Atlanta, GA, August 8, 2023 — FLEETCOR Technologies, Inc. (NYSE: FLT), a leading global business payments company, today reported financial results for its second quarter ended June 30, 2023.

“Our second quarter results were solid with 10% revenue growth, 20% sales growth and 11% EBITDA growth,” said Ron Clarke, chairman and chief executive officer, FLEETCOR Technologies, Inc. “We are raising our 2023 guidance to reflect our second quarter beat. We are progressing with our strategic review and a range of options are on the table.”

GAAP Results

•Revenues increased 10% to $948.2 million in the second quarter of 2023, compared to $861.3 million in the second quarter of 2022.

•Net income decreased 9% to $239.7 million in the second quarter of 2023, compared to $262.2 million in the second quarter of 2022, largely due to $65 million in higher interest expense over the second quarter of 2022.

•Net income per diluted share decreased 5% to $3.20 in the second quarter of 2023, compared to $3.35 per diluted share in the second quarter of 2022, largely due to higher interest expense.

Non-GAAP Results1

•EBITDA1 increased 11% to $497.1 million in the second quarter of 2023, compared to $448.9 million in the second quarter of 2022.

•Adjusted net income1 decreased 4% to $314.3 million in the second quarter of 2023, compared to $326.1 million in the second quarter of 2022, largely due to lower fuel prices and higher net interest expense.

•Adjusted net income per diluted share1 increased 1% to $4.19 in the second quarter of 2023, compared to $4.17 per diluted share in the second quarter of 2022.

“Our second quarter results came in ahead of the expectations we provided in May, for both revenue and adjusted net income per share,” said Tom Panther, chief financial officer, FLEETCOR Technologies, Inc.

“The outlook for the second half of the year remains in-line with our expectations as we expect the fundamental trends from the first half of the year to continue. We expect solid growth in the second half of 2023 as we lap the interest and credit overhangs from last year and our organic revenue growth continues,” concluded Panther.

For fiscal year 2023, FLEETCOR Technologies, Inc.'s updated financial guidance1 is as follows:

•Total revenues between $3,836 million and $3,860 million;

•Net income between $1,006 million and $1,028 million;

•Net income per diluted share between $13.42 and $13.68;

•Adjusted net income between $1,281 million and $1,303 million; and

•Adjusted net income per diluted share between $17.09 and $17.35.

FLEETCOR’s guidance assumptions are as follows:

For the balance of the year:

•Weighted average U.S. fuel prices of $3.66 per gallon;

•Market fuel spreads to decline compared to the second half of 2022 average; and

•Foreign exchange rates equal to the monthly average for July 2023.

For the full year:

•Interest expense between $330 million and $340 million;

•Approximately 75 million fully diluted shares outstanding;

•A tax rate of 26% to 27%; and

•No impact related to acquisitions and dispositions not already closed.

The Company currently expects third quarter revenues between $980 million and $1 billion, and adjusted net income per diluted share between $4.44 and $4.64.

In August 2023, the Company entered into $2.0 billion of interest rate swaps, with an average term of three and a half years and average fixed rate of 4.30%, to reduce the variability of interest payments on our floating rate debt. The combination of these swaps, along with existing swaps, helps to manage interest rate risk on approximately 60% of floating rate debt in our Credit Facility.

The Company will host a conference call to discuss second quarter 2023 financial results today at 5:00 pm ET. Hosting the call will be Ron Clarke, chief executive officer, Tom Panther, chief financial officer and Jim Eglseder, investor relations. The conference call can be accessed live via webcast from the Company's investor relations website at http://investor.fleetcor.com. A replay will be available one hour after the call and can be accessed by dialing (844) 512-2921 or (412) 317-6671 for international callers; the conference ID is 34263350. The replay will be available until August 15, 2023. Prior to the conference call, the Company will post supplemental financial information that will be discussed during the call and live webcast.

This press release contains forward-looking statements within the meaning of the federal securities laws. Statements that are not historical facts, including statements about FLEETCOR’s beliefs, assumptions, expectations and future performance, are forward-looking statements. Forward-looking statements can be identified by the use of words such as “anticipate,” “intend,” “believe,” “estimate,” “plan,” “seek,” “project” or “expect,” “may,” “will,” “would,” “could” or “should,” the negative of these terms or other comparable terminology.

These forward-looking statements are not a guarantee of performance, and you should not place undue reliance on such statements. We have based these forward-looking statements largely on preliminary information, internal estimates and management assumptions, expectations and plans about future conditions, events and results. Forward-looking statements are subject to many uncertainties and other variable circumstances, such as our ability to successfully execute our strategic plan and portfolio review; adverse changes in program fees or charges we may collect, whether through legal, regulatory or contractual changes; adverse outcomes with respect to current and future legal proceedings or investigations, including without limitation, the FTC lawsuit, or actions of governmental, regulatory or quasi-governmental bodies or standards or industry organizations with respect to our payment cards; delays or failures associated with implication of, or adaption to, new technology, changes in credit risk of customers and associated losses; failure to maintain or renew key business relationships; failure to maintain competitive product offerings; failure to complete, or delays in completing, acquisitions, new partnerships or customer arrangements; and to successfully integrate or otherwise achieve anticipated benefits from such acquisitions, partnerships, and customer arrangements; failure to successfully expand and manage our business internationally; and other risks related to our international operations, including the impact of the conflict between Russia and Ukraine on our business and operations, the potential impact to our business as a result of the United Kingdom’s referendum to leave the European Union; the impact of foreign exchange rates on operations, revenues and income; and the failure or compromise of our data centers and other information technology assets; as well as the other risks and uncertainties identified under the caption "Risk Factors" in FLEETCOR's Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission (“SEC”) on February 28, 2023 and subsequent filings with the SEC made by us. These factors could cause our actual results and experience to differ materially from any forward-looking statement made herein. The forward-looking statements included in this press release are made only as of the date hereof and we do not undertake, and specifically disclaim, any obligation to update any such statements as a result of new information, future events or developments, except as specifically stated or to the extent required by law. You may access FLEETCOR’s SEC filings for free by visiting the SEC web site at www.sec.gov.

This press release includes non-GAAP financial measures, which are used by the Company as supplemental measures to evaluate its overall operating performance. The Company’s definitions of the non-GAAP financial measures used herein may differ from similarly titled measures used by others, including within our industry. By providing these non-GAAP financial measures, together with reconciliations to the most directly comparable GAAP financial measures, we believe we are enhancing investors’ understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing strategic initiatives. See the appendix for additional information regarding these non-GAAP financial measures and a reconciliation to the most directly comparable GAAP measure.

Adjusted net income is calculated as net income, adjusted to eliminate (a) non-cash share based compensation expense related to share based compensation awards, (b) amortization of deferred financing costs, discounts, intangible assets, and amortization of the premium recognized on the purchase of receivables, (c) integration and deal related costs, and (d) other non-recurring items, including unusual credit losses, the impact of discrete tax items, impairment charges, asset write-offs, restructuring costs, gains due to disposition of assets/businesses, loss on extinguishment of debt, and legal settlements and related legal fees. We adjust net income for the tax effect of adjustments using our effective income tax rate, exclusive of discrete tax items.

We calculate adjusted net income and adjusted net income per diluted share to eliminate the effect of items that we do not consider indicative of our core operating performance.

Adjusted net income and adjusted net income per diluted share are supplemental measures of operating performance that do not represent and should not be considered as an alternative to net income, net income per diluted share or cash flow from operations, as determined by U.S. generally accepted accounting principles, or U.S. GAAP. We believe it is useful to exclude non-cash share based compensation expense from adjusted net income because non-cash equity grants made at a certain price and point in time do not necessarily reflect how our business is performing at any particular time and share based compensation expense is not a key measure of our core operating performance. We also believe that amortization expense can vary substantially from company to company and from period to period depending upon their financing and accounting methods, the fair value and average expected life of their acquired intangible assets, their capital structures and the method by which their assets were acquired; therefore, we have excluded amortization expense from our adjusted net income. Integration and deal related costs represent business acquisition transaction costs, professional services fees, short-term retention bonuses and system migration costs, etc., that are not indicative of the performance of the underlying business. We also believe that certain expenses, discrete tax items, recoveries (e.g. legal settlements, write-off of customer receivable, etc.), gains and losses on investments, and impairment charges do not necessarily reflect how our investments and business are performing. We adjust net income for the tax effect of each of these adjustments items using the effective tax rate during the period, exclusive of discrete tax items.

Organic revenue growth is calculated as revenue growth in the current period adjusted for the impact of changes in the macroeconomic environment (to include fuel price, fuel price spreads and changes in foreign exchange rates) over revenue in the comparable prior period adjusted to include or remove the impact of acquisitions and/or divestitures and non-recurring items that have occurred subsequent to that period. We believe that organic revenue growth on a macro-neutral, one-time item, and consistent acquisition/divestiture/non-recurring item basis is useful to investors for understanding the performance of FLEETCOR.

EBITDA is defined as earnings before interest, income taxes, interest expense, net, other expense (income), depreciation and amortization, loss on extinguishment of debt, investment loss/gain and other operating, net.

Management uses adjusted net income, adjusted net income per diluted share, organic revenue growth and EBITDA:

•as measurements of operating performance because they assist us in comparing our operating performance on a consistent basis;

•for planning purposes, including the preparation of our internal annual operating budget;

•to allocate resources to enhance the financial performance of our business; and

•to evaluate the performance and effectiveness of our operational strategies.

FLEETCOR Technologies (NYSE: FLT) is a leading global business payments company that helps businesses spend less by providing innovative solutions that enable and control expense-related purchasing and payment processes. The FLEETCOR portfolio of brands automate, secure, digitize and manage payment transactions on behalf of businesses across more than 150 countries in North America, Latin America, Europe, and Asia Pacific. For more information, please visit www.FLEETCOR.com.

Investor Relations

Jim Eglseder, 770-417-4697

Jim.Eglseder@fleetcor.com

 

						Three Months Ended June 30,																		Six Months Ended June 30,
						2023						2022						% Change						2023						2022						% Change
Revenues, net						$	948,174					$	861,278					10		%				$	1,849,507					$	1,650,519					12		%
Expenses:
Processing						205,265						185,588						11		%				410,232						359,782						14		%
Selling						86,412						79,324						9		%				168,004						156,213						8		%
General and administrative						159,356						147,446						8		%				314,040						290,968						8		%
Depreciation and amortization						83,676						78,474						7		%				167,908						155,276						8		%
Other operating, net						815						(34)						NM						1,478						79						NM
Total operating expense						535,524						490,798						9		%				1,061,662						962,318						10		%
Operating income						412,650						370,480						11		%				787,845						688,201						14		%
Other expenses:
Investment loss (gain)						18						193						NM						(172)						345						NM
Other (income) expense, net						(2,424)						3,564						NM						(1,678)						4,433						NM
Interest expense, net						88,486						23,070						284		%				168,281						45,100						273		%
Total other expense						86,080						26,827						221		%				166,431						49,878						234		%
Income before income taxes						326,570						343,653						(5)		%				621,414						638,323						(3)		%
Provision for income taxes						86,868						81,482						7		%				166,877						158,200						5		%
Net income						$	239,702					$	262,171					(9)		%				$	454,537					$	480,123					(5)		%
Basic earnings per share						$	3.24					$	3.42					(5)		%				$	6.17					$	6.22					(1)		%
Diluted earnings per share						$	3.20					$	3.35					(5)		%				$	6.08					$	6.10					—		%
Weighted average shares outstanding:
Basic shares						73,887						76,769												73,705						77,250
Diluted shares						75,001						78,239												74,763						78,762

NM- Not Meaningful

 

						June 30, 2023						December 31, 2022
						(Unaudited)
Assets
Current assets:
Cash and cash equivalents						$	1,254,243					$	1,435,163
Restricted cash						1,456,992						854,017
Accounts and other receivables (less allowance)						2,460,650						2,064,745
Securitized accounts receivable — restricted for securitization investors						1,248,000						1,287,000
Prepaid expenses and other current assets						503,684						465,227
Total current assets						6,923,569						6,106,152
Property and equipment, net						329,146						294,692
Goodwill						5,473,603						5,201,435
Other intangibles, net						2,107,081						2,130,974
Investments						69,721						74,281
Other assets						275,533						281,726
Total assets						$	15,178,653					$	14,089,260
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable						$	1,679,702					$	1,568,942
Accrued expenses						392,652						351,936
Customer deposits						2,013,236						1,505,004
Securitization facility						1,248,000						1,287,000
Current portion of notes payable and lines of credit						823,231						1,027,056
Other current liabilities						279,069						303,517
Total current liabilities						6,435,890						6,043,455
Notes payable and other obligations, less current portion						4,678,258						4,722,838
Deferred income taxes						538,832						527,465
Other noncurrent liabilities						262,237						254,009
Total noncurrent liabilities						5,479,327						5,504,312
Commitments and contingencies
Stockholders’ equity:
Common stock						128						128
Additional paid-in capital						3,176,562						3,049,570
Retained earnings						7,665,306						7,210,769
Accumulated other comprehensive loss						(1,357,263)						(1,509,650)
Treasury stock						(6,221,297)						(6,209,324)
Total stockholders’ equity						3,263,436						2,541,493
Total liabilities and stockholders’ equity						$	15,178,653					$	14,089,260

The following table reconciles net income to adjusted net income and adjusted net income per diluted share:*

						Three Months Ended June 30,												Six Months Ended June 30,
						2023						2022						2023						2022
Net income						$	239,702					$	262,171					$	454,537					$	480,123
Stock based compensation						34,748						34,017						60,844						66,648
Amortization1						57,704						57,994						117,743						115,624
Integration and deal related costs						9,580						2,957						15,465						9,210
Legal settlements/litigation						140						1,467						484						1,902
Restructuring, related and other2 costs						(595)						763						703						763
Loss on extinguishment of debt						—						1,934						—						1,934
Total pre-tax adjustments						101,577						99,132						195,239						196,081
Income taxes						(27,020)						(35,164)						(52,436)						(60,405)
Adjusted net income						$	314,259					$	326,139					$	597,340					$	615,799
Adjusted net income per diluted share						$	4.19					$	4.17					$	7.99					$	7.82
Diluted shares						75,001						78,239						74,763						78,762

*Columns may not calculate due to rounding.

Revenues, net by Segment*			Three Months Ended June 30,																								Six Months Ended June 30,
			2023						%						2022						%						2023						%						2022						%
Fleet			$	383					40		%				$	377					44		%				$	755					41		%				$	729					44		%
Corporate Payments			247						26		%				190						22		%				474						26		%				373						23		%
Lodging			137						14		%				117						14		%				259						14		%				211						13		%
Brazil			126						13		%				112						13		%				248						13		%				214						13		%
Other			56						6		%				65						8		%				113						6		%				122						7		%
Consolidated Revenues, net			$	948					100		%				$	861					100		%				$	1,850					195		%				$	1,651					100		%

            

*Columns may not calculate due to rounding. Segment and solutions reporting have converged to be the same.

 

						Three Months Ended June 30,																		Six Months Ended June 30,
						20231						2022						% Change						20231						2022						% Change
Revenues, net:
Fleet						$	382,609					$	377,361					1		%				$	755,321					$	728,954					4		%
Corporate Payments						246,952						189,699						30		%				474,158						373,467						27		%
Lodging						136,564						116,900						17		%				258,898						211,476						22		%
Brazil						126,081						111,825						13		%				247,825						214,362						16		%
Other1						55,968						65,493						(15)		%				113,305						122,260						(7)		%
						$	948,174					$	861,278					10		%				$	1,849,507					$	1,650,519					12		%
Operating income:
Fleet						$	183,657					$	186,790					(2)		%				$	357,189					$	354,635					1		%
Corporate Payments						91,755						65,859						39		%				167,268						124,066						35		%
Lodging						68,246						58,559						17		%				122,809						98,339						25		%
Brazil						52,802						41,617						27		%				107,619						78,945						36		%
Other1						16,190						17,655						(8)		%				32,960						32,216						2		%
						$	412,650					$	370,480					11		%				$	787,845					$	688,201					14		%
Depreciation and amortization:
Fleet						$	35,906					$	34,927					3		%				$	70,992					$	69,634					2		%
Corporate Payments						18,277						16,724						9		%				39,148						33,072						18		%
Lodging						11,661						10,321						13		%				23,059						20,855						11		%
Brazil						15,522						14,288						9		%				30,075						27,409						10		%
Other1						2,310						2,214						4		%				4,634						4,306						8		%
						$	83,676					$	78,474					7		%				$	167,908					$	155,276					8		%
Capital expenditures:
Fleet						$	20,734					$	18,447					12		%				$	37,865					$	34,237					11		%
Corporate Payments						7,471						5,158						45		%				15,266						9,646						58		%
Lodging						3,496						2,067						69		%				6,873						3,759						83		%
Brazil						8,642						7,620						13		%				15,530						13,598						14		%
Other1						1,842						1,950						(6)		%				3,388						5,389						(37)		%
						$	42,185					$	35,242					20		%				$	78,922					$	66,629					18		%

1Other includes Gift and Payroll Card operating segments.
*Columns may not calculate due to rounding.

The following table reconciles EBITDA and EBITDA margin to net income.*

The following table reconciles the third quarter 2023 and full year 2023 financial guidance for net income to adjusted net income and adjusted net income per diluted share, at both ends of the range.