WEX Inc. Reports Fourth Quarter and Full Year 2019 Financial Results

2019 was another record year for WEX, capped off by an impressive fourth quarter driven by double-digit top-line growth and strong operating leverage

WEX Inc. (NYSE: WEX), a leading financial technology service provider, reported financial results for the three months and year ended December 31, 2019.

Total revenue for the fourth quarter of 2019 increased 15% to $440.0 million from $381.2 million for the fourth quarter of 2018. The $58.8 million increase in the quarter includes an $8.7 million negative impact from lower average fuel prices and foreign exchange rates. In addition, the 4th quarter includes a $20.9 million reduction to properly reflect fleet segment revenue and expenses.

Net income attributable to shareholders on a GAAP basis for the fourth quarter increased by $33.2 million to $54.4 million, or $1.24 per diluted share, compared with $21.3 million, or $0.49 per diluted share for the same period a year ago. The Company’s adjusted net income attributable to shareholders, which is a non-GAAP measure, was $114.7 million for the fourth quarter of 2019, or $2.61 per diluted share, up 24% from $91.8 million, or $2.11 per diluted share, for the same period last year. See Exhibit 1 for a full explanation and reconciliation of adjusted net income attributable to shareholders and adjusted net income attributable to shareholders per diluted share to the comparable GAAP measures.

For the full year 2019, revenue increased 15% to $1.72 billion from $1.49 billion in 2018. Net income attributable to shareholders on a GAAP basis was $2.26 per diluted share in 2019 compared to $3.86 per diluted share in 2018. On a non-GAAP basis, adjusted net income per diluted share increased 11% to $9.20 from $8.28 in 2018.

“2019 was another record year for WEX, capped off by an impressive fourth quarter driven by double-digit top-line growth and strong operating leverage.” said Melissa Smith, WEX’s Chair and Chief Executive Officer. “The fourth quarter built upon the momentum from earlier in the year, marked by robust transaction volume growth, strong performance from acquisitions, significant contribution from our previous contract signings and meaningful new contract wins.”

Smith continued, “Our strong performance in 2019 is due to WEX’s commitment to generating sustainable long-term growth, reflected in the customer volume ramp, successful integration of Noventis, Discovery Benefits and Go Fuel Card, strong execution in our Shell and Chevron portfolios, and a great contribution from the U.S. Health business. We remain committed to providing best-in-class technologies and capabilities to our customers and focused on driving innovation across our segments. We are well-positioned to gain additional market share in 2020 as we continue to execute against our strategic pillars and create shareholder value.”

Fourth Quarter 2019 Performance Metrics

• Average number of vehicles serviced was approximately 14.9 million, an increase of 19% from the fourth quarter of 2018.
• Total fuel transactions processed increased 12% from the fourth quarter of 2018 to 156.0 million. Payment processing transactions increased 9% to 126.7 million.
• U.S. retail fuel price decreased to $2.80 per gallon from $2.94 per gallon in the fourth quarter of 2018.
• Travel and Corporate Solutions’ purchase volume grew 17% to $9.6 billion from $8.2 billion for the fourth quarter of 2018.
• Health and Employee Benefit Solutions’ average number of Software-as-a-Service (SaaS) accounts in the U.S. grew 17% to 13.4 million from 11.5 million for the fourth quarter of 2018.

“WEX delivered strong fiscal year results with fourth quarter adjusted earnings at the top-end of our guidance, despite a number of macroeconomic headwinds,” said Roberto Simon, WEX’s Chief Financial Officer. “Good organic growth coupled with solid returns from our strategic acquisitions are proof of the extraordinary progress we’ve made in 2019. Looking forward into 2020, we plan to capitalize on additional opportunities, focusing on our core fleet business and the high-growth travel, corporate payments, and U.S. health markets in the coming year.”

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