Corpay (CPAY) The 44th Annual William Blair Growth Stock Conference summary

Business Overview and Strategy

• Focuses on simplifying corporate payments, excluding payroll, with a strong track record of organic and acquisition-driven growth.

• Operates in over 150 countries, with primary markets in the U.S., U.K., and Brazil, and additional presence in Europe and Australia.

• Launched new enterprise brand, Corpay, to better reflect the portfolio of corporate payment solutions and simplify messaging for over 800,000 customers.

• Segments include corporate payments, vehicle payments, and lodging, each serving distinct customer needs and leveraging overlapping verticals like construction, transportation, and business services.

• Proprietary networks and millions of customers create a defensible moat and enable bundled solutions and cross-sell opportunities across segments.

Segment Performance and Product Innovation

• Corporate payments segment is growing over 20%, processing nearly $150 billion in spend and serving over 1 million vendors; Paymerang acquisition will increase its share of total revenue to 30%.

• Vehicle payments represent over 50% of the business, with proprietary fueling and charging networks, recent expansion into EV and consumer vehicle solutions, and Brazil serving as a model for growth.

• Lodging accounts for about 15% of revenue, supporting workforce, airline, and insurance verticals with access to 45,000 hotels and nearly 40 million room nights annually, offering discounted rates and customizable payment controls.

• Integration of services allows customers to manage T&E, fuel, lodging, and AP through a single provider, especially targeting larger SMB and mid-market enterprises.

• Sales growth driven by increased investment in marketing, diverse sales channels, and high customer retention (92%) with strong cross-sell performance.

Financial Performance and Capital Allocation

• Reported $3.8 billion in revenue and $1.3 billion in adjusted net income for 2023, with 43% of revenue from international markets.

• Achieved 17% compound annual revenue growth and 19% compound annual cash EPS growth from 2010 to 2024 guidance.

• Maintains high EBITDA margins (over 50%) and strong free cash flow conversion, with capex as a percentage of revenue below 5%.

• 2024 guidance includes 8% organic revenue growth, $19.00 cash EPS (12% YoY growth), 100 bps EBITDA margin improvement, and $1.4 billion in free cash flow.

• Free cash flow is used for share buybacks and acquisitions, with a history of doubling acquired company profits within two years and maintaining low leverage.