Element Fleet Management (EFN) Q2 2025 earnings summary

Executive summary

• Achieved record Q2 2025 results, demonstrating resilience and consistent growth amid economic uncertainty, with robust top-line growth and disciplined expense management.

• Net revenue grew 6% year-over-year, driven by services and net financing revenue, despite a $10M FX headwind.

• Welcomed 46 new clients, mostly converted from self-managed fleets, and added 265 new service enrollments, strengthening recurring revenue.

• Launched Element Mobility and Element Risk Solutions, expanding intelligent mobility and risk management offerings, and announced partnerships with Samsara, Motus, and HUB.

• Released the fifth annual sustainability report, highlighting 80% reduction in Scope 1 & 2 emissions since 2019 and 95,000 EVs under management as of Dec 2024.

Financial highlights

• Net revenue reached $290M, up 6% year-over-year and 5% quarter-over-quarter, with services revenue up 8% to $151M and net financing revenue up 4% to $127M.

• Adjusted EPS (diluted) rose 7% year-over-year to $0.30; adjusted free cash flow per share increased 8% to $0.40.

• Adjusted operating margin expanded to 55.8%, up 100bps year-over-year.

• Origination volumes totaled $1.9B, down 4% year-over-year due to FX, but up 26% quarter-over-quarter, with a $1.7B committed order pipeline.

• Syndication revenue steady at $12M, with some transactions deferred to benefit from new U.S. tax legislation.

Outlook and guidance

• Expect to finish 2025 at or above the high end of guidance for all key metrics except originations, which are anticipated to improve as macro uncertainty eases.

• Full-year 2025 guidance: net revenue $1,160–$1,185M, adjusted EPS $1.20–$1.25, adjusted FCF/share $1.48–$1.53.

• Partnerships with Samsara and Motus expected to contribute to revenue in 2026, with little impact in 2025.

• FX headwinds expected to moderate in H2 2025; guidance incorporates anticipated revenue headwinds and higher interest expenses.

• Effective tax rate for 2025 projected at 24.5%–26.5%.