WEX (WEX) Q4 2023 earnings summary

Executive summary

• Q4 revenue reached a record $663.3M, up 7% YoY; adjusted diluted EPS rose 11% to $3.82. More than 80% of Q4 revenue was recurring.

• FY2023 revenue was a record $2.548B, up 8%; adjusted diluted EPS rose 9.4% to $14.81, led by Corporate Payments and Benefits.

• Scalable volumes and cost savings supported margin gains; strategic priorities included technology and AI investment, EV offerings, and the Payzer and Ascensus Health and Benefits acquisitions.

Financial highlights

• Q4 GAAP net income attributable to shareholders was $84.9M versus $88.7M; adjusted net income was $163.9M versus $152.8M.

• FY GAAP net income was $266.6M, up 32%; adjusted net income was $645.8M versus $611.0M.

• Q4 GAAP diluted EPS was $1.98 versus $2.02; FY GAAP diluted EPS was $6.16 versus $4.50.

• Q4 adjusted operating income was $262.5M versus $237.9M; FY adjusted operating income was $1.015B versus $935.3M.

• Q4 revenue increased $44.7M YoY, including a net $24.9M unfavorable fuel-price and spread impact and $0.3M favorable FX impact.

Outlook and guidance

• Q1 2024 revenue guidance: $650M–$660M; adjusted diluted EPS: $3.40–$3.50, or adjusted net income of $144M–$148M.

• FY2024 revenue guidance: $2.70B–$2.74B; adjusted diluted EPS: $15.90–$16.40, or adjusted net income of $679M–$700M.

• Guidance assumes US GDP growth of 1.5%, fuel at $3.50/gallon in Q1 and $3.55/gallon for FY, a 25% adjusted tax rate and 42.7M diluted shares.

• Lower FY fuel assumptions reduce guidance by $54M in revenue and $0.81 per share; swap termination is expected to add financing interest expense of $0.19/share in Q1 and $0.52/share for FY.

• 2024 priorities include customer wins and expansion, product launches, acquisition integration and adjusted free cash flow; no future M&A benefits or additional buybacks beyond announced amounts are assumed.