Corpay (CPAY) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached $976 million, up 7% year-over-year excluding Russia, with cash EPS of $4.55, up 14% excluding Russia, both at the high end of guidance.

• Corporate Payments led growth with revenue up 17–18%, while Lodging Payments declined 10% and Vehicle Payments was flat due to Russia exit and FX headwinds.

• Free cash flow enabled share repurchases and strategic acquisitions, including Paymerang (closed July 2024) and GPS Capital Markets (expected early 2025).

• Key business trends improved: retention rose to nearly 92%, same-store sales stabilized, and new bookings increased 21%.

• Full-year 2024 guidance reaffirmed at $4 billion revenue and $19 cash EPS, with Q4 expected to show double-digit organic revenue growth and a $21 EPS run rate.

Financial highlights

• Organic revenue grew 6% in Q2, led by 18% growth in Corporate Payments; reported revenue growth was 3%.

• EBITDA margin expanded to 53.1%, up 60–63 basis points year-over-year, and 165–166 basis points excluding Russia.

• Free cash flow was $325 million, or $4.55 per share, up 8% year-over-year and 14% excluding Russia.

• Q2 operating expenses were $542 million, up 1% year-over-year, with a 20% decline in bad debt expense.

• Interest expense increased $6 million due to higher rates and the Russia sale; effective tax rate was 24.7%.

Outlook and guidance

• Full-year 2024 guidance maintained at $3,975–$4,025 million revenue and $18.85–$19.15 cash EPS, with a tightened range due to increased visibility.

• Q3 revenue expected at $1,015–$1,035 million and cash EPS at $4.90–$5.00, with growth driven by Paymerang and seasonal Gift business.

• Q4 projected to deliver low- to mid-teens organic revenue growth, led by Corporate Payments exceeding 20%.

• At least $0.50 of EPS accretion expected in 2025 from Paymerang and GPS, with potential for double that post-integration.

• Guidance assumes US fuel prices at $3.55/gal, flat fuel spreads, July 2024 FX rates, interest expense $370M–$390M, 72M diluted shares, tax rate 24–25%.