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Q4 2025 Corpay Inc Earnings Call
Speaker #3: Thank you for your continued patience. Your meeting will begin shortly. If you need assistance at any time, please press star zero and a member of our team will be happy to help you.
Operator: Hello, and welcome everyone joining today's Corpay Fourth Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question and answer session. To register to ask a question at any time, please press star one on your telephone keypad. Please note this call is being recorded. We are standing by if you should need any assistance. It is now my pleasure to turn the meeting over to Jim Eglseder, Investor Relations. Please go ahead.
Operator: Hello, and welcome everyone joining today's Corpay Fourth Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question and answer session. To register to ask a question at any time, please press star one on your telephone keypad. Please note this call is being recorded. We are standing by if you should need any assistance. It is now my pleasure to turn the meeting over to Jim Eglseder, Investor Relations. Please go ahead.
Speaker #3: today's CORPAY 4th Quarter Hello, and welcome everyone joining 2025 earnings conference call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question-and-answer session.
Speaker #3: To register to ask a question at any time, please press star one on your telephone keypad. Please note this call is being recorded. We are standing by if you should need any assistance.
Speaker #3: It is now my pleasure to turn the meeting over to James Eglseder, Investor Relations. Please go ahead.
Speaker #3: ahead. Good afternoon.
Jim Eglseder: Good afternoon, and thank you for joining us today for our earnings call to discuss the fourth quarter and full year 2025 results. With me today are Ron Clarke, our Chairman and CEO, and Peter Walker, our CFO. Our earnings release and supplemental materials for the quarter are available on the investor relations section of our website. Please refer to these materials for an explanation of the non-GAAP financial measures discussed on this call, along with the reconciliation of those measures to the nearest applicable GAAP measures. Our remarks today will also include forward-looking statements about expected operating and financial results, strategic initiatives, acquisitions, synergies, and divestitures, among other matters. Forward-looking statements may differ materially from actual results and are subject to a number of risks and uncertainties.
Jim Eglseder: Good afternoon, and thank you for joining us today for our earnings call to discuss the fourth quarter and full year 2025 results. With me today are Ron Clarke, our Chairman and CEO, and Peter Walker, our CFO. Our earnings release and supplemental materials for the quarter are available on the investor relations section of our website. Please refer to these materials for an explanation of the non-GAAP financial measures discussed on this call, along with the reconciliation of those measures to the nearest applicable GAAP measures. Our remarks today will also include forward-looking statements about expected operating and financial results, strategic initiatives, acquisitions, synergies, and divestitures, among other matters. Forward-looking statements may differ materially from actual results and are subject to a number of risks and uncertainties.
Speaker #2: And thank you for joining us today for our earnings call to discuss the fourth quarter and full year 2025 results. With me today are Ron Clarke, our chairman and CEO, and Peter Walker, our CFO.
Speaker #2: Our earnings release and supplemental materials for the quarter are available on the Investor Relations section of our website. Please refer to these materials for an explanation of the non-GAAP financial metrics discussed on this call, along with the reconciliation of those measures to the nearest applicable GAAP measures.
Speaker #2: Our remarks today will also include forward-looking statements about expected operating and financial results, strategic initiatives, acquisitions and synergies, and divestitures, among other matters. Forward-looking statements may differ materially from actual results and are subject to a number of risks and uncertainties.
Speaker #2: Some of those risks are mentioned in today's press release and annual report on Form 10-K. These documents are available on our website and at sec.gov.
Jim Eglseder: Some of those risks are mentioned in today's press release and on Form 8-K, and can also be found in our annual report on Form 10-K. These documents are available on our website and at sec.gov. So now I'll turn the call over to Ron Clarke, our Chairman and CEO. Ron?
Jim Eglseder: Some of those risks are mentioned in today's press release and on Form 8-K, and can also be found in our annual report on Form 10-K. These documents are available on our website and at sec.gov. So now I'll turn the call over to Ron Clarke, our Chairman and CEO. Ron?
Speaker #2: So now I'll turn the call over to Ron Clarke, our Chairman and CEO. Ron?
Ron Clarke: Okay, Jim, thanks. Good afternoon, everyone, and thanks for joining today's call. Upfront here, I'll plan to cover three subjects. First, provide my take on Q4, along with highlights for 2025. Second, I'll share our 2026 guidance. And then lastly, I'll outline our major priorities for 2026. Okay, let me begin with our Q4 results. We reported revenue of $1.248 billion, up 21%, and cash EPS of $6.04, up 13%. That would be up 20% at a constant tax rate. The results are better than our expectations, mostly driven by cross-border and Alpha overperformance. We did call the macro spot on, so neutral impact versus our guide.
Ron Clarke: Okay, Jim, thanks. Good afternoon, everyone, and thanks for joining today's call. Upfront here, I'll plan to cover three subjects. First, provide my take on Q4, along with highlights for 2025. Second, I'll share our 2026 guidance. And then lastly, I'll outline our major priorities for 2026. Okay, let me begin with our Q4 results. We reported revenue of $1.248 billion, up 21%, and cash EPS of $6.04, up 13%. That would be up 20% at a constant tax rate. The results are better than our expectations, mostly driven by cross-border and Alpha overperformance. We did call the macro spot on, so neutral impact versus our guide.
Speaker #3: Good afternoon, everyone, and thanks. Okay, Jim. Thanks for joining today's call. Up front here, I'll plan to cover three subjects. First, provide my take on Q4, along with highlights for 2025.
Speaker #3: Second, I'll share our 2026 guidance. And then, lastly, I'll outline our major priorities for 2026. Okay, let me begin with our Q4 results. We reported revenue of $1,248 million, up 21%.
Speaker #3: And cash EPS of $6.04, up 13%. That would be up 20% at a constant tax rate. The results were better than our expectations, mostly driven by cross-border and Alpha overperformance.
Speaker #3: We did call the macro spot on, so neutral impact versus our guide. In the quarter overall, revenue grew 11%. That's three consecutive quarters. Inside of that, our vehicle segment continued growth at 10%, and our corporate payments segment grew 16%.
Ron Clarke: In the quarter, overall revenue growth 11%. That's 3 consecutive quarters. Inside of that, our vehicle segment continued growth at 10%, and our corporate payment segment grew 16%. So our two biggest businesses doing quite well against pretty difficult comps. Importantly, our trends in the quarter also quite positive. New sales or bookings up 29% versus prior year, so super robust sales. Same-store sales inched into the positive territory, up 1%, and overall revenue retention stable at 92%. Cash EBITDA in Q4 surpassed $700 million in the quarter. So look, all of this produced a record cash EPS print of over $6 a share. So really a terrific quarter for us.
Ron Clarke: In the quarter, overall revenue growth 11%. That's 3 consecutive quarters. Inside of that, our vehicle segment continued growth at 10%, and our corporate payment segment grew 16%. So our two biggest businesses doing quite well against pretty difficult comps. Importantly, our trends in the quarter also quite positive. New sales or bookings up 29% versus prior year, so super robust sales. Same-store sales inched into the positive territory, up 1%, and overall revenue retention stable at 92%. Cash EBITDA in Q4 surpassed $700 million in the quarter. So look, all of this produced a record cash EPS print of over $6 a share. So really a terrific quarter for us.
Speaker #3: So our two biggest businesses doing quite well against pretty difficult comps. Importantly, our trends in the quarter also quite positive. New sales or bookings up 29% versus prior year, so super robust sales.
Speaker #3: Same-store sales inched into positive territory, up 1%. Overall, revenue retention remained stable at 92%. Cash EBITDA in Q4 surpassed $700 million for the quarter.
Speaker #3: So look, all of this produced a record cash EPS print of over $6 a share. So really a terrific quarter for us. Let me make the turn to highlights for full year 2025.
Ron Clarke: Let me make the turn to highlights for full year 2025. So first, our financial performance for the year, quite good. Full year revenue of $4.5 billion, that's up 14%. Cash EPS of $21.38, up 12%, or again, up 17%, at a constant tax rate. Organic revenue growth for the full year, 10%. So that makes, 4 of the last 5 years, 10% organic, revenue growth or higher. Full year sales growth also 29%, with, improving productivity. So, we're continuing to, to sell a lot. Additionally, in the year, we made a number of moves, to better position the company for the midterm.
Ron Clarke: Let me make the turn to highlights for full year 2025. So first, our financial performance for the year, quite good. Full year revenue of $4.5 billion, that's up 14%. Cash EPS of $21.38, up 12%, or again, up 17%, at a constant tax rate. Organic revenue growth for the full year, 10%. So that makes, 4 of the last 5 years, 10% organic, revenue growth or higher. Full year sales growth also 29%, with, improving productivity. So, we're continuing to, to sell a lot. Additionally, in the year, we made a number of moves, to better position the company for the midterm.
Speaker #3: So first, our financial performance for the year was quite good. Full-year revenue of $4.5 billion—that's up 14%. Cash EPS of $21.38, up 12%.
Speaker #3: Or again, up 17% at a constant tax rate. Organic revenue growth for the full year 10%. So that makes four of the last five years 10% organic revenue growth or higher.
Speaker #3: Full-year sales growth was also 29%. With improving productivity, we're continuing to sell a lot. Additionally, in the year, we made a number of moves.
Speaker #3: To better position the company for the midterm, we acquired Alpha, the second largest acquisition the company's history, giving us access to an international bank account product as well as the asset management market segment.
Ron Clarke: We acquired Alpha, the second largest acquisition in the company's history, giving us access to an international bank account product, as well as the asset management market segment. Mastercard invested $300 million in our cross-border business at a $13 billion valuation, hopefully to unlock and serve the FI channel. We invested in Avid, that deepens our position in the middle market AP automation and payment space. And lastly, we acquired a second vehicle debt company in Brazil that'll further help accelerate Brazil's non-toll revenue growth. So look, financial performance ahead of our initial 2025 guide, along with a further rotation of our portfolio towards corporate payments. So, quite pleased. Okay, let me transition to our 2026 guidance.
Ron Clarke: We acquired Alpha, the second largest acquisition in the company's history, giving us access to an international bank account product, as well as the asset management market segment. Mastercard invested $300 million in our cross-border business at a $13 billion valuation, hopefully to unlock and serve the FI channel. We invested in Avid, that deepens our position in the middle market AP automation and payment space. And lastly, we acquired a second vehicle debt company in Brazil that'll further help accelerate Brazil's non-toll revenue growth. So look, financial performance ahead of our initial 2025 guide, along with a further rotation of our portfolio towards corporate payments. So, quite pleased. Okay, let me transition to our 2026 guidance.
Speaker #3: Mastercard invested $300 million in our cross-border business at a $13 billion unlock and serve the FI valuation, hopefully to channel. We invested in Avid, which deepens our position in the middle market AP automation and payment space.
Speaker #3: And lastly, we acquired a second vehicle debts company in Brazil that'll further help accelerate Brazil's non-toll revenue growth. So, look, financial performance is ahead of our initial 2025 guide, along with a further rotation of our portfolio towards corporate payments.
Speaker #3: So, quite pleased. Okay, let me transition to our 2026 guidance. We are quite excited about it. So, we're providing full-year 2026 guidance at the midpoint of print revenue: $5 billion to $6.5 billion.
Ron Clarke: We are quite excited about it. So we're providing full year 2026 guidance at the midpoint of print revenue $5.265 billion. That's up over $700 million versus last year, or up 16%. And we're providing Cash EPS at the midpoint of $26 on the button. That's up 22%. Look, the drivers behind this 2026 guide, a few things. So first, fundamentals. Look, the business is, it's working. We had a record Q4 finish, and the corresponding exit rate, super good trends, you know, positive sales, healthy client base, same-store sales, stable retention trends. Big sales year again in 2025. We get a lot of that benefit as it rolls into 2026.
Ron Clarke: We are quite excited about it. So we're providing full year 2026 guidance at the midpoint of print revenue $5.265 billion. That's up over $700 million versus last year, or up 16%. And we're providing Cash EPS at the midpoint of $26 on the button. That's up 22%. Look, the drivers behind this 2026 guide, a few things. So first, fundamentals. Look, the business is, it's working. We had a record Q4 finish, and the corresponding exit rate, super good trends, you know, positive sales, healthy client base, same-store sales, stable retention trends. Big sales year again in 2025. We get a lot of that benefit as it rolls into 2026.
Speaker #3: That's up over $700 million versus last year, or up 16%. And we're providing cash EPS at the midpoint of $26 on the button. That's up 22%.
Speaker #3: Look, the drivers behind this 2026 guide are a few things. So first, fundamentals. Look, the business is working. We had a record Q4 finish in the corresponding exit rate.
Speaker #3: Super good trends, positive sales. Healthy client base, same-store sales. Stable retention trends. Big sales year again in 2025. We get a lot of that benefit as it rolls into 2026.
Speaker #3: And we are expecting continued 10% organic revenue growth this year. Second driver are creative acquisitions. So, our Alpha acquisition is expected to contribute about $300 million of incremental revenue.
Ron Clarke: And we are expecting continued 10% organic revenue growth this year. A second driver are our creative acquisitions. So our Alpha acquisition expected to contribute about $300 million of incremental revenue. And Alpha, paired with Avid, together should contribute, approximately $1 of cash EPS to, our 2026 outlook. That's based on, kind of our final, plans now. And then third, macro. We are expecting the macro to be our friend, to be helpful here in 2026. Favorable FX rates, particularly so in the first half, lower SOFR rates, and finally, a constant, year-over-year tax rate, expected. So look, lots of reasons, for confidence in our, 2026 guide.
Ron Clarke: And we are expecting continued 10% organic revenue growth this year. A second driver are our creative acquisitions. So our Alpha acquisition expected to contribute about $300 million of incremental revenue. And Alpha, paired with Avid, together should contribute, approximately $1 of cash EPS to, our 2026 outlook. That's based on, kind of our final, plans now. And then third, macro. We are expecting the macro to be our friend, to be helpful here in 2026. Favorable FX rates, particularly so in the first half, lower SOFR rates, and finally, a constant, year-over-year tax rate, expected. So look, lots of reasons, for confidence in our, 2026 guide.
Speaker #3: And Alpha paired with Avid together should contribute approximately $1 of cash EPS to our 2026 outlook. That's based on kind of final plans now.
Speaker #3: And then third, macro. We are expecting the macro to be our friend, to be 2026—favorable, helpful here in FX rates. Particularly so in the first half.
Speaker #3: Lower SOFR rates, and finally, a constant year-over-year tax rate expected. So look, lots of reasons for confidence in our 2026 guide. The guide, just for clarity, does not include the impact of expected divestitures, including the PayByPhone.
Ron Clarke: The guide, just for clarity, does not include the impact of expected divestitures, including the PayByPhone, nor the impact of any material capital allocation actions beyond simply delevering. Okay, let me turn to our top five priorities for 2026, which really are pretty consistent with last year's priorities. So first up is our portfolio. The goal, again, to further simplify the company, resulting in fewer, bigger businesses and accelerate our rotation of corporate payments. We've announced one vehicle payment divestiture. We have two additional divestitures that we're working. And as always, we're continuing to work the acquisition pipeline for new corporate payment acquisition opportunities. Second priority, US sales. We're continuing to work to improve US AP sales, particularly of our vehicle payments and lodging solutions.
Ron Clarke: The guide, just for clarity, does not include the impact of expected divestitures, including the PayByPhone, nor the impact of any material capital allocation actions beyond simply delevering. Okay, let me turn to our top five priorities for 2026, which really are pretty consistent with last year's priorities. So first up is our portfolio. The goal, again, to further simplify the company, resulting in fewer, bigger businesses and accelerate our rotation of corporate payments. We've announced one vehicle payment divestiture. We have two additional divestitures that we're working. And as always, we're continuing to work the acquisition pipeline for new corporate payment acquisition opportunities. Second priority, US sales. We're continuing to work to improve US AP sales, particularly of our vehicle payments and lodging solutions.
Speaker #3: Nor the impact of any material capital allocation actions beyond simply delivering. Okay, let me turn to our top five priorities for 2026, which really are pretty consistent with last year's priorities.
Speaker #3: So first up is our portfolio. The goal, again, is to further simplify the company, resulting in fewer, bigger businesses, and accelerate our rotation of corporate payments.
Speaker #3: We've announced one vehicle payment divestiture. We have two additional divestitures that we're continuing to work, and the acquisition pipeline for new corporate payment acquisition opportunities.
Speaker #3: Second priority: U.S.A. sales. We're continuing to work to improve U.S.A. sales, particularly of our vehicle payments and lodging solutions. We've done a few things.
Ron Clarke: We've done a few things. We've hired a new CMO, who recently started. We've developed some new Corpay brand creative ads to raise awareness of the company. We're growing our Zoom sales teams here in 2026. Concurrently, we're also really rethinking entirely on new ways to sell our US vehicle payment solutions as we de-emphasize digital sales. A third priority in payables, a number of things. One, we're trying to add new enterprise accounts there, particularly after our success with our first Elephant last year. We are selling payables now in the UK, seeing some initial traction. We are doubling down on the sales force in the UK. And lastly, lots of energy exploring new monetization options with our merchant base or our vendor base.
Ron Clarke: We've done a few things. We've hired a new CMO, who recently started. We've developed some new Corpay brand creative ads to raise awareness of the company. We're growing our Zoom sales teams here in 2026. Concurrently, we're also really rethinking entirely on new ways to sell our US vehicle payment solutions as we de-emphasize digital sales. A third priority in payables, a number of things. One, we're trying to add new enterprise accounts there, particularly after our success with our first Elephant last year. We are selling payables now in the UK, seeing some initial traction. We are doubling down on the sales force in the UK. And lastly, lots of energy exploring new monetization options with our merchant base or our vendor base.
Speaker #3: We've recently hired a new CMO who just started. We've developed some new CORPAY brand creative ads to raise awareness of the company. We're growing our Zoom sales teams here in 2026.
Speaker #3: Concurrently, we're also really rethinking entirely new ways to sell our US vehicle payment solutions as we de-emphasize digital sales. Third priority, in payables, a number of things.
Speaker #3: One, we're trying to add new enterprise accounts there, particularly after our success with our first elephant last year. We are selling payables now in the UK, seeing some initial traction.
Speaker #3: We are doubling down on the sales force in the UK. And lastly, lots of energy exploring new monetization options with our merchant base or our vendor base.
Speaker #3: Those things include instant payment options, debit card e-checks to help accelerate revenue growth in the AP payments and even segment. Fourth priority is cross-border.
Ron Clarke: Those things include instant payment options, debit card payments, and even e-checks to help accelerate revenue growth in the AP segment. A fourth priority is cross-border. Super focused on our multicurrency account and our international bank account capabilities, particularly given the Alpha deal. We're furthering our stablecoin capabilities, and obviously working hard to implement synergies related to the Alpha acquisition. We are progressing the FI channel opportunity with MasterCard. We have logged our first joint sale, so kudos there. And building really a pretty meaningful pipeline, so excited about that. So fifth and last, AI. Yes, we have gotten religioned around AI. We're currently in pilot with a conversational AI being added to a number of our client UIs.
Ron Clarke: Those things include instant payment options, debit card payments, and even e-checks to help accelerate revenue growth in the AP segment. A fourth priority is cross-border. Super focused on our multicurrency account and our international bank account capabilities, particularly given the Alpha deal. We're furthering our stablecoin capabilities, and obviously working hard to implement synergies related to the Alpha acquisition. We are progressing the FI channel opportunity with MasterCard. We have logged our first joint sale, so kudos there. And building really a pretty meaningful pipeline, so excited about that. So fifth and last, AI. Yes, we have gotten religioned around AI. We're currently in pilot with a conversational AI being added to a number of our client UIs.
Speaker #3: We’re super focused on our multi-currency account and our international bank account capabilities, particularly given the Alpha deal. We’re furthering our stablecoin capabilities and obviously working hard to implement synergies related to the Alpha acquisition.
Speaker #3: We have the FI channel opportunity with Mastercard. We have logged our first joint sale, so kudos there. And we're building really a pretty meaningful pipeline, so excited about that.
Speaker #3: So, fifth and last, AI. Yes, we have gotten religioned around AI. We're currently in pilot with conversational AI being added to a number of our client UIs.
Speaker #3: We're using AI agents to reduce live agent expense, particularly in our lodging business. And we're even using AI to speed our merchant matching process.
Ron Clarke: We're using AI agents to reduce live agent expense, particularly in our lodging business. And we're even using AI to speed our merchant matching process against our internal merchant database to help drive, you know, new payable sales with prospects. So look, 5 key priorities here in 2026. Each is well defined, each is being worked, the portfolio, USA sales, payables expansion, cross-border capabilities, and AI implementation. So a busy year for sure. So look, in conclusion today, a strong finish, record earnings in Q4 on the high side of our guide. Again, encouraging organic revenue, new sales, same-store sales, and retention trends. Our full year 2025 financial performance, again, finishing ahead of our initial guide.
Ron Clarke: We're using AI agents to reduce live agent expense, particularly in our lodging business. And we're even using AI to speed our merchant matching process against our internal merchant database to help drive, you know, new payable sales with prospects. So look, 5 key priorities here in 2026. Each is well defined, each is being worked, the portfolio, USA sales, payables expansion, cross-border capabilities, and AI implementation. So a busy year for sure. So look, in conclusion today, a strong finish, record earnings in Q4 on the high side of our guide. Again, encouraging organic revenue, new sales, same-store sales, and retention trends. Our full year 2025 financial performance, again, finishing ahead of our initial guide.
Speaker #3: Again, our internal merchant database is helping drive new payable sales with prospects. So, look, five key priorities here in 2026. Each is well-defined. Each is being worked.
Speaker #3: The portfolio, USA sales, payables expansion, cross-border capabilities, and AI implementation—so a busy year for sure. So, look, in conclusion, finish record earnings in our guide.
Speaker #3: Again, encouraging organic revenue, new sales, same-store sales, and retention trends. Our full year 2025 financial performance again finishing ahead of our initial guide. We logged another 10% full-year organic revenue growth year—that makes again for the last five. 2025 again a repositioning, active repositioning year, further simplification of the company, and the addition of more corporate payment assets.
Ron Clarke: We logged another 10% full year organic revenue growth year. That makes, again, for the last 5. 2025, again, a repositioning, active repositioning year, further simplification of the company, and the addition of more corporate payment assets. In terms of 2026, again, outlooking really a super strong 2026. EPS expected to be up over 20%, driven by the favorable fundamentals, the accretive acquisitions, and, and even a favorable macro. And lastly, we have laid out a clear set of priorities to better position the company to continue to compound over the midterm. So with that, let me turn the call back over to Peter to provide some additional detail on the quarter, the year, and our 2026 outlook. Peter?
Ron Clarke: We logged another 10% full year organic revenue growth year. That makes, again, for the last 5. 2025, again, a repositioning, active repositioning year, further simplification of the company, and the addition of more corporate payment assets. In terms of 2026, again, outlooking really a super strong 2026. EPS expected to be up over 20%, driven by the favorable fundamentals, the accretive acquisitions, and, and even a favorable macro. And lastly, we have laid out a clear set of priorities to better position the company to continue to compound over the midterm. So with that, let me turn the call back over to Peter to provide some additional detail on the quarter, the year, and our 2026 outlook. Peter?
Speaker #3: '26, again, outlooking really a super strong 2026. EPS expected to be up over 20%, driven by the favorable fundamentals, the accretive acquisitions, and even a favorable macro.
Speaker #3: And lastly, we have laid out a clear set of priorities to better position the company to continue to compound over the midterm. So with that, let me turn the call back over to Peter.
Speaker #3: To provide some additional detail on the quarter, the year, and our '26 outlook. Peter.
Speaker #2: Thanks, Ron. And good afternoon, everyone. Let's start with highlights of the quarter and the year. Q4 revenue was $1.248 billion, overperforming the midpoint of our guidance, driven by strong corporate payments performance.
Peter Walker: Thanks, Ron, and good afternoon, everyone. Let's start with highlights of the quarter and the year. Q4 revenue was $1.248 billion, overperforming the midpoint of our guidance, driven by strong corporate payments performance. GAAP revenue grew 21% year-over-year, driven by 11% organic revenue growth. Q4 adjusted EPS of $6.04 per share overperformed the midpoint of our guidance and grew 13% year-over-year due to strong top-line performance and solid expense management. The headline for the quarter is Overperformance, with over 20% top line and low teens bottom line growth, driven by our third consecutive quarter of delivering 11% organic revenue growth. We grew Q4 new sales 29% year-over-year and delivered a 92.3% retention rate, fueling our business for 2026.
Peter Walker: Thanks, Ron, and good afternoon, everyone. Let's start with highlights of the quarter and the year. Q4 revenue was $1.248 billion, overperforming the midpoint of our guidance, driven by strong corporate payments performance. GAAP revenue grew 21% year-over-year, driven by 11% organic revenue growth. Q4 adjusted EPS of $6.04 per share overperformed the midpoint of our guidance and grew 13% year-over-year due to strong top-line performance and solid expense management. The headline for the quarter is Overperformance, with over 20% top line and low teens bottom line growth, driven by our third consecutive quarter of delivering 11% organic revenue growth. We grew Q4 new sales 29% year-over-year and delivered a 92.3% retention rate, fueling our business for 2026.
Speaker #2: Cap revenue grew 21% year over year, driven by 11% organic revenue growth. Q4 adjusted EPS of $6.04 per share outperformed the midpoint of our guidance and grew 13% year over year due to strong top-line performance and solid expense management.
Speaker #2: The headline for the quarter is overperformance, with over 20% top-line and low-teens bottom-line growth, driven by our third consecutive quarter of delivering 11% organic revenue growth.
Speaker #2: We grew Q4 new sales 29% year over year and delivered a 92.3% retention rate, fueling our business for 2026. Full-year revenue was $4.528 billion, delivering organic revenue growth of 10% for the full year and for four out of the last five years.
Peter Walker: Full year revenue was $4.528 billion, delivering organic revenue growth of 10% for the full year and for 4 out of the last 5 years. Full year adjusted EPS was $21.38, growing 12%, but growing 17% at a constant tax rate. These strong year-over-year results are further reinforced by the healthy, consistent, sequential quarterly growth in revenue, EBITDA, and adjusted EPS throughout 2025, which positions us well for 2026. We are exiting 2025 as an even stronger company than we entered the year. Now, turning to our segment performance and the underlying drivers of our organic revenue growth. Corporate payments delivered 16% organic growth for the quarter, despite a 200 basis points drag from float revenue compression due to lower interest rates.
Peter Walker: Full year revenue was $4.528 billion, delivering organic revenue growth of 10% for the full year and for 4 out of the last 5 years. Full year adjusted EPS was $21.38, growing 12%, but growing 17% at a constant tax rate. These strong year-over-year results are further reinforced by the healthy, consistent, sequential quarterly growth in revenue, EBITDA, and adjusted EPS throughout 2025, which positions us well for 2026. We are exiting 2025 as an even stronger company than we entered the year. Now, turning to our segment performance and the underlying drivers of our organic revenue growth. Corporate payments delivered 16% organic growth for the quarter, despite a 200 basis points drag from float revenue compression due to lower interest rates.
Speaker #2: Full-year adjusted EPS was $21.38, growing 12%, but growing 17% at a constant tax rate. The strong year-over-year results are further reinforced by the healthy, consistent sequential quarterly growth in revenue, EBITDA, and adjusted EPS throughout 2025, which positions us well for 2026.
Speaker #2: We are exiting 2025 as an even stronger company than we entered the year. Now, turning to our segment performance and the underlying drivers of our organic revenue growth.
Speaker #2: Corporate payments delivered 16% organic growth for the quarter, despite a 200-basis-point drag from float revenue compression due to lower interest rates. This exceeded our expectations by 100 basis points, partially driven by alpha revenue overperformance, setting us up well for 2026.
Peter Walker: This exceeded our expectations by 100 basis points, partially driven by Alpha revenue overperformance, setting us up well for 2026. Overall, corporate payments performance was driven by growth in spend volumes, which increased 44% on a pro forma basis to over $81 billion in spend. Cross-Border continued to deliver strong sales and revenue performance in Q4. This business is quite resilient, with significant demand even in the face of trade-related uncertainty throughout the year. Additionally, the Alpha Group integration efforts are progressing well. The payables business continues to perform with especially strong sales performance in Q4. We're optimistic about the future of the business as we are in the early innings of market penetration and closed our strategic investment in AvidXchange during the fourth quarter. We see tremendous upside over a very long period of time for this business.
Peter Walker: This exceeded our expectations by 100 basis points, partially driven by Alpha revenue overperformance, setting us up well for 2026. Overall, corporate payments performance was driven by growth in spend volumes, which increased 44% on a pro forma basis to over $81 billion in spend. Cross-Border continued to deliver strong sales and revenue performance in Q4. This business is quite resilient, with significant demand even in the face of trade-related uncertainty throughout the year. Additionally, the Alpha Group integration efforts are progressing well. The payables business continues to perform with especially strong sales performance in Q4. We're optimistic about the future of the business as we are in the early innings of market penetration and closed our strategic investment in AvidXchange during the fourth quarter. We see tremendous upside over a very long period of time for this business.
Speaker #2: Overall, corporate payments performance was driven by growth in spend volumes, which increased 44% on a pro forma basis to over $81 billion in spend.
Speaker #2: Cross-border continued to deliver strong sales and revenue performance in Q4. This business is quite resilient, with significant demand even in the face of trade-related uncertainty throughout the year.
Speaker #2: Additionally, the Alpha Group integration efforts are progressing well. The payables business continues to perform, with especially strong sales performance in Q4. We're optimistic about the future of the business as we are in the early innings of market penetration and closed our strategic investment in Abbott Exchange during the fourth quarter.
Speaker #2: We see tremendous upside over a very long period of time for this business. Vehicle payments organic revenue growth was 10% again this quarter. As a reminder, we operate three approximately equal-sized vehicle payments businesses across the globe in the U.S., Europe, and Brazil.
Peter Walker: Vehicle payments organic revenue growth was 10% again this quarter. As a reminder, we operate 3 approximately equal-sized vehicle payments businesses across the globe in the US, Europe, and Brazil. We saw continued strong results in all three geographies, which drove the performance. Improving US vehicle payments performance throughout the year is particularly encouraging. Lodging, representing less than 10% of our total revenue, decreased 7% year-over-year, or was roughly flat for the quarter when adjusting for a 600 basis points drag from lower FEMA emergency revenue year-over-year. While clearly not recovering, progress continues, and we are assuming low single-digit growth in our 2026 outlook, with headwinds in the first half of the year and returning to positive organic growth in the back half of the year as new sales and implementations come online.
Peter Walker: Vehicle payments organic revenue growth was 10% again this quarter. As a reminder, we operate 3 approximately equal-sized vehicle payments businesses across the globe in the US, Europe, and Brazil. We saw continued strong results in all three geographies, which drove the performance. Improving US vehicle payments performance throughout the year is particularly encouraging. Lodging, representing less than 10% of our total revenue, decreased 7% year-over-year, or was roughly flat for the quarter when adjusting for a 600 basis points drag from lower FEMA emergency revenue year-over-year. While clearly not recovering, progress continues, and we are assuming low single-digit growth in our 2026 outlook, with headwinds in the first half of the year and returning to positive organic growth in the back half of the year as new sales and implementations come online.
Speaker #2: We saw continued strong results in all three geographies, which drove the performance. Improving US vehicle payments performance throughout the year is particularly encouraging. Lodging, representing less than 10% of our total revenue, decreased 7% year over year, or was roughly flat for the quarter when adjusting for a 600 basis point drag from lower FEMA emergency revenue year over year.
Speaker #2: We are recovering, and progress continues. While clearly not assuming low single-digit growth in our 2026 outlook, we anticipate headwinds in the first half of the year and a return to positive organic growth in the back half of the year as new sales and implementations come online.
Speaker #2: In summary, we delivered 11% organic in our target range, driven by continued strong corporate payments organic growth and double-digit vehicle payments organic growth. Now, looking further down the income statement.
Peter Walker: In summary, we delivered 11% organic growth in Q4 at the high end of our target range, driven by continued strong corporate payments organic growth, and double-digit vehicle payments organic growth. Now looking further down the income statement. Operating expenses of $684 million increased 25%, primarily driven by a lower net gain on business dispositions year-over-year, acquisitions, divestitures, and related expenses, and FX, partially offset by a non-cash impairment charge in Q4 of last year, excluding these impacts, operating expenses increased 8%, driven by investments in sales and processing expenses related to higher transaction volumes. As we exit the quarter, we're starting to see benefit from expense rationalization initiatives recently executed that will deliver additional savings in 2026. Our adjusted EBITDA margin was 57.1%, and our adjusted effective tax rate for the quarter was 25.8%.
Peter Walker: In summary, we delivered 11% organic growth in Q4 at the high end of our target range, driven by continued strong corporate payments organic growth, and double-digit vehicle payments organic growth. Now looking further down the income statement. Operating expenses of $684 million increased 25%, primarily driven by a lower net gain on business dispositions year-over-year, acquisitions, divestitures, and related expenses, and FX, partially offset by a non-cash impairment charge in Q4 of last year, excluding these impacts, operating expenses increased 8%, driven by investments in sales and processing expenses related to higher transaction volumes. As we exit the quarter, we're starting to see benefit from expense rationalization initiatives recently executed that will deliver additional savings in 2026. Our adjusted EBITDA margin was 57.1%, and our adjusted effective tax rate for the quarter was 25.8%.
Speaker #2: Operating expenses of $684 million increased 25%, primarily driven by a lower net gain on business dispositions, year-over-year acquisitions, divestitures and related expenses, and FX, partially offset by a non-cash impairment charge in Q4 of last year.
Speaker #2: Excluding these impacts, operating expenses increased 8%, driven by investments in sales and processing expenses related to higher transaction volumes. As we exited the quarter, we're starting to see benefit from expense rationalization initiatives recently executed that will deliver additional savings in 2026.
Speaker #2: Our adjusted EBITDA margin was 57.1%, and our adjusted effective tax rate for the quarter was 25.8%. The increase in the rate was due to the favorable impact of employee stock options on the tax rate last year.
Peter Walker: The increase in the rate was due to favorable impact of employee stock options on the tax rate last year. On to the balance sheet. We ended the quarter in excellent shape with a leverage ratio of 2.8 times, spot on our guidance. We repurchased 1.7 million shares in the quarter for $500 million and a total of 2.6 million shares for the year. This leaves us with approximately $1.5 billion authorized for share repurchases, inclusive of the $1 billion of additional authorization approved by the board at the December meeting. We will continue to pursue M&A opportunities and will continue to buy back shares at this valuation, while maintaining leverage within our target range. Now, let me share some additional information on our 2026 full year and Q1 outlook.
Peter Walker: The increase in the rate was due to favorable impact of employee stock options on the tax rate last year. On to the balance sheet. We ended the quarter in excellent shape with a leverage ratio of 2.8 times, spot on our guidance. We repurchased 1.7 million shares in the quarter for $500 million and a total of 2.6 million shares for the year. This leaves us with approximately $1.5 billion authorized for share repurchases, inclusive of the $1 billion of additional authorization approved by the board at the December meeting. We will continue to pursue M&A opportunities and will continue to buy back shares at this valuation, while maintaining leverage within our target range. Now, let me share some additional information on our 2026 full year and Q1 outlook.
Speaker #2: Onto the balance sheet. We ended the quarter in excellent shape with a leverage ratio of 2.8 times, spot on our guidance. We repurchased 1.7 million shares in the quarter for $500 million, and a total of 2.6 million shares for the year.
Speaker #2: This leaves us with approximately $1.5 billion authorized for share repurchases, inclusive of the $1 billion of additional authorization approved by the board at the December meeting.
Speaker #2: We will continue to pursue M&A opportunities and will continue to buy back shares at this valuation, while maintaining leverage within our target range. Now, let me share some additional information on our 2026 full-year and Q1 outlook.
Speaker #2: As Ron mentioned, as part of our continued rotation into corporate payments, we signed a definitive agreement to sell PayByPhone, a non-core vehicle payments asset.
Peter Walker: As Ron mentioned, as part of our continued rotation into corporate payments, we signed a definitive agreement to sell PayByPhone, a non-core vehicle payments asset. The transaction is expected to close in Q2 2026. The impact of this sale is not included in our guidance as we are sharing today, as our policy is to update guidance for closed deals. PayByPhone is expected to produce 2026 annual revenues of approximately $100 million, and the transaction is not expected to have a material impact to adjusted EPS, as we plan to use the proceeds to buy back shares. We'll provide more information when the deal is closed. Our 2026 revenue guidance is $5.265 billion at the midpoint of our range, growing 16% year-over-year. This assumes 10% organic revenue growth, also at the midpoint of our range.
Peter Walker: As Ron mentioned, as part of our continued rotation into corporate payments, we signed a definitive agreement to sell PayByPhone, a non-core vehicle payments asset. The transaction is expected to close in Q2 2026. The impact of this sale is not included in our guidance as we are sharing today, as our policy is to update guidance for closed deals. PayByPhone is expected to produce 2026 annual revenues of approximately $100 million, and the transaction is not expected to have a material impact to adjusted EPS, as we plan to use the proceeds to buy back shares. We'll provide more information when the deal is closed. Our 2026 revenue guidance is $5.265 billion at the midpoint of our range, growing 16% year-over-year. This assumes 10% organic revenue growth, also at the midpoint of our range.
Speaker #2: The transaction is expected to close in the second quarter of 2026. The impact of this sale is not included in our guidance as we are sharing today, as our policy is to update guidance for closed deals.
Speaker #2: PayByPhone is expected to produce 2026 annual revenues of approximately $100 million, and the transaction is not expected to have a material impact to adjusted EPS, as we plan to use the proceeds to buy back shares.
Speaker #2: We’ll provide more information when the deal is closed. Our 2026 revenue guidance is $5.265 billion at the midpoint of our range, growing 16% year over year.
Speaker #2: This assumes 10% organic revenue growth, also at the midpoint of our range. 2026 organic revenue growth is lower than our 2025 exit rate of 11% due to additional float headwinds, more heavily weighted in the first half of 2026. In our corporate 2026 guidance for adjusted EPS, it is $26 per share at the midpoint, growing 22% year over year.
Peter Walker: 2026 organic revenue growth is lower than our 2025 exit rate of 11% due to additional float headwinds, more heavily weighted in the first half of 2026 in our corporate payments business. Our 2026 guidance for adjusted EPS is $26 per share at the midpoint, growing 22% year-over-year. Our confidence in our guidance is high, given most of the building blocks for this performance are already in place. This includes our strong organic growth exit rate and annualized Q4 trends, our expense rationalization initiatives, which are already producing savings, and our Q4 share buybacks. The $1 accretion from the Avid and Output deals is achievable, given our strong track record of M&A integration. The macro environment provides additional tailwinds, including a flat tax rate year-over-year. As a reminder, our revenue and adjusted EPS build throughout the year.
Peter Walker: 2026 organic revenue growth is lower than our 2025 exit rate of 11% due to additional float headwinds, more heavily weighted in the first half of 2026 in our corporate payments business. Our 2026 guidance for adjusted EPS is $26 per share at the midpoint, growing 22% year-over-year. Our confidence in our guidance is high, given most of the building blocks for this performance are already in place. This includes our strong organic growth exit rate and annualized Q4 trends, our expense rationalization initiatives, which are already producing savings, and our Q4 share buybacks. The $1 accretion from the Avid and Output deals is achievable, given our strong track record of M&A integration. The macro environment provides additional tailwinds, including a flat tax rate year-over-year. As a reminder, our revenue and adjusted EPS build throughout the year.
Speaker #2: Our confidence in our guidance is high. This performance is already in place. This includes our strong, given most of the building blocks for organic growth exit rate and annualized Q4 trends, our expense rationalization initiatives which are already producing savings, and our Q4 share buybacks.
Speaker #2: The $1 of accretion from the Abbott and Alfa deals is achievable given our strong track record of M&A integration. The macro environment provides additional tailwinds, including a flat tax rate year over year.
Speaker #2: As a reminder, our revenue and adjusted EPS are billed throughout the year. You can see on page 19 of the supplement that the percentage of full-year revenue and adjusted EPS are lowest in Q1 and highest in Q4.
Peter Walker: You can see on page 19 of the supplement, the percentage of full-year revenue and adjusted EPS are lowest in Q1 and highest in Q4. This pattern is driven by our clients' highest business volumes occurring in Q2 and Q3, along with acquisition synergy realization increasing through the year, all over a relatively fixed cost basis. The consistent historical pattern gives us confidence in our ability to deliver our 2026 guidance. Below EBITDA, we're expecting net interest expense to be between $370 million and $400 million, the adjusted tax rate to be between 25% and 27%, and weighted average shares to be flat with the period end shares for Q1 2025. Related to capital allocation, our forecast assumes free cash flow is used to pay down debt, which provides some potential upside opportunity should we deploy capital for buybacks or M&A.
Peter Walker: You can see on page 19 of the supplement, the percentage of full-year revenue and adjusted EPS are lowest in Q1 and highest in Q4. This pattern is driven by our clients' highest business volumes occurring in Q2 and Q3, along with acquisition synergy realization increasing through the year, all over a relatively fixed cost basis. The consistent historical pattern gives us confidence in our ability to deliver our 2026 guidance.
Speaker #2: This pattern is driven by our client's highest business volumes occurring in Q2 and Q3, along with acquisition synergy realization increasing through the year, all over a relatively fixed cost basis.
Speaker #2: The consistent historical pattern gives us confidence in our ability to deliver our 2026 guidance. Below EBITDA, we're expecting net interest expense to be between $370 million and $400 million, 25% and 27%, and weighted average shares to be flat with period-end shares for Q4 2025.
Peter Walker: Below EBITDA, we're expecting net interest expense to be between $370 million and $400 million, the adjusted tax rate to be between 25% and 27%, and weighted average shares to be flat with the period end shares for Q1 2025. Related to capital allocation, our forecast assumes free cash flow is used to pay down debt, which provides some potential upside opportunity should we deploy capital for buybacks or M&A.
Speaker #2: Related to capital allocation, our forecast assumes free cash flow is used to pay down debt, which provides some potential upside opportunity should we deploy capital for buybacks or M&A.
Speaker #2: Our guidance does not include any share buybacks. From a segment perspective, we expect the following organic revenue growth rates: Corporate Payments, mid-teens, inclusive of the drag on float revenue from lower interest rates.
Peter Walker: Our guidance does not include any share buybacks. From a segment perspective, we expect the following organic revenue growth rates: Corporate payments, mid-teens, inclusive of the drag on float revenue from lower interest rates. Vehicle payments, high single digits. Lodging, low single digit. Our Q1 revenue guidance is $1.21 billion at the midpoint, growing 20% year-over-year. We expect Q1 organic revenue growth of 9% at the midpoint, lower than the full year 10% organic growth guide, driven by the float headwind I mentioned earlier. We're expecting adjusted EPS of $5.45 at the midpoint, growing 21% year-over-year. We're planning organic revenue growth to increase in the remaining quarters as we digest the float headwinds. We provided additional detail regarding our full year and Q1 outlook in our press release and earnings supplement.
Peter Walker: Our guidance does not include any share buybacks. From a segment perspective, we expect the following organic revenue growth rates: Corporate payments, mid-teens, inclusive of the drag on float revenue from lower interest rates. Vehicle payments, high single digits. Lodging, low single digit. Our Q1 revenue guidance is $1.21 billion at the midpoint, growing 20% year-over-year. We expect Q1 organic revenue growth of 9% at the midpoint, lower than the full year 10% organic growth guide, driven by the float headwind I mentioned earlier. We're expecting adjusted EPS of $5.45 at the midpoint, growing 21% year-over-year. We're planning organic revenue growth to increase in the remaining quarters as we digest the float headwinds. We provided additional detail regarding our full year and Q1 outlook in our press release and earnings supplement.
Speaker #2: Vehicle payments, high single digits. Lodging, low single digits. Our Q1 revenue guidance is $1.21 billion at the midpoint, growing 20% year over year. We expect Q1 organic revenue growth of 9% at the midpoint, lower than the full-year 10% organic growth guide, driven by the float headwind I mentioned earlier.
Speaker #2: We're expecting adjusted EPS of $5.45 at the midpoint, growing 21% year over year. We're planning organic revenue growth to increase in the remaining quarters as we digest the float headwinds.
Speaker #2: We provided additional detail regarding our full-year and Q1 outlook in our press release and earnings supplement. Before I turn it over to the operator for Q&A, I'm delighted to share that we've remediated the outstanding material weakness related to user access, and you'll see this formally in our 10-K.
Peter Walker: Before I turn it over to the operator for Q&A, I'm delighted to share that we've remediated the outstanding material weakness related to user access, and you'll see this formally in our 10-K. I want to thank the team that made this happen. So Operator, please open the line for questions.
Peter Walker: Before I turn it over to the operator for Q&A, I'm delighted to share that we've remediated the outstanding material weakness related to user access, and you'll see this formally in our 10-K. I want to thank the team that made this happen. So Operator, please open the line for questions.
Speaker #2: I want to thank the team that made this happen. So, operator, please open the line for questions. Thank you. If you'd like to ask a question, to leave the queue at any time, press star two.
Operator: Thank you. If you'd like to ask a question, press star one on your keypad. To leave the queue at any time, press star two. We do ask that you please limit yourself to one question and one follow-up. Once again, that is star one to ask a question. Our first question comes from Andrew Jeffrey with William Blair. Please go ahead, your line is now open.
Operator: Thank you. If you'd like to ask a question, press star one on your keypad. To leave the queue at any time, press star two. We do ask that you please limit yourself to one question and one follow-up. Once again, that is star one to ask a question. Our first question comes from Andrew Jeffrey with William Blair. Please go ahead, your line is now open.
Speaker #2: We do ask that you please limit yourself to one question and one follow-up. Once again, that is star one to ask a question. This comes from Andrew Jeffrey with William Blair.
Speaker #2: Please go ahead. Your line is now open.
Speaker #3: Thank you. I appreciate you taking the question. Great to see the business momentum. Ron, I wanted to ask a little bit about the commentary around payables monetization.
Andrew Jeffrey: Thank you. Appreciate you taking the question. Great to see the business momentum. Ron, I wanted to ask a little bit about the commentary around payables monetization. I know this is an area that you know, historically, has been a little bit stubborn when it's come to you know, non-check-based payments. I know you mentioned e-check, but could you maybe dimensionalize that for us? Is that an initiative that could add to already impressive segment organic revenue growth? Or, what's the timeline, do you think, for driving better yield from those initiatives?
Andrew Jeffrey: Thank you. Appreciate you taking the question. Great to see the business momentum. Ron, I wanted to ask a little bit about the commentary around payables monetization. I know this is an area that you know, historically, has been a little bit stubborn when it's come to you know, non-check-based payments. I know you mentioned e-check, but could you maybe dimensionalize that for us? Is that an initiative that could add to already impressive segment organic revenue growth? Or, what's the timeline, do you think, for driving better yield from those initiatives?
Speaker #3: I know this is an area that historically has been a little bit stubborn when it comes to non-check-based payments. I know you mentioned e-check, but could you maybe dimensionalize that for us?
Speaker #3: Is it an initiative that could add to already impressive segment organic revenue growth, or what's the timeline, do you think, for driving better yield from those?
Speaker #3: initiatives? Hey, Andrew.
Ron Clarke: Hey, Andrew, it's a great question. I think, you know, we've been a one-trick pony to the industry in terms of using, you know, virtual cards for monetization. And so this, you know, set of options now, and basically kind of eliminating paper checks is the game. The idea of getting that thing sunset and using, you know, e-checks, debit, lower interchange, you know, ACH Plus, instant payments, the whole plethora of things that we can do. The research suggests that merchants like that choice, and some set of merchants will accept these new methods of payment, where they won't accept virtual card. And so we're in the middle of it. We're laying that stuff out, we're doing the research, we're testing. And so I would say, sometime Q2, Q3, we should see some impact of that.
Ron Clarke: Hey, Andrew, it's a great question. I think, you know, we've been a one-trick pony to the industry in terms of using, you know, virtual cards for monetization. And so this, you know, set of options now, and basically kind of eliminating paper checks is the game. The idea of getting that thing sunset and using, you know, e-checks, debit, lower interchange, you know, ACH Plus, instant payments, the whole plethora of things that we can do. The research suggests that merchants like that choice, and some set of merchants will accept these new methods of payment, where they won't accept virtual card. And so we're in the middle of it. We're laying that stuff out, we're doing the research, we're testing. And so I would say, sometime Q2, Q3, we should see some impact of that.
Speaker #4: It's a great question. I think we've been a one-trick pony. The industry, in terms of using virtual cards for monetization, and so this set of options now and basically kind of eliminating paper checks, is the gain.
Speaker #4: The idea of getting that thing sunset and using e-checks, debit at lower interchange, ACH plus instant payments—the whole plethora of things that we can do—the research suggests that merchants like that choice.
Speaker #4: And some set of merchants will accept these new methods of payment where they won't accept virtual cards. And so we're in the middle of it.
Speaker #4: We're laying that stuff out. We're doing the research. We're testing. And so I would say sometime Q2, Q3, we should see some impact of that.
Speaker #4: I think it just creates more length for the business, right? Long term.
Ron Clarke: I think it just creates more legs for the business, right, long term.
Ron Clarke: I think it just creates more legs for the business, right, long term.
Speaker #3: Yeah, I agree. And then just a quick follow-up for Peter, if I may. Could you sort of parse out domestic vehicle payment organic revenue growth versus Brazil?
Andrew Jeffrey: Yeah, I agree. And then just a quick follow-up for Peter, if I may. Could you sort of parse out domestic vehicle payment organic revenue growth versus Brazil? I assume that US and Europe look pretty similar. Just trying to get a sense of what positive same store sales might mean for that business.
Andrew Jeffrey: Yeah, I agree. And then just a quick follow-up for Peter, if I may. Could you sort of parse out domestic vehicle payment organic revenue growth versus Brazil? I assume that US and Europe look pretty similar. Just trying to get a sense of what positive same store sales might mean for that business.
Speaker #3: I assume that US and Europe look pretty similar. Just trying to get a sense of what positive same-store sales might mean for that business.
Speaker #4: Yeah, so UFCP business, approximately 5% organic growth for the quarter, and Europe and the rest of the world and Brazil tracked right on where they were for earlier in the year, so consistent results across all three.
Peter Walker: Yeah. So, UFCP business, you know, approximately 5% organic growth for the quarter. Europe, the rest of the world, and Brazil, you know, tracked right on where they were for earlier in the year. So consistent results across all three, for the 10% overall organic growth rate for vehicle payments.
Peter Walker: Yeah. So, UFCP business, you know, approximately 5% organic growth for the quarter. Europe, the rest of the world, and Brazil, you know, tracked right on where they were for earlier in the year. So consistent results across all three, for the 10% overall organic growth rate for vehicle payments.
Speaker #4: For the 10% overall organic growth rate for vehicle,
Speaker #4: payments. Okay.
Andrew Jeffrey: Okay. Thank you.
Andrew Jeffrey: Okay. Thank you.
Speaker #3: Thank you.
Speaker #2: Thank you. We'll now move on to Darren Peller with Wolfe Research. Your line is now open.
Operator: Thank you. We'll now move on to Darrin Peller with Wolfe Research. Your line is now open.
Operator: Thank you. We'll now move on to Darrin Peller with Wolfe Research. Your line is now open.
Speaker #2: open. Hey, guys.
Darrin Peller: Hey, guys. Thanks. Nice job. I just wanted to start off with one more of a strategic question and a sustainability question on the growth rate on vehicles, and then I'll have a follow-up on the modeling side. But just when I look at the double digit growth rate, obviously, it's good to see it holding up in these ranges, even against what you're getting into harder comps towards the end of 2024. So maybe just touch on sustainability, especially of the US fleet acceleration and what's needed to maybe even push same store sales meaningfully higher, in your view.
Darrin Peller: Hey, guys. Thanks. Nice job. I just wanted to start off with one more of a strategic question and a sustainability question on the growth rate on vehicles, and then I'll have a follow-up on the modeling side. But just when I look at the double digit growth rate, obviously, it's good to see it holding up in these ranges, even against what you're getting into harder comps towards the end of 2024. So maybe just touch on sustainability, especially of the US fleet acceleration and what's needed to maybe even push same store sales meaningfully higher, in your view.
Speaker #5: Thanks. Nice job. I just wanted to start off with one more of a strategic question and sustainability question on the growth rate on vehicles.
Speaker #5: And then I'll have a follow-up on the modeling side. But just when I look at the double-digit growth rate, obviously, it's good to see it holding up in these ranges even against what you're getting into harder comps towards the end of '24.
Speaker #5: So maybe just touch on sustainability, especially of the US fleet acceleration, and what's needed to maybe even push same-store sales meaningfully higher. In your
Speaker #5: view? Hey, Darren.
Ron Clarke: Hey, Darrin, it's Ron. It's sales is the answer, right? So just to follow up on Peter's thing, if you think of the three horsemen to create 10% is kind of low single digit, like right on 10, high double digit. Average those things, you get to 10. And so the good news, if there is any, is this work we've done on the US piece of vehicle has finally landed, right? We've got stable retention that's now kind of in line with the rest of the businesses. I'm literally looking at a piece of paper, and the same-store sales of the US business, vehicle business, went positive for the first time in 6 quarters. I'm looking at the piece of paper now. Approval rates are up, credit is good.
Ron Clarke: Hey, Darrin, it's Ron. It's sales is the answer, right? So just to follow up on Peter's thing, if you think of the three horsemen to create 10% is kind of low single digit, like right on 10, high double digit. Average those things, you get to 10. And so the good news, if there is any, is this work we've done on the US piece of vehicle has finally landed, right? We've got stable retention that's now kind of in line with the rest of the businesses. I'm literally looking at a piece of paper, and the same-store sales of the US business, vehicle business, went positive for the first time in 6 quarters. I'm looking at the piece of paper now. Approval rates are up, credit is good.
Speaker #4: It's Ron. It's sales, is the answer, right? So just a follow-up on Peter's thing. If you think of the three horsemen that create 10%, it's kind of low single digit, right on 10, high double digit. Average those things, you get to 10.
Speaker #4: And so the good news, if there is any, is this work we've done on the US piece of vehicle has finally landed, right? We've got stable retention that's now kind of in line with the rest of the businesses.
Speaker #4: I'm literally looking at a piece of paper, and the same-store sales of the U.S. business, vehicle business, went positive for the first time in six quarters.
Speaker #4: I'm looking at the piece of paper now. Approval rates are up, credit is good. So, literally, the business has gotten to a spot. And now, like I said, the entire assignment of sales.
Ron Clarke: So literally, the business has gotten to a good kind of reset spot, and now, like I said, the entire assignment is sales. So if we could make a lot more sales there, we could, you know, inch the aggregated vehicle, you know, growth rate up, and if not, we'll stay with kind of low, mid, high for that business. The real question for me is, do we keep allocating? What level of investment for growth do we keep making in that business? These are the other ones. This is one of the internal questions.
Ron Clarke: So literally, the business has gotten to a good kind of reset spot, and now, like I said, the entire assignment is sales. So if we could make a lot more sales there, we could, you know, inch the aggregated vehicle, you know, growth rate up, and if not, we'll stay with kind of low, mid, high for that business. The real question for me is, do we keep allocating? What level of investment for growth do we keep making in that business? These are the other ones. This is one of the internal questions.
Speaker #4: So, if we could make a lot more sales there, we could inch the aggregated vehicle growth rate up. And if not, we'll stay with kind of low, mid, high.
Speaker #4: So, for that matter, the real question for me is: Do we keep allocating, and at what level of investment for growth? Do we keep making investments in that business?
Speaker #4: These are the other ones, is one of the internal questions.
Speaker #5: Right. All right. That's good to hear. Thanks. I guess just one follow-up would be on more of a modeling—couple of questions, which is, number one, just if you could provide a little more color on the cadence of the accretion contribution, given it's a pretty notable, fair amount of the B versus some of the street numbers. Was the magnitude of accretion—
Darrin Peller: Right. All right. That's good to hear. Thanks. I guess, just one follow-up would be on more of a modeling couple of questions, which is, number one, would be just if you could provide a little more color on the cadence of the accretion contribution, given it's a pretty notable, you know, a fair amount of the beat versus some of the street numbers was the magnitude of accretion. Just so it's ramping through the year, help us understand that. And then I know we're getting some questions on interest expense. I, I think you're assuming a lower interest expense rate dollar amount. Just help us understand that notion, just given you're adding debt at a pretty healthy rate as well. Thanks again, guys. Good, good job.
Darrin Peller: Right. All right. That's good to hear. Thanks. I guess, just one follow-up would be on more of a modeling couple of questions, which is, number one, would be just if you could provide a little more color on the cadence of the accretion contribution, given it's a pretty notable, you know, a fair amount of the beat versus some of the street numbers was the magnitude of accretion. Just so it's ramping through the year, help us understand that. And then I know we're getting some questions on interest expense. I, I think you're assuming a lower interest expense rate dollar amount. Just help us understand that notion, just given you're adding debt at a pretty healthy rate as well. Thanks again, guys. Good, good job.
Speaker #5: Just so it's ramping through the year, help us understand that. And then I know we're getting some questions on interest expense. I think you're assuming a lower interest expense rate.
Speaker #5: Dollar amount—just help us understand that notion, just given you're adding debt at a pretty healthy rate as well. Thanks again, guys. Good.
Speaker #5: Dollar amount—just help us understand that notion, just given you're adding debt at a pretty healthy rate as well. Thanks again, guys. Good job.
Speaker #4: Well, Darren, it's Ron. Let me take the first part and Peter can take the second—of jumping the plan. So when we talked, I guess 90 days ago, we were literally just onboarding Alpha.
Ron Clarke: Well, Darrin, it's Ron. Let me take the first part, and Peter can take the second. So, you know, we're kind of done with the plan. So when we talked, I guess, 90 days ago, and we're literally just onboarding, but we've finished the work. And so, in the opening comments, I gave the dollar. So between those two deals, the Abbott investment and the Alpha acquisition, we're pretty comfortable we can get the dollar. And so we're literally already on the way on a bunch of the things. Certainly on the cost takeout side, on some of the revenue synergies that are super easy, like they're coming across to our contracts and things. And so the biggest thing that'll unlock a bunch in the second half is the IT.
Ron Clarke: Well, Darrin, it's Ron. Let me take the first part, and Peter can take the second. So, you know, we're kind of done with the plan. So when we talked, I guess, 90 days ago, and we're literally just onboarding, but we've finished the work. And so, in the opening comments, I gave the dollar. So between those two deals, the Abbott investment and the Alpha acquisition, we're pretty comfortable we can get the dollar. And so we're literally already on the way on a bunch of the things. Certainly on the cost takeout side, on some of the revenue synergies that are super easy, like they're coming across to our contracts and things. And so the biggest thing that'll unlock a bunch in the second half is the IT.
Speaker #4: We finished the work. And so in the opening comments, I gave a dollar. So between those two deals, the AVID investment and the Alpha acquisition, we're pretty comfortable we can get the dollar.
Speaker #4: And so we're literally already on the way on a bunch of the things. Certainly on the cost takeout side, and on some of the revenue synergies that are super easy, like them coming across to our contracts and things.
Speaker #4: And so the biggest thing that'll unlock a bunch in the second half is the IT. We're going to sunset their kind of corporate IT system in favor of ours, which opens up all kinds of savings around not only IT, but compliance and ops and stuff like that.
Ron Clarke: We're gonna sunset their, you know, kind of their corporate IT system in favor of ours, which opens up all kinds of savings around not only IT, but compliance, ops, and stuff like that. So I would say, you know, this is our third, fourth, fifth rodeo, right, of doing these things, so our confidence in what to do and what number is high. And then the last point I'll make, 'cause you're good at math, is it's not one and done, it's one and more. So the way we think about it is, whatever EBITDA we're getting in those businesses has to grow over, right, the interest expense to finance those. So as we create the synergies, and those businesses grow, they're growing obviously over fixed interest expense.
Ron Clarke: We're gonna sunset their, you know, kind of their corporate IT system in favor of ours, which opens up all kinds of savings around not only IT, but compliance, ops, and stuff like that. So I would say, you know, this is our third, fourth, fifth rodeo, right, of doing these things, so our confidence in what to do and what number is high. And then the last point I'll make, 'cause you're good at math, is it's not one and done, it's one and more. So the way we think about it is, whatever EBITDA we're getting in those businesses has to grow over, right, the interest expense to finance those. So as we create the synergies, and those businesses grow, they're growing obviously over fixed interest expense.
Speaker #4: So I would say this is our third, fourth, fifth rodeo of doing these things. So our confidence in what to do and what number is high.
Speaker #4: And then the last point I'll make, because you're good at math, is it's not one and done. It's one and more. So the way we think about it is, whatever EBITDA we're getting in those businesses, it has to grow over the interest expense to finance those.
Speaker #4: So as we create the synergies, and those businesses grow, they're growing obviously over a fixed interest expense. And so in our multi-year plan, that creates even acceleration in EPS as you walk into next year.
Ron Clarke: You know, in our multi-year plan, that creates even acceleration in EPS as you walk into next year. The setup for those two things is quite good.
Ron Clarke: You know, in our multi-year plan, that creates even acceleration in EPS as you walk into next year. The setup for those two things is quite good.
Speaker #4: So the setup for those two things is quite good.
Speaker #3: So Darren, picking up on your question on interest expense. So, we ended the year at about $7.7 billion in debt. As you know, we produce really high cash flows, so call it $1.8 billion of cash flows.
Peter Walker: So, Darrin, picking up on your question on interest expense. We ended the year about $7.7 billion in debt. As you know, we produce really high cash flows, so call it $1.8 billion of cash flows we've produced throughout the year, so debt will reduce throughout the year. Also, the forward curve is looking pretty positive for us on SOFR. You put those two together, and that's what's leading to your lower interest expense.
Peter Walker: So, Darrin, picking up on your question on interest expense. We ended the year about $7.7 billion in debt. As you know, we produce really high cash flows, so call it $1.8 billion of cash flows we've produced throughout the year, so debt will reduce throughout the year. Also, the forward curve is looking pretty positive for us on SOFR. You put those two together, and that's what's leading to your lower interest expense.
Speaker #3: We produce throughout the year, so debt will reduce throughout the year. Also, the forward curve is looking pretty positive for us on SOFR. So you put those two together, and that's what's leading to your lower interest expense.
Speaker #5: Okay. Very helpful. Thanks, Peter. Thanks, Ron.
Madison Sewell: Okay, very helpful. Thanks, Peter. Thanks, Ron.
Darrin Peller: Okay, very helpful. Thanks, Peter. Thanks, Ron.
Speaker #2: Thank you. We'll now move on to Tenzhen Huang with J.P. Morgan. Please go ahead.
Operator: Thank you. We'll now move on to Tien-tsin Wong with J.P. Morgan. Please go ahead.
Operator: Thank you. We'll now move on to Tien-tsin Wong with J.P. Morgan. Please go ahead.
Speaker #6: Thank you so much, Avon, Peter, and Jim. Great results. I wanted to ask about corporate payments, if that's okay. Just mid-teens growth expected this year.
Tien-Tsin Huang: Thank you so much, Peter and Jim. Great results. I wanted to ask on corporate payments, if that's okay. Just mid-teens growth expected this year. Do you have the backlog to support this growth, or is there more business to go get? I'm just curious what the visibility looks like there, and could there be some room for upside, and if so, where?
Tien-Tsin Huang: Thank you so much, Peter and Jim. Great results. I wanted to ask on corporate payments, if that's okay. Just mid-teens growth expected this year. Do you have the backlog to support this growth, or is there more business to go get? I'm just curious what the visibility looks like there, and could there be some room for upside, and if so, where?
Speaker #6: Do you have the backlog to support this growth, or is there more business to go get? I'm just curious what the visibility looks like there, and could there be some room for upside?
Speaker #6: And if so, where?
Speaker #4: Hey, Tenzhen. Thanks for the data, boy. So I'd say on the 26 number, it's really two different things. In the payables, the full payables business, I'd say we have the sales.
Ron Clarke: Hey, Tien-tsin, thanks for the data boy. So I'd say on the 26 number, it's really two different things. In the payables, the full payables business, I'd say we have the sales, 'cause the implementation cycle is longer there, and so basically we have a bunch of deals that we implement that drive that revenue. In the cross-border, it's a much shorter sales to implementation cycle, so we have to make sales there. Although, if there was one bet to place on our company, I would not bet against the cross-border sales. We had a just rocking finish between, you know, our core cross-border business and even the new Alpha business and stuff. And so that thing is firing.
Ron Clarke: Hey, Tien-tsin, thanks for the data boy. So I'd say on the 26 number, it's really two different things. In the payables, the full payables business, I'd say we have the sales, 'cause the implementation cycle is longer there, and so basically we have a bunch of deals that we implement that drive that revenue. In the cross-border, it's a much shorter sales to implementation cycle, so we have to make sales there. Although, if there was one bet to place on our company, I would not bet against the cross-border sales. We had a just rocking finish between, you know, our core cross-border business and even the new Alpha business and stuff. And so that thing is firing.
Speaker #4: Because the implementation cycle is longer there. And so, basically, we have a bunch of deals that we implement that drive that revenue. In the cross-border, it's a much shorter—right—sales-to-implementation cycle.
Speaker #4: So we have to make sales there. Although, if there was one debt to place on our company, I would not bet against the cross-border sales.
Speaker #4: We had just a rocking finish between our core cross-border business and even the new Alpha business and stuff. And so that thing is firing.
Speaker #4: So, I would say our confidence in the thing is super high. And again, the reason for the thing not being a bit more robust is just the compression, obviously, of the float rates, right?
Ron Clarke: So I would say our confidence in the thing is super high. And again, the reason for the thing not being a bit more robust is just the compression, obviously, at the float rate, right? Particularly as we absorb Alpha, which has a way bigger bank account deposit-based business than we do. It's a bit more acute, right, the compression there, particularly early on. So you know, when we get. It's transitory, obviously. So when we get to the other side of that, I think the outlook would be, will be even better for the business.
Ron Clarke: So I would say our confidence in the thing is super high. And again, the reason for the thing not being a bit more robust is just the compression, obviously, at the float rate, right? Particularly as we absorb Alpha, which has a way bigger bank account deposit-based business than we do. It's a bit more acute, right, the compression there, particularly early on. So you know, when we get. It's transitory, obviously. So when we get to the other side of that, I think the outlook would be, will be even better for the business.
Speaker #4: Particularly as we absorb Alpha—bigger, bank account deposit-based—which has a way of doing business that’s different than we do. It's a bit more acute, right? The compression there, particularly early on.
Speaker #4: So, when we get, it's transitory, obviously. So when we get to the other side of that, I think the outlook would be even better for the business.
Speaker #4: And if we get the monetization thing right, that Andrew asked, if we get that cranking, that would be another upside, basically, to the business.
Tien-Tsin Huang: Yeah.
Tien-Tsin Huang: Yeah.
Ron Clarke: If we get the monetization thing right, that Andrew asked, if we get that cranking, that would be another upside, basically, to the business.
Ron Clarke: If we get the monetization thing right, that Andrew asked, if we get that cranking, that would be another upside, basically, to the business.
Speaker #6: Got it. No, you sound quite pleased with Alpha. That's great to hear. So mid-teens would be a win, but that segment — I did want to ask just on margins, if that's okay, as my follow-up with the expense rationalization.
Tien-Tsin Huang: Got it. No, you sound quite pleased with Alpha. That's great to see here. So mid-teens would be a win for that segment. I did want to ask just on margins, if that's okay, as my follow-up with the expense rationalization. Is there a way to think about that impact to 2026 and just some broader comments on incremental margins in 2026? Any surprises or puts and takes to consider?
Tien-Tsin Huang: Got it. No, you sound quite pleased with Alpha. That's great to see here. So mid-teens would be a win for that segment. I did want to ask just on margins, if that's okay, as my follow-up with the expense rationalization. Is there a way to think about that impact to 2026 and just some broader comments on incremental margins in 2026? Any surprises or puts and takes to consider?
Speaker #6: Is there a way to think about that impact to '26, and just some broader comments on incremental margins in '26? Any surprises or puts and takes to consider?
Speaker #6: consider?
Speaker #4: Yeah, maybe I'll
Ron Clarke: Yeah, maybe, maybe I'll start, Tien-tsin, and let Peter pick up. So we're targeting about $75 million of expense out. We've executed kind of 50 of it. We're still working on the other 25, which we've identified, but still working. If you looked at our internal plan, not shockingly, margins climb like crazy sequentially, you know, pretty fixed cost base once we make the sales investment, which we do early, and then revenue snowballs, right? So revenue increases, call it $100 million plus, as you get into the second half or quarter. And so that's, I think it's probably 3 points, if you look at it, your innovation points from Q1 to Q4. The reason that the overall margins for the full year wouldn't look a ton different is really it's the acquisition expense, right?
Ron Clarke: Yeah, maybe, maybe I'll start, Tien-tsin, and let Peter pick up. So we're targeting about $75 million of expense out. We've executed kind of 50 of it. We're still working on the other 25, which we've identified, but still working. If you looked at our internal plan, not shockingly, margins climb like crazy sequentially, you know, pretty fixed cost base once we make the sales investment, which we do early, and then revenue snowballs, right? So revenue increases, call it $100 million plus, as you get into the second half or quarter. And so that's, I think it's probably 3 points, if you look at it, your innovation points from Q1 to Q4. The reason that the overall margins for the full year wouldn't look a ton different is really it's the acquisition expense, right?
Speaker #4: Start, Tenzhen, let Peter pick up. So we're targeting about $75 million of expense—$50 million of it we're still out. We've executed, kind of working on the other $25 million, which we've identified but are still working.
Speaker #4: If you looked at our internal plan, not shockingly, margins climb like crazy sequentially. Pretty fixed cost base. Once we make the sales investment, which we do early, and then revenue snowballs, right?
Speaker #4: So revenue increases, call it $100 million plus, as you get into the second half or quarter. And so I think it's probably three points.
Speaker #4: If you look at it, if you're on a basis point from Q1 to Q4, the reason that the overall margins for the full year wouldn't look a ton different is really it's the acquisition expense, right?
Speaker #4: We're bringing across, in these couple of deals, a fair amount of cost at lower margins, basically. And then, second, we've made the call—given the profitability—to put more into sales and marketing, and even into our brand.
Ron Clarke: We're bringing across in these couple of deals, you know, a fair amount of cost, you know, at lower margins, basically. Then second, we've made the call, given the profitability, to put more in the sales and marketing and even into our brand. So we're trying to hold the margins, you know, pretty constant, improve them sequentially, and spend on some things that will help the growth going into next year.
Ron Clarke: We're bringing across in these couple of deals, you know, a fair amount of cost, you know, at lower margins, basically. Then second, we've made the call, given the profitability, to put more in the sales and marketing and even into our brand. So we're trying to hold the margins, you know, pretty constant, improve them sequentially, and spend on some things that will help the growth going into next year.
Speaker #4: So we’re trying to hold the margins pretty constant, improve them sequentially, and spend on some things that will help the growth going into the next—
Speaker #4: year. Perfect.
Tien-Tsin Huang: Perfect. No, that's great. Well done. Thank you.
Tien-Tsin Huang: Perfect. No, that's great. Well done. Thank you.
Speaker #6: No, that's great.
Speaker #6: Well done. Thank you. Thank you,
Ron Clarke: Thank you.
Ron Clarke: Thank you.
Operator: Thank you. Our next question comes from Mihir Bhatia with Bank of America. Your line is now open.
Operator: Thank you. Our next question comes from Mihir Bhatia with Bank of America. Your line is now open.
Speaker #2: Thank you. Our next question comes from Mahir Bhatia with Bank of America. Your line is open.
Speaker #2: is now open.
Speaker #4: Thank you. All
Ron Clarke: Mihir?
Ron Clarke: Mihir?
Speaker #7: Right. Hi, good afternoon. Thank you for taking my question, and nice results here. But, Ron, maybe just wanted to ask you about Pay by Phone.
Peter Walker: Hi. Hi, good afternoon. Thank you for taking my question, and, nice results here. But Ron, maybe just I want- wanted to ask you about, PayByPhone. I think you bought that asset maybe a couple of years ago. Just any lessons from that, process from owning that? Just what worked, what didn't, as you think about go forward?
Mihir Bhatia: Hi. Hi, good afternoon. Thank you for taking my question, and, nice results here. But Ron, maybe just I want- wanted to ask you about, PayByPhone. I think you bought that asset maybe a couple of years ago. Just any lessons from that, process from owning that? Just what worked, what didn't, as you think about go forward?
Speaker #7: I think you bought that asset maybe a couple of years ago. Just, any lessons from that process, from owning that—just what worked, what didn’t—as you think about going...
Speaker #7: forward? Yeah,
Speaker #4: Hey, that's a good question. So, lessons—I’d say maybe two lessons on that one. One is, we had a thesis for buying that at their five users.
Ron Clarke: Yeah, hey, that's a good question. So, lessons, I'd say maybe two lessons on that one. One is, you know, we had a thesis for buying that, that there are 5, 6, 7 million active users. And a lot of it in Europe could be kind of a launching pad for us to put those people into the network and create some incremental business. And basically, we proved we couldn't do very well at that, so a new idea, and it didn't work as great as it has in Brazil. But the second learning is, we're good. Like, we take a business, we buy it, we triple the profits, we're selling it for 50% more than we bought it for.
Ron Clarke: Yeah, hey, that's a good question. So, lessons, I'd say maybe two lessons on that one. One is, you know, we had a thesis for buying that, that there are 5, 6, 7 million active users. And a lot of it in Europe could be kind of a launching pad for us to put those people into the network and create some incremental business. And basically, we proved we couldn't do very well at that, so a new idea, and it didn't work as great as it has in Brazil. But the second learning is, we're good. Like, we take a business, we buy it, we triple the profits, we're selling it for 50% more than we bought it for.
Speaker #4: And a lot of them in Europe could be kind of a launching pad for us to put those people into the network and create some incremental business.
Speaker #4: And basically, we couldn't do very well at that. So, A, a new idea, and it didn't work as great as it has in Brazil.
Speaker #4: But the second learning is we're good. We take a business, we buy it, we triple the profits, we're selling it for 50% more than we bought it for.
Speaker #4: And so, it's a great reminder that even when the thesis isn't perfect, we can still make a return on the thing. And so, we're pleased.
Ron Clarke: And so it's a great reminder that even when the thesis isn't perfect, that we can still make a return on the thing. And so we're pleased. I'm also pleased for the people that, you know, that are running the thing, that built it, that where they'll go, they'll be happy and stuff. So I'm hoping for only good things for the buyer and the management team.
Ron Clarke: And so it's a great reminder that even when the thesis isn't perfect, that we can still make a return on the thing. And so we're pleased. I'm also pleased for the people that, you know, that are running the thing, that built it, that where they'll go, they'll be happy and stuff. So I'm hoping for only good things for the buyer and the management team.
Speaker #4: I'm also pleased with the people that are running the thing, that built it, that where they'll go, they'll be happy and stuff. So I'm hoping for only good things for the buyer and the management team.
Speaker #7: Got it. No, and I think kudos to you all for trying and pulling the plug when you all wanted to maybe switch gears a little bit. To just the—going back to the corporate payments.
Mihir Bhatia: Got it. No, and I think, you know, kudos to you all for trying and pulling the plug when you all realized it, it wouldn't work. Wanted to maybe switch gears a little bit to just going back to the corporate payments business and just some of the questions there. Maybe, like, I think you kind of answered it a little bit, but just trying to understand, you know, you laid out a lot of priorities in that business, right? Whether it's building the UK payables, adding enterprise accounts, new monetization options, growing sales in the FI channel, multi... So just trying to understand the timelines there, like the lift that it'll take to implement some of those changes.
Mihir Bhatia: Got it. No, and I think, you know, kudos to you all for trying and pulling the plug when you all realized it, it wouldn't work. Wanted to maybe switch gears a little bit to just going back to the corporate payments business and just some of the questions there. Maybe, like, I think you kind of answered it a little bit, but just trying to understand, you know, you laid out a lot of priorities in that business, right? Whether it's building the UK payables, adding enterprise accounts, new monetization options, growing sales in the FI channel, multi... So just trying to understand the timelines there, like the lift that it'll take to implement some of those changes.
Speaker #7: Business—and just some of the questions there. Maybe—I think you kind of answered it a little bit, but just trying to understand, you laid out a lot of priorities in that business, right?
Speaker #7: Whether it's building the UK payables, adding enterprise accounts, new monetization options, growing sales in the FI channel, or multi—so just trying to understand the timelines there and the lift that it'll take to implement some of those changes.
Speaker #7: What's going to be a meaningful contributor there in 2026 versus initiatives that are maybe longer term, but you're just laying the building blocks for today?
Mihir Bhatia: Like, what's going to be a meaningful contributor there in 2026 versus initiatives that are maybe longer term, but just you're laying the building blocks today?
Mihir Bhatia: Like, what's going to be a meaningful contributor there in 2026 versus initiatives that are maybe longer term, but just you're laying the building blocks today?
Speaker #4: Yeah, that is a really good question. I think the main thing we're trying to do with that priority is just make sure people are clear on the opportunities—that when you stare at payables, beyond just chopping the wood we have, that there's some kind of vectors out from the middle-market core there where, hey, we can get more monetization against the spend.
Ron Clarke: Yeah, that, that is a really good question. I think the main thing we're trying to do with that priority is just make sure people are clear on the opportunities. That when you stare at payables, you know, beyond just chopping the wood, we have that there's some kind of vectors, you know, out from the middle market core there, where, hey, we can get more monetization against the spend. We can add enterprise right to the mix. We can go to geographies that widen the TAM. I'm mostly trying to make sure people are clear that there's, there's way vectors to, to make the business go.
Ron Clarke: Yeah, that, that is a really good question. I think the main thing we're trying to do with that priority is just make sure people are clear on the opportunities. That when you stare at payables, you know, beyond just chopping the wood, we have that there's some kind of vectors, you know, out from the middle market core there, where, hey, we can get more monetization against the spend. We can add enterprise right to the mix. We can go to geographies that widen the TAM. I'm mostly trying to make sure people are clear that there's, there's way vectors to, to make the business go.
Speaker #4: We can add Enterprise, right, to the mix. We can go to geographies that widen the TAM. I'm mostly trying to make sure people are clear that there are wave vectors to make the business go.
Speaker #4: I'd say on that one, it's clearly the monetization that's the short term, it's the 2026 thing—because we have the clients, we have the merchants, we have the money moving.
Ron Clarke: I'd say on that one, it's clearly the monetization is the short term, is the 2026 thing, because we have the clients, we have the merchants, we have the money moving, and so we're simply trying to give more choice and stuff. So I'd say for sure in that one. And then the same kind of on, I think, on the cross-border side. I think longer term, because the sales cycle will be like the Mastercard, you know, opportunity there, or even frankly, the international bank account opportunity. I think those are, you know, longer term, whereas the synergies of combining the Alpha corporate business would be a 2026. So I'd say those are the two, get the money in 2026 things.
Ron Clarke: I'd say on that one, it's clearly the monetization is the short term, is the 2026 thing, because we have the clients, we have the merchants, we have the money moving, and so we're simply trying to give more choice and stuff. So I'd say for sure in that one. And then the same kind of on, I think, on the cross-border side. I think longer term, because the sales cycle will be like the Mastercard, you know, opportunity there, or even frankly, the international bank account opportunity. I think those are, you know, longer term, whereas the synergies of combining the Alpha corporate business would be a 2026. So I'd say those are the two, get the money in 2026 things.
Speaker #4: And so we're simply trying to give more choice and stuff. So I'd say for sure in that one. And then the same kind of on, I think, on the cross-border side, I think longer term, because the sales cycle will be like the MasterCard opportunity there, or even, frankly, the international bank account opportunity.
Speaker #4: I think those are longer term, whereas the synergies of combining the Alpha corporate business would be a 2026. So I'd say those are the two get-the-money-in-2026 things.
Speaker #4: Monetization and payables and alpha consolidation and synergies would be the things for this year. You got
Ron Clarke: Monetization, payables, Alpha consolidation, and synergies would be the things for this year.
Ron Clarke: Monetization, payables, Alpha consolidation, and synergies would be the things for this year.
Mihir Bhatia: Got it. Thank you for taking my questions and the results.
Mihir Bhatia: Got it. Thank you for taking my questions and the results.
Speaker #7: Results. Got it. Thank you for taking my questions. Nice.
Ron Clarke: You got it.
Ron Clarke: You got it.
Speaker #2: Thank you. Our next question comes from Sanjay Sokrani with KBW. Your line is now open.
Operator: Thank you. Our next question comes from Sanjay Sakhrani with KBW. Your line is now open.
Operator: Thank you. Our next question comes from Sanjay Sakhrani with KBW. Your line is now open.
Speaker #2: open. Thank
[Analyst] (Aiera): Thank you. Ron, you talked about a couple of more divestitures in the pipeline, and obviously, this one that you did today or announced today. Could you just give us a sense of what kind of liquidity you're looking at in terms of raising from that? I know you put out that $1.5 billion number last quarter, but if we just think about today's announcement plus the other two, does that get you to a higher number or equal number? Just trying to think through you know the liquidity you could raise and use of proceeds.
Sanjay Sakhrani: Thank you. Ron, you talked about a couple of more divestitures in the pipeline, and obviously, this one that you did today or announced today. Could you just give us a sense of what kind of liquidity you're looking at in terms of raising from that? I know you put out that $1.5 billion number last quarter, but if we just think about today's announcement plus the other two, does that get you to a higher number or equal number? Just trying to think through you know the liquidity you could raise and use of proceeds.
Speaker #8: About a couple more for you. Ron, you talked divestitures in the pipeline and obviously this one that you did today—or announced today. Could you just give us a sense of what kind of liquidity you're looking at in terms of raising from that?
Speaker #8: I know you put out that $1.5 billion number last quarter, but if we just think about today's announcement plus the other two, does that get you to a higher number or equal number?
Speaker #8: Just trying to think—use of proceeds.
Speaker #4: Yeah, it's a good question, Sanjay. So yeah, there are two other vehicle businesses that are out in process now, pretty late stage too. If we end up transacting on both of those, it'll be over a billion.
Ron Clarke: Yeah, it's a-- it's a good question, Sanjay. So yeah, there's two other vehicle businesses that are out in process now, pretty late stage too. If we end up transacting on both of those, it'll be over $1 billion. I could call it a, you know, a $1 billion to a $1.3 billion, somewhere in there. And the use of proceeds is to buy CPay at this price that we're at. So we'll have an answer, my guess is the next probably 30 days on those things.
Ron Clarke: Yeah, it's a-- it's a good question, Sanjay. So yeah, there's two other vehicle businesses that are out in process now, pretty late stage too. If we end up transacting on both of those, it'll be over $1 billion. I could call it a, you know, a $1 billion to a $1.3 billion, somewhere in there. And the use of proceeds is to buy CPay at this price that we're at. So we'll have an answer, my guess is the next probably 30 days on those things.
Speaker #4: Think of, call it a billion to a billion three, somewhere in there. And the use of proceeds is to buy CPAY at this price that we're at.
Speaker #4: So we'll have an answer, my guess is, in the next, probably, 30 days on those things.
Speaker #8: Got it. And then just maybe if you could elaborate on lodging. I know it remained weak and you guys are assuming sort of low single digits, but anything specific happening there in terms of turning that ship around, and how we should think about it on a go-forward basis?
[Analyst] (Aiera): Got it. And then just maybe if you could elaborate on lodging. I know it remained weak, and you guys are assuming sort of low single digits, but anything specific happening there, in terms of turning that ship around, and how we should think on a go-forward basis? Thanks.
Sanjay Sakhrani: Got it. And then just maybe if you could elaborate on lodging. I know it remained weak, and you guys are assuming sort of low single digits, but anything specific happening there, in terms of turning that ship around, and how we should think on a go-forward basis? Thanks.
Speaker #8: Thanks.
Speaker #4: Yeah, the prints obviously, Sanjay, not too good. I feel a little bit similar for the US vehicle business—sort of, as problem children, not behaving well a couple of years ago, and lots of things wrong.
Ron Clarke: Yeah, the prints, obviously, Sanjay, not too good. I feel a little bit similar to the US vehicle business of... You know, I think I characterize those two businesses as problem children, you know, not behaving well a couple of years ago and lots of things wrong. I feel kind of the same, that both businesses, and particularly lodging, have stabilized. We fixed the IT, we fixed the product thing, we fixed the customers that kind of scooted away, the volume that scooted away. And so if you look at, like, the same stores I quoted, you know, that's actually positive now in US vehicle, and I think mostly flat in lodging. And so the good news is, the management teams have made progress doing things that have stabilized the revenue.
Ron Clarke: Yeah, the prints, obviously, Sanjay, not too good. I feel a little bit similar to the US vehicle business of... You know, I think I characterize those two businesses as problem children, you know, not behaving well a couple of years ago and lots of things wrong. I feel kind of the same, that both businesses, and particularly lodging, have stabilized. We fixed the IT, we fixed the product thing, we fixed the customers that kind of scooted away, the volume that scooted away. And so if you look at, like, the same stores I quoted, you know, that's actually positive now in US vehicle, and I think mostly flat in lodging. And so the good news is, the management teams have made progress doing things that have stabilized the revenue.
Speaker #4: I feel kind of the same, that both businesses—and particularly lodging—have stabilized. We fixed the IT, we fixed the product thing, we fixed the customers that kind of scooted away, the volume that scooted away.
Speaker #4: And so, if you look at the same stores I quoted, that's actually positive now in U.S. Vehicle, and I think mostly flat in Lodging.
Speaker #4: And so, the good news is the management teams have made progress in stabilizing the revenue. I'm still super disappointed in the new sales. And so that's the ticket.
Ron Clarke: I'm still super disappointed in the new sales, and so that's the ticket. Really, the ticket for both of them is can they produce new sales now that the losses, you know, have stabilized? And they're both super great margin businesses. They're both above the line average. I don't have it in front of me, but they're in the 60s in terms of EBITDA margins, so they're super great cash generators. The question is just, can we productively make sales there vis-a-vis the other options we have for investing sales in the company? And so we're giving it a run here in 2026, and if we see sales improve and accelerate throughout the year, we'll be happy, and if we don't, we'll be probably thinking about doing something else.
Ron Clarke: I'm still super disappointed in the new sales, and so that's the ticket. Really, the ticket for both of them is can they produce new sales now that the losses, you know, have stabilized? And they're both super great margin businesses. They're both above the line average. I don't have it in front of me, but they're in the 60s in terms of EBITDA margins, so they're super great cash generators. The question is just, can we productively make sales there vis-a-vis the other options we have for investing sales in the company? And so we're giving it a run here in 2026, and if we see sales improve and accelerate throughout the year, we'll be happy, and if we don't, we'll be probably thinking about doing something else.
Speaker #4: Really, the ticket for both of them is: can they produce new sales now that the losses have stabilized? And they're both super great margin businesses.
Speaker #4: They're both above the line average, only that in front of me, but they're in the 60s in terms of EBITDA margins, so they're super great cash generators.
Speaker #4: The question is just, can we productively make sales there, vis-à-vis the other options we have for investing sales in the company? And so we're giving it a run here and in 2026.
Speaker #4: And if we see sales improve and accelerate throughout the year, we'll be happy. And if we don't, we'll probably be thinking about doing something else.
Speaker #8: Okay. Great. Thank you.
Nate Svensson: Okay, great. Thank you.
Sanjay Sakhrani: Okay, great. Thank you.
Speaker #4: Got it.
Ron Clarke: You got it.
Ron Clarke: You got it.
Speaker #2: Thank you. We'll go next to Nate Svensson with Deutsche Bank. Please go ahead.
Operator: Thank you. We'll go next to Nate Svensson with Deutsche Bank. Please go ahead.
Operator: Thank you. We'll go next to Nate Svensson with Deutsche Bank. Please go ahead.
Speaker #2: ahead. Hey,
Speaker #9: Guys, thanks for the question. I want to follow up on some of the cross-border priorities that you were talking about in the prepared remarks, Ron.
Nate Svensson: Hey, guys. Thanks for the question. I want to follow up on some of the cross-border priorities that you were talking about in the prepared remarks, Ron. So you, you mentioned outperformance at Alpha a few times, and you obviously bumped up the Alpha plus Avid accretion to a buck. Just maybe hoping for a little more color on what's going better than expected at Alpha, what on the revenue synergies are you realizing is a better organic growth, anything beyond that? And then you also called out the first joint sale with Mastercard. Fully get from your earlier answer, that's kind of a longer term opportunity. But we'd just love to hear more about that first win, some, any specific details or learnings from that partnership as you look to go out and win more sales, in the pipeline that you do have.
Nate Svensson: Hey, guys. Thanks for the question. I want to follow up on some of the cross-border priorities that you were talking about in the prepared remarks, Ron. So you, you mentioned outperformance at Alpha a few times, and you obviously bumped up the Alpha plus Avid accretion to a buck. Just maybe hoping for a little more color on what's going better than expected at Alpha, what on the revenue synergies are you realizing is a better organic growth, anything beyond that? And then you also called out the first joint sale with Mastercard.
Speaker #9: So, you mentioned outperformance at Alpha a few times, and you obviously bumped up the Alpha plus AVID accretion to a buck. Just maybe hoping for a little more color on what's going better than expected at Alpha.
Speaker #9: What are the revenue synergies you are realizing as better organic growth? Anything beyond joint sales with MasterCard? Fully get from your earlier answer.
Nate Svensson: Fully get from your earlier answer, that's kind of a longer term opportunity. But we'd just love to hear more about that first win, some, any specific details or learnings from that partnership as you look to go out and win more sales, in the pipeline that you do have.
Speaker #9: That's kind of a longer-term opportunity, but we'd just love to hear more about that first. And then you also called out the first win.
Speaker #9: So, any specific details or learnings from that partnership as you look to go out and win more sales in the pipeline that you do have?
Speaker #4: Yeah, Nate, two good questions there. I think the overperformance in alpha is the integration—the people thing has gone better than I thought. So, when you meet a new group like that and bring the organizations together, sometimes there's a pause.
Ron Clarke: Yeah, Nate, two good questions there. I think the overperformance in Alpha is the integration, the people thing has gone better than I thought. So when you meet a new group like that and, you know, bring the organizations together, sometimes there's a pause, people aren't firing and stuff. But I just feel like our management team and their team did a great job, a great kumbaya or whatever, where their guys just came, you know, roaring out of the blocks, you know, pitching, "Hey, we're a bigger and meaner company. We have better credit. We, you know, obviously, we have better products.
Ron Clarke: Yeah, Nate, two good questions there. I think the overperformance in Alpha is the integration, the people thing has gone better than I thought. So when you meet a new group like that and, you know, bring the organizations together, sometimes there's a pause, people aren't firing and stuff. But I just feel like our management team and their team did a great job, a great kumbaya or whatever, where their guys just came, you know, roaring out of the blocks, you know, pitching, "Hey, we're a bigger and meaner company. We have better credit. We, you know, obviously, we have better products.
Speaker #4: People aren't firing and stuff. And I just feel like our management team and their team did a great job—a great kumbaya, or whatever—where their guys just came roaring out of the blocks pitching, 'Hey, we're a bigger meter company.'
Speaker #4: We have better credit. Obviously, we have better products. We have better payment products versus just risk management products. And so, to me, what was so great is the people, particularly the salespeople, have embraced some of the stuff that we bring to them and just went running out.
Ron Clarke: We have better payment products versus just risk management products." And so, to me, what was so great is the people, particularly the salespeople, have embraced some of the stuff that we bring to them, and just went running out and got a bunch of business closed. So that thing not only performed better than the finish. I've looked at January, and those businesses are ahead again this month. So I think it's, you know, it's cultural, it's something, but just everybody's at it. People aren't moping around and stuff. They're excited to be part of the game with us and stuff. So this is way before the other synergies of contract advantages, rate advantages, cost, IT. We got all the stuff in front of us, bank account licenses.
Ron Clarke: We have better payment products versus just risk management products." And so, to me, what was so great is the people, particularly the salespeople, have embraced some of the stuff that we bring to them, and just went running out and got a bunch of business closed. So that thing not only performed better than the finish. I've looked at January, and those businesses are ahead again this month. So I think it's, you know, it's cultural, it's something, but just everybody's at it. People aren't moping around and stuff. They're excited to be part of the game with us and stuff. So this is way before the other synergies of contract advantages, rate advantages, cost, IT. We got all the stuff in front of us, bank account licenses.
Speaker #4: And got a bunch of business closed. So that thing not only performed better than the finish, I've looked at January, and those businesses are ahead again.
Speaker #4: This month, so I think it's cultural. It's something, but just everybody's at it. People aren't moping around and stuff. They're excited to be part of the game with us and stuff.
Speaker #4: So this is way before the other synergies of contract advantages, rate advantages, cost, IT. We got all the stuff in front of us: bank account, license.
Speaker #4: We have nine other things that are going to create money. But to me, that's super important. On the MasterCard thing, I got to say, it has way exceeded mine.
Ron Clarke: We've nine other things that are going to create money, but to me, that's, like, super important. On the Mastercard thing, I got to say, like, it is way exceeded mine. I don't know if it has the Mastercard folks' expectations, but we now have a second sale. I think I said one, so that script's old already. We've actually closed out two deals, but more importantly, it's a crazy pipeline of, particularly in Europe, where, you know, Mastercard has done their part of, you know, getting some dedicated people to call on accounts that they know and love, and our guys go in and know a lot. And literally, I don't know, it's 50 to 70 in process, you know, opportunities.
Ron Clarke: We've nine other things that are going to create money, but to me, that's, like, super important. On the Mastercard thing, I got to say, like, it is way exceeded mine. I don't know if it has the Mastercard folks' expectations, but we now have a second sale. I think I said one, so that script's old already. We've actually closed out two deals, but more importantly, it's a crazy pipeline of, particularly in Europe, where, you know, Mastercard has done their part of, you know, getting some dedicated people to call on accounts that they know and love, and our guys go in and know a lot. And literally, I don't know, it's 50 to 70 in process, you know, opportunities.
Speaker #4: I don't know if folks' expectations, but we—it has the MasterCard now—have a second sale. I think I said one, so that script's old already.
Speaker #4: We've actually closed, now, two deals. But more importantly, it's a crazy pipeline, particularly in Europe, where MasterCard has done their part of getting some dedicated people to call on accounts that they know and love, and our guys go in and know a lot. And literally, I don't know if it's 50 to 70 in process.
Speaker #4: Opportunities. And so that thing, which tends to have a very long sales cycle, has stood up quite well. And I think back to the thesis question that was before, I think the thesis is proving out: the good relationships and credibility that MasterCard has, coupled with our products and expertise, is a good combo.
Ron Clarke: And so that thing, which tends to have a very long sales cycle, has stood up quite well. And I think back to the thesis, you know, question that was before, is I think the thesis is proving out the good relationships and credibility that Mastercard has, coupled with our, you know, products and expertise is a good combo. So it'll take time to build, but it is a way help to make that segment meaningful, right, for cross-border. I mean, I don't know if everyone's getting it, but that business was mostly a one-trick pony.
Ron Clarke: And so that thing, which tends to have a very long sales cycle, has stood up quite well. And I think back to the thesis, you know, question that was before, is I think the thesis is proving out the good relationships and credibility that Mastercard has, coupled with our, you know, products and expertise is a good combo. So it'll take time to build, but it is a way help to make that segment meaningful, right, for cross-border. I mean, I don't know if everyone's getting it, but that business was mostly a one-trick pony.
Speaker #4: So, it'll take time to build, but it is a way to help make that segment meaningful for cross-border. I mean, I don't know if everyone's getting it, but that business was mostly a one-trick pony.
Speaker #4: We went out to the mid-size businesses around the world and sold services. And now we're talking about basically getting banks, getting FIs around the world to use us—becoming an international bank account deposit company as well.
Speaker #4: We went out to the mid-size businesses around the world and sold services. And now we're talking about basically getting banks, getting FIs around the world to use our becoming an international bank account deposit company services.
Ron Clarke: We went out to midsize businesses around the world and sold services, and now we're talking about basically getting banks, getting FIs around the world to use our services and becoming, you know, an international bank account deposit company as well. And so the extensions of those two additional kind of product and market segments is way significant. I don't know if people are picking it up, but it completely changes, I think, the long-term prospects of that business. So we spent lots of time in this company doing iceberg work, kind of getting ready, getting things positioned. I think people discount it because everyone just wants to know what the numbers are, but I'm telling you, that is going to make a big difference for durability.
Ron Clarke: We went out to midsize businesses around the world and sold services, and now we're talking about basically getting banks, getting FIs around the world to use our services and becoming, you know, an international bank account deposit company as well. And so the extensions of those two additional kind of product and market segments is way significant. I don't know if people are picking it up, but it completely changes, I think, the long-term prospects of that business. So we spent lots of time in this company doing iceberg work, kind of getting ready, getting things positioned. I think people discount it because everyone just wants to know what the numbers are, but I'm telling you, that is going to make a big difference for durability.
Speaker #4: And Well, super exciting stuff.
Speaker #4: Additional kind of product and market segments is way significant. I don't know if people are picking it up, but it completely changes, I think, the long-term prospects for that business.
Speaker #4: So we spent lots of those, two of time in this company doing iceberg work, kind of getting ready, getting things positioned. I think people discount it because everyone just wants to know what the numbers are.
Speaker #4: But I'm telling you, that is going to make a big difference for durability.
Nate Svensson: Well, super, super exciting stuff. I guess for the follow-up, also on the cross-border business, we get some questions from time to time on a potential Supreme Court ruling on IEEPA and maybe some impact that could have to CPA in the event that tariffs are rolled back. So I'm not asking you to speculate on any potential outcome, but I guess in the event that there is some level of rollback of tariffs, any idea on how that could play out across either your corporate payments business or maybe the vehicle payments business as well? Is there still any pent-up demand you think might be released? Could this alleviate some of the pressure on the shipping and freight industry in the US or any other factors to keep in mind there?
Nate Svensson: Well, super, super exciting stuff. I guess for the follow-up, also on the cross-border business, we get some questions from time to time on a potential Supreme Court ruling on IEEPA and maybe some impact that could have to CPA in the event that tariffs are rolled back. So I'm not asking you to speculate on any potential outcome, but I guess in the event that there is some level of rollback of tariffs, any idea on how that could play out across either your corporate payments business or maybe the vehicle payments business as well? Is there still any pent-up demand you think might be released? Could this alleviate some of the pressure on the shipping and freight industry in the US or any other factors to keep in mind there?
Speaker #9: I guess for the follow-up, also on the cross-border business, we get some questions from time to time on a potential Supreme Court ruling on IEPA and maybe some impact that could have to Corpay in the event that tariffs are rolled back.
Speaker #9: So, I'm not asking you to speculate on any potential outcome, but I guess in the event that there is some level of rollback of tariffs, any idea on how that could play out across either your corporate payments business or maybe the vehicle payments business as well?
Speaker #9: Is there still any pent-up demand you think might be released? Could this alleviate some of the pressure on the shipping and freight industry in the US, or are there any other factors to keep in mind there?
Speaker #4: Yeah, that's a super good follow-up. I would say tariff certainty is our friend. Whatever it is, just be what it is. So it had a super jolt during Trump's liberation thing.
Ron Clarke: ... Yeah, that's a super good follow-up. I would say, tariff certainty is our friend. Like, whatever it is, just be what it is. So it had a super jolt during Trump's liberation thing. I think our numbers in April were crazy as people tried to anticipate things, and then kind of our US, our North America business did really bad the rest of the year because of the uncertainty, and the other geographies picked it up. So anything that would either roll back, limit, or even just fix tariffs would be a plus to the cross-border business. Remember, like, half, you know, the dollars in there are service-based, not goods-based.
Ron Clarke: ... Yeah, that's a super good follow-up. I would say, tariff certainty is our friend. Like, whatever it is, just be what it is. So it had a super jolt during Trump's liberation thing. I think our numbers in April were crazy as people tried to anticipate things, and then kind of our US, our North America business did really bad the rest of the year because of the uncertainty, and the other geographies picked it up. So anything that would either roll back, limit, or even just fix tariffs would be a plus to the cross-border business. Remember, like, half, you know, the dollars in there are service-based, not goods-based.
Speaker #4: I think our numbers in April were crazy as people tried off, our US, our North America business did really to anticipate things. And then kind bad.
Speaker #4: The rest of the year, because of the uncertainty and the other geographies picked it up. So, anything that would either roll back limit or even just fix tariffs would be a plus to the cross-border business.
Speaker #4: Remember, half the dollars there were service-based, not goods-based. And then again, we do risk management contracts and stuff. So the exposure isn't across—that exposure is in North America, which is probably a third of the business.
Ron Clarke: Then again, you know, we do risk management contracts and stuff, so the exposure, you know, isn't across that entire business, and really, most of the exposure is in North America, which is probably, I know, 1/3 of the business. So it's not like a massive amount, but it still would be, to your point, a plus for us if that thing got clarified.
Ron Clarke: Then again, you know, we do risk management contracts and stuff, so the exposure, you know, isn't across that entire business, and really, most of the exposure is in North America, which is probably, I know, 1/3 of the business. So it's not like a massive amount, but it still would be, to your point, a plus for us if that thing got clarified.
Speaker #4: So, it's not like a massive amount, but it still would be, to your point, a plus for us if that thing got—
Speaker #4: clarified. Super helpful.
Darrin Peller: Super helpful. Thanks, Ron.
Nate Svensson: Super helpful. Thanks, Ron.
Speaker #9: Thanks, Ron.
Ron Clarke: Got it.
Ron Clarke: Got it.
Speaker #1: Thank you. We'll, yeah, go next to Ramsey Alasol with Cantor Fitzgerald. Your line is now open.
Operator: Thank you. We'll go next to Ramsey El-Assal with Cantor Fitzgerald. Your line is now open.
Operator: Thank you. We'll go next to Ramsey El-Assal with Cantor Fitzgerald. Your line is now open.
Speaker #10: Hi, thank you so much for taking my call tonight. I wanted to ask about the strong sales growth, which is obviously super impressive. Can you give us your thoughts on whether the conversion of that sales to revenue—the timing of that conversion of bookings to revenue—has changed as your business has corporate payments?
Ramsey El-Assal: Hi. Thank you so much for taking my call tonight. I wanted to ask about the strong sales growth, which is obviously super impressive. Can you give us your thoughts on whether the conversion of that sales to revenue, the timing of that conversion of bookings to revenue, has changed as your business has changed? In other words, as now you have more corporate payments, are you seeing a situation where you convert that revenue faster or convert those bookings rather, faster or slower to revenue? Or is it sort of the same as it was when you were primarily a, you know, fleet card business years and years ago?
Ramsey El-Assal: Hi. Thank you so much for taking my call tonight. I wanted to ask about the strong sales growth, which is obviously super impressive. Can you give us your thoughts on whether the conversion of that sales to revenue, the timing of that conversion of bookings to revenue, has changed as your business has changed? In other words, as now you have more corporate payments, are you seeing a situation where you convert that revenue faster or convert those bookings rather, faster or slower to revenue? Or is it sort of the same as it was when you were primarily a, you know, fleet card business years and years ago?
Speaker #10: Are you seeing a situation where your convert—that changed? In other words, is it now you have more revenue faster, or convert those bookings, rather, faster or slower to revenue, or is it sort of the same as it was when you were primarily a fleet card business years and years ago?
Speaker #4: Well, hey, Ramsey, welcome to your—
Ron Clarke: Well, hey, Ramsey, welcome to your new spot. I want to say-
Ron Clarke: Well, hey, Ramsey, welcome to your new spot. I want to say-
Speaker #4: New spot. I want to say thank you. Congrats to you on that, and appreciate you continuing to keep an eye on us. So, it's a really good question.
Ramsey El-Assal: Thank you.
Ramsey El-Assal: Thank you.
Ron Clarke: - Congrats to you, on that and appreciate you continuing to keep an eye on us.
Ron Clarke: - Congrats to you, on that and appreciate you continuing to keep an eye on us.
Ramsey El-Assal: My pleasure.
Ramsey El-Assal: My pleasure.
Ron Clarke: So it's a really good question. So at the high level, the answer is, it varies by business. As I mentioned, I think Ginjan asked, you know, our payables business has a slower contract signings with bookings to implementation and ramping, and I mentioned the cross-border business is much faster. So as you run through the businesses we have, that varies. Some are, you know, super fast, like in the fleet card business, it's almost programmatic. We don't even book until we start. We actually call it a "go live." But the total is, for the company, is about 1/3 in a year. So for example, let me make up a number. Let's say we recorded $300 million in bookings in calendar year 2025.
Ron Clarke: So it's a really good question. So at the high level, the answer is, it varies by business. As I mentioned, I think Ginjan asked, you know, our payables business has a slower contract signings with bookings to implementation and ramping, and I mentioned the cross-border business is much faster. So as you run through the businesses we have, that varies. Some are, you know, super fast, like in the fleet card business, it's almost programmatic. We don't even book until we start. We actually call it a "go live." But the total is, for the company, is about 1/3 in a year. So for example, let me make up a number. Let's say we recorded $300 million in bookings in calendar year 2025.
Speaker #4: So at the high level, the answer is it varies by business. As I mentioned—I think Tinjan asked—our Payables business has a slower contract signings or bookings to implementation and ramping.
Speaker #4: And I mentioned the faster. So, as you run through the businesses we have, that varies. Some are super fast, like in the fleet card business—it's almost instantaneous.
Speaker #4: We don't even book until we start. We actually call it a go-live. But the total is, for the company, it's about one-third in-year.
Speaker #4: So far, we recorded $300 million in bookings in calendar year 2025. We would print about $100 million of print revenue inside of the 2025 goalposts.
Ron Clarke: We would print about $100 million of print revenue inside of the 2025 goalposts, and then we would ramp some amount of that 200 that we didn't capture into the forward year. So the way we think about, like, building our revenue plans is, we already have, in that example, $200 million coming our way here in 2026 that we didn't have, right? In our revenue numbers last year. And we'll grab 1/3 of what our bookings plan is here in 2026. So that, that's kind of the model, kind of 1/3 in the current year, and then the 2/3 ramp, depending on what the attrition is.
Ron Clarke: We would print about $100 million of print revenue inside of the 2025 goalposts, and then we would ramp some amount of that 200 that we didn't capture into the forward year. So the way we think about, like, building our revenue plans is, we already have, in that example, $200 million coming our way here in 2026 that we didn't have, right? In our revenue numbers last year. And we'll grab 1/3 of what our bookings plan is here in 2026. So that, that's kind of the model, kind of 1/3 in the current year, and then the 2/3 ramp, depending on what the attrition is.
Speaker #4: And then we would ramp some amount of that $200 million that we didn't capture into the forward year. So the way we think about building our revenue plans is we already have, in that example, $200 million coming our way here in 2026 that we didn't have—right—hit our revenue numbers last year.
Speaker #4: And we'll grab a third of what our bookings plan is here in 2026. So that's kind of the model, kind of one-third in the current year, and then the two-thirds ramp depending on what the attrition is.
Ramsey El-Assal: That's super helpful.
Ramsey El-Assal: That's super helpful.
Speaker #4: So we've really just got statistics in all of this. So it's really easy for us to model.
Ron Clarke: So we've really did the statistics in all of this, so it's really easy for us to model it.
Ron Clarke: So we've really did the statistics in all of this, so it's really easy for us to model it.
Speaker #4: it.
Speaker #10: Got it. Yeah, that's super helpful. Thank you for that.
Ramsey El-Assal: Got it. Yeah, that's super helpful. Thank you for that. And one follow-up for me: You know, stablecoin's a big thematic topic. Can you just give us an update on what you're seeing in the marketplace in terms of demand, if any? And also just give us a quick overview of the capabilities that you guys are building out to accommodate stablecoins.
Ramsey El-Assal: Got it. Yeah, that's super helpful. Thank you for that. And one follow-up for me: You know, stablecoin's a big thematic topic. Can you just give us an update on what you're seeing in the marketplace in terms of demand, if any? And also just give us a quick overview of the capabilities that you guys are building out to accommodate stablecoins.
Speaker #10: And one follow-up for me. Stablecoins are a big thematic topic. Can you just give us an update on what you're seeing in the marketplace in terms of demand, if any?
Speaker #10: And also, just give us a quick overview of the capabilities that you guys are building out to accommodate stablecoins.
Speaker #4: Yeah, that's super—I’m laughing a bit, Ramsey, because this morning when I got up, knowing we had this earnings call tonight, I went out to three of our guys. I went to the guy that has thousands and thousands of US merchants that we pay across border, that obviously moves tons of money to beneficiaries around the world.
Ron Clarke: Yeah, that's a super. I'm laughing a bit, Ramsey, because this morning when I got up, knowing we had this earnings call tonight, I went out to 3 of our guys. I went to the guy that has, you know, thousands and thousands of US merchants that we pay cross-border, heads that obviously moves tons of money to beneficiaries around the world. And our Alpha guy who does the, you know, bank accounts, the 7,000 bank accounts, you know, that hold deposits. And I asked all three of them: "Hey, talk to me about the demand. How many of the merchants or the deposit holders or beneficiaries are asking for a companion stablecoin wallet, so that they can receive funds and stablecoins?" And the basic answer was crickets.
Ron Clarke: Yeah, that's a super. I'm laughing a bit, Ramsey, because this morning when I got up, knowing we had this earnings call tonight, I went out to 3 of our guys. I went to the guy that has, you know, thousands and thousands of US merchants that we pay cross-border, heads that obviously moves tons of money to beneficiaries around the world. And our Alpha guy who does the, you know, bank accounts, the 7,000 bank accounts, you know, that hold deposits. And I asked all three of them: "Hey, talk to me about the demand. How many of the merchants or the deposit holders or beneficiaries are asking for a companion stablecoin wallet, so that they can receive funds and stablecoins?" And the basic answer was crickets.
Speaker #4: And our alpha guy, who does the bank accounts—the 7,000 bank accounts that hold deposits. And I asked all three of them, 'Hey, talk to me about the demand. How many of the merchants or the deposit holders or beneficiaries are asking for a companion stablecoin wallet so that they can receive funds in stablecoins?'
Speaker #4: And the basic answer was crickets. There's been really no—basically kind of no noise, kind of no demand. Despite that, we are, I think we said before, doing three things anyway.
Ron Clarke: There's been really no, you know, basically kind of no noise, kind of no demand. Despite that, we are, I think we said before, doing three things anyway. One is, we're trying to serve crypto clients that actually have crypto, have Bitcoin, have stablecoins as clients, so we're doing that. We have four or five signed up. Two is, we are working on the rails and piloting that, like, you know, in our own treasury, for example, to make sure we can actually move funds, you know, via, you know, blockchain. And then third, which is my favorite, is despite the demand comment, we are building stablecoin digital wallets so that anyone that has a bank account, if you will, they'll have a companion stablecoin account.
Ron Clarke: There's been really no, you know, basically kind of no noise, kind of no demand. Despite that, we are, I think we said before, doing three things anyway. One is, we're trying to serve crypto clients that actually have crypto, have Bitcoin, have stablecoins as clients, so we're doing that. We have four or five signed up. Two is, we are working on the rails and piloting that, like, you know, in our own treasury, for example, to make sure we can actually move funds, you know, via, you know, blockchain. And then third, which is my favorite, is despite the demand comment, we are building stablecoin digital wallets so that anyone that has a bank account, if you will, they'll have a companion stablecoin account.
Speaker #4: One is, we're trying to serve crypto clients that actually have crypto—have Bitcoin, have stablecoins—as clients. So we're doing that. We have four or five signed up.
Speaker #4: Two is, we are working on the rails and piloting that, like in our own treasury for example, to make sure we can actually move via blockchain.
Speaker #4: And then third, which is my favorite, is despite the demand comment, we are building stablecoin digital wallets so that anyone that has a bank account, if you will, they'll have a companion stablecoin account.
Speaker #4: So, if someone wants to send them money outside of Captured, and then we could toggle it into the fiat account during the banking hours, it could be pushing ahead to have what we have for them.
Ron Clarke: So if someone wants to send them money outside of the banking hours, it could be captured, and then we could toggle it, you know, into the fiat account that we have for them. So we are pushing ahead to have that and just see if there's more uptake on this. But it's, what's the line? It's all quiet on the western front, as of now.
Ron Clarke: So if someone wants to send them money outside of the banking hours, it could be captured, and then we could toggle it, you know, into the fiat account that we have for them. So we are pushing ahead to have that and just see if there's more uptake on this. But it's, what's the line? It's all quiet on the western front, as of now.
Speaker #4: that and just see if there's more uptake on this. But it's—what's the line? It's all quiet on the Western Front as of—so we are
Speaker #4: now. Fantastic, Ron.
Darrin Peller: Fantastic, Ron. Thanks for your response, sir.
Ramsey El-Assal: Fantastic, Ron. Thanks for your response, sir.
Speaker #10: Thanks for your response,
Speaker #10: sir. You got
Ron Clarke: You got it.
Ron Clarke: You got it.
Speaker #4: it. Thank
Speaker #1: You. Our next question comes from Raina Kumar with Oppenheimer. Your line is now open.
Operator: Thank you. Our next question comes from Rayna Kumar with Oppenheimer. Your line is now open.
Operator: Thank you. Our next question comes from Rayna Kumar with Oppenheimer. Your line is now open.
Speaker #11: Good evening. Thanks for taking my question. Could you talk about just some of the drivers that’ll get lodging back up to low single-digit growth this year?
Rayna Kumar: Good evening. Thanks for taking my question. Could you talk about just some of the drivers that'll get lodging back up to low single digit growth this year? And, separately, could you talk about your outlook for EBITDA margin this year and any puts and takes we should be aware of? Thank you.
Rayna Kumar: Good evening. Thanks for taking my question. Could you talk about just some of the drivers that'll get lodging back up to low single digit growth this year? And, separately, could you talk about your outlook for EBITDA margin this year and any puts and takes we should be aware of? Thank you.
Speaker #11: And separately, could you talk about your outlook for EBITDA margin this year, and any puts and takes we should be aware of? Thank you.
Speaker #4: For EBITDA margin? You want to take this?
Ron Clarke: Do you want to take this, Peter?
Ron Clarke: Do you want to take this, Peter?
Speaker #4: Yeah. Hey, Raina. Yeah, it's Peter. So, on the lodging side, the thought process is, for the full year, we're expecting—call it—low single digits there.
Peter Walker: Yeah. Hey, hey, Raina, it's Peter. So on the lodging side, the thought process is, full year, we're expecting, you know, call it, low single digits there, but it's really a tale of two stories. So the first half of the year will continue to be negative organic growth with a pickup in the back half of the year. And so I think the good news to share there is we have had quite a bit of luck on the sales side, and so those implementations are coming online in the back half of the year. So that kind of what gets you to the full year outlook on lodging. Then, if we look at EBITDA margins, they are increasing substantially quarter-over-quarter across 2026. EBITDA margins will be slightly down year-over-year, mostly driven by the acquisitions.
Peter Walker: Yeah. Hey, hey, Raina, it's Peter. So on the lodging side, the thought process is, full year, we're expecting, you know, call it, low single digits there, but it's really a tale of two stories. So the first half of the year will continue to be negative organic growth with a pickup in the back half of the year. And so I think the good news to share there is we have had quite a bit of luck on the sales side, and so those implementations are coming online in the back half of the year. So that kind of what gets you to the full year outlook on lodging. Then, if we look at EBITDA margins, they are increasing substantially quarter-over-quarter across 2026. EBITDA margins will be slightly down year-over-year, mostly driven by the acquisitions.
Speaker #4: So, the first half of the year, we'll continue to see negative organic growth, with a pickup in the back half of the year. But it's really a tale of two stories.
Speaker #4: And so I think the good news to share there is we have had quite a sight. And so, if you do, those implementations are coming online in the back half of the year, so that’s kind of what gets you to the full year outlook on EBITDA margins. They are increasing substantially quarter over quarter across 2026.
Speaker #4: EBITDA margins will be slightly down year over year, mostly driven by the acquisitions. But as we start to implement, as business volume grows and we implement the synergies, that's where you see the margins start to expand quarter over quarter.
Peter Walker: But as we start to implement, as the business volume grows and we implement the synergies, that's where you see the margins start to expand quarter-over-quarter.
Peter Walker: But as we start to implement, as the business volume grows and we implement the synergies, that's where you see the margins start to expand quarter-over-quarter.
Speaker #4: quarter.
Speaker #1: Thank
Speaker #1: Thank you. Our next question comes from Trevor Williams with Jefferies. Your line is now open.
Rayna Kumar: Thank you.
Rayna Kumar: Thank you.
Operator: Thank you. Our next question comes from Trevor Williams with Jefferies. Your line is now open.
Operator: Thank you. Our next question comes from Trevor Williams with Jefferies. Your line is now open.
Speaker #1: open.
Speaker #12: Great, thanks very much. Peter, I—
Trevor Williams: Great. Thanks very much. Peter, I want to go back to the organic guide. So the 9% growth in Q1 relative to the 11% in Q4 and the 10% you're assuming for the full year. It sounds like that's mostly just due to a bigger float headwind for corporate payments in the first half, and then the lodging improvement that you just walked through. But any other puts and takes, cadence wise, for us to be mindful of? And then specific to the first quarter, just what you're baking in for corporate payments growth, both with and without float, would be helpful. Thanks.
Trevor Williams: Great. Thanks very much. Peter, I want to go back to the organic guide. So the 9% growth in Q1 relative to the 11% in Q4 and the 10% you're assuming for the full year. It sounds like that's mostly just due to a bigger float headwind for corporate payments in the first half, and then the lodging improvement that you just walked through. But any other puts and takes, cadence wise, for us to be mindful of? And then specific to the first quarter, just what you're baking in for corporate payments growth, both with and without float, would be helpful. Thanks.
Speaker #12: I want to go back to the organic guide. So, the 9% growth in Q1 relative to the 11% in Q4 and the 10% you're assuming for the full year—it sounds like that's mostly just due to a bigger float headwind for corporate payments in the first half, and then the lodging improvement that you just walked through.
Speaker #12: But any other puts and takes cadence-wise for us to be mindful of? And then, specific to the first quarter, just what you're baking in for corporate payments growth—both with and without float—would be helpful.
Speaker #12: Thanks.
Speaker #4: Yeah, so Trevor, I do think you have it right when we look at Q1 '26. It is the float headwinds, mostly, really, as we pick up the Alpha business, right?
Peter Walker: Yeah. So, so Trevor, I do think you have it right. When we look at Q1 2026, it is the float headwinds. Mostly really, as we pick up the Alpha business, right, you see a pretty sharp drop in the rate for the pound and the rate for the euro. So that's a big driver there. Whereas the drop in SOFR is more kind of even throughout the year. And then, you're exactly right on lodging being a drag on overall organic growth for Q1 at the 9%, but then we see ourselves returning to 10% for Q2 and the rest of the year. In terms of the guidance for corporate payments, you know, I'd say the guidance for the quarter is similar to what I shared for the year.
Peter Walker: Yeah. So, so Trevor, I do think you have it right. When we look at Q1 2026, it is the float headwinds. Mostly really, as we pick up the Alpha business, right, you see a pretty sharp drop in the rate for the pound and the rate for the euro. So that's a big driver there. Whereas the drop in SOFR is more kind of even throughout the year. And then, you're exactly right on lodging being a drag on overall organic growth for Q1 at the 9%, but then we see ourselves returning to 10% for Q2 and the rest of the year. In terms of the guidance for corporate payments, you know, I'd say the guidance for the quarter is similar to what I shared for the year.
Speaker #4: You see a pretty sharp drop in the rate for the pound and the rate for the euro, so that's a big driver there. Whereas the drop in so far is more kind of even throughout the year.
Speaker #4: And then you're exactly right on lodging being a drag on overall organic growth for Q1 at 9%. But then we see ourselves returning to 10% for Q2 and the rest of the year.
Speaker #4: In terms of the guidance for corporate payments, I'd say the guidance for the quarter is similar to what I shared for the year. We expect it to be mid-teens, with float drag against that.
Peter Walker: We expect it to be, mid-teens with, you know, float drag against that.
Peter Walker: We expect it to be, mid-teens with, you know, float drag against that.
Speaker #3: Yeah. Hey, Trevor, it's Ron. I just want to add to what Peter said. So, when we look out at the curves in our weighted average of what we earn, the Q1 versus Q1 last year, the compression is just way more acute in this quarter we're sitting in.
Ron Clarke: Yeah. Hey, Trevor, it's Ron. Just to add to what Peter said, so when we look at our curves and our weighted average of what we earn, the Q1 versus Q1 last year is just the compression is just way more acute in this quarter we're sitting in. It's about 70 to 75 basis points. When we run it out to the end of the year, that thing shrinks to, like, 25 to 30 basis points. And so that's enough, given we have Alpha in the mix now, for us to run the quarter at 9 instead of 10. The other one, just by the way, which is a tad, is really gift. We have a, you know, that thing has been running super hot with this secure packaging thing.
Ron Clarke: Yeah. Hey, Trevor, it's Ron. Just to add to what Peter said, so when we look at our curves and our weighted average of what we earn, the Q1 versus Q1 last year is just the compression is just way more acute in this quarter we're sitting in. It's about 70 to 75 basis points. When we run it out to the end of the year, that thing shrinks to, like, 25 to 30 basis points. And so that's enough, given we have Alpha in the mix now, for us to run the quarter at 9 instead of 10. The other one, just by the way, which is a tad, is really gift. We have a, you know, that thing has been running super hot with this secure packaging thing.
Speaker #3: It's about 70 or 75 basis points. When we run it out to the end of the year, that thing shrinks to like 25 to 30 basis points.
Speaker #3: That's enough, given we have alpha in the mix now, for us to run. And so the other one, just by the way, which is a tad, is really gift.
Speaker #3: We have that thing—it's been running super hot with this secure packaging thing. I don't have it in front of me, but mid to high teens for the last three or four quarters.
Ron Clarke: I don't have it in front of me, but mid to high teens for the last 3 or 4 quarters, that's coming back to earth. Positive, but back to earth here in Q1. So those two things together is what has us running the quarter at 9.
Ron Clarke: I don't have it in front of me, but mid to high teens for the last 3 or 4 quarters, that's coming back to earth. Positive, but back to earth here in Q1. So those two things together is what has us running the quarter at 9.
Speaker #3: That's coming back to earth. Positive, but back to earth here in Q1. So those two things together is what have us running the quarter at 9.
Speaker #12: Okay, no, that's helpful. And good color on gift. And then, just as a follow-up on Brazil—with how much you guys are outpacing the underlying TAG growth—is that all coming from the contribution from extended network?
Trevor Williams: Okay. No, that's helpful and good color on gift. Then just as a follow-up on Brazil, with how much you guys are outpacing the underlying toll tag growth, that's all coming from the contribution from extended network. Ron, how you think about the sustainability of that, and if you're able to keep that, if we think, like, high teens to 20% growth in Brazil, if you can keep that without layering in more acquisitions like Gringo, Zapay, I know there was the other vehicle debt company that you bought last year. Just how to think about the durability of that growth? Thanks.
Trevor Williams: Okay. No, that's helpful and good color on gift. Then just as a follow-up on Brazil, with how much you guys are outpacing the underlying toll tag growth, that's all coming from the contribution from extended network. Ron, how you think about the sustainability of that, and if you're able to keep that, if we think, like, high teens to 20% growth in Brazil, if you can keep that without layering in more acquisitions like Gringo, Zapay, I know there was the other vehicle debt company that you bought last year. Just how to think about the durability of that growth? Thanks.
Speaker #12: sustainability of that? And Ron, how do you think about the if you're able to keep that, if we think like high teens to 20% growth in Brazil, if you can keep that without layering in more acquisitions like Gringo, Zappay, I know there was the other vehicle debts company that you bought last year, just how to think about the durability of that growth?
Speaker #12: Thanks.
Speaker #3: It's a great question. Yeah, we're planning Trevor another crazy high-teens year. As you know, half of it you get because it had a crazy good year last year.
Ron Clarke: Great question. Yeah, we're planning, Trevor, another crazy high teens year. Part, as you know, half of it you get because it had a crazy good year last year, right? So that just, just rolls in. But look, the story of Brazil is the free banks didn't beat us. We said we were gonna create a bunch of non-toll revenue. We've got millions and millions of customers and businesses as well. And so we're like, "Okay, if we give them some of these other vehicle things, will they come?" And I want to be super clear, yes, they will. They buy fuel, they buy parking, they buy insurance, they buy vehicle debts. They're now going crazy with 10% of our new sales, we're selling the Sempar credit card. The Sempar credit card now for 10% of our new sales.
Ron Clarke: Great question. Yeah, we're planning, Trevor, another crazy high teens year. Part, as you know, half of it you get because it had a crazy good year last year, right? So that just, just rolls in. But look, the story of Brazil is the free banks didn't beat us. We said we were gonna create a bunch of non-toll revenue. We've got millions and millions of customers and businesses as well. And so we're like, "Okay, if we give them some of these other vehicle things, will they come?" And I want to be super clear, yes, they will. They buy fuel, they buy parking, they buy insurance, they buy vehicle debts. They're now going crazy with 10% of our new sales, we're selling the Sempar credit card. The Sempar credit card now for 10% of our new sales.
Speaker #3: So that just rolls in. But look, the story of Brazil is the free banks didn't beat us. We said we were going to create a bunch of non-toll revenue.
Speaker #3: We've got millions and millions of customers, and businesses as well. And so we're like, "Okay, if we give them some of these other vehicle things, will they come?" And I want to be super clear.
Speaker #3: Yes, they will. They buy fuel. They buy parking. They buy insurance. They buy vehicle debts. They're now going crazy with 10% of our new sales—we're selling the Semper credit card.
Speaker #3: The Semper credit card now accounts for 10% of our new sales. And so to say it's working, I think is an understatement. And the second thing I’d say is, I think it's helping sell the core toll product.
Ron Clarke: To say it's working, I think, is an understatement. The second thing I'd say is, I think it's helping sell the core toll products, because it's so differentiated now from a guy, you know, a bank who's buying some crappy toll thing, wholesale one product and offering it. Not only is it creating incremental revenue with profit leverage because it's added on, I think it's allowing us to keep selling, you know, mid to high single-digit tag growth as well. It is good, and I do feel like the banks there are getting weary from some market feedback. That could be the next domino to fall there, is people think they could beat us by being free, and they haven't, and so that would be the next thing I'd keep an eye on.
Ron Clarke: To say it's working, I think, is an understatement. The second thing I'd say is, I think it's helping sell the core toll products, because it's so differentiated now from a guy, you know, a bank who's buying some crappy toll thing, wholesale one product and offering it. Not only is it creating incremental revenue with profit leverage because it's added on, I think it's allowing us to keep selling, you know, mid to high single-digit tag growth as well. It is good, and I do feel like the banks there are getting weary from some market feedback. That could be the next domino to fall there, is people think they could beat us by being free, and they haven't, and so that would be the next thing I'd keep an eye on.
Speaker #3: Because it's so differentiated now from a guy at a bank who's buying some crappy toll thing wholesale—one product—and offering it. So not only is it creating incremental revenue with profit leverage because it's added on, I think it's allowing us to keep selling mid- to high-single-digit tag growth as well.
Speaker #3: So it is good. And I do feel like the banks there are getting weary from some market feedback. So that could be the next domino to fall there. People think they could beat us by being free, and they haven't.
Speaker #3: And so that would be the next thing I keep an eye on.
Speaker #3: on. Okay.
Madison Sewell: Okay. Thank you, Ron.
Trevor Williams: Okay. Thank you, Ron.
Speaker #12: Thank you, Ron.
Operator: Thank you. Our next question comes from Michael Infante with Morgan Stanley. Your line is now open.
Operator: Thank you. Our next question comes from Michael Infante with Morgan Stanley. Your line is now open.
Speaker #1: Thank you. Our next question comes from Michael Infante with Morgan Stanley. Your line is now open.
Michael Infante: Yeah. Hey, guys, thanks for squeezing me in here. I'll just ask one for the sake of time. Commentary on the stablecoin demand was helpful, but I'd be curious just to get your high-level perspective on really the mechanism by which we'll actually start to see some medium-term compression of stablecoin off-ramp costs in the future, if those costs themselves are effectively just dictated by liquidity in those corridors. And if the answer is we're not likely to see that cost compression, like, how should we be thinking about the incremental tailwind for if you do actually start to see that demand from your customers show up? Thanks, guys.
Michael Infante: Yeah. Hey, guys, thanks for squeezing me in here. I'll just ask one for the sake of time. Commentary on the stablecoin demand was helpful, but I'd be curious just to get your high-level perspective on really the mechanism by which we'll actually start to see some medium-term compression of stablecoin off-ramp costs in the future, if those costs themselves are effectively just dictated by liquidity in those corridors. And if the answer is we're not likely to see that cost compression, like, how should we be thinking about the incremental tailwind for if you do actually start to see that demand from your customers show up? Thanks, guys.
Speaker #13: Just ask one for the sake of time. Commentary on the stablecoin demand was helpful, but I'd be curious just to get your—yeah. Hey, guys.
Speaker #13: High-level perspective—thanks for squeezing me in here. I'll focus on really the mechanism by which we'll actually start to see some medium-term compression of stablecoin off-ramp costs in the future, if those costs themselves are effectively just dictated by liquidity in those corridors.
Speaker #13: And if the answer is we're not likely to see that cost compression, how should we be thinking about the incremental tailwind for, if you do actually start to see that demand from your customers show up?
Speaker #13: Thanks, guys.
Speaker #3: Yeah. Hey, Michael. It's Ron. I mean, I'd start with—I guess your guess is as good as ours, because we see nothing, right? At this point.
Ron Clarke: Yeah. Hey, hey, Michael, it's Ron. I mean, I'd start with, I guess, your guess is as good as ours because we see nothing, right, at this point. And I think we've reiterated that the rails are an insignificant piece of the cost structure and of the value chain. And so, look, who knows? I mean, people can price things crazy, right, for whatever reason they have, but, like, we don't see it. To your point, we see nothing, and we don't think it's likely if we're getting 50 or 60 basis points on a trade and sometimes 200, depending on the customer and the corridor. It's mostly because of the liquidity and the compliance and everything else.
Ron Clarke: Yeah. Hey, hey, Michael, it's Ron. I mean, I'd start with, I guess, your guess is as good as ours because we see nothing, right, at this point. And I think we've reiterated that the rails are an insignificant piece of the cost structure and of the value chain. And so, look, who knows? I mean, people can price things crazy, right, for whatever reason they have, but, like, we don't see it. To your point, we see nothing, and we don't think it's likely if we're getting 50 or 60 basis points on a trade and sometimes 200, depending on the customer and the corridor. It's mostly because of the liquidity and the compliance and everything else.
Speaker #3: And I think we've reiterated that the rails are an insignificant piece of the cost structure and of the value chain. And so, look, who knows?
Speaker #3: I mean, people can price things crazy, right, for whatever reason they have. But we don't see it, to your point. We see nothing. And we don't think it's likely if we're getting 50 or 60 basis points on a trade, and sometimes 200, depending on the customer and the quarter. It's mostly because of the liquidity, and so we're staying tuned.
Ron Clarke: We're staying tuned, we're watching it carefully and stuff, but we do not see that as a high risk. And then, as I said, whether there is demand or not, we're gonna be there with the stablecoin offerings, and so if our clients want it, we're gonna make it available. But so it reminds me a little bit of EV, this whole thing, you know, there's more being written and said about this than actually being used today, is my takeaway.
Ron Clarke: We're staying tuned, we're watching it carefully and stuff, but we do not see that as a high risk. And then, as I said, whether there is demand or not, we're gonna be there with the stablecoin offerings, and so if our clients want it, we're gonna make it available. But so it reminds me a little bit of EV, this whole thing, you know, there's more being written and said about this than actually being used today, is my takeaway.
Speaker #3: We're watching it carefully and stuff, but we do not see that as a high risk. And then, as I said, whether there is demand or not, we're going to be there with the stablecoin offerings.
Speaker #3: And we're going to make it available, so if our clients want it. But it reminds me a little bit of EV. This whole thing—there's more being written and said about this than actually being used.
Speaker #3: Today. Is my takeaway.
Speaker #13: It's helpful. Thanks, Ron.
Michael Infante: It's helpful. Thanks, Ron.
Michael Infante: It's helpful. Thanks, Ron.
Ron Clarke: Yeah.
Ron Clarke: Yeah.
Speaker #1: Thank you. Yeah. We'll go next to Dave Koning with Baird. Your line is now open.
Operator: Thank you. We'll go next to Dave Koning with Baird. Your line is now open.
Operator: Thank you. We'll go next to Dave Koning with Baird. Your line is now open.
Speaker #14: Yeah, hey guys, thanks so much. Just one question—minority interest, that line has become a lot more important now with AVID and a little bit of the MasterCard impact.
David Koning: Yeah. Hey, guys. Thanks so much. Just one question. Minority interest, that line has become a lot more important now with Avid and, a little bit of the Mastercard impact. It looks like on an adjusted basis, it was like $27 million in the quarter when you do the add back that was in your line. Is that-- I guess, why was that so high? That seems very high, and is that the right number on a quarterly basis going forward, or what should we think about that line?
David Koning: Yeah. Hey, guys. Thanks so much. Just one question. Minority interest, that line has become a lot more important now with Avid and, a little bit of the Mastercard impact. It looks like on an adjusted basis, it was like $27 million in the quarter when you do the add back that was in your line. Is that-- I guess, why was that so high? That seems very high, and is that the right number on a quarterly basis going forward, or what should we think about that line?
Speaker #14: It looks like, on an adjusted basis, it was about $27 million in the quarter when you do the add-back that was in your line.
Speaker #14: Is that—I guess, why was that so high? That seems very high. And is that the right number on a quarterly basis going forward?
Speaker #14: Or what should we think about that line?
Ron Clarke: Maybe let's take that question with you offline in a modeling conversation, just so we can go through it in more detail.
Speaker #15: So maybe let's take that question with you offline in a modeling conversation, just so we can go through it in more detail.
Peter Walker: Maybe let's take that question with you offline in a modeling conversation, just so we can go through it in more detail.
Speaker #15: detail. Okay.
David Koning: Okay. Great. Thanks.
David Koning: Okay. Great. Thanks.
Speaker #13: Great. Thanks.
Speaker #1: And our last question comes from Madison Sewer with Raymond James. Your line is now open.
Operator: Our last question comes from Madison Sewell with Raymond James. Your line is now open.
Operator: Our last question comes from Madison Sewell with Raymond James. Your line is now open.
Speaker #16: Hey guys, thanks for sneaking me in. And I'll just ask one as well here—just circling back to the MasterCard partnership. Early indications sound pretty positive there.
Madison Sewell: Hey, guys. Thanks for sneaking me in, and I'll just ask one as well here. Just circling back to the Mastercard partnership, early indications sound pretty positive there. So is the 200 to 300 basis point tailwind to cross-border still kind of the right way to think about the contribution from that partnership? Or do you think there could be potential upside, given some of the early indications? Thanks, guys.
Madison Suhr: Hey, guys. Thanks for sneaking me in, and I'll just ask one as well here. Just circling back to the Mastercard partnership, early indications sound pretty positive there. So is the 200 to 300 basis point tailwind to cross-border still kind of the right way to think about the contribution from that partnership? Or do you think there could be potential upside, given some of the early indications? Thanks, guys.
Speaker #16: So is the 200 to 300 basis point tailwind to cross-border still kind of the right way to think about the contribution from that partnership?
Speaker #16: Or do you think there could be potential upside given some of the early indications? Thanks, guys.
Speaker #3: Yeah, that's another good question. I'd say it's a timing call, right? Because the sales cycle on FIs is longer than it is for corporates.
Ron Clarke: Yeah, that's another good question. I'd say it's a timing call, right? Because the sales cycle on FIs is longer than it is for corporates. But to your point, given the size of the pipeline and the fact that some of the things we're actually, you know, converting, it's a whopper segment. I do want to remind you and others that virtually all of the cross-border business that we don't have, they have. So, like, all of it, right, is there.
Ron Clarke: Yeah, that's another good question. I'd say it's a timing call, right? Because the sales cycle on FIs is longer than it is for corporates. But to your point, given the size of the pipeline and the fact that some of the things we're actually, you know, converting, it's a whopper segment. I do want to remind you and others that virtually all of the cross-border business that we don't have, they have. So, like, all of it, right, is there.
Speaker #3: But to your point, given the size of the pipeline and the fact that some of the things were actually converting, it's a whopper segment.
Speaker #3: I do want to remind you and others that virtually all of the cross-border business that we don't have, they have. So all of it, right, is there.
Speaker #3: And so, to the extent that we're successful getting this thing going and happening with MasterCard, all I can say is, it is just so crazy large—the flows that these banks have today—that if we get in with a number of them, over some cycle, it could be a big, big contribution.
Ron Clarke: And so to the extent that we're successful getting this thing going and happening with Mastercard, all I can say is, like, it is just so crazy large, the flows that these banks have today, that if we get in with a number of them, it, you know, over some cycle, it could be a big, big contribution, just because they have all the business today, right? The independents like us have such a fraction of the, you know, of the book today. So it's super exciting. Again, it's to me, it's just a question of what the timeframe is.
Ron Clarke: And so to the extent that we're successful getting this thing going and happening with Mastercard, all I can say is, like, it is just so crazy large, the flows that these banks have today, that if we get in with a number of them, it, you know, over some cycle, it could be a big, big contribution, just because they have all the business today, right? The independents like us have such a fraction of the, you know, of the book today. So it's super exciting. Again, it's to me, it's just a question of what the timeframe is.
Speaker #3: Just because they have all the business today, right? The independents, like us, have such a fraction of the book today, so it's super exciting.
Speaker #3: Again, to me, it's just a question of what the timeframe is.
Speaker #1: Thank you. At this time, there are no further questions in the queue. I will now turn the meeting back to our presenters for any additional or closing remarks.
Operator: Thank you. At this time, there are no further questions in queue. I will now turn the meeting back to our presenters for any additional or closing remarks.
Operator: Thank you. At this time, there are no further questions in queue. I will now turn the meeting back to our presenters for any additional or closing remarks.
Speaker #1: remarks.
Speaker #3: Great. Thanks,
Jim Eglseder: Great. Thanks, everybody, for your interest. If you need anything else, you know where to find me. Have a good evening.
Jim Eglseder: Great. Thanks, everybody, for your interest. If you need anything else, you know where to find me. Have a good evening.
Speaker #3: Everybody, for your interest. If you need anything else, you know where to find me. Have a good
Speaker #3: evening. Thank
Operator: Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.
Operator: Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.
