Corpay (CPAY) Q3 2024 earnings summary

Executive summary

• Achieved record Q3 2024 revenue of $1.029 billion, surpassing $1 billion for the first time, with 6% organic growth and strong performance in Corporate Payments, which grew 18%–25% year-over-year.

• Net income attributable to Corpay rose 1.8%–2% to $276.4 million, with diluted EPS up 7% to $3.90 and adjusted EPS up 11%–14% to $5.00.

• EBITDA margin improved to 54.2%, with EBITDA reaching $557.7–$558 million, up 5%–8% year-over-year.

• Retention improved to 92%–92.1%, and new bookings growth was 14%, led by 28% growth in Corporate Payments sales.

• Closed Paymerang acquisition and progressing toward GPS Capital Markets acquisition, with ongoing strategic focus on digital payments and spend management.

Financial highlights

• Q3 2024 revenue: $1,029.2 million (+6% YoY); organic revenue growth 6%; net income $276.4 million (+1.8% YoY); adjusted net income $354.5 million.

• Adjusted EPS $5.00, up 11%–14% year-over-year; EBITDA margin at 54.2%.

• Free cash flow of $355 million; operating cash flow for nine months $1.29 billion; cash and equivalents at period end $1.3 billion.

• Operating expenses up 7% due to acquisitions, but flat excluding M&A; interest expense increased 18% to $104.4 million.

• Effective tax rate dropped to 22.9% from 26.6% due to discrete tax benefits.

Outlook and guidance

• Q4 2024 organic revenue growth expected to accelerate to 13%, with EBITDA margin guidance at 55.6% and adjusted EPS $5.25–$5.45.

• Full-year 2024 guidance: revenue $3,980–$4,010 million, adjusted EPS $18.90–$19.10, net income $1,061–$1,081 million.

• 2025 preview: organic revenue growth outlook of 9%–11%, cash EPS targeted at ~$22 per share, with additional 3% GAAP revenue growth from acquisitions.

• Q4 outlook calls for 21% earnings growth at the mid-point, with segment acceleration and synergy realization.

• Key assumptions include FX (Brazil real), lower interest rates, higher tax rates, and average US fuel price of $3.26/gal.