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FLEETCOR Technologies, Inc.
CEO : Mr. Ronald F. Clarke

Quarterly earnings growth(YoY,%)

Period	Revenue	Operating Income	EPS	Release Date
2023 Q2	10.1% YoY	11.4%	-5.3%	2023-08-08

Ron Clarke says,

Q2 Results

• Revenue of $948 million and cash EPS of $4.19, both up sequentially
• Q2 EBITDA reached an all-time record of almost $500 million
• Current revenue growth and organic revenue growth both at 10% for the quarter
• Fleet stepping up 6% for the quarter, helped by international markets in Mexico and Australia
• EV revenue increased 45% year-over-year
• Core toll line tag volume up 7%, helped by new bank partnerships and increased demand for vehicle insurance add-ons
• Lodging up 14%, led by new airline implementations and usage of auto rebooking feature
• Corporate payments up 22%, led by direct payables business and record levels of new sales and accounts in cross-border business

2023 Guidance

• Full year 2023 revenue guidance of $3,848 million at the midpoint
• Full year 2023 cash EPS guidance of $17.22 at the midpoint
• Revised second half guide implies current revenue growth of about 12% and organic revenue growth of about 10%
• Q4 exit with revenue growth expected to be 14% and reach $1 billion in quarterly revenue for the first time
• Expected cash EPS growth of 16% in the exit

Key Priorities

• EV efforts showing positive economics and revenue growth
• Added three new directors to the fleet Board for stronger oversight and diversity
• Progress in transitioning digital sales to bigger company prospects

Strategic Review

• FTC injunctive relief chapter closed
• Progress on potential sale of noncore assets such as prepaid businesses
• Exploring separation or spin-off of one or more major businesses
• Considering potential combination with dance partner company in similar solutions space
• Expect to complete work on initiatives before year-end and share conclusions

Tom Panther says,

Organic and reported revenue growth

• Q2 organic revenue growth was 10%
• Reported revenue growth was also 10%
• Acquisition-related growth offset fuel price headwinds
• Revenue of $948 million exceeded guidance by $8 million

Fuel prices and spreads

• Fuel prices for the quarter were $3.65 per gallon
• Lower than the May guidance of $3.99 per gallon
• Caused approximately $20 million of lower revenues compared to the prior year
• Fuel spreads were positive and improved by about $5 million

Foreign exchange rates

• $9 million of negative impact from lower foreign exchange rates
• Mainly due to the decline in the ruble
• Impact from the war dragging on the economy

Performance of Corporate Payments

• Corporate Payments revenue was up 22%
• Driven by strength in direct business and AP software solutions
• Comprehensive payment solutions selling well

Performance of Fleet business

• Organic revenue increased 6%
• Driven by higher revenue per transaction and international sales growth
• Seeing early success in digital sales and pivot to larger customer segment

Q & A sessions,

Fleet Business Transformation and EVs

• FLT is focusing on transforming its fleet business into a vehicle business with a durable and exciting future.
• The company is working hard on this transformation, particularly in the EV segment.
• FLT will provide more updates on this transformation in the next 90 days.

Potential Separation and Synergies

• If FLT can combine its separation with something else, it could create more scale and have synergies.
• Structural separation enables transactions that may not be as easy out of the mothership.
• FLT is exploring the potential for separation and combination to enhance its value.

Commercial Fleet Business and EV Advantage

• FLT does not care about the specific types of commercial vehicles as long as they are owned by the company.
• FLT believes it can make money and generate revenue from commercial fleets, particularly with its advantage in EV technology.
• The company expects to do well in selling and retaining commercial fleets by offering a combined package of old-fashioned and new-fashioned vehicles.

Direct Business Performance and Cross-Selling

• The direct business of FLT is performing well, with a consolidated growth rate of over 22%.
• The cross-border business saw a significant increase in new business sales, up 80% quarter-over-quarter.
• FLT has identified a 15-20% overlap in clients across its three biggest businesses (fleet, lodging, and corporate payments) in the US market.
• The company plans to leverage this overlap to cross-sell its products to existing clients.

Confidence in Guidance and Seasonality

• FLT is confident in its guidance, based on a decent look at July and sales performance year-to-date.
• The company expects sequential growth in revenue due to the nature of its recurring revenue business.
• There is a seasonality factor, with Q3 being a strong quarter and Q4 expected to be better than Q1.

Focus on Separation of Fleet and Corporate Payments

• FLT is focusing on the separation of fleet and corporate payments as part of its value creation plan.
• The primary question is whether the company would be better off with these businesses separated.
• FLT is considering both pure separation and a combination of the two businesses.
• There are dyssynergies and challenges in separation, particularly in the areas of IT and management.

Growth and Expansion in Brazil

• FLT is experiencing healthy growth in Brazil, with a 7% increase in tag volume and double-digit revenue growth.
• The company is widening its distribution channels, signing deals with major banks to sell its Sem Parar tags.
• FLT is adding incremental revenue through add-ons such as fuel, insurance, and other vehicle-related products.
• 40% of spending in Brazil is now beyond toll products, indicating the success of the company’s expansion strategy.