WEX Q4 2O25 WEX Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2O25 WEX Inc Earnings Call
Speaker #1: Hello, Energy for Standing By. My name is Tiffany, and I will be your conference operator everyone to the WEX Q4, 2025 earnings call. All lines have been placed on mute to prevent After the speakers' remarks, there will be a question and answer session.
Melissa Smith: Hello, thank you for standing by. My name is Tiffany, and I will be your conference operator today. At this time, I would like to welcome everyone to the WEX Q4 2025 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during that time, simply press star, then the number one on your telephone keypad. I would now like to turn the call over to Steve Elder, Senior Vice President of Investor Relations. Steve, please go ahead.
Operator: Hello, thank you for standing by. My name is Tiffany, and I will be your conference operator today. At this time, I would like to welcome everyone to the WEX Q4 2025 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during that time, simply press star, then the number one on your telephone keypad. I would now like to turn the call over to Steve Elder, Senior Vice President of Investor Relations. Steve, please go ahead.
Speaker #1: question, during that time, simply press star then the number one on your to turn the call over to Steve Elder, Senior Vice President If you would like to ask a of Investor Relations.
Speaker #1: I would now like
Speaker #1: Steve, please go ahead with your question.
Steve Elder: Thank you, operator, and good morning, everyone. With me today is Melissa Smith, our Chair and CEO, and Jagtar Narula, our CFO. The press release and supplemental materials we issued yesterday and a slide deck to walk through our prepared remarks have been posted to the Investor Relations section of our website at wexinc.com. A copy of the release and supplemental materials have been included in an 8-K filed with the SEC yesterday afternoon. As a reminder, we will be discussing non-GAAP metrics, specifically adjusted net income, which we sometimes refer to as ANI, adjusted net income per diluted share, adjusted operating income and related margin, as well as adjusted free cash flow during our call. Please see Exhibit 1 of the press release for an explanation and reconciliation of these non-GAAP measures.
Steve Elder: Thank you, operator, and good morning, everyone. With me today is Melissa Smith, our Chair and CEO, and Jagtar Narula, our CFO. The press release and supplemental materials we issued yesterday and a slide deck to walk through our prepared remarks have been posted to the Investor Relations section of our website at wexinc.com. A copy of the release and supplemental materials have been included in an 8-K filed with the SEC yesterday afternoon. As a reminder, we will be discussing non-GAAP metrics, specifically adjusted net income, which we sometimes refer to as ANI, adjusted net income per diluted share, adjusted operating income and related margin, as well as adjusted free cash flow during our call. Please see Exhibit 1 of the press release for an explanation and reconciliation of these non-GAAP measures.
Speaker #2: everyone. With me today is Melissa Smith, our Chair and CEO, and Jagtar Narula, our CFO. The press release and supplemental materials we issued our prepared remarks, have been posted to the Investor Relations section of our website, at WEXinc.com.
Speaker #2: yesterday, and a slide deck to walk through supplemental materials have been included in an 8K filed with the SEC yesterday afternoon. As a reminder, we will be discussing non-GAAP A copy of the release and metrics, specifically adjusted net as ANI, adjusted net income per diluted share, margin, as well as adjusted free cash income, which we sometimes refer to Exhibit 1 of the press release for an explanation and reconciliation of these non-GAAP measures.
Speaker #2: The company provides revenue guidance on a GAAP basis, and earnings guidance on a non-GAAP basis, due to the uncertainty in the indeterminate amount of certain elements that are included in reported GAAP earnings.
Steve Elder: The company provides revenue guidance on a GAAP basis and earnings guidance on a non-GAAP basis due to the uncertainty and the indeterminate amount of certain elements that are included in reported GAAP earnings. I would also like to remind you that we'll discuss forward-looking statements under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those forward-looking statements as a result of various factors, including those discussed in the press release, the supplemental materials, and the risk factors identified in our most recently filed annual report on Form 10-K, and in our subsequent quarterly reports on Form 10-Q and other subsequent SEC filings. While we may update forward-looking statements in the future, we disclaim any obligations to do so. You should not place undue reliance on these forward-looking statements, all of which speak only as of today.
Steve Elder: The company provides revenue guidance on a GAAP basis and earnings guidance on a non-GAAP basis due to the uncertainty and the indeterminate amount of certain elements that are included in reported GAAP earnings. I would also like to remind you that we'll discuss forward-looking statements under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those forward-looking statements as a result of various factors, including those discussed in the press release, the supplemental materials, and the risk factors identified in our most recently filed annual report on Form 10-K, and in our subsequent quarterly reports on Form 10-Q and other subsequent SEC filings. While we may update forward-looking statements in the future, we disclaim any obligations to do so. You should not place undue reliance on these forward-looking statements, all of which speak only as of today.
Speaker #2: remind you that we'll discuss forward-looking I would also like to Reform Act of materially from those forward-looking statements, as a result of various factors, including flow during our call.
Speaker #1: discussed in the Including those press release . supplemental The factors materials and the risk identified in our most filed annual on Form report 10-K recently Annual Report on Form 10-K and in subsequent Reports on Form Quarterly and 10-q other SEC filings .
Speaker #1: forward looking update statements in the future , our disclaim any obligation to do so . You should not place undue on these forward reliance statements , all of which speak looking only as today of With that , I'll turn the call .
Steve Elder: With that, I'll turn the call over to Melissa.
Steve Elder: With that, I'll turn the call over to Melissa.
Melissa Smith: Thank you, Steve, and good morning, everyone. We appreciate you joining us. Let me start today with how we think about our strategy and why we believe our business model is so durable. WEX serves customers in mission-critical areas where reliability, compliance, and control matter most. Our focus on and expertise in these areas has allowed us to earn long-lasting customer trust, win market share over time, and generate strong recurring cash flow. Today, we're modernizing our platforms to reduce friction, deepen workflow integration, and expand customer lifetime value, all while executing with discipline to deliver durable growth and expanding margins. Before I go further, I want to connect back to what we said on our Q3 call. We described WEX as reaching an inflection point where the investments we've made in product velocity, go-to-market execution, and cost discipline were beginning to translate into stronger performance.
Melissa Smith: Thank you, Steve, and good morning, everyone. We appreciate you joining us. Let me start today with how we think about our strategy and why we believe our business model is so durable. WEX serves customers in mission-critical areas where reliability, compliance, and control matter most. Our focus on and expertise in these areas has allowed us to earn long-lasting customer trust, win market share over time, and generate strong recurring cash flow. Today, we're modernizing our platforms to reduce friction, deepen workflow integration, and expand customer lifetime value, all while executing with discipline to deliver durable growth and expanding margins. Before I go further, I want to connect back to what we said on our Q3 call. We described WEX as reaching an inflection point where the investments we've made in product velocity, go-to-market execution, and cost discipline were beginning to translate into stronger performance.
Speaker #1: Melissa
Speaker #1: . Thank you
Speaker #2: good morning , everyone . We Steve , and you joining us . Let me start today with how we think about our 1995. why our believe business we model so we durable Rex is serves customers .
Speaker #2: in mission critical where reliability Actual results may differ areas and control Most . matter . Our focus on and expertise in these areas allowed us to has long earn customer win trust , time over generate recurring market cash share Today , we're .
Speaker #2: modernizing to reduce friction , deepen workflow integration , and expand customer value lifetime while , compliance executing with discipline to durable growth and expanding .
Speaker #2: go further , I connect want to margins back to what our said on Q3 call . described wax as reaching an point inflection where the investments we've made in product velocity we execution and discipline cost beginning to translate into stronger performance .
Melissa Smith: In the fourth quarter, we saw that inflection point take hold. Earnings growth accelerated, operating leverage improved, and we made tangible progress towards the margin expansion we expect as our investments continue to scale. We're confident in our ability to build upon this progress. Our strategy remains anchored in three pillars: amplifying our core, expanding our reach, and accelerating innovation. Each of these pillars is designed to turn customer trust into durable growth, margin expansion, and consistently strong free cash flow. Now turning to the quarter. Our fourth quarter results reflect the momentum we're building as execution improves across product, sales, and customer experience. In the fourth quarter, we delivered revenue of $672.9 million, an increase of 5.7% year-over-year, or 4.5% excluding the impact of fluctuations in fuel prices and foreign exchange rates. Adjusted net income per diluted share was $4.11, an increase of 15.1% year-over-year.
Melissa Smith: In the fourth quarter, we saw that inflection point take hold. Earnings growth accelerated, operating leverage improved, and we made tangible progress towards the margin expansion we expect as our investments continue to scale. We're confident in our ability to build upon this progress. Our strategy remains anchored in three pillars: amplifying our core, expanding our reach, and accelerating innovation. Each of these pillars is designed to turn customer trust into durable growth, margin expansion, and consistently strong free cash flow. Now turning to the quarter. Our fourth quarter results reflect the momentum we're building as execution improves across product, sales, and customer experience. In the fourth quarter, we delivered revenue of $672.9 million, an increase of 5.7% year-over-year, or 4.5% excluding the impact of fluctuations in fuel prices and foreign exchange rates. Adjusted net income per diluted share was $4.11, an increase of 15.1% year-over-year.
Speaker #2: In the fourth quarter, we saw that inflection take hold. Growth accelerated, operating leverage improved, and earnings increased. We made tangible progress towards the expectations, as our investments continue to scale.
Speaker #2: expansion . We're confident in our ability to build upon this progress . Our strategy remains in anchored amplifying our improved , and core , expanding reach and accelerating Each of these innovation .
Speaker #2: Pillars is designed to turn customer trust in our durable business into growth, expansion, and consistently strong free cash flow. Now, turning to the quarter.
Speaker #2: Our fourth quarter results reflect the momentum we're as building execution across product , sales and customer experience . In the improves fourth quarter , we delivered increase $672.9 million , an of year , or 4.5% excluding the impact of fluctuations in fuel and prices foreign exchange .
Speaker #2: rates Adjusted net income diluted share per was $4.11 , an increase of 15.1% year over year the Excluding impact of fluctuations in fuel prices and .
Melissa Smith: Excluding the impact of fluctuations in fuel prices and foreign exchange rates, Q4 adjusted EPS grew 12.1%. For the full year 2025, we delivered record revenue of $2.66 billion, up 1.2% year over year, with improving performance as the year progressed. Adjusted net income per share was $16.10, up 5.4% year over year. Excluding the impact of lower fuel prices and foreign exchange rates, revenue increased 2%, with adjusted net income per share up 7.7% year over year. A few years ago, we started a journey to reimagine and accelerate how we organically invest in technology and new products. Part of that journey included bringing on a new tech and new product leader who have enhanced our foundational capabilities in technology and augmented our team's expertise in AI and data science. We've been modernizing our architecture, strengthening execution rigor, and increasing accountability for delivery.
Melissa Smith: Excluding the impact of fluctuations in fuel prices and foreign exchange rates, Q4 adjusted EPS grew 12.1%. For the full year 2025, we delivered record revenue of $2.66 billion, up 1.2% year-over-year, with improving performance as the year progressed. Adjusted net income per share was $16.10, up 5.4% year-over-year. Excluding the impact of lower fuel prices and foreign exchange rates, revenue increased 2%, with adjusted net income per share up 7.7% year-over-year. A few years ago, we started a journey to reimagine and accelerate how we organically invest in technology and new products. Part of that journey included bringing on a new tech and new product leader who have enhanced our foundational capabilities in technology and augmented our team's expertise in AI and data science. We've been modernizing our architecture, strengthening execution rigor, and increasing accountability for delivery.
Speaker #2: rates , Q4 adjusted EPs grew 12.1% . For the full 2025 . We delivered record year revenue of $2.66 billion , 1.2% year over year , with improving performance progressed income up per share up .
Speaker #2: year 5.4% year over . Excluding impact of the lower fuel prices and foreign rates , revenue increased 2% with adjusted net income per share 7.7% year over year years ago , we started a journey to reimagine and accelerate how we organically invest in technology and new products Part of .
Speaker #2: journey included that bringing on a new tech and new product leader enhanced our foundational who have in capabilities technology augmented and team's our expertise in AI and data science .
Speaker #2: We've been modernizing Adjusted net our exchange architecture , strengthening execution rigor , and increasing accountability for delivery . The result is that we're faster building , scaling more and efficiently , lowering our long term cost to .
Melissa Smith: The result is that we're building faster, scaling more efficiently, and lowering our long-term cost to serve. By combining operational discipline with an AI-first approach to product development, we increased product innovation velocity by more than 50% year-over-year. These investments are already improving customer outcomes and delivering efficiency. As we move through 2026, we plan to shift from an investment phase to a scaling phase, with operating leverage driving meaningful margin expansion over the medium term. Let me give you a few examples of how this is showing up across the business. In mobility, we continue to invest in our industry-leading fuel card solutions for fleets of all sizes. Targeted marketing investments in 2025 drove a 13% year-over-year increase in new small business customers. On the product side, we've introduced innovative offerings like Fleet Plus, which combines the power of our proprietary closed-loop fuel card with open-loop flexibility.
Melissa Smith: The result is that we're building faster, scaling more efficiently, and lowering our long-term cost to serve. By combining operational discipline with an AI-first approach to product development, we increased product innovation velocity by more than 50% year-over-year. These investments are already improving customer outcomes and delivering efficiency. As we move through 2026, we plan to shift from an investment phase to a scaling phase, with operating leverage driving meaningful margin expansion over the medium term. Let me give you a few examples of how this is showing up across the business. In mobility, we continue to invest in our industry-leading fuel card solutions for fleets of all sizes. Targeted marketing investments in 2025 drove a 13% year-over-year increase in new small business customers. On the product side, we've introduced innovative offerings like Fleet Plus, which combines the power of our proprietary closed-loop fuel card with open-loop flexibility.
Speaker #2: Combining operational buy with a serve AI-first approach to product development, we increased product innovation by more velocity than 50% year over year.
Speaker #2: These year investments are already customer improving outcomes and delivering as we efficiency move through 2026 . to shift from an We plan investment phase to a scaling phase with operating leverage driving meaningful margin expansion over the medium term .
Speaker #2: me give you Let a few examples of how this is the showing up business . In mobility , we continue to invest in our industry leading card solutions for fuel fleets of all sizes .
Speaker #2: across investments in 2025 drove a 13% year over year in increase new small business customers on the product side . We've introduced innovative offerings like Fleet Plus , which power combines the of a proprietary closed loop fuel card with open loop flexibility that translates superior into data experience that controls and is replicate at , creates a difficult to scale and increases revenue per customer .
Speaker #2: across investments in 2025 drove a 13% year over year in increase new small business customers on the product side . We've introduced innovative offerings like Fleet Plus , which power combines the of a proprietary closed loop fuel card with open loop flexibility that translates superior into data experience that controls and is replicate at , creates a difficult to scale and increases revenue per product mobility business in the benefits segment , investments in both sales product helped and another strong enrollment open season .
Melissa Smith: That translates into superior controls and data, creates a product experience that is difficult to replicate at scale, and increases revenue per customer in our mobility business. In the benefits segment, investments in both sales and product help drive another strong open enrollment season. A great example is our use of AI to streamline healthcare claim reimbursements. Our AI-powered solution has reduced processing times from days to minutes with 98% accuracy, supporting our goal of improving participant satisfaction, reducing friction, and lowering our cost to serve. We also launched a modernized brokerage experience that enables real-time trading and provides seamless access to HSA cash and investments, and is designed to drive higher balances and asset retention. These are key drivers of long-term value creation in the HSA market.
Melissa Smith: That translates into superior controls and data, creates a product experience that is difficult to replicate at scale, and increases revenue per customer in our mobility business. In the benefits segment, investments in both sales and product help drive another strong open enrollment season. A great example is our use of AI to streamline healthcare claim reimbursements. Our AI-powered solution has reduced processing times from days to minutes with 98% accuracy, supporting our goal of improving participant satisfaction, reducing friction, and lowering our cost to serve. We also launched a modernized brokerage experience that enables real-time trading and provides seamless access to HSA cash and investments, and is designed to drive higher balances and asset retention. These are key drivers of long-term value creation in the HSA market.
Speaker #2: A great example is our use of to AI drive healthcare claim reimbursements . Our AI powered solution has reduced processing times from days to minutes , with 98% accuracy , supporting our goal of improving participant reducing satisfaction , friction , lowering our and cost to serve .
Speaker #2: Also, a modernized brokerage experience that launched enables real-time trading and provides access to cash, HSA, and investments. And it's designed to drive higher balances and seamless asset retention.
Speaker #2: These are key drivers of value long-term creation in the HSA. Our direct accounts payable market product continues to grow rapidly, and investments in expanding the sales force are delivering as expected.
Melissa Smith: Our Direct Accounts Payable product continues to grow rapidly, and our investments in expanding the sales force are delivering as expected, with Q4 volumes up approximately 15% year-over-year. The momentum in our Direct AP is complemented by early success in our embedded payments offering, with a growing pipeline of prospects and customers to support sustained growth in 2026 and beyond. We're deliberately expanding our reach and extending addressable use cases across verticals. Our product investments continue to help us differentiate ourselves across this business. For example, we recently launched a global funding engine that enables customers to issue virtual cards in multiple currencies and execute on-demand currency conversions without incurring FX costs. This expands our product capability to better serve customer needs, strengthens our value proposition beyond travel, and supports continued operating leverage as volume scales.
Melissa Smith: Our Direct Accounts Payable product continues to grow rapidly, and our investments in expanding the sales force are delivering as expected, with Q4 volumes up approximately 15% year-over-year. The momentum in our Direct AP is complemented by early success in our embedded payments offering, with a growing pipeline of prospects and customers to support sustained growth in 2026 and beyond. We're deliberately expanding our reach and extending addressable use cases across verticals. Our product investments continue to help us differentiate ourselves across this business. For example, we recently launched a global funding engine that enables customers to issue virtual cards in multiple currencies and execute on-demand currency conversions without incurring FX costs. This expands our product capability to better serve customer needs, strengthens our value proposition beyond travel, and supports continued operating leverage as volume scales.
Speaker #2: With volumes up approximately 15% year over year , the momentum in our direct AP is complemented by success in our embedded payments offering .
Speaker #2: Growing with a pipeline of prospects and supporting customers to sustain growth in 2026 and beyond. We're expanding deliberately and extending addressable use cases across verticals.
Speaker #2: Our product investments continue to differentiate ourselves across this business . For example , we recently launched a global funding engine that enables customers cards virtual in issue currencies to execute and on demand currency conversions without incurring FX costs expands our product .
Speaker #2: This capability to better serve customer needs , strengthens our proposition beyond value and sports operating . Continued leverage as volume scales Looking . see the potential for additional upside from geographic expansion in travel as well as new digital tools that accelerate onboarding and improve customer productivity .
Melissa Smith: Looking ahead, we see the potential for additional upside from geographic expansion in travel, as well as new digital tools that accelerate onboarding and improve customer productivity. By balancing growth acceleration with operational efficiency, we've built a stronger and more agile WEX that is well-positioned to capitalize on market opportunities, scale efficiently, and strengthen our long-term competitive advantages. Now let's turn to our segment results for Q4, beginning with mobility. Mobility is our largest segment and a great example of how we are amplifying our core by protecting profitable share in a down cycle while we continue to invest to drive long-term value. Despite ongoing market softness, Q4 mobility revenue was flat year-over-year as we focused on capturing profitable market share. Transaction volumes declined modestly, consistent with our expectations, broader market trends, and the patterns we saw in Q3.
Melissa Smith: Looking ahead, we see the potential for additional upside from geographic expansion in travel, as well as new digital tools that accelerate onboarding and improve customer productivity. By balancing growth acceleration with operational efficiency, we've built a stronger and more agile WEX that is well-positioned to capitalize on market opportunities, scale efficiently, and strengthen our long-term competitive advantages. Now let's turn to our segment results for Q4, beginning with mobility. Mobility is our largest segment and a great example of how we are amplifying our core by protecting profitable share in a down cycle while we continue to invest to drive long-term value. Despite ongoing market softness, Q4 mobility revenue was flat year-over-year as we focused on capturing profitable market share. Transaction volumes declined modestly, consistent with our expectations, broader market trends, and the patterns we saw in Q3.
Speaker #2: By accelerating operational efficiency, we've built a stronger and more agile organization. Balancing growth, WEX is well positioned to capitalize on opportunities, scale efficiently, and strengthen our long-term competitive advantages.
Speaker #2: Now , let's turn to our market results segment Beginning with mobility . for Mobility is our largest Q4 . segment great and a example of how we are amplifying our core by protecting profitable in a cycle .
Speaker #2: we continue While to invest to drive long term value despite ongoing market . softness Fourth quarter mobility revenue was flat year year over we focused as on capturing profitable market , transaction volumes declined modestly consistent expectations .
Speaker #2: market Broader trends patterns the in saw third quarter . in the we It's also important to address what seeing in the we're trucking market over the Over-the-road remains market cyclical downcycle with demand and pressure muted freight small operators .
Melissa Smith: It's also important to address what we're seeing in the over-the-road trucking market. The over-the-road market remains in a cyclical down cycle with muted freight demand and pressure on small operators. We've seen this pattern before. These cycles are historically temporary. We're executing on what is in our control by protecting profitable market share, maintaining high retention, and continuing to invest in differentiated capabilities so that when volumes recover, we exit this cycle with stronger economics and greater operating leverage. As I mentioned earlier, we've been directing sales and marketing investments towards smaller fleets, which we believe represent a large and underserved market with significant potential. 10-4 by WEX expands our reach by bringing new small trucking fleets into the ecosystem while creating a pathway to amplify the core over time through deeper relationships.
Melissa Smith: It's also important to address what we're seeing in the over-the-road trucking market. The over-the-road market remains in a cyclical down cycle with muted freight demand and pressure on small operators. We've seen this pattern before. These cycles are historically temporary. We're executing on what is in our control by protecting profitable market share, maintaining high retention, and continuing to invest in differentiated capabilities so that when volumes recover, we exit this cycle with stronger economics and greater operating leverage. As I mentioned earlier, we've been directing sales and marketing investments towards smaller fleets, which we believe represent a large and underserved market with significant potential. 10-4 by WEX expands our reach by bringing new small trucking fleets into the ecosystem while creating a pathway to amplify the core over time through deeper relationships.
Speaker #2: We've seen this pattern before . in a cycles are historically temporary with our These . We're executing on what is in our control by profitable share , maintaining high retention , and continuing to differentiated in capabilities so that protecting recover , exit the we economics stronger operating greater market leverage and .
Speaker #2: I mentioned been directing earlier , we've marketing investments towards sales and As fleets , smaller which we believe represent a large underserved market with significant potential .
Speaker #2: Ten four by wax our expands reach by bringing new trucking fleets small into the ecosystem while creating a pathway to amplify the core time through deeper relationships .
Melissa Smith: The discounts that we've negotiated with Truckstop chains save the typical user hundreds of dollars each month, helping drive adoption. Momentum has been strong, with December accounting for more than half of the total Q4 volume on the platform. Finally, WEX Field Service Management, formerly Payzer, continues to build momentum, delivering healthy double-digit revenue growth in the fourth quarter. Since acquiring this business two years ago, we have updated and aligned the brand, refined our cross-sell process, improved retention, made key product enhancements, and updated pricing. We remain energized by this opportunity as we deepen our presence in this attractive adjacent market where we believe we can generate up to 10 times more revenue per field service management customer than for a traditional small fleet. Now turning to benefits, which simplifies the complex world of employee benefits administration and comprises approximately 30% of annual revenue.
Melissa Smith: The discounts that we've negotiated with Truckstop chains save the typical user hundreds of dollars each month, helping drive adoption. Momentum has been strong, with December accounting for more than half of the total Q4 volume on the platform. Finally, WEX Field Service Management, formerly Payzer, continues to build momentum, delivering healthy double-digit revenue growth in the fourth quarter. Since acquiring this business two years ago, we have updated and aligned the brand, refined our cross-sell process, improved retention, made key product enhancements, and updated pricing. We remain energized by this opportunity as we deepen our presence in this attractive adjacent market where we believe we can generate up to 10 times more revenue per field service management customer than for a traditional small fleet. Now turning to benefits, which simplifies the complex world of employee benefits administration and comprises approximately 30% of annual revenue.
Speaker #2: The discounts that we've negotiated over stop with truck chains save the typical hundreds of dollars each month, helping drive adoption. Momentum has been strong, with December accounting for more than half of the total Q4 volume on the platform.
Speaker #2: Finally , Field Wex Service Management , Pacer , continues to build momentum , delivering healthy double digit revenue in the growth fourth quarter .
Speaker #2: Since acquiring this ago , we have business two years and updated aligned the brand , refined our cross-sell process , improved retention on , made key product enhancements updated pricing .
Speaker #2: We remain energized by this opportunity, presence in, deepen our this attractive, adjacent where believe we market can generate revenue ten times more per field, service up to management than for customer our traditional small fleet.
Speaker #2: Now , turning to benefits , which simplifies complex the world of employee benefits administration and comprises approximately 30% of annual revenue our innovation and expand .
Melissa Smith: Benefits, as our accelerate innovation and expand our reach, strategic priorities intersect most clearly. In 2025, we extended our track record of consistently growing HSA accounts faster than the underlying market, as reported by Devenir. Our diversified portfolio, spanning benefits administration, consumer-driven benefits, and HSA custodial services, positions us to sustain market leadership as we continue to further strengthen our competitive edge. Overall SaaS account growth was 6% in the quarter, in line with previous quarters last year. Following a strong open enrollment season, we now have more than 9.4 million HSA accounts on our platform. We remain a top five HSA provider, powering more than 20% of all HSA accounts in the country and serving approximately 60% of the Fortune 1000 companies. We're very pleased with the results of our 2026 open enrollment season, with direct new sales exceeding expectations and continued strength across our partner channels.
Melissa Smith: Benefits, as our accelerate innovation and expand our reach, strategic priorities intersect most clearly. In 2025, we extended our track record of consistently growing HSA accounts faster than the underlying market, as reported by Devenir. Our diversified portfolio, spanning benefits administration, consumer-driven benefits, and HSA custodial services, positions us to sustain market leadership as we continue to further strengthen our competitive edge. Overall SaaS account growth was 6% in the quarter, in line with previous quarters last year. Following a strong open enrollment season, we now have more than 9.4 million HSA accounts on our platform. We remain a top five HSA provider, powering more than 20% of all HSA accounts in the country and serving approximately 60% of the Fortune 1000 companies. We're very pleased with the results of our 2026 open enrollment season, with direct new sales exceeding expectations and continued strength across our partner channels.
Speaker #2: our reach accelerate Most intersect . clearly priorities extended our track record of consistently , in 2025 , we growing accounts faster than the underlying market .
Speaker #2: As reported by devenir , our diversified portfolio spanning benefits administration , consumer driven benefits , and HSA custodial services positions us to sustain market as we continue to leadership further strengthen our competitive edge overall , SaaS account growth 6% in the was quarter , in line with previous last quarters , following a year enrollment season .
Speaker #2: strong open We now have more than 9.4 million HSA on our platform . We top five HSA provider , powering more than 20% of remain a all HSA accounts in the country and serving approximately 60% of the fortune 1000 companies .
Speaker #2: We're pleased with the HSA results of our 2026 open enrollment season, with direct new sales exceeding expectations and continued strength across our partner channels.
Melissa Smith: As a result, we expect account growth to be in the range of 6% to 7% year-over-year in Q1. Our benefits business continues to outperform the market, and we're confident in its long-term growth trajectory. Finally, let's turn to corporate payments, which is the clearest example of how we're expanding our reach, expanding our core capability across industries, geographies, and workflows, representing approximately 20% of annual revenue. This segment helps businesses pay their partners faster and more securely while simplifying the workflows. Fourth quarter performance for this segment improved meaningfully from the first half of the year, in line with our expectations. Purchase volume processed by WEX increased 16.9% year-over-year, reflecting the continued strength in travel customers. Travel-related revenue grew more than 30% in the quarter, supported by high existing customer activity and the onboarding of a meaningful new customer in Asia.
Melissa Smith: As a result, we expect account growth to be in the range of 6% to 7% year-over-year in Q1. Our benefits business continues to outperform the market, and we're confident in its long-term growth trajectory. Finally, let's turn to corporate payments, which is the clearest example of how we're expanding our reach, expanding our core capability across industries, geographies, and workflows, representing approximately 20% of annual revenue. This segment helps businesses pay their partners faster and more securely while simplifying the workflows. Fourth quarter performance for this segment improved meaningfully from the first half of the year, in line with our expectations. Purchase volume processed by WEX increased 16.9% year-over-year, reflecting the continued strength in travel customers. Travel-related revenue grew more than 30% in the quarter, supported by high existing customer activity and the onboarding of a meaningful new customer in Asia.
Speaker #2: As a expect account result , growth to we be in the range of 6 to 7% year over year in Q1 , our benefits business continues to outperform the and market , we're confident in its term growth trajectory .
Speaker #2: Finally , turn to corporate long let's the clearest example of how we're expanding our reach a core capability , expanding industries across , geographies , and workflows representing approximately 20% of annual revenue .
Speaker #2: This segment helps businesses pay their and more faster securely , while partners simplifying the workflows Fourth quarter performance for this segment . improved meaningfully from the first half of the year , in line with our expectations volume processed by wax increased 16.9% year over year , reflecting the strength in travel customers related .
Speaker #2: , purchase Travel revenue grew more than 30% in the quarter , supported by a high existing customer activity in onboarding of a meaningful new customer in Asia from grew in Non-travel the mid-single digits .
Melissa Smith: Revenue from non-travel customers grew in the mid-single digits. The adjusted operating margin for corporate payments increased by 450 basis points, reflecting the strong operating leverage in the model as volume scaled. Our Direct Accounts Payable product continues to scale rapidly. New customer wins fall within the construction and healthcare verticals, alongside retail and media, and this growing book of business now represents 20% of segment revenue. Before I turn it over to Jagtar, I want to highlight a governance update we announced last month. As part of our multi-year board refreshment plan and reflecting input from our ongoing engagement with shareholders, we announced the next phase of the board's planned evolution. Under this plan, newly appointed Director Dave Foss will assume the role of Vice Chair and Lead Independent Director, effective as of our 2026 annual meeting of stockholders.
Melissa Smith: Revenue from non-travel customers grew in the mid-single digits. The adjusted operating margin for corporate payments increased by 450 basis points, reflecting the strong operating leverage in the model as volume scaled. Our Direct Accounts Payable product continues to scale rapidly. New customer wins fall within the construction and healthcare verticals, alongside retail and media, and this growing book of business now represents 20% of segment revenue. Before I turn it over to Jagtar, I want to highlight a governance update we announced last month. As part of our multi-year board refreshment plan and reflecting input from our ongoing engagement with shareholders, we announced the next phase of the board's planned evolution. Under this plan, newly appointed Director Dave Foss will assume the role of Vice Chair and Lead Independent Director, effective as of our 2026 annual meeting of stockholders.
Speaker #2: adjusted The operating customers margin for corporate payments increased by 450 basis points , reflecting the strong operating leverage in the model as volumes scale our direct accounts payable product scale rapidly .
Speaker #2: New customer fall within, continues to the wins in healthcare verticals alongside retail and media. In, of this growing book now business, represents 20% of segment revenue in turn.
Speaker #2: To Jagtar, I want, before it’s over, to highlight a governance update. We announced last month a multi-year board refreshment plan, reflecting and in part our input from ongoing discussions with our shareholders.
Speaker #2: We announced the phase of the planned board's evolution next engagement with David Foss will assume the role of lead chair and independent , effective as of our 2020 sixth Annual Meeting of Stockholders .
Melissa Smith: We also announced that Shikhar Ghosh and Jack VanWoerkom will retire from the board at that time. We're grateful to Shikhar and Jack for their dedicated stewardship, and we look forward to Dave's leadership as we remain focused on long-term shareholder value creation. Stepping back, we enter 2026 with strong momentum. We expect to deliver the strongest new sales year yet based on our current pipeline, improving sales productivity, and greater customer demand across all three segments. Together, the strength of our platform, the resilience of our model, and the returns from our targeted investments give us confidence we're on the right path. As these investments continue to scale, we expect operating leverage to support margin expansion while sustaining strong free cash flow generation. With that, I'll turn the call over to Jagtar to walk you through our financial performance and our 2026 guidance in more detail.
Melissa Smith: We also announced that Shikhar Ghosh and Jack VanWoerkom will retire from the board at that time. We're grateful to Shikhar and Jack for their dedicated stewardship, and we look forward to Dave's leadership as we remain focused on long-term shareholder value creation. Stepping back, we enter 2026 with strong momentum. We expect to deliver the strongest new sales year yet based on our current pipeline, improving sales productivity, and greater customer demand across all three segments. Together, the strength of our platform, the resilience of our model, and the returns from our targeted investments give us confidence we're on the right path. As these investments continue to scale, we expect operating leverage to support margin expansion while sustaining strong free cash flow generation. With that, I'll turn the call over to Jagtar to walk you through our financial performance and our 2026 guidance in more detail.
Speaker #2: We also announced that Chicago and Jack Van will retire Woerkom from the board . At that time vice . We're grateful to Shankar and Jack for their dedicated stewardship , and we to today's leadership as we remain on shareholder value creation back , we .
Speaker #2: We also announced that Chicago and Jack Van will retire Woerkom from the board . At that time vice . We're grateful to Shankar and Jack for their dedicated stewardship , and we to today's leadership as we remain on shareholder value creation back , we . Stepping focused long term 2026 with strong We momentum .
Speaker #2: expect to deliver the strongest new sales year yet based on our pipeline improving sales , productivity greater customer current demand across all and look forward three segments .
Speaker #2: Together, the strength of our platform, the resilience of our model, and the targeted returns from our investments give us confidence that we're on the right path. As these investments continue to scale, we expect operating leverage to support margin expansion while sustaining strong free cash flow generation.
Speaker #2: With that , I'll turn the call over to Jagtar to walk you through financial performance and our our 2026 guidance in more detail
Melissa Smith: Thank you, Melissa, and good morning, everyone. Before I begin, I want to remind you that unless otherwise noted, all comparisons are year-over-year. Overall, we delivered solid revenue growth and strong earnings performance while also continuing to lay the foundation for accelerating both top-line growth and profitability in 2026. Total revenue in the quarter was $672.9 million, up 5.7%. The impact of foreign exchange rates and fuel prices increased revenue growth by 1.2%. Notably, revenue exceeded the guidance range we provided last quarter, primarily as a result of higher-than-anticipated fuel prices and a strong quarter in the benefits segment. Without the fuel price benefit, revenue came in at the high end of our guidance range of $646 to $666 million. Adjusted earnings per share of $4.11 were up 15.1%, including a 3.1% favorable impact from fuel prices and foreign exchange rates.
Jagtar Narula: Thank you, Melissa, and good morning, everyone. Before I begin, I want to remind you that unless otherwise noted, all comparisons are year-over-year. Overall, we delivered solid revenue growth and strong earnings performance while also continuing to lay the foundation for accelerating both top-line growth and profitability in 2026. Total revenue in the quarter was $672.9 million, up 5.7%. The impact of foreign exchange rates and fuel prices increased revenue growth by 1.2%. Notably, revenue exceeded the guidance range we provided last quarter, primarily as a result of higher-than-anticipated fuel prices and a strong quarter in the benefits segment. Without the fuel price benefit, revenue came in at the high end of our guidance range of $646 to $666 million. Adjusted earnings per share of $4.11 were up 15.1%, including a 3.1% favorable impact from fuel prices and foreign exchange rates.
Speaker #3: Melissa , and good morning , everyone . Before I begin , I want to remind you unless otherwise that noted , all comparisons are year .
Speaker #3: Melissa , and good morning , everyone . Before I begin , I want to remind you unless otherwise that noted , all comparisons are year
Speaker #3: Overall , we delivered solid year over revenue growth and strong earnings performance , while continuing also to lay the foundation for top line and profitability accelerating both .
Speaker #3: Total In 2026 . quarter revenue in the was $672.9 million , . up 5.7% . impact The Thank you . of foreign exchange rates and fuel increased revenue by 1.2% .
Speaker #3: Notably , revenue guidance range . We last as a provided of higher anticipated result fuel and a strong the benefit , primarily segment .
Speaker #3: quarter the fuel Without price benefit , revenue came high end in at the guidance range of of our 646 to $666 million , adjusted earnings per share of $4.11 were up 15.1% , 3.1% favorable from fuel impact a foreign exchange prices in rates .
Melissa Smith: Adjusted EPS was $0.25 above the midpoint of the guidance range we provided in October, of which $0.18 was attributable to higher-than-anticipated fuel prices and the remainder due to execution. In our mobility segment, revenue was $345.1 million, which is flat with the prior year. This includes a favorable impact of 1.4% due to fuel prices and foreign exchange rates and a negative impact of 1% from lower interest rates. The market softness that we had highlighted throughout the year persisted in the fourth quarter, in line with our expectations. Our payment processing rate of 1.33% was down approximately three basis points, primarily due to the decline in interest rates. In our benefits segment, revenue of $204.9 million rose 9.6%. SAS account growth of 6% continues to be above recent industry trends, according to Devenir.
Jagtar Narula: Adjusted EPS was $0.25 above the midpoint of the guidance range we provided in October, of which $0.18 was attributable to higher-than-anticipated fuel prices and the remainder due to execution. In our mobility segment, revenue was $345.1 million, which is flat with the prior year. This includes a favorable impact of 1.4% due to fuel prices and foreign exchange rates and a negative impact of 1% from lower interest rates. The market softness that we had highlighted throughout the year persisted in the fourth quarter, in line with our expectations. Our payment processing rate of 1.33% was down approximately three basis points, primarily due to the decline in interest rates. In our benefits segment, revenue of $204.9 million rose 9.6%. SAS account growth of 6% continues to be above recent industry trends, according to Devenir.
Speaker #3: Adjusted EPs was $0.25 above the midpoint of the guidance range . We provided in October , of which $0.18 was to higher attributable than anticipated fuel prices and the remainder due to execution mobility segment .
Speaker #3: Revenue which is was $345.1 million , prior year . This a includes favorable of fuel prices rates , and exchange 1.4% due to impact negative a impact of 1% from lower interest rates .
Speaker #3: The market softness that we had and foreign highlighted throughout the year persisted in the fourth quarter , in line with our expectations , our rate in our 1.33% was down of processing points approximately , primarily due to the in interest rates decline and our benefits segment of revenue $204.9 million rose account 9.6% .
Speaker #3: growth SaaS 6% be continues to industry trends , above according recent to . Custodial investment represents the revenue , which income we earn custodial cash on balances , rose to the increase $61 million due to both in average asset higher rates .
Speaker #3: growth SaaS 6% be continues to industry trends , above according recent to . Custodial investment represents the revenue , which income we earn custodial cash on balances , rose to the increase $61 million due to both in average asset higher rates levels and Earned increased yield 11 basis points interest to 5% .
Melissa Smith: Custodial investment revenue, which represents the income we earn on custodial cash balances, rose 14.2% to $61 million due to the increase in both average asset levels and higher rates. Earned interest yield increased 11 basis points to 5%. Turning to our corporate payments segment, revenue of $122.9 million increased 17.8%. Purchase volume increased 16.9%, with particular strengths from travel-related customers benefiting from both underlying growth and a favorable comparison to last year. Results also benefited from our incentive contract with our primary scheme provider. Direct accounts payable purchase volume grew more than 15%. The addressable AP market remains very large and relatively unpenetrated. Our virtual card products are resonating with customers, and our Salesforce remains productive. This continues to be one of our key focus areas going forward and where we plan to invest more in the future. Turning now to the balance sheet.
Jagtar Narula: Custodial investment revenue, which represents the income we earn on custodial cash balances, rose 14.2% to $61 million due to the increase in both average asset levels and higher rates. Earned interest yield increased 11 basis points to 5%. Turning to our corporate payments segment, revenue of $122.9 million increased 17.8%. Purchase volume increased 16.9%, with particular strengths from travel-related customers benefiting from both underlying growth and a favorable comparison to last year. Results also benefited from our incentive contract with our primary scheme provider. Direct accounts payable purchase volume grew more than 15%. The addressable AP market remains very large and relatively unpenetrated. Our virtual card products are resonating with customers, and our Salesforce remains productive. This continues to be one of our key focus areas going forward and where we plan to invest more in the future. Turning now to the balance sheet.
Speaker #3: Turning to corporate payments segment , revenue of increased 17.8% . volume increased particular 16.9% , with strength from travel related customers benefiting from both growth and a favorable comparison to underlying year last results .
Speaker #3: Also benefited from our incentive contract with our primary scheme provider . Direct accounts payable , purchase more than 15% . The market AP remains addressable volume grew and relatively unpenetrated .
Speaker #3: Products are virtual card. Our resonating with customers and force our sales remains productive. This continues to be, going forward, one of our key we plan focus invest more, and where in the to future.
Melissa Smith: Our business continues to generate strong recurring revenue and reliable free cash flow. That cash flow provides the flexibility to enhance shareholder value through our disciplined capital allocation strategy. Last year, we generated $638 million of adjusted free cash flow compared to $562 million the prior year. I want to note that as of the end of the first quarter in 2026, we'll have substantially completed our deferred and contingent M&A payments related to our benefits business, which will free up approximately $150 million of cash flow starting in 2027. When it comes to deploying capital, our priorities haven't changed, and we delivered last year in line with the commitments we set. First, we focus on preserving financial strength and flexibility by maintaining a strong balance sheet and appropriate leverage, ensuring we can operate effectively under both normal and stress conditions.
Jagtar Narula: Our business continues to generate strong recurring revenue and reliable free cash flow. That cash flow provides the flexibility to enhance shareholder value through our disciplined capital allocation strategy. Last year, we generated $638 million of adjusted free cash flow compared to $562 million the prior year. I want to note that as of the end of the first quarter in 2026, we'll have substantially completed our deferred and contingent M&A payments related to our benefits business, which will free up approximately $150 million of cash flow starting in 2027. When it comes to deploying capital, our priorities haven't changed, and we delivered last year in line with the commitments we set. First, we focus on preserving financial strength and flexibility by maintaining a strong balance sheet and appropriate leverage, ensuring we can operate effectively under both normal and stress conditions.
Speaker #3: Turning now to the balance sheet , our continues to business generate strong revenue and reliable free recurring cash flow cash flow . That flexibility to shareholder enhance value through our capital provides the strategy disciplined .
Speaker #3: Last year , we generated $638 million of adjusted free cash flow compared to allocation $562 million the prior year note that as . I of the end of the first quarter want to in 2026 , we'll have substantially completed our deferred and contingent M&A payments related to our benefits business , which will free up approximately $150 million of cash flow starting in 2027 , when it comes to deploying capital , haven't priorities changed and we delivered last year in line with the set commitments we .
Speaker #3: First , we focused on financial and strength by flexibility maintaining a balance preserving sheet and leverage appropriate , ensuring we can strong operate effectively under both normal and stress conditions .
Melissa Smith: We ended Q4 with a leverage ratio of 3.1x, down from 3.25x at the end of Q3, and continue to operate within our long-term target range of 2.5x to 3.5x. We will continue to prioritize debt reduction until leverage is below 3x, which we expect to achieve in Q2 or Q3 of this year. Second, we invest in our core businesses where we see attractive returns and opportunities to strengthen our competitive position. This is aligned with our focus on amplifying our core and accelerating innovation. Tied to what Melissa said earlier about our plan to accelerate revenue growth, this will be driven by innovating and investing more in product development. We are taking a balanced and disciplined approach to margins by driving efficiencies, reducing costs in other areas of the company, and reallocating resources towards our growth initiatives.
Jagtar Narula: We ended Q4 with a leverage ratio of 3.1x, down from 3.25x at the end of Q3, and continue to operate within our long-term target range of 2.5x to 3.5x. We will continue to prioritize debt reduction until leverage is below 3x, which we expect to achieve in Q2 or Q3 of this year. Second, we invest in our core businesses where we see attractive returns and opportunities to strengthen our competitive position. This is aligned with our focus on amplifying our core and accelerating innovation. Tied to what Melissa said earlier about our plan to accelerate revenue growth, this will be driven by innovating and investing more in product development. We are taking a balanced and disciplined approach to margins by driving efficiencies, reducing costs in other areas of the company, and reallocating resources towards our growth initiatives.
Speaker #3: Q4 with a We leverage ratio of ended down from , 3.25 times at the Q3 end of continued to operate within our term target long of two and a range half to three and a half times .
Speaker #3: We will prioritize debt until reduction leverage is three times, which we expect to achieve below that level in Q2 or Q3 of this year.
Speaker #3: Second , we our core invest businesses where we see attractive returns and opportunities to strengthen our competitive position . This is aligned with our focus on our amplifying core and innovation accelerating tied to what Melissa said earlier about our plan to accelerate revenue growth .
Speaker #3: This will be driven by innovating and more in investing product development . We are taking a and balanced disciplined approach to by driving margins reducing other efficiencies and areas of company costs in the reallocating resources towards our initiatives growth .
Melissa Smith: We are applying a rigorous return threshold to every potential investment, with clear accountability for growth, retention, and margin impact. This is a core of our financial algorithm: disciplined cost actions fund high-return growth investments, and as revenue scales, we expect margins to expand over the medium term. After addressing these two priorities, we evaluate deploying our remaining capital towards accretive M&A opportunities, which must meet strict financial and strategic criteria, or returning capital to shareholders through share repurchases. Every step of our disciplined capital allocation process is underpinned by a clear objective to maximize long-term shareholder value. I also want to briefly touch on the important financial advantage we gain from having WEX Bank on our platform. The bank provides greater access to liquidity for our balance sheet at a lower cost than funding solely through capital markets.
Jagtar Narula: We are applying a rigorous return threshold to every potential investment, with clear accountability for growth, retention, and margin impact. This is a core of our financial algorithm: disciplined cost actions fund high-return growth investments, and as revenue scales, we expect margins to expand over the medium term. After addressing these two priorities, we evaluate deploying our remaining capital towards accretive M&A opportunities, which must meet strict financial and strategic criteria, or returning capital to shareholders through share repurchases. Every step of our disciplined capital allocation process is underpinned by a clear objective to maximize long-term shareholder value. I also want to briefly touch on the important financial advantage we gain from having WEX Bank on our platform. The bank provides greater access to liquidity for our balance sheet at a lower cost than funding solely through capital markets.
Speaker #3: are applying We a rigorous return threshold potential investment to every with clear accountability growth for and , retention impact . margin This is a core of financial our algorithm .
Speaker #3: cost Disciplined actions fund high return growth investments and as revenue scales , we expect margins expand to over the medium term . After addressing these two we evaluate deploying our priorities , remaining accretive towards M&A opportunities , which meet strict financial and strategic criteria , or returning capital to shareholders through repurchases .
Speaker #3: step of our Every disciplined capital allocation process underpinned by a clear objective to is maximize long term shareholder value . also I want to briefly touch on the important financial advantage gain from having Bank on our platform Wex we .
Speaker #3: The bank access to greater liquidity for our at a balance lower sheet cost than provides funding solely through capital markets . It allows us to earn yields on our portfolio .
Melissa Smith: It also allows us to earn higher yields on our HSA portfolio. The bank is an important differentiator for the business that improves our bottom line. Now, let's turn to 2026 revenue and earnings guidance for the first quarter and the full year. Starting with the first quarter, we expect revenue in the range of $650 to 670 million, which represents a growth of 4% at the midpoint. This growth includes a 2% net drag from fuel prices, FX, and interest rates. We expect adjusted net income EPS to be between $3.80 and 4 per diluted share, which represents growth of 11% at the midpoint. For the full year, we expect revenue in the range of $2.70 to 2.76 billion. We expect adjusted net income EPS to be between $17.25 and 17.85 per diluted share.
Jagtar Narula: It also allows us to earn higher yields on our HSA portfolio. The bank is an important differentiator for the business that improves our bottom line. Now, let's turn to 2026 revenue and earnings guidance for the first quarter and the full year. Starting with the first quarter, we expect revenue in the range of $650 to 670 million, which represents a growth of 4% at the midpoint. This growth includes a 2% net drag from fuel prices, FX, and interest rates. We expect adjusted net income EPS to be between $3.80 and 4 per diluted share, which represents growth of 11% at the midpoint. For the full year, we expect revenue in the range of $2.70 to 2.76 billion. We expect adjusted net income EPS to be between $17.25 and 17.85 per diluted share.
Speaker #3: HSA Bank is an important part of the business, also an improved differentiator for our higher offerings. Now, let's turn to 2026 revenue and earnings guidance for the first quarter and the year.
Speaker #3: For the first quarter, we expect revenue in the range of $650 to $670 million, which represents a growth of starting.
Speaker #3: This growth midpoint includes fuel drag FX and rates . We expect from 2% net EPs be to interest between and $4 per diluted share , which represents growth of 11% at the midpoint for the full we $3.80 revenue in the range of year , 2.70 billion to $2.76 billion .
Speaker #3: We expect adjusted income , EPs to be between net and $17.25 $17.85 per diluted at the full midpoint , share year guidance reflects revenue of 5% , growth EPs growth and impact excluding the of fuel prices , FX rates and 13% when interest of rates .
Melissa Smith: At the midpoint, full-year guidance reflects revenue growth of 5% and EPS growth of 13%, excluding the impact of fuel prices, FX rates, and interest rates. These growth rates are accelerating into the long-term target ranges we set last year. Let me touch on some key factors driving guidance this year. Note that you can find a complete list of assumptions in our supplemental materials. In mobility, excluding the impact of fuel price changes and FX, we are expecting full-year revenue growth of 1% to 3%, which includes a headwind of approximately 1% due to the impact of lower interest rates on merchant contracts that include pricing escalators. We are also prudently assuming no improvement in the macro environment.
Jagtar Narula: At the midpoint, full-year guidance reflects revenue growth of 5% and EPS growth of 13%, excluding the impact of fuel prices, FX rates, and interest rates. These growth rates are accelerating into the long-term target ranges we set last year. Let me touch on some key factors driving guidance this year. Note that you can find a complete list of assumptions in our supplemental materials. In mobility, excluding the impact of fuel price changes and FX, we are expecting full-year revenue growth of 1% to 3%, which includes a headwind of approximately 1% due to the impact of lower interest rates on merchant contracts that include pricing escalators. We are also prudently assuming no improvement in the macro environment.
Speaker #3: These growth rates are accelerating into the term long target ranges . We set year last . Let me on some key factors guidance .
Speaker #3: This year . Note driving can find a list of touch assumptions in our supplemental complete Materials that you in Mobility , impact fuel of price changes and FX , expecting revenue growth full year headwind approximately of includes a 1% due to the impact of lower interest rates on merchant contracts that include escalators pricing assuming also .
Speaker #3: This year . Note driving can find a list of touch assumptions in our supplemental complete Materials that you in Mobility , impact fuel of price changes and FX , expecting revenue growth full year headwind approximately of includes a 1% due to the impact of lower interest rates on merchant contracts that include escalators pricing assuming also prudently no improvement macro in the environment for quarterly .
Melissa Smith: As for quarterly cadence, recall that Q1 last year had a pull forward of gallons in OTR due to tariff worries, which creates a tougher comp for Q1 this year, followed by an easier comp in Q2. Also note that the incremental BP contribution will be weighted to the second half of the year and then continue to ramp into 2027. Credit losses in mobility are expected to be between 12 to 17 basis points for the full year and between 17 and 22 basis points in Q1. In benefits, we are expecting full-year revenue growth of 5% to 7%, which includes approximately a two-point headwind from lower interest rates on the floating rate portion of our non-bank custodial assets. As a reminder, over 75% of our portfolio is in fixed-rate instruments and therefore not rate-sensitive.
Jagtar Narula: As for quarterly cadence, recall that Q1 last year had a pull forward of gallons in OTR due to tariff worries, which creates a tougher comp for Q1 this year, followed by an easier comp in Q2. Also note that the incremental BP contribution will be weighted to the second half of the year and then continue to ramp into 2027. Credit losses in mobility are expected to be between 12 to 17 basis points for the full year and between 17 and 22 basis points in Q1. In benefits, we are expecting full-year revenue growth of 5% to 7%, which includes approximately a two-point headwind from lower interest rates on the floating rate portion of our non-bank custodial assets. As a reminder, over 75% of our portfolio is in fixed-rate instruments and therefore not rate-sensitive.
Speaker #3: cadence that As We are Q1 last year pull of forward otter had a worries , tariff which creates a tougher comp for due this year by an comp in easier , followed Q2 .
Speaker #3: Also note that BP the contribution will be weighted to the second half of the year , and then continue to ramp into 2027 .
Speaker #3: Credit mobility are expected to be incremental 12 to 17 basis points for the year . And between 17 and 22 basis points Q1 .
Speaker #3: In benefits, expecting full year, we are full of 5 to 7%, which includes a two-point growth headwind, approximately, from lower interest rates on the floating rate portion of our bank custodial assets.
Speaker #3: As a revenue over 75% of our portfolio non is rate and therefore in fixed not instruments sensitive raised account is SaaS growth expected higher than rest .
Melissa Smith: Note Q1 SAS account growth is expected to be higher than the rest of 2026 as we lap the benefit of the UAW contract that began in Q2 of last year. In corporate payments, we're expecting full-year revenue growth of 5% to 7%. As I mentioned earlier, we are investing more in innovation and product development to drive future growth. Embedded in our guidance is $50 million of cost-savings actions. A portion of these savings will be reinvested in the business, and a portion will drop to margins. The expected lower fuel prices this year impact adjusted operating margins negatively by approximately 75 basis points. As a result, for 2026, we expect the adjusted operating income margin to be flat with 2025. Our guidance does not assume any future M&A activity or share repurchases, and last year's tender offer will continue to benefit EPS growth through Q1 before annualizing.
Jagtar Narula: Note Q1 SAS account growth is expected to be higher than the rest of 2026 as we lap the benefit of the UAW contract that began in Q2 of last year. In corporate payments, we're expecting full-year revenue growth of 5% to 7%. As I mentioned earlier, we are investing more in innovation and product development to drive future growth. Embedded in our guidance is $50 million of cost-savings actions. A portion of these savings will be reinvested in the business, and a portion will drop to margins. The expected lower fuel prices this year impact adjusted operating margins negatively by approximately 75 basis points. As a result, for 2026, we expect the adjusted operating income margin to be flat with 2025. Our guidance does not assume any future M&A activity or share repurchases, and last year's tender offer will continue to benefit EPS growth through Q1 before annualizing.
Speaker #3: As we lap the of 2026 . to be benefit of UAW contract that Note began in Q2 of last the in corporate payments , we are full year revenue growth 5 to 7% .
Speaker #3: mentioned of we are investing more in earlier , innovation and development to product future drive growth . Embedded in our guidance is $50 million of cost savings actions portion of .
Speaker #3: these A savings reinvested in the business , and will be will drop to margins expected lower fuel prices this year . The margins As I negatively by approximately 75 basis points a .
Speaker #3: As for 2026 , we adjusted the income margin to be flat with 2025 . does not assume any future Our M&A activity or operating share result , repurchases , year's and last offer will continue to benefit EPs growth through Before Annualizing .
Melissa Smith: Finally, our guidance assumes average fuel price per gallon of $3.10 for the year and two interest rate cuts in line with market expectations. As outlined in our earnings supplement, the sensitivities to these factors are for each $0.10 increase in price per gallon, revenue increases by approximately $20 million, and adjusted EPS increases by approximately $0.35, with symmetrical impacts in the event of a decrease. For interest rates, 100 basis points higher than our outlook would translate to approximately $30 million higher revenue and $0.35 lower adjusted EPS, while 100 basis point lower rates would decrease revenue by approximately $30 million while increasing EPS by $0.45. Let me take a moment to review our revenue and earnings trajectory. 2025 was a transition year, with muted revenue growth in the first half that accelerated in the second half, while earnings growth benefited from stock buybacks.
Jagtar Narula: Finally, our guidance assumes average fuel price per gallon of $3.10 for the year and two interest rate cuts in line with market expectations. As outlined in our earnings supplement, the sensitivities to these factors are for each $0.10 increase in price per gallon, revenue increases by approximately $20 million, and adjusted EPS increases by approximately $0.35, with symmetrical impacts in the event of a decrease. For interest rates, 100 basis points higher than our outlook would translate to approximately $30 million higher revenue and $0.35 lower adjusted EPS, while 100 basis point lower rates would decrease revenue by approximately $30 million while increasing EPS by $0.45. Let me take a moment to review our revenue and earnings trajectory. 2025 was a transition year, with muted revenue growth in the first half that accelerated in the second half, while earnings growth benefited from stock buybacks.
Speaker #3: Finally, our assumed Q1 price per gallon guidance of $3.10 for the year and two interest rate cuts are in line with market expectations, as outlined in the supplement.
Speaker #3: The sensitivities to these factors are earnings Tencent increase price per in gallon . Revenue by increases approximately $20 million and adjusted EPs increases by approximately $0.35 with symmetrical impacts event of a .
Speaker #3: A decrease in interest rates, 100 basis points higher than our outlook, would translate to approximately $30 million higher revenue and $0.35 lower adjusted EPS. Meanwhile, 100 basis points lower rates would decrease revenue by approximately $30 million, while increasing EPS by $0.45.
Speaker #3: Let me take a review moment to our revenue and earnings . trajectory year transition with muted growth in revenue the first half that 2025 was a accelerated in the while benefited growth stock buybacks .
Melissa Smith: As we look to 2026, we anticipate continued revenue growth as momentum builds. At the same time, we are actively managing our levers to invest in the business while also driving earnings growth. In closing, our results underscore our disciplined financial execution and the strength of WEX's operating model. We are energized by the momentum we are driving across the business and the tangible progress we are making toward our long-term growth and margin expansion goals. We remain firmly focused on operational excellence, maintaining financial resilience, and allocating capital strategically to support sustainable, long-term value creation for our shareholders. As we enter 2026, we're well positioned to capitalize on improving market conditions and to continue executing against our strategic and financial priorities. With that, operator, please open the line for questions.
Jagtar Narula: As we look to 2026, we anticipate continued revenue growth as momentum builds. At the same time, we are actively managing our levers to invest in the business while also driving earnings growth. In closing, our results underscore our disciplined financial execution and the strength of WEX's operating model. We are energized by the momentum we are driving across the business and the tangible progress we are making toward our long-term growth and margin expansion goals. We remain firmly focused on operational excellence, maintaining financial resilience, and allocating capital strategically to support sustainable, long-term value creation for our shareholders. As we enter 2026, we're well positioned to capitalize on improving market conditions and to continue executing against our strategic and financial priorities. With that, operator, please open the line for questions.
Speaker #3: As we second half , we anticipate continued revenue growth as builds momentum at the same we are actively time , our levers to invest in the business also earnings managing .
Speaker #3: In closing, while underscore results disciplined financial growth our in the strength of WEX's operating model, we are the driving are execution and across the business energized by tangible progress we toward making momentum we long our term margin growth and expansion.
Speaker #3: We firmly remain focused on financial goals resilience , and allocating capital strategically to support sustainable term for our creation are As we long we earnings are well capitalize on improving market conditions and to positioned to executing against our strategic and shareholders priorities .
Speaker #3: operator , please open the line for questions .
Melissa Smith: At this time, if you would like to ask a question, press * then 1 on your telephone keypad. To withdraw your question, simply press *1 again. We kindly ask that you limit your questions to one and one follow-up for today's call. For additional questions, please return to the queue. We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of David Koning with Baird. Please go ahead. Yeah, hey guys. Thanks. And good job. I guess my first question, just the cadence of the corporate business through 2026, both kind of volumes and yield, just kind of thinking about it seems like the first half had much easier comps, so Q4 growth was really good. I assume the first half will continue to be good on easy comps. So that's on the growth side.
Operator: At this time, if you would like to ask a question, press * then 1 on your telephone keypad. To withdraw your question, simply press *1 again. We kindly ask that you limit your questions to one and one follow-up for today's call. For additional questions, please return to the queue. We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of David Koning with Baird. Please go ahead.
Speaker #4: At this time , if you would like to ask a question , press star . Then the number one on your keypad . To withdraw question , press star simply one .
Speaker #4: kindly ask Again . that you limit your questions to one and one . Follow up for today's call for questions , please return to the queue .
Speaker #4: We will moment to compile the just a. Your first question comes from the line of David with Koning Baird. Additional ahead.
David Koning: Yeah, hey guys. Thanks. And good job. I guess my first question, just the cadence of the corporate business through 2026, both kind of volumes and yield, just kind of thinking about it seems like the first half had much easier comps, so Q4 growth was really good. I assume the first half will continue to be good on easy comps. So that's on the growth side.
Speaker #5: Yeah . Hey We guys . Q&A . I my my first job question , the the just cadence of the corporate business through 2026 .
Speaker #5: kind of Both both yields volumes and thinking . Just kind of it seems like the much about easier comps . So Q4 growth was good .
Speaker #5: I assume the really continue to be good on easy . So that's growth side . And then on yield side on the , just understanding really the 25 .
Melissa Smith: Then on the yield side, just understanding yield was really good in 2025. Some of that was the mix more towards B2B. Is mix going to stay? I know you had the new Asia client that was big that came on. Can yield stay flat to even maybe up in 2026? Good. So thanks. Let me start and give a little bit of context around that because you're right. We had really strong growth in the fourth quarter. Some of that, as you point out, because we had a favorable comp. So the prior year, we saw more volatility in our OTA spend quarter to quarter. So that was a headwind in the first half of the year, and it's been a tailwind in the second half of the year.
David Koning: Then on the yield side, just understanding yield was really good in 2025. Some of that was the mix more towards B2B. Is mix going to stay? I know you had the new Asia client that was big that came on. Can yield stay flat to even maybe up in 2026?
Speaker #5: Was the more mix good in some of that B2B comps—is mix yield where you have the client going to that which came new Asia on.
Speaker #5: yield stay flat to even maybe up 26 . in
Melissa Smith: Good. So thanks. Let me start and give a little bit of context around that because you're right. We had really strong growth in the fourth quarter. Some of that, as you point out, because we had a favorable comp. So the prior year, we saw more volatility in our OTA spend quarter to quarter. So that was a headwind in the first half of the year, and it's been a tailwind in the second half of the year.
Speaker #2: thanks . So Let
Speaker #2: start and give a little me let context Can around that because right . We strong had really in the growth bit of Some , as you out , are point because we of had a favorable comp .
Speaker #2: the year we saw prior more So our spend quarter to in quarter . OTA that was a was a headwind in the first half of the And it's been a in the year we're really .
Melissa Smith: Part of what we're really excited about is now that we've successfully got our transition with that major OTA behind us, that we're entering a period where volume is just going to be cleaner, and we think visibility is better. So that puts us in a position where you're going to be able to see more normalized growth in the course of next year. So think of the quarter should play out more evenly year-over-year than what you've seen historically. But we did get a bit of a benefit in the Q4 because of the comp year-over-year. And then, David, I'll address your questions on the yield rates. So we're expecting yield overall to be flat to slightly down. And slightly, I mean like a basis point. When you look at it, travel will be down a basis point or two.
Melissa Smith: Part of what we're really excited about is now that we've successfully got our transition with that major OTA behind us, that we're entering a period where volume is just going to be cleaner, and we think visibility is better. So that puts us in a position where you're going to be able to see more normalized growth in the course of next year. So think of the quarter should play out more evenly year-over-year than what you've seen historically. But we did get a bit of a benefit in the Q4 because of the comp year-over-year.
Speaker #2: about is now that successfully got our transition with that What we've OTA major year . behind excited be cleaner , and we think puts us in So that better .
Speaker #2: position where you're going to be able to see more , more , part of what normalized growth more in the of , of year .
Speaker #2: So think of the Should play out more next over year you've seen historically . But we did did than what bit of get a a benefit in the fourth quarter we comp because year over year quarter . .
Speaker #2: So think of the Should play out more next over year you've seen historically . But we did did than what bit of get a a benefit in the fourth quarter we comp because year over year quarter .
Jagtar Narula: And then, David, I'll address your questions on the yield rates. So we're expecting yield overall to be flat to slightly down. And slightly, I mean like a basis point. When you look at it, travel will be down a basis point or two.
Speaker #3: And David , I'll address your the on the yield then , rates . So expecting we're yield overall to be flat to down and slightly slightly .
Speaker #3: I mean like a basis point when you look at travel it it will be down a basis will be down point two , two to three or 2 to 4 .
Melissa Smith: Non-travel will be down 2 to 3 or 2 to 4. But you'll mix more to non-travel, so that'll stabilize overall yield. Gotcha. Thanks, guys. Nice job. Your next question comes from the line of Sanjay Sakhrani with KBW. Please go ahead. Thank you. Good morning. I wanted to drill down a little bit on mobility. I know, Melissa, you talked about over the road still seeing choppiness. I guess when we think about sort of organic growth assumptions in 2026, could you just sort of outline what you're expecting? What are the key variables there that could maybe help it outperform, underperform? And then I know, Jagtar, you mentioned BP sort of more of a second-half contributor. So maybe you could just give us sort of what the first half versus second-half contribution might be in terms of total mobility and growth. Thanks. Yeah. Sure. Sure. Happy to.
Jagtar Narula: Non-travel will be down 2 to 3 or 2 to 4. But you'll mix more to non-travel, so that'll stabilize overall yield.
Speaker #3: But to mix more, you'll overall stabilize, and that'll stay yield.
David Koning: Gotcha. Thanks, guys. Nice job.
Operator: Your next question comes from the line of Sanjay Sakhrani with KBW. Please go ahead.
Speaker #5: Thanks , guys . Gotcha . Nice .
Speaker #5: Thanks , guys . Gotcha . Nice
Speaker #4: Your
Speaker #4: comes from the line of
Speaker #4: Sakhrani with Please go next ahead KBW . non-travel so .
Sanjay Sakhrani: Thank you. Good morning. I wanted to drill down a little bit on mobility. I know, Melissa, you talked about over the road still seeing choppiness. I guess when we think about sort of organic growth assumptions in 2026, could you just sort of outline what you're expecting? What are the key variables there that could maybe help it outperform, underperform? And then I know, Jagtar, you mentioned BP sort of more of a second-half contributor. So maybe you could just give us sort of what the first half versus second-half contribution might be in terms of total mobility and growth. Thanks.
Speaker #6: Thank you. Good morning. I'm a little bit down on mobility to drill. I know I talked to Melissa, you, over the road.
Speaker #6: Still seeing choppiness . I we guess when job about think sort of organic growth assumptions in 2026 , could you just sort of outline you're expecting ?
Speaker #6: What there you know maybe that could outperform help it, then I underperform? And know are the key in BP, sort of more variables of a second half contributor.
Speaker #6: So maybe you us sort of what the first mentioned versus could just give contribution second half might be in terms of mobility and growth .
Melissa Smith: Yeah. Sure. Sure. Happy to.
Speaker #6: total
Melissa Smith: In our mobility business, when we think about the business, about 40% of the volume comes from over-the-road customers. So I'll split the business in those two pieces. The way that we've approached this part of the business, and we're thinking about amplifying our core, it's been really leveraging the benefit of our closed-loop network, make sure that we're acquiring customers, retaining customers, and delighting customers throughout the course of the year. And our actual retention rates have remained strong. Our acquisition rates have gone up year-over-year, you might imagine, in part because we've invested more in marketing in the small end of the marketplace, but also because we've seen productivity in the large end of the marketplace. And so we're going into the year feeling really good about how we're positioned.
Melissa Smith: In our mobility business, when we think about the business, about 40% of the volume comes from over-the-road customers. So I'll split the business in those two pieces. The way that we've approached this part of the business, and we're thinking about amplifying our core, it's been really leveraging the benefit of our closed-loop network, make sure that we're acquiring customers, retaining customers, and delighting customers throughout the course of the year. And our actual retention rates have remained strong. Our acquisition rates have gone up year-over-year, you might imagine, in part because we've invested more in marketing in the small end of the marketplace, but also because we've seen productivity in the large end of the marketplace. And so we're going into the year feeling really good about how we're positioned.
Speaker #2: Yeah , sure . Sure . Happy
Speaker #2: And to . mobility our business , when we Thanks . think about the business , about comes over the road . 40% of the Customers from volume split the .
Speaker #2: in those So two pieces . The way that we've part of the business , thinking about amplifying our core , it's been really leveraging the our closed benefit of network .
Speaker #2: Make sure that approached this acquiring we're customers , customers , customers . You throughout the know , course of the year delighting and our actual retention rates have remained strong rates acquisition have gone up year over year , as you might imagine , in because part we've invested more in marketing and the small end of the also marketplace , but because productivity in the large end of the And so we're marketplace .
Speaker #2: into the year feeling really good we're positioned . And , you part of the question , I think that's the your point is the macro underlying going itself is about how something know know , historically has been transient .
Melissa Smith: And part of the question I think that's underlying your point is the macro itself is something that we know historically has been transient. We know in the over-the-road marketplace that we're seeing some good signs, although there's still volume weakness in the course of what we're seeing play out right now. But there's tightening of drivers, which is creating spot rates to go up, which we think is overall good for the industry and will make it healthier and more vibrant. The assumption we have in our guidance is that we're going to be in a similar macro environment in 2026 as what we've been in in 2025. We will have continued acceleration in new sales. We'll have strong retention of customers. And so the things that could play out that are different, the macro environment could improve from what we expect from a sales perspective.
Melissa Smith: And part of the question I think that's underlying your point is the macro itself is something that we know historically has been transient. We know in the over-the-road marketplace that we're seeing some good signs, although there's still volume weakness in the course of what we're seeing play out right now. But there's tightening of drivers, which is creating spot rates to go up, which we think is overall good for the industry and will make it healthier and more vibrant. The assumption we have in our guidance is that we're going to be in a similar macro environment in 2026 as what we've been in in 2025. We will have continued acceleration in new sales. We'll have strong retention of customers. And so the things that could play out that are different, the macro environment could improve from what we expect from a sales perspective.
Speaker #2: We over the road know in the we're marketplace that seeing good signs , although some volume there's still weakness in the course of seeing right now play out what we're there's of tightening .
Speaker #2: drivers , we've seen rates to go which is up , creating spot which we good for the industry . overall make it creating and more It will vibrant .
Speaker #2: The assumption we have guidance we're going to be in a But in our macro environment in 26 , is what in we've been in 25 , we will have continued acceleration in new sales .
Speaker #2: strong retention of customers and and so the things that could play out environment macro could improve from what we that are expect perspective .
Melissa Smith: We have a pretty good line of sight, but always an opportunity to outperform there as well. And then, Sanjay, I'll address your question on the guidance bridge and the cadence of 2026. So just to think about the guide that we've given for mobility, if you look at mobility in 2025 ex-fuel prices and ex-FX, we grew about 1% in mobility. So when you think about 2026, you take that run rate and you say, "Okay, with BP, with new products that are coming online, and with the sales and marketing investments last year, you can understand the increasing growth rates that we have going into 2026." From a cadence standpoint, we really expect the growth rate to be roughly even over the course of the year, but there's some puts and takes with that.
Melissa Smith: We have a pretty good line of sight, but always an opportunity to outperform there as well.
Speaker #2: We have a pretty good line of sight, but there's always an opportunity to outperform there as well.
Jagtar Narula: And then, Sanjay, I'll address your question on the guidance bridge and the cadence of 2026. So just to think about the guide that we've given for mobility, if you look at mobility in 2025 ex-fuel prices and ex-FX, we grew about 1% in mobility. So when you think about 2026, you take that run rate and you say, "Okay, with BP, with new products that are coming online, and with the sales and marketing investments last year, you can understand the increasing growth rates that we have going into 2026." From a cadence standpoint, we really expect the growth rate to be roughly even over the course of the year, but there's some puts and takes with that.
Speaker #3: Sanjay , I'll healthier question on on
Speaker #3: Guidance bridge and and the cadence of So think about the guy just to 26 . given we we've for if . in 2025 x fuel prices And you look at we about 1% in mobility .
Speaker #3: So think if about 2026 , you when you take that run rate and you say , okay , with BP , with new products that coming along are marketing and with investments year , you last can , you know , you understand can the , you know the sales and rates that we have going into 26 from a cadence really expect the standpoint , we to be even roughly even over the course of the year .
Melissa Smith: So obviously, we have BP coming online the second half, which helps growth and mobility. But we're also assuming interest rates decrease over the course of the year, especially in the second half of the year. And so that puts an overall drag on mobility. And hence, once you look at those two together, you get to the cadence of roughly even growth over the course of the year. Okay. Great. Maybe follow-up question on corporate payments. Sort of similar vein, as we think about the organic growth assumptions there, I know, Melissa, you were talking relative to the previous question that there'd be more balanced growth over the course of the year for the travel. But how about sort of non-travel? I know you guys have some wins there. I saw the announcement with Nuvei.
Jagtar Narula: So obviously, we have BP coming online the second half, which helps growth and mobility. But we're also assuming interest rates decrease over the course of the year, especially in the second half of the year. And so that puts an overall drag on mobility. And hence, once you look at those two together, you get to the cadence of roughly even growth over the course of the year.
Speaker #3: But there's the with some puts that . and takes So obviously we BP coming growth rate online in the second half , helps growth in mobility .
Speaker #3: But there's the with some puts that . and takes So obviously we BP coming growth rate online in the second half , helps growth in which But we're interest over the assuming decrease year , course of the especially in the year .
Speaker #3: And so also drag in mobility . And hence once you look at those two overall together , to the the of cadence roughly over the course of the year
Sanjay Sakhrani: Okay. Great. Maybe follow-up question on corporate payments. Sort of similar vein, as we think about the organic growth assumptions there, I know, Melissa, you were talking relative to the previous question that there'd be more balanced growth over the course of the year for the travel. But how about sort of non-travel? I know you guys have some wins there. I saw the announcement with Nuvei.
Speaker #6: great Okay ,
Speaker #6: question on payments , sort of corporate vein we think about the organic growth assumptions , there , I Melissa , know , you were talking relative to the previous that there more would be balanced growth
Speaker #6: Some wins—similar there. I just wanted to share that with Nuvei, trying to make sure I understand just sort of how to think about that.
Melissa Smith: Just trying to make sure I understand sort of how to think about that and factor that in. And then even in that direct payables business, sort of what the assumptions are there because I know you guys were making some investments there. Do you see an acceleration there as a result of some of these investments? Maybe you can just elaborate a little bit more on corporate payments and the building blocks there. Thank you. Sure. We're really confident in the trajectory of corporate payments. I'd just start with that.
Sanjay Sakhrani: Just trying to make sure I understand sort of how to think about that and factor that in. And then even in that direct payables business, sort of what the assumptions are there because I know you guys were making some investments there. Do you see an acceleration there as a result of some of these investments? Maybe you can just elaborate a little bit more on corporate payments and the building blocks there. Thank you.
Speaker #6: And factor saw the . And then how to even in that direct sort of question , what the announcement are there payables know you assumptions guys were .
Speaker #6: Making some investments, I see, and as a result of that, there—do you see that in the business? Give us a bit more detail on the corporate payments and building blocks there. Thank you.
Melissa Smith: Sure. We're really confident in the trajectory of corporate payments. I'd just start with that.
Speaker #6: you .
Speaker #2: Sure . We're really confident in the director of corporate payments . I start with trends seeing some board . across the strong volume And a coming We're with our travel through well as customers , as you look functionality that just out .
Melissa Smith: We're seeing some really great trends across the board, strong volume coming through with our travel customers, as well as if you look at the functionality that we've rolled out. So we took the core capability that we have with our travel customers and made enhancements to that so that we've been selling it in the course of this year outside of travel to other embedded payments customers. And really, the core offering that we have for that customer base is leveraging the banks and being able to take really complicated payment flows that often have quite a bit of regulatory oversight and doing that in one shop. And so we're using our world-class virtual card platform, but we've got our bank combined in that. And so that product in the marketplace continues to have really good product-market fit. We're continuing to add new customers.
Melissa Smith: We're seeing some really great trends across the board, strong volume coming through with our travel customers, as well as if you look at the functionality that we've rolled out. So we took the core capability that we have with our travel customers and made enhancements to that so that we've been selling it in the course of this year outside of travel to other embedded payments customers. And really, the core offering that we have for that customer base is leveraging the banks and being able to take really complicated payment flows that often have quite a bit of regulatory oversight and doing that in one shop. And so we're using our world-class virtual card platform, but we've got our bank combined in that. And so that product in the marketplace continues to have really good product-market fit. We're continuing to add new customers.
Speaker #2: we the took So core have capability with customers made and enhancements to travel that so been selling it in our Outside of year .
Speaker #2: We took the core, have capability with customers, made enhancements to travel, and have been selling it in our—outside of that, we have taken this travel to other embedded payments customers, core offering, really.
Speaker #2: And for that base is leveraging the customer and being able to take complicated payment flows that have are often have quite really a bit of regulatory oversight in doing that .
Speaker #2: In And using our world class one shop . card we've got so we're combined in that . And our bank so that product continued marketplace to have really good product market We're new customers .
Speaker #2: In And using our world class one shop . card we've got so we're combined in that . And our bank so that product continued marketplace to have really good product market We're new to add We're cycles now .
Melissa Smith: We're going through implementation cycles now. And so we're really bullish about how that product will continue to build in the course of the year. On the AP Direct side, I think of that as it's a great engine. We've continued to add salespeople in. Those salespeople are ramping. We're seeing really good production from that. And so we'll expect to continue to have double-digit growth in 2026 relating to sales in that. It's coming off a growing base, and so we expect the growth rates to look pretty similar. So if you kind of take all of that in and factor in any contract renewals we have across the portfolio, we are expecting to see a build in the course of the year. So spend on travel will look pretty consistent in the course of the year from everything we know.
Melissa Smith: We're going through implementation cycles now. And so we're really bullish about how that product will continue to build in the course of the year. On the AP Direct side, I think of that as it's a great engine. We've continued to add salespeople in. Those salespeople are ramping. We're seeing really good production from that. And so we'll expect to continue to have double-digit growth in 2026 relating to sales in that. It's coming off a growing base, and so we expect the growth rates to look pretty similar. So if you kind of take all of that in and factor in any contract renewals we have across the portfolio, we are expecting to see a build in the course of the year. So spend on travel will look pretty consistent in the course of the year from everything we know.
Speaker #2: And FIT, really bullish implementation, how that will continue to be about product this course we're in this year. On the AP Direct side, I think it's a part of the engine.
Speaker #2: to add continued great salespeople are ramping . We're really good salespeople that in virtual . we so that seeing continue to digit Double growth in 2026 .
Speaker #2: to , in that it's coming off a expect to growing base . And so we expect the growth rates to look pretty . So if you kind of take all of in that production from factor .
Speaker #2: any contract in renewals we have across the portfolio , we are And to see similar expecting the course of the year . So spend on a travel will look consistent in , you know , pretty the the course of year everything know travel we these new customer outside of in implementations , you're going to see that volume spend lift in over the course of the increase year .
Melissa Smith: Outside of travel, in these new customer implementations, you're going to see that spend volume lift and increase over the course of the year. And so there will be a little bit of an increase in growth. But I would say travel's still a large part of the business. And our embedded payments and our Direct AP products are still the minority of the segment. So places were super excited because we're building on that. We think they're going to become a bigger part of the segment. It will drive growth rate acceleration over time. But it's going to have less of an impact in terms of seeing a huge ramp from a quarter-to-quarter perspective. Great. Thank you. Your next question comes from the line of Ramsey El-Assal with Cantor Fitzgerald. Please go ahead. Hi. Thank you very much for taking my question.
Melissa Smith: Outside of travel, in these new customer implementations, you're going to see that spend volume lift and increase over the course of the year. And so there will be a little bit of an increase in growth. But I would say travel's still a large part of the business. And our embedded payments and our Direct AP products are still the minority of the segment. So places were super excited because we're building on that. We think they're going to become a bigger part of the segment. It will drive growth rate acceleration over time. But it's going to have less of an impact in terms of seeing a huge ramp from a quarter-to-quarter perspective.
Speaker #2: And there be build in so a little bit of an in growth increase . But but I would will know , travel still at part large of the business .
Speaker #2: And our say , you places segment . where super So excited because that . We think they're still become a going to bigger part of the will drive segment .
Speaker #2: acceleration over time , but have less of an in terms it's going to from a ramp quarter to quarter . It
Speaker #2: Acceleration over time, but have less of a ramp in terms—it's going to go from a ramp quarter to quarter. We're
Sanjay Sakhrani: Great. Thank you.
Operator: Your next question comes from the line of Ramsey El-Assal with Cantor Fitzgerald. Please go ahead.
Speaker #6: Great . Thank .
Speaker #6: Great . Thank
Speaker #6: .
Speaker #4: the line of Ramsey
[Analyst] (Cantor Fitzgerald): Hi. Thank you very much for taking my question.
Melissa Smith: I wanted to ask a question about benefits and whether you're seeing any impacts, probably tailwinds, from any political or policy-related stuff that's going on out there. I'm thinking the big, beautiful bill, lapsing of some Affordable Care Act coverage. Just curious if there's any kind of political overlay to the performance in that segment that you're seeing or expect to see. Yeah. Yeah. It's interesting times, right? I would say there's a lot of interest. And pretty much every month, we hear different ideas of how these tax-deferred assets can be further utilized and specifically focusing around the construct of an HSA. There's still a lot of details that need to make their way through. So I believe we're in an environment that is really positive, likely something that we will benefit from, not something that we factored into our guidance.
[Analyst] (Cantor Fitzgerald): I wanted to ask a question about benefits and whether you're seeing any impacts, probably tailwinds, from any political or policy-related stuff that's going on out there. I'm thinking the big, beautiful bill, lapsing of some Affordable Care Act coverage. Just curious if there's any kind of political overlay to the performance in that segment that you're seeing or expect to see.
Speaker #7: Thank you very Hi . much for taking my
Speaker #7: question . I wanted to
Speaker #7: question . I wanted to
Speaker #7: about benefits you're seeing any any impacts . Probably tailwinds from any political or policy stuff related that's going of like ask a on out there .
Speaker #7: about benefits you're seeing any any impacts . Probably tailwinds from any political and whether I'm know , the big bill beautiful lapsing of some Affordable with Care Act Just curious if there's any kind of political overlay to performance in that you're that segment see to expect the seeing or
Speaker #7: coverage . ?
Melissa Smith: Yeah. Yeah. It's interesting times, right? I would say there's a lot of interest. And pretty much every month, we hear different ideas of how these tax-deferred assets can be further utilized and specifically focusing around the construct of an HSA. There's still a lot of details that need to make their way through. So I believe we're in an environment that is really positive, likely something that we will benefit from, not something that we factored into our guidance.
Speaker #2: it's yeah , Yeah , interesting times , would say a lot interest there's and , you know , pretty every month we I much hear right ?
Speaker #2: . And specifically focusing around the construct of an . There's there's lot of HSA that need to make their way details through . So I seeing a an environment that is really positive , likely will from , not something that we factored in And I would guidance .
Melissa Smith: And I would say we had a really strong open enrollment season, but we don't think we saw much of an impact from the big, beautiful bill, in part because the consumers are going through these exchanges. So consumer education takes some time. We do believe that this will continue to be a headwind, I mean, a tailwind for us in this part of the business. And so we're excited about not just what has happened already in terms of legislative changes, but the conversations that are happening and where we think this is going, but nothing that we factored into our guidance. Okay. One quick follow-up. And forgive me if I missed you guys commenting on this a little more. Jagtar, I wanted to ask about the elevated credit losses in the Q1 versus the rest of the year.
Melissa Smith: And I would say we had a really strong open enrollment season, but we don't think we saw much of an impact from the big, beautiful bill, in part because the consumers are going through these exchanges. So consumer education takes some time. We do believe that this will continue to be a headwind, I mean, a tailwind for us in this part of the business. And so we're excited about not just what has happened already in terms of legislative changes, but the conversations that are happening and where we think this is going, but nothing that we factored into our guidance.
Speaker #2: say we had a really our season don't think we , but we saw much of an impact from the big bill beautiful enrollment , in part the because consumers going through these are So exchanges .
Speaker #2: Consumer education takes some time. We do believe that this will continue to be, I mean, a headwind—a tailwind—for us in this part of the business.
Speaker #2: of the And so not we're about excited just what terms of has happened changes , the conversations that are but happening where we is going .
Speaker #2: legislative guidance into our .
[Analyst] (Cantor Fitzgerald): Okay. One quick follow-up. And forgive me if I missed you guys commenting on this a little more. Jagtar, I wanted to ask about the elevated credit losses in the Q1 versus the rest of the year.
Speaker #7: Okay .
Speaker #7: One quick follow up and forgive me if I missed you guys commenting on this a little little a more . Jack , I wanted to ask about the credit losses in the first quarter versus the year .
Melissa Smith: Is there anything that you had already called out or any kind of finite reasons why that is occurring? Hey, Ramsey. Great question. Thanks for the question. Really, two pieces for it. So first, let me say overall, we feel really good about the quality of our portfolio. We've made investments that we've talked about in the past in our ability to use AI and heavy analytics and managing the credit quality of portfolio. We still feel really good and really confident about that. Relative to Q1, there's really two reasons. So first, just recall that it takes about six months for something to be a late payment that eventually doesn't get paid and goes into being written off.
[Analyst] (Cantor Fitzgerald): Is there anything that you had already called out or any kind of finite reasons why that is occurring?
Speaker #7: there anything that you had Is already called out elevated or any kind of finite reasons why that that is ?
Jagtar Narula: Hey, Ramsey. Great question. Thanks for the question. Really, two pieces for it. So first, let me say overall, we feel really good about the quality of our portfolio. We've made investments that we've talked about in the past in our ability to use AI and heavy analytics and managing the credit quality of portfolio. We still feel really good and really confident about that. Relative to Q1, there's really two reasons. So first, just recall that it takes about six months for something to be a late payment that eventually doesn't get paid and goes into being written off.
Speaker #3: Hey , great Ramsay , question . Thanks for the nothing that question .
Speaker #3: for . Really . So first let me say overall we feel really good about the quality of our portfolio . Our you know , we've made investments that we've in the past and talked about ability to our use and heavy analytics and AI
Speaker #3: Managing the credit quality portfolio. And we still feel really good and really confident about that relative to Q1, occurring—I think there's reasons.
Speaker #3: really two So there's to just recall , you know , about it takes six months for , you know , something to be a late payment that that , you know , eventually goes doesn't get into , you know , being written off .
Melissa Smith: So when we're talking about receivables that are now six months old when fuel prices were higher, so with fuel prices coming down but the higher value of those receivables that are being written off, just the simple math of the write-offs against the spend levels with lower PPG just causes an increase in the basis points. A second smaller reason is we went into market in the second half of last year. We were testing a couple of offers. Those offers are no longer in market, but we saw a little bit of elevated credit losses associated with them. Like I said, we've pulled those offers, but those are taken Q1 to work through. But overall, we feel really good about where we are. Got it. Super helpful. Thank you. Your next question comes from the line of Mihir Bhatia with Bank of America. Please go ahead. Good morning.
Jagtar Narula: So when we're talking about receivables that are now six months old when fuel prices were higher, so with fuel prices coming down but the higher value of those receivables that are being written off, just the simple math of the write-offs against the spend levels with lower PPG just causes an increase in the basis points. A second smaller reason is we went into market in the second half of last year. We were testing a couple of offers. Those offers are no longer in market, but we saw a little bit of elevated credit losses associated with them. Like I said, we've pulled those offers, but those are taken Q1 to work through. But overall, we feel really good about where we are.
Speaker #3: So when we're talking about paid and receivables that are old , when now six months fuel prices were so with higher , with prices down , but the higher receivables that are being written value of those off , just the simple math of the fuel offs against of spend the levels against lower with PPG just causes an increase in the basis points .
Speaker #3: A second , smaller reason is into market in the second half of we went last year . We were testing a couple of offers of those offers are no market , but we longer in saw a little bit of elevated credit associated with them .
Speaker #3: Like I pulled those offers , but those losses are taking Q1 to work through . But overall , we said , we've where we feel really to
[Analyst] (Cantor Fitzgerald): Got it. Super helpful. Thank you.
Operator: Your next question comes from the line of Mihir Bhatia with Bank of America. Please go ahead.
Speaker #7: it . Super
Speaker #7: helpful . Thank you . Got .
Speaker #4: question the line comes from next Your of Mihir with Bank of America . ahead .
Mihir Bhatia: Good morning. Thank you for taking my question. I wanted to go back to the direct payables business. You called out making some investments in it, but the growth has slowed, I think, from like 25% in the first half of this year to 20%, I think, in Q3 and now 15%+, I think you said, this quarter. Now, some of it, I suspect, is you're just growing off a larger base. But maybe just talk a little bit more about that. Given the investments you're making, what's driving that, and what do you expect that to look like for 2026?
Melissa Smith: Thank you for taking my question. I wanted to go back to the direct payables business. You called out making some investments in it, but the growth has slowed, I think, from like 25% in the first half of this year to 20%, I think, in Q3 and now 15%+, I think you said, this quarter. Now, some of it, I suspect, is you're just growing off a larger base. But maybe just talk a little bit more about that. Given the investments you're making, what's driving that, and what do you expect that to look like for 2026? Yeah. We do expect to see double-digit growth in 2026. Part of why you're seeing that decelerate is there's some lumpiness around when the customers that have been implementing, when they actually spend. So I wouldn't read too much into it. It's still prone to having some mix in there.
Speaker #8: Good Thank you for taking my
Speaker #8: to the payables business you called out , investments
Speaker #8: it . But slowed , I you know , the think , 25% first half of this growth has 20% , I think , in three .
Speaker #8: it . But slowed , I you know , the think , 25% first half of this growth has 20% , I think , some Q and 15% year to you said now this quarter , but some of it , I going off Bhatia base , but is you're just maybe just talk a little bit about that , more investments you're given making or the what's driving that .
Speaker #8: in the
Speaker #8: And what do you Please go that to look like expect for 2026 ?
Melissa Smith: Yeah. We do expect to see double-digit growth in 2026. Part of why you're seeing that decelerate is there's some lumpiness around when the customers that have been implementing, when they actually spend. So I wouldn't read too much into it. It's still prone to having some mix in there.
Speaker #2: see expect to double growth in 2026 . Part of why you're seeing that decelerate is there's some lumpiness around when the customers that have been implementing , when they actually So I wouldn't read too spend .
Speaker #2: much into it . You know , it's still it's still prone to having some mix in there from a just what we're adding to would say it's the business .
Melissa Smith: From just what we're adding to the business, I would say it's a very consistent motion of adding salespeople. Those salespeople are out there soliciting customers as customers are going through, actually, a pretty quick implementation process, very high retention rates with that underlying customer base, and so very, very consistent with the investment thesis that we've laid out. We think that will continue to play out really well into 2026 and beyond. Got it. Okay. Then maybe turning to benefits. I just wanted to make sure I heard correctly. I think, Melissa, you said 6% to 7% account growth in Q1 for benefits. Does that include the UAW benefit in there? So it would be a step down after that? Is that the way to think about it, just given your just assume you're through enrollment season at this point.
Melissa Smith: From just what we're adding to the business, I would say it's a very consistent motion of adding salespeople. Those salespeople are out there soliciting customers as customers are going through, actually, a pretty quick implementation process, very high retention rates with that underlying customer base, and so very, very consistent with the investment thesis that we've laid out. We think that will continue to play out really well into 2026 and beyond.
Speaker #2: it's a very consistent of adding salespeople , those salespeople are out there soliciting customers as I customers are through actually a going quick pretty implementation very retention rates high underlying with that customer base .
Speaker #2: And process, very consistent with the thesis of investment we've laid out. And we think that will continue to play out really well into, beyond 2026 and.
Mihir Bhatia: Got it. Okay. Then maybe turning to benefits. I just wanted to make sure I heard correctly. I think, Melissa, you said 6% to 7% account growth in Q1 for benefits. Does that include the UAW benefit in there? So it would be a step down after that? Is that the way to think about it, just given your just assume you're through enrollment season at this point.
Speaker #8: Got it And then maybe benefits I want to make sure I heard just correctly . I think Melissa , . you said 6 to 7% account growth in one Q for a benefits .
Speaker #8: Does that 'and' include the UAW benefit in there? So, would that be after, like, it would—that? Is that the way to think about it, just given you assume you're, like, enrollment season at this? I'm just trying to point.
Speaker #8: just understand So think about for account growth for the full year . step down what we should
Melissa Smith: So just trying to understand what we should think about for account growth for the full year. Yeah. So just to correct, Q1, we expect 5% to 7% account growth. I think I said that in my prepared remarks. Then in terms of UAW, no, we don't expect a step down in Q1. Those accounts will continue. We typically have a step down from Q1 to Q2 just in the number of accounts. We see that year after year just because new onboarding happens in Q1, and then customers that are leaving the system tend to happen in Q2. So you do see a step down. But UAW is continuing. Nothing to be worried about that. It's just the year-over-year comparison of the growth rate that UAW becomes a year-over-year compare issue going in the second half of the year, but not an account loss. Right.
Mihir Bhatia: So just trying to understand what we should think about for account growth for the full year.
Jagtar Narula: Yeah. So just to correct, Q1, we expect 5% to 7% account growth. I think I said that in my prepared remarks. Then in terms of UAW, no, we don't expect a step down in Q1. Those accounts will continue. We typically have a step down from Q1 to Q2 just in the number of accounts. We see that year after year just because new onboarding happens in Q1, and then customers that are leaving the system tend to happen in Q2. So you do see a step down. But UAW is continuing. Nothing to be worried about that. It's just the year-over-year comparison of the growth rate that UAW becomes a year-over-year compare issue going in the second half of the year, but not an account loss. Right.
Speaker #3: to for correct just the Q1 , we 5 to 7 , seven , expect 5 to 7% account growth . I think I said that in So prepared .
Speaker #3: to for correct just the Q1 , we 5 to 7 , seven , expect 5 to 7% account growth . I think I said that in So prepared my of Then UAW , you know , we in terms expect a step down in Those accounts will Q1 .
Speaker #3: continue . We typically have a step down Q1 to Q2 , just in the from see that year . year after Just new accounts .
Speaker #3: happens And that Q1 . onboarding in , you know , customers We then are are system tend to happen Q2 . So in see a you do step down .
Speaker #3: But but UAW is continuing worried about that . year over compared It's just the growth rate year leaving the over year becomes compare issue in the second half of the year .
Speaker #3: nothing to be Right .
Speaker #3: But not in account loss to the.
Melissa Smith: So the growth rate will step down, though, just to clarify. Correct. Sorry. Correct. Correct. Okay. Thank you. Your next question comes from the line of Rayna Kumar with Oppenheimer. Please go ahead. Good morning. Thanks for taking my question. So I just want to ask something about free cash flow. I think your free cash flow conversion this year was a bit below 55%. Any callouts there? And how should we think about free cash flow for 2026? And then separately, could you just call out the same store sales growth for your local fleets and mobility? Thank you. Sure. So free cash flow, I mean, nothing in particular to call out. We were very pleased with keep free cash flow in 2025 at $638 million. We view that as pretty strong keep free cash flow and improvement over the $500 million and change that we did in 2024.
Mihir Bhatia: So the growth rate will step down, though, just to clarify. Correct. Sorry. Correct. Correct. Okay. Thank you.
Operator: Your next question comes from the line of Rayna Kumar with Oppenheimer. Please go ahead.
Speaker #8: Correct. Okay. You, thank you.
Speaker #4: Your next question comes from the line of Rayna
Rayna Kumar: Good morning. Thanks for taking my question. So I just want to ask something about free cash flow. I think your free cash flow conversion this year was a bit below 55%. Any callouts there? And how should we think about free cash flow for 2026? And then separately, could you just call out the same store sales growth for your local fleets and mobility? Thank you.
Speaker #4: Oppenheimer. Please go ahead, Kumar.
Speaker #9: Good morning . Thanks for taking my So want to about something ask cash free flow . think your free I just flow I a bit this year below 55% .
Speaker #9: Any callouts there, and how should we think about free cash flow conversion for the year? And then separately, could you discuss the same store sales growth for your local fleets and Mobility?
Speaker #9: Thank you
Jagtar Narula: Sure. So free cash flow, I mean, nothing in particular to call out. We were very pleased with keep free cash flow in 2025 at $638 million. We view that as pretty strong keep free cash flow and improvement over the $500 million and change that we did in 2024.
Speaker #3: free Sure . flow I mean nothing in particular to call out . We were very pleased with Keith So . Free cash flow in 25 at $638 million .
Speaker #3: We view that cash pretty strong free cash flow and as improvement over the 500 change we did in 2024 . For 2026 , we are continuing expect north of 600 million .
Melissa Smith: For 2026, we continue to expect north of $600 million. We expect a further increase from the 2025 levels. So we continue to feel confident. With regard to same-store sales, I think what we said overall is that we saw similar trends to what we saw in Q3. I'd say local fleets was a slight improvement over what we saw in Q3. In OTR, it was slightly worse. Yes. Thank you. Your next question comes from the line of Nate Svensson with Deutsche Bank. Please go ahead. Hey. Thanks for the question. I was hoping to ask about some of the moving pieces for operating margins in 2026. I guess for the full year, how should we think about each of the segments and how that builds up to total company margins being flat? I know in benefits, we'll have the impact of float headwinds, corporate payments.
Jagtar Narula: For 2026, we continue to expect north of $600 million. We expect a further increase from the 2025 levels. So we continue to feel confident. With regard to same-store sales, I think what we said overall is that we saw similar trends to what we saw in Q3. I'd say local fleets was a slight improvement over what we saw in Q3. In OTR, it was slightly worse. Yes.
Speaker #3: We continue to be confident with regard to same-store sales. I think what we said was we saw overall trends similar to what is in line with fleets. I would say local was a Q3. We want to further increase the levels from So.
Speaker #3: Slight improvement over what we saw in Q3.
Rayna Kumar: Thank you.
Speaker #2: In was slightly worse .
Speaker #3: Yes
Operator: Your next question comes from the line of Nate Svensson with Deutsche Bank. Please go ahead.
Speaker #3: .
Speaker #4: Next, your question comes from the line of Nate Svenson with Deutsche Bank. Please go ahead, Nate.
Nate Svensson: Hey. Thanks for the question. I was hoping to ask about some of the moving pieces for operating margins in 2026. I guess for the full year, how should we think about each of the segments and how that builds up to total company margins being flat? I know in benefits, we'll have the impact of float headwinds, corporate payments.
Speaker #10: Hey, I was hoping to thank you for some of the moving pieces for operating margins in '26. I wanted to ask about your guess for the full year.
Speaker #10: How should we think question . about each of the segments I that builds up to total company margins flat ? I know have the impact benefits we'll of being float in Corporate know , we're payments , you exiting the year a little north 48% .
Melissa Smith: We're exiting the year a little north of 48%. And then hopefully, we get some operating leverage as that normalizes. Mobility, we have BP coming on, lower interest rates offsetting. And then on top of all of that, you have the investments. So I was just hoping you could put all of that together and maybe talk about margin cadence for the year by each of the segments. Yeah. And let me start actually just talking about margins overall because it's something that we think a lot about. Jagtar talked about some of the cost actions that we're taking and have been taking in the course of this year. Those are setting us up well. So if you exclude the impact of macro, in the midpoint of our guidance, we're assuming 75 basis points of improvement in margins. So margin improvement, that's coming.
Nate Svensson: We're exiting the year a little north of 48%. And then hopefully, we get some operating leverage as that normalizes. Mobility, we have BP coming on, lower interest rates offsetting. And then on top of all of that, you have the investments. So I was just hoping you could put all of that together and maybe talk about margin cadence for the year by each of the segments.
Speaker #10: know , hopefully we get some of operating leverage headwinds . And then , you normalizes mobility . We have BP lower rates , offsetting .
Speaker #10: on top interest of all of And then investments . I was just hoping you could put together and maybe all that talk about year by by each of the segments cadence
Melissa Smith: Yeah. And let me start actually just talking about margins overall because it's something that we think a lot about. Jagtar talked about some of the cost actions that we're taking and have been taking in the course of this year. Those are setting us up well. So if you exclude the impact of macro, in the midpoint of our guidance, we're assuming 75 basis points of improvement in margins. So margin improvement, that's coming.
Speaker #2: me start
Speaker #2: margins overall something that we is think a lot Jack
Speaker #2: actions that as that we're And taking . cost been taking the course of this year are setting us up well . So . Those if exclude the for the impact of you macro midpoint of our guidance , we're assuming points of improvement in in the So margin improvement margins .
Melissa Smith: When I talked about product innovation velocity, one of the things that we've really focused on is how to get more through using AI and advanced tools than we have in the past. So we're getting more through, and we're doing it at a lower cost. So that 50% improvement had about 400 less people in our technology group. You can see that coming through with lower CapEx in the course of 2025. So we're seeing some material improvements of how we're bringing products into the marketplace, from a redesign all the way from a development perspective. We've taken that same philosophy and started to deploy it in our operations group. We talked about the fact that we have a new tool that we've put out there within our benefits business, which is claims automation.
Melissa Smith: When I talked about product innovation velocity, one of the things that we've really focused on is how to get more through using AI and advanced tools than we have in the past. So we're getting more through, and we're doing it at a lower cost. So that 50% improvement had about 400 less people in our technology group. You can see that coming through with lower CapEx in the course of 2025. So we're seeing some material improvements of how we're bringing products into the marketplace, from a redesign all the way from a development perspective. We've taken that same philosophy and started to deploy it in our operations group. We talked about the fact that we have a new tool that we've put out there within our benefits business, which is claims automation.
Speaker #2: coming . When about innovation one of the things that we've really focused how to get more I talked through using that's AI and advanced tools than we have in the past .
Speaker #2: So we're getting more through, and we're doing it at a lower cost. That improvement—50%—had cost about 400 less people in our technology group.
Speaker #2: And you can see that coming lower CapEx with course of 2025 . And so of some material of improvements how bringing products into we're from a redesign from velocity , development taken that We've same perspective .
Speaker #2: and in the in our operations We talked about the fact that have we a new that we put out there within our a benefits which is claims automation business , .
Melissa Smith: Great tool because it relieves one of the pain points from our customer in submitting a claim, does it more accurately and quicker than what we were able to do before. And we think of that as just the tip of the iceberg. And so we're really focused on how we can continue to use these use cases, amplify that through increasing our innovation. And those are things that we're factoring in when we're thinking about margin expansion. So as Jagtar said, we're really focused on how we can invest at the same time that how we can create scale within the business. And then Nate, just how to think about margins per segment. I would say we're pleased because within our guide, all of our segment margins are improving before you include the effects of macro. And so we're pleased with that.
Melissa Smith: Great tool because it relieves one of the pain points from our customer in submitting a claim, does it more accurately and quicker than what we were able to do before. And we think of that as just the tip of the iceberg. And so we're really focused on how we can continue to use these use cases, amplify that through increasing our innovation. And those are things that we're factoring in when we're thinking about margin expansion. So as Jagtar said, we're really focused on how we can invest at the same time that how we can create scale within the business.
Speaker #2: Great tool our points from it submitting and claim does it more accurately quicker than in were able to before . And we think of that as of the iceberg .
Speaker #2: And so we're really focused on we can continue to tool these cases use , amplify that through increasing our and innovation our and those are things that we're just the tip factoring in when about thinking margin expansion .
Speaker #2: moving focused . So as how we invest time , how we create at the on within the same scale
Jagtar Narula: And then Nate, just how to think about margins per segment. I would say we're pleased because within our guide, all of our segment margins are improving before you include the effects of macro. And so we're pleased with that.
Speaker #3: how to think about margins just segment .
Speaker #3: we're pleased because
Speaker #3: within say , our guide , all of our segment margins are improving . you Before effects of of
Melissa Smith: Obviously, with macro effects, that impacts a couple of our segments. So mobility and benefits will be a little more flatish because of the macro impacts, while corporate payments will continue to improve from the higher revenue and relatively fixed cost base. Yeah. That does make sense. Appreciate the detail. And then Jagtar, maybe this is one for you. You mentioned it in the prepared remarks, and there were some comments in the supplemental just about the incentives with your scheme provider in corporate payments. Correct me if I'm wrong, but it seems like maybe incentives were a little bit higher than normal this year, maybe a little more weighted to Q4. I guess if that's right, what were the reasons for that? And then is there any way to think about incentives with the scheme partner in 2026?
Jagtar Narula: Obviously, with macro effects, that impacts a couple of our segments. So mobility and benefits will be a little more flatish because of the macro impacts, while corporate payments will continue to improve from the higher revenue and relatively fixed cost base.
Speaker #3: And so we're pleased that, obviously, with macro, that impacts. And then mobility and a couple of our benefits will be a bit more flattish because of the macro Jack impacts.
Speaker #3: While corporate payments will continue a little to improve from the revenue and fixed relatively cost base segments, some higher, said,
Nate Svensson: Yeah. That does make sense. Appreciate the detail. And then Jagtar, maybe this is one for you. You mentioned it in the prepared remarks, and there were some comments in the supplemental just about the incentives with your scheme provider in corporate payments. Correct me if I'm wrong, but it seems like maybe incentives were a little bit higher than normal this year, maybe a little more weighted to Q4. I guess if that's right, what were the reasons for that? And then is there any way to think about incentives with the scheme partner in 2026?
Speaker #10: Soup makes Appreciate the detail . And Jack , maybe sense . it in the mentioned prepared remarks , and there were some comments in the supplemental just about the incentives with your provider in corporate payments .
Speaker #10: Correct me if I'm wrong , but it seems like incentives are a little bit than normal this year , maybe a little more weighted to for Q , I guess right , what if were the reasons for then that ?
Speaker #10: that's any way to think is there about incentives with the And higher Are there partner in 26 ? comp considerations we have to keep scheme in specifically regards to that with ?
Melissa Smith: Are there comp considerations we have to keep in mind with regards to that specifically? Yeah. We negotiated a new scheme relationship in the second half of the year. We were really pleased with that. It helped us in the second half. Saw a little bit in Q3, a little bit more in Q4. That'll continue on into next year. So you'll have good comps on that in the first half of the year and then while we're in the second half. Appreciate it. Thank you. Your next question comes from the line of Trevor Williams with Jefferies. Please go ahead. Great. Thanks very much. I wanted to start with a bigger picture question on mobility, just given the sales focus on the lower end of the market.
Nate Svensson: Are there comp considerations we have to keep in mind with regards to that specifically?
Jagtar Narula: Yeah. We negotiated a new scheme relationship in the second half of the year. We were really pleased with that. It helped us in the second half. Saw a little bit in Q3, a little bit more in Q4. That'll continue on into next year. So you'll have good comps on that in the first half of the year and then while we're in the second half.
Speaker #3: Yeah, we negotiated a new relationship in the second half of the year. We're really pleased—it helped us a little bit in the second half, and we saw a little bit more in Q4.
Speaker #3: year . That'll continue on into next year . So We were you'll have scheme good comps on that in the first half of the year , and then lower in the second half .
Nate Svensson: Appreciate it. Thank you.
Operator: Your next question comes from the line of Trevor Williams with Jefferies. Please go ahead.
Speaker #10: .
Speaker #4: Your next question
Speaker #4: from the line of
Trevor Williams: Great. Thanks very much. I wanted to start with a bigger picture question on mobility, just given the sales focus on the lower end of the market.
Speaker #4: Thank you, Jefferies. Ahead.
Speaker #11: Thanks very much. I'll start with the bigger picture question on Mobility, just given the sales focus on the lower end of the market.
Melissa Smith: Melissa, maybe you can give us a sense for how much of that segment you think is still up for grabs at the low end, and how you'd frame any of the competitive dynamics with some of the open-loop providers. Thanks. Sure. Sure. Actually, if you look at the market, we are continuing to, when you think about the marketplace itself, we have a sales force that's dedicated towards going after larger accounts. It's a place that we've had a lot of success in our business model. We've continued to win those new accounts. And then when we've thought about where's the kind of broader open market opportunity, it's in the smaller account arena. We spend a lot of time refining first our credit tools and fraud tools, and making sure that we're in a position that we felt really good about opening up our marketing channels.
Trevor Williams: Melissa, maybe you can give us a sense for how much of that segment you think is still up for grabs at the low end, and how you'd frame any of the competitive dynamics with some of the open-loop providers. Thanks.
Speaker #11: Up for grabs, you think, at the low end. And how you'd frame any of the dynamics with some open loop providers?
Melissa Smith: Sure. Sure. Actually, if you look at the market, we are continuing to, when you think about the marketplace itself, we have a sales force that's dedicated towards going after larger accounts. It's a place that we've had a lot of success in our business model. We've continued to win those new accounts. And then when we've thought about where's the kind of broader open market opportunity, it's in the smaller account arena. We spend a lot of time refining first our credit tools and fraud tools, and making sure that we're in a position that we felt really good about opening up our marketing channels.
Speaker #11: Thanks .
Speaker #2: Sure , sure . Actually ,
Speaker #2: if you Appreciate it . we are continuing to when you think about the of the marketplace itself , we have a sales force that's dedicated towards after larger accounts .
Speaker #2: It's a place that we've had lot of success in our a model . We've continued to to business win those new . And then when we've thought about accounts the kind of broader where's open market opportunity , it's in the smaller account arena .
Speaker #2: We've spent a time lot of refining . First , our credit tools and tools , and making sure that we're in a position that we felt really good about our marketing opening up channels .
Melissa Smith: We've opened those up. We're having success in bringing customers through digitally, and seeing that continue to be quite profitable for the business. So the focus for us has continued to build market leadership in the mid and upward part of the marketplace. But we're also keenly focused on how can we increase the market share, which is largely unpenetrated in that smaller end of the marketplace, both for our North American mobility business, but also over-the-road business. This 10-4 offering that we have out there, we're really excited about because it allows us to extend into a new part of the marketplace that we historically haven't played in, and that's owner-operators. And what they're doing is downloading an application. They're accessing our fuel network. They're doing that at a discount. Fuel prices are their largest operating cost.
Melissa Smith: We've opened those up. We're having success in bringing customers through digitally, and seeing that continue to be quite profitable for the business. So the focus for us has continued to build market leadership in the mid and upward part of the marketplace. But we're also keenly focused on how can we increase the market share, which is largely unpenetrated in that smaller end of the marketplace, both for our North American mobility business, but also over-the-road business. This 10-4 offering that we have out there, we're really excited about because it allows us to extend into a new part of the marketplace that we historically haven't played in, and that's owner-operators. And what they're doing is downloading an application. They're accessing our fuel network. They're doing that at a discount. Fuel prices are their largest operating cost.
Speaker #2: Opened those up. We've been having, you know, success in bringing customers through, success digitally, and seeing that, you know, continue to be quite profitable for the business.
Speaker #2: And so , you know , the focus for us is to continued to build market in the mid and upside part of the upward leadership marketplace .
Speaker #2: But we're also keenly focused on how can we increase the market share , which is largely unpenetrated . And that that smaller end of the marketplace , both for both for our North American mobility business , but also with our over the road business .
Speaker #2: Now , this ten out there , we're four offering that we have really excited about because it allows us to extend into a new part of the marketplace that we historically haven't played in .
Speaker #2: And that's owner, and what they're doing is downloading an application. They're accessing our fuel network, they're doing that at a discount field.
Speaker #2: Prices are their largest operating cost. And so we're saving them meaningful money. But we're also introducing them into our set of products, where they're building a relationship with us, which if they grow, they can continue to mature into the other products that they have.
Melissa Smith: And so we're saving them meaningful money, but we're also introducing them into our set of products where they're building relationship with us, which if they grow, they can continue to mature into the other products that we have. If we don't, we have an extended credit to them. And so across the board, we think of this small fleet opportunity as a place that we're going to continue to penetrate. Okay. Great. And then maybe for Jagtar on quarter-to-date trends, I'm just wondering how same-store sales in mobility are looking relative to Q4 between the comps, assuming there's been some weather impact from the last couple of weeks.
Melissa Smith: And so we're saving them meaningful money, but we're also introducing them into our set of products where they're building relationship with us, which if they grow, they can continue to mature into the other products that we have. If we don't, we have an extended credit to them. And so across the board, we think of this small fleet opportunity as a place that we're going to continue to penetrate.
Speaker #2: If we don't , we haven't extended credit to them . And so board , we think of small this fleet as a opportunity across the place that we're going to continue to penetrate .
Trevor Williams: Okay. Great. And then maybe for Jagtar on quarter-to-date trends, I'm just wondering how same-store sales in mobility are looking relative to Q4 between the comps, assuming there's been some weather impact from the last couple of weeks.
Speaker #11: Okay , great . And then maybe for Jagtar on date trends , wondering how same store sales I'm just in mobility are looking relative to Q4 between the comps and assuming there's been some weather impact from the last couple of weeks , and then just to clarify , to make sure we're hearing you're right on the X fuel growth cadence for mobility is the message that Q1 should be the low point of the year because of the comps .
Melissa Smith: And then just to clarify to make sure we're hearing you right on the ex-fuel growth cadence for mobility, is the message that Q1 should be the low point of the year because of the comps, and then growth should look pretty similar for the balance of 2026? I just want to make sure we have that. Thanks. Yeah. Let me address the second one first. So Q1 is slightly lower because, remember, we had the pull forward last year in the OTR business. So that'll impact Q1 a little bit. And then growth, yes, correct. It's pretty similar over the balance of the year for the reasons I talked about earlier, BP coming online, but then you have the drag from interest rates. On the KPIs, what we saw from same-store sales has embedded the guidance that we've given you.
Trevor Williams: And then just to clarify to make sure we're hearing you right on the ex-fuel growth cadence for mobility, is the message that Q1 should be the low point of the year because of the comps, and then growth should look pretty similar for the balance of 2026? I just want to make sure we have that. Thanks.
Speaker #11: And then growth should look pretty similar for the balance of 26 . I just want to make sure we have that . Thanks .
Jagtar Narula: Yeah. Let me address the second one first. So Q1 is slightly lower because, remember, we had the pull forward last year in the OTR business. So that'll impact Q1 a little bit. And then growth, yes, correct. It's pretty similar over the balance of the year for the reasons I talked about earlier, BP coming online, but then you have the drag from interest rates. On the KPIs, what we saw from same-store sales has embedded the guidance that we've given you.
Speaker #3: Yeah . Let me let me address the second one first . So Q1 is slightly lower because we have . Remember we have the forward last year in the pull business .
Speaker #3: So that that will impact Q1 a little bit . And then growth . Yes . Correct . It's pretty similar over the balance of the year for the reasons I talked about earlier , BP coming online .
Speaker #3: you have then you But have the drag from interest rates on the KPIs . saw from What same we store sales has embedded the guidance that we've given you and what we're seeing from KPIs right now is , is on to on track track for the guidance we've put out there .
Melissa Smith: What we're seeing from KPIs right now is on track for the guidance we've put out there. We did have some weather impacts. What was that? A week or two ago. But that's embedded into guidance so far. Things are looking like they're on plan. Okay. Appreciate it. Thanks. Your next question comes from the line of Darrin Peller with Wolfe Research. Please go ahead. Guys. Hey. Thanks. I want to start off just. I saw the changes with Dave Foss. We're big fans of his, and it's good to see him taking such an active role on the board. But more importantly, just curious what the. I know you could have released that about the changes on the board a bit more, bringing down a couple of positions to 10, I think.
Jagtar Narula: What we're seeing from KPIs right now is on track for the guidance we've put out there. We did have some weather impacts. What was that? A week or two ago. But that's embedded into guidance so far. Things are looking like they're on plan.
Speaker #3: We did have some weather impacts . What was that a week or two ago ? But that's that's embedded into guidance so far .
Trevor Williams: Okay. Appreciate it. Thanks.
Speaker #3: Things things are looking like they're on plan .
Operator: Your next question comes from the line of Darrin Peller with Wolfe Research. Please go ahead.
Speaker #11: Okay. Appreciate it. Thanks.
Speaker #4: Next, your question comes from the line of Darrin Peller with Wolfe Research. Please go ahead, guys.
Darrin Peller: Guys. Hey. Thanks. I want to start off just. I saw the changes with Dave Foss. We're big fans of his, and it's good to see him taking such an active role on the board. But more importantly, just curious what the. I know you could have released that about the changes on the board a bit more, bringing down a couple of positions to 10, I think.
Speaker #12: Hey , thanks . You know , I want to start off just I saw the with changes David Foss . We're big fans of his , and it's good to see him taking such an active role in the board .
Speaker #12: But more importantly , just curious what the . I know you put a release out about the changes on the board a bit more , bringing down a couple of positions to ten .
Melissa Smith: Help us understand what the thought process is there, what you think the board wants to see strategically. Has anything changed from a strategic direction standpoint over the last couple of quarters as this has gone on as well? Obviously, you had a process going on. I'm curious what came out of that, more so with the new board. Thanks. Yeah. Yeah. Great question. I think, if anything, it has reinforced the strategy that we have in place. When we talk about the three pillars of how we're really focused on driving strategy and driving growth across the company, both the process of bringing in the external bankers, which just validated the fact that the business is better off together, and execution should be our focus, execution of our strategy.
Darrin Peller: Help us understand what the thought process is there, what you think the board wants to see strategically. Has anything changed from a strategic direction standpoint over the last couple of quarters as this has gone on as well? Obviously, you had a process going on. I'm curious what came out of that, more so with the new board. Thanks.
Speaker #12: I think help us understand what the thought process is there , what you think the board wants to see . Has changed anything from a strategically strategic direction standpoint last couple of over the quarters , as this has gone on as well ?
Speaker #12: Obviously you had a going on . I'm curious what came out of that process . More , more so with the new board .
Melissa Smith: Yeah. Yeah. Great question. I think, if anything, it has reinforced the strategy that we have in place. When we talk about the three pillars of how we're really focused on driving strategy and driving growth across the company, both the process of bringing in the external bankers, which just validated the fact that the business is better off together, and execution should be our focus, execution of our strategy.
Speaker #12: Thanks .
Speaker #2: Yeah , yeah . Great question . I think if anything , it has reinforced the strategy that we have in place . And we talk about the three pillars of how we're really focused on driving strategy and driving growth across the company .
Speaker #2: Both the process of bringing in the external bankers , which just validated the fact that we're that , you know , the business is better off together and execution is should be our focus , execution of our strategy .
Melissa Smith: And I would say that same thing has been true as we've gone through a refreshment process over a number of years. Bringing Dave on is part of that refreshment process of bringing in a new lead independent director. He's great. I'm excited to have him on board. I'm sure he'll have his own perspectives. But so far, I'd say it's just reinforcing the strategy that we have. Okay. And no change from your perspective to capital allocation decisions versus what maybe we would have thought about a year ago? I mean, maybe just remind us what you're hoping for and looking for from the mix between M&A and buybacks. I know you talked a bit about it in the presentation, but anything that's really changed would be helpful in terms of thought process. Yeah.
Melissa Smith: And I would say that same thing has been true as we've gone through a refreshment process over a number of years. Bringing Dave on is part of that refreshment process of bringing in a new lead independent director. He's great. I'm excited to have him on board. I'm sure he'll have his own perspectives. But so far, I'd say it's just reinforcing the strategy that we have.
Speaker #2: And I would say that that same thing has been true as we've gone through . And we've gone through a refreshment process over of a number years , bringing Dave on is part of that refreshment process , of bringing in a new lead , independent director .
Speaker #2: He's great . I'm excited to have board . I'm him on sure he'll have his own perspectives , but it's it's know , so far reinforcing the , you just strategy that we have .
Darrin Peller: Okay. And no change from your perspective to capital allocation decisions versus what maybe we would have thought about a year ago? I mean, maybe just remind us what you're hoping for and looking for from the mix between M&A and buybacks. I know you talked a bit about it in the presentation, but anything that's really changed would be helpful in terms of thought process.
Speaker #12: Okay . And no change from your perspective to capital allocation decisions versus what maybe we would have thought about a year ago ? I mean , maybe just remind us what you're what you're hoping for and looking for from , you know , the mix between M&A and buybacks .
Speaker #12: I know you talked a bit about it in the presentation, but anything that's really changed would be helpful in terms of thought process.
Melissa Smith: Yeah. It's a great question because when we think about capital allocation, risk-adjusted return is our north star. And so for quite a period of time, that moved us into M&A. Over the last few years, we've spent $2 billion buying back stock. And it actually kind of leads in the path when I talked about in my prepared remarks that a couple of years ago, we started on this journey of really focusing on increasing organic innovation. It's really in mind the fact that we're in an environment where we've been doing less M&A, and therefore, we're really focused on how we can continue to go faster, bring new products into the marketplace, and commercialize them. And we've seen some really good success in that. So we're actually really excited in the path we're on because we're seeing new products coming in. We're seeing them have commercial success.
Melissa Smith: It's a great question because when we think about capital allocation, risk-adjusted return is our north star. And so for quite a period of time, that moved us into M&A. Over the last few years, we've spent $2 billion buying back stock. And it actually kind of leads in the path when I talked about in my prepared remarks that a couple of years ago, we started on this journey of really focusing on increasing organic innovation. It's really in mind the fact that we're in an environment where we've been doing less M&A, and therefore, we're really focused on how we can continue to go faster, bring new products into the marketplace, and commercialize them. And we've seen some really good success in that. So we're actually really excited in the path we're on because we're seeing new products coming in. We're seeing them have commercial success.
Speaker #2: Yeah , it's a great question . When we think about capital allocation , risk adjusted return is our North Star . And so for you know , for quite a period of time that moved us into M&A over the last few years , we've spent $2 billion in a buying back stock .
Speaker #2: And it actually kind of leads to the path. When I talked about in my prepared remarks that a couple of years ago, we started on this journey of really focusing on increasing organic innovation.
Speaker #2: It's really, you know, within mind the fact we're in an environment where we've been doing less M&A, and therefore we're really focused on how we can continue to go faster and bring new products into the marketplace and commercialize them.
Speaker #2: And we've seen some really good success in that . So we're actually really excited in the path we're on because we're products coming seeing new in .
Speaker #2: We're seeing them commercial success . We feel really bullish on how we're going to continue to increase the pace of that . And and in where that's going to bring the company over time .
Melissa Smith: We feel really bullish on how we're going to continue to increase the pace of that and where that's going to bring the company over time. So from a capital allocation perspective, I would say it'll stay. Our north star is risk-adjusted return, and we're going to evaluate share buyback versus looking at M&A for the near term. We're very focused on paying down debt. And the multiple we're trading at right now, we'll continue to buy back stock. Okay. All right. Take that, guys. Your next question comes from the line of Michael Infante with Morgan Stanley. Please go ahead. Yeah. Hey, guys. Thanks for taking my question. There's obviously been a lot of noise around agentic travel booking, potentially reshaping OTA workflows, and over time, the economics and the routing of travel payments.
Melissa Smith: We feel really bullish on how we're going to continue to increase the pace of that and where that's going to bring the company over time. So from a capital allocation perspective, I would say it'll stay. Our north star is risk-adjusted return, and we're going to evaluate share buyback versus looking at M&A for the near term. We're very focused on paying down debt. And the multiple we're trading at right now, we'll continue to buy back stock.
Speaker #2: So from a capital allocation perspective , I would say today , you know , our North Star is risk adjusted return . And we're going to evaluate share buyback versus looking at M&A for the near term .
Speaker #2: We're very focused on paying down debt . And you know , the multiple terrain that right now we're you know , we'll continue to buy back stock .
Darrin Peller: Okay. All right. Take that, guys.
Operator: Your next question comes from the line of Michael Infante with Morgan Stanley. Please go ahead.
Speaker #13: Okay . All right guys .
Speaker #4: next Your question comes from the line of Michael Infante with Morgan Stanley . Please go ahead .
Michael Infante: Yeah. Hey, guys. Thanks for taking my question. There's obviously been a lot of noise around agentic travel booking, potentially reshaping OTA workflows, and over time, the economics and the routing of travel payments.
Speaker #14: Yeah . Hey guys . Thanks for taking my question . There's obviously been a lot of noise around Agentic travel booking potentially reshaping OTA workflows .
Speaker #14: And over time, the economics and the routing of travel payments. I'm curious how you are thinking about that and what you're doing to be positioned for a shift.
Melissa Smith: So I'm curious how you are thinking about that and what you're doing to be positioned for that shift. And as you contemplate the medium term, how should we be thinking about sort of where any potential impact would show up first across volumes, take rates, or just changes in channel mix? Thanks. Yeah. Yeah. Sure. And obviously, we think a lot of agentic AI across our whole customer segments. When you talk specifically about travel, when we think about the search-to-book-to-pay journey, it's evolved for decades, and it's going to continue to do that. So what we think about and what we see, actually, when we're working with OTAs is that they're structurally embedded in that journey. The large OTAs are effectively partnering with the AI platforms like OpenAI, like Google. And the smaller ones are differentiating through curated experiences.
Michael Infante: So I'm curious how you are thinking about that and what you're doing to be positioned for that shift. And as you contemplate the medium term, how should we be thinking about sort of where any potential impact would show up first across volumes, take rates, or just changes in channel mix? Thanks.
Speaker #14: And that you as you contemplate the medium term , how should we be thinking about sort of where any potential impact would show up first across , you know , volumes , take rates or just changes in channel mix ?
Melissa Smith: Yeah. Yeah. Sure. And obviously, we think a lot of agentic AI across our whole customer segments. When you talk specifically about travel, when we think about the search-to-book-to-pay journey, it's evolved for decades, and it's going to continue to do that. So what we think about and what we see, actually, when we're working with OTAs is that they're structurally embedded in that journey. The large OTAs are effectively partnering with the AI platforms like OpenAI, like Google. And the smaller ones are differentiating through curated experiences.
Speaker #14: Thanks .
Speaker #2: Yeah . Yeah , sure . We obviously we think a lot about agenda guy across our whole customer segments . When you talk specifically about travel , we think about the search to book to pay journey .
Speaker #2: It's evolved for decades, and it's going to continue to do that. So what we think, see, what we're actually about—and when working with OTAs is, they're structurally embedded in that journey.
Speaker #2: The large OTAs are effectively partnering with the AI platforms like OpenAI , like Google in the smaller ones , are differentiating through curated experiences .
Melissa Smith: And so there's a lot of adoption that's happening right now within the OTA space. What we know is that virtual card payments are really important in the space because it's this unique ability to have buyer-seller predictions. You have global acceptance, automated reconciliation, a whole wealth of data that's put in there. So what we're seeing right now is that what we have, the capabilities that we have, are becoming, if anything, more important. And the way that it's happening is changing, but the OTA is still deeply embedded in that process. And you can see that coming through in our volume growth. We've had really strong volume growth. That's helpful. And then just one housekeeping follow-up. Melissa, you alluded to this in some of your commentary on corporate payments. And I know it's a fairly small part of the portfolio on both an absolute and a relative basis.
Melissa Smith: And so there's a lot of adoption that's happening right now within the OTA space. What we know is that virtual card payments are really important in the space because it's this unique ability to have buyer-seller predictions. You have global acceptance, automated reconciliation, a whole wealth of data that's put in there. So what we're seeing right now is that what we have, the capabilities that we have, are becoming, if anything, more important. And the way that it's happening is changing, but the OTA is still deeply embedded in that process. And you can see that coming through in our volume growth. We've had really strong volume growth.
Speaker #2: And so there's a lot of of adoption that's happening right now within the OTA space . What we know is that virtual card payments important in the are really space because , this unique you know , ability to have it's buyer , seller protections .
Speaker #2: They have global acceptance , automated reconciliation , a wealth of whole data put that's in there . So we what we're seeing right now that is what we have , the capabilities that we have are becoming , if more anything important and and the the way that it's happening that is the changing .
Speaker #2: But it is embedded in deeply still, that process. And you can see that coming through in our volume growth—we've had really strong volume growth.
Michael Infante: That's helpful. And then just one housekeeping follow-up. Melissa, you alluded to this in some of your commentary on corporate payments. And I know it's a fairly small part of the portfolio on both an absolute and a relative basis.
Speaker #14: That's helpful . And then just one housekeeping follow up , Melissa , you alluded to this in some of your commentary on corporate payments .
Speaker #14: And I know it's a fairly of the small part on portfolio both an absolute and a relative basis , but have you directly incorporated any impact from a potential renewal of a of a key OTA customer within the guide this year ?
Melissa Smith: But have you directly incorporated any impact from a potential renewal of a key OTA customer within the guide this year? Thank you. Yeah, Michael. We factor that into our guidance. Our guidance includes everything that we're thinking about for the corporate payments business, including potential pricing impacts, etc. Thanks, Jagtar. Yep. That concludes our question-and-answer session. I will now turn the call back over to Steve Elder for closing remarks. Well, I appreciate everyone joining us today. And we're going to a couple of minutes over here. But thank you for all the questions and interest. And we'll look forward to sharing our progress next quarter. Ladies and gentlemen, this concludes today's call. Thank you all for joining. You may now disconnect.
Michael Infante: But have you directly incorporated any impact from a potential renewal of a key OTA customer within the guide this year? Thank you.
Jagtar Narula: Yeah, Michael. We factor that into our guidance. Our guidance includes everything that we're thinking about for the corporate payments business, including potential pricing impacts, etc.
Speaker #14: Thank you .
Speaker #3: Yeah . Michael , that we have we've factored that into our guidance . Our guidance know , includes , you everything that we're thinking about payments for the corporate business , you including , know , potential pricing impacts , etc.
Michael Infante: Thanks, Jagtar. Yep.
Speaker #3: .
Jagtar Narula: That concludes our question-and-answer session. I will now turn the call back over to Steve Elder for closing remarks.
Speaker #14: Thanks to .
Speaker #13: Yep .
Speaker #4: concludes That our answer question and session . I will now turn the call back over to Elder .
Steve Elder: Well, I appreciate everyone joining us today. And we're going to a couple of minutes over here. But thank you for all the questions and interest. And we'll look forward to sharing our progress next quarter.
Speaker #1: I
Speaker #1: joining remarks us today , and we're going to a couple here . minutes over But all the thank you for questions and interest .
Speaker #1: We'll look forward to sharing our progress next quarter.
Operator: Ladies and gentlemen, this concludes today's call. Thank you all for joining. You may now disconnect.
