go ahead.
Strong originations higher than orders and Thats with the OEM model J&J, though so we always see a drop in order volume during that period in Q3, and then it does pick up.
Hi, Good morning, maybe I could start with just auto fleet.
Graham Ryding: Hi, good morning. Maybe I could start with just Autofleet. Anything you can quantify around the potential impact here of that inDrive win, either revenue or just, would you expect this to build over time? Maybe just commentary, you know, Autofleet broadly. Are there some tangible sort of revenue contributions coming in from that acquisition now that you have that as a business more than 1 year? Sure, Graham. Happy to take that one. I won't comment specifically on revenue per client, as we wouldn't normally do that. But it is, I'd say, a great sign for us.
Anything you can quantify around the potential impact here of that in drive win.
In Q4.
In terms of why are we confident that too to continue to expand.
On the revenue or just would you expect this to build over time and then maybe just commentary auto fleet broadly.
Yes.
The comments from Laura it's often in terms of the new client wins, we saw about a return to growth this quarter with a 1% increase in the quarter Super setting price year over year.
Are there some tangible sort of revenue contributions coming in from that acquisition now that you are yeah that is a business more than one year.
And the.
Sure Graham are happy to take that one so I won't comment specifically on our revenue per clients with we wouldn't normally do that.
Those things will combine to drive higher orders, all we'll say that order pickup in Q4.
Once again analysts with any further questions May press the star key than one.
But it is a I'd say a great sign for us.
I mean from where I sit it's like a proof point of how element mobility that we talked about last quarter is really going to allow us to I'm going to say broaden our scope beyond traditional fleet management.
Your next question comes from Graham Ryding with TD Securities. Please go ahead.
Graham Ryding: I mean, from where I sit, it's like a proof point of how Element Mobility that we talked about last quarter is really gonna allow us to, I'm gonna say, broaden our scope beyond traditional fleet management. This will help strengthen us as a global leader in intelligent fleet management. From where I sit, it's gonna help amplify, I'm gonna say, our digital moat.
Oh, Hi, good morning, maybe I could start with just auto fleet.
So this will help strengthen us as a global leader in intelligent fleet management, so from where I sit is going to help them find and let's say our digital moats.
Anything you can quantify around the potential impact here of that in drive win.
Other revenue or I guess would you.
Do you expect this to build over time.
So that is good with and drive and we expect to see more of these types of things with element mobility.
And then maybe just commentary you know auto fleet broadly.
Laura Dottori-Attanasio: That is good with inDrive, and we expect to see more of these types of things with Element Mobility or Autofleet. For Autofleet, it's been just a little over a year now that we acquired the team. It really has been a home run for us. Not only did we pick up honestly a phenomenal team and a great tech platform, we are going to be able to drive things, and we've seen it. For Elements, we have been able to really move forward with more speed, more cost efficiency. It's been great as it relates to decreasing our costs of technological digitization, automation, advancement. That's a positive.
Are there some tangible sort of revenue contributions coming in from that acquisition now that you are yeah that is a business more than one year.
Fleet and for honestly.
And then just a little over a year now that we acquired the team. It really has been a home run for us not only did they pick up honestly.
Sure Graeme I'm happy to take that one so I won't comment specifically on our revenue per client.
Oh <unk>.
Normally do that.
Great.
But it is a great sign for us.
Farm.
We are going to be able to drive things than you've seen it so for elements.
I mean from where I sit it's like a proof point of how AR element mobility that we talked about last quarter, it's really going to allow us to unless they brought in are still.
We have been able to really move forward with more speed more cost efficiency. So it's been great as it relates to decreasing our cost of technological digitization automation advancement. So that's a positive and then for auto fleet on its own.
Still beyond traditional fleet management.
So this will help strengthen us as a global leader in intelligent fleet management, so from where I sit it's going to help amplify our let's say our digital moats.
It's doing really well not only with a win like Android, but others that it is.
So that has led with and drive and we expect to see more of these types of things with element mobility or auto fleet and for honestly I've been just a little over a year now that we acquired the team. It really has been a home run for us not only does he pick up.
Laura Dottori-Attanasio: For Autofleet on its own, it's doing really well, not only with win like inDrive, but others that it is profitable on its own. We are very happy with where we're at and feeling very confident about where we can go together.
Profitable on its own and so we are very happy.
With where we're at and feeling very confident about where we can go to.
Get them.
Honestly.
Okay great.
Angel.
And then maybe I could.
Great.
That farm.
Pivot to just the services revenue growth.
Graham Ryding: Okay, great. Maybe I could pivot to just the services revenue growth. You flagged that, you know, higher utilization in the quarter was driving some growth, but it seemed like growth from sort of VUM and penetration on the services side is not there right now. Maybe what do you see the business needs to do to sort of get that back to double digits, like you were previously?
We are going to be able to drive things that he's seen it so for elements.
Flag that.
Higher utilization utilization in the quarter was driving some growth, but it seemed like.
We have been able to really move forward with more speed more cost efficiency. So it's been right as it relates to decreasing our cost of technological digitization automation advancement. So that's a positive and then for auto fleet on itself.
Growth from sort of bump and penetration.
On the services side is not there right now so maybe whats.
What do you see in the business needs to do to sort of get that back to double digits like you were previously.
Yes, good morning, Brian.
Thing upsize on a year to date basis, excluding FX and one off items revenue was up 10%. So we are still driving double digit growth.
It's doing really well not only with <unk>, but others that it is.
Heath Valkenburg: Yeah. Good morning, Graham. The first thing I'd say is on a year to date basis, excluding FX and one-off items, revenue is up 10%. We are still driving double-digit growth. Specifically for Q3, while we saw an uptick in the VUM, a lot of those vehicles were actually onboarded in September. The revenue they contribute for Q3 was relatively modest. And we expect that those vehicles that we onboarded will see an uptick in Q4 as long as well as rather additional VUM we expect to bring in Q4. Last quarter, I raised one large client win that we had that represents approximately 1% of VUM growth.
Profitable on its own and so we are very happy.
Specifically for Q.
Q3.
With where we're at.
While we saw an uptick in the volume a lot of those vehicles are actually on boarded in September. So the revenue that contribute for Q3 was relatively modest.
And feeling very confident about where we can go to.
Yeah.
Okay, Great and then maybe I could pivot.
And we expect that.
Pivot to just the services revenue growth you flagged that.
Those vehicles that we on boarded we'll see an uptick in Q4 as long as as well as Irobot additional bump and we expect to bring in in Q4, So last quarter I raised one large client win that we had that represents approximately 1% volume growth.
Yes.
Higher utilization utilization in the quarter was driving some growth, but it seems like.
Growth from sort of thumb and penetration.
On the services side is not there right now so maybe whats.
What do you see the business needs to do to sort of get that back to double digits like you were previously.
Actually not in our Q3 numbers, so we will likely see that coming to into Q4, so well.
Heath Valkenburg: That's actually not in our Q3 numbers, so we'll likely see that into Q4. you know, 1% VUM growth in Q3, minimal impact to service revenue, but we'll see that come through in Q4, plus additional clients that we're onboarding in Q4 will set ourselves up to continue to grow our service revenue.
Yeah. Good morning, Graham So first thing upsides on a year to date basis, excluding FX and one off items revenue was up 10%. So we are still driving double digit growth.
One 1% volume growth in Q3 minimal impact to service revenue, but we'll see that come through in Q4, plus additional costs that we are onboarding in Q4 will set us up to continue to grow our service revenue.
Specifically for <unk>.
Q3.
While we saw an uptick in the volume.
A lot of those vehicles are actually on boarded in September so the revenue that contributes for Q3 was relatively modest.
This concludes the question and answer session.
I would like to turn the conference back over to Laura <unk> for closing remarks.
Operator: This concludes the question and answer session. I would like to turn the conference back over to Laura Dottori-Attanasio for closing remarks.
And we expect that.
That's always vehicles that we on boarded we'll see an uptick in Q4 as long as as well as Irobot additional bump we expect to bring in in Q4, So last quarter I raised a one large client win that we had that represents approximately a 1% volume growth that's.
Thank you operator, and thanks, everyone for joining us today.
Laura Dottori-Attanasio: Thank you, operator, thanks everyone for joining us today. Looking ahead, our strategic priorities remain clear. That's to provide exceptional value to our clients, advance our digital leadership, and deliver sustainable growth for our shareholders. All while we stay true to our purpose and to our values. I really want to take this time to thank our global team members for their commitment and to thank our shareholders, our analysts, and our stakeholders for your continued support. We look forward to speaking with you again on our next quarterly call in February.
Looking ahead, our strategic priorities remain clear so that's to provide exceptional value to our clients advance our digital leadership and deliver sustainable growth for our shareholders. All while we stay true to our purpose and to our values and so I really wanted to take this time to thank our global team.
Actually, noting our Q3 numbers, so we will likely see that coming to into Q4.
Well, 1% volume growth in Q3 minimal impact to service revenue, but we'll see that come through in Q4, plus additional costs that we are onboarding in Q4 will set us up to continue to grow our service revenue.
Members for their commitment and to thank our shareholders, our analysts and our stakeholders for your continued support we look forward to speaking with you again on our next quarterly call in February.
Okay.
This concludes the question and answer session I would like to turn the conference back over to Laura Vitoria <unk> for closing remarks.
This brings today's conference call to a close.
Operator: This brings today's conference call to a close. You may disconnect your lines. Thank you for participating, and have a pleasant day.
May disconnect your lines.
You for participating and have a pleasant day.
Yes.
Thank you operator, and thanks, everyone for joining us today.
Looking ahead, our strategic priorities remain clear so that's to provide exceptional value to our clients advance our digital leadership and deliver sustainable growth for our shareholders. All while we stay true to our purpose and our values and so I really wanted to take this time to thank our global team.
Members for their commitment and to thank our shareholders, our analysts and our stakeholders for your continued support.
Look forward to speaking with you again on our next quarterly call in February.
Yeah.
This brings today's conference call to a close.
You may disconnect. Your lines. Thank you for participating and have a pleasant day.
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