Wex, Inc. (WEX) Misses Q2 EPS by 18c, Revenues Miss

Wex, Inc. (NYSE: WEX) reported Q2 EPS of $1.21, $0.18 worse than the analyst estimate of $1.39. Revenue for the quarter came in at $347.1 million versus the consensus estimate of $349.01 million.

Second Quarter 2020 Performance Metrics

• Average number of vehicles serviced was approximately 15.1 million, an increase of 8% from the second quarter of 2019.
• Total fuel transactions processed decreased 17% from the second quarter of 2019 to 127.9 million. Payment processing transactions decreased 19% to 103.1 million.
• Travel and Corporate Solutions' purchase volume decreased 68% to $3.2 billion from $10.0 billion in the second quarter of 2019.
• Health and Employee Benefit Solutions' average number of Software-as-a-Service (SaaS) accounts in the U.S. grew 15% to 14.5 million from 12.6 million in the second quarter of 2019.

“Our second quarter results reflect the impact of the COVID-19 pandemic and underscore the resilience of our business, where we saw a few bright spots even in this challenged environment. We experienced recovery in spend volume trends throughout the quarter across each of our segments. Additionally, our U.S. Health business remains strong with year-over-year top-line growth, driven by an increase in the number of SaaS accounts as customers continue to rely on WEX products to pay for their essential healthcare needs," said Melissa Smith, WEX’s Chair and Chief Executive Officer.

Ms. Smith added, “Strong execution against our strategic pillars, effective cost management, disciplined capital allocation and our recent balance sheet and liquidity enhancements all position WEX to successfully navigate the current market environment. We continued to have notable new customer wins across each of our business segments, which is an important part of our growth strategy, and have begun to realize the early benefits of our cost containment measures and capital allocation plan outlined last quarter. Looking to the back half of the year, we will continue to focus on providing best-in-class products and services to our customers, winning in the marketplace and laying the foundation for sustained long-term growth."

“We continue to look for ways to strengthen our balance sheet and enhance our liquidity position in the current uncertain environment. During the quarter, we secured a $400 million investment from Warburg Pincus, which closed at the beginning of the third quarter, and favorably amended our current credit agreement,” said Roberto Simon, WEX’s Chief Financial Officer. “These actions provide us with increased financial flexibility, improved liquidity and additional cash on hand to better focus on our strategic priorities as we navigate the pandemic. Looking ahead, we remain confident in WEX's ability to fund growth initiatives and capitalize on the economic recovery as operating conditions improve.”

For earnings history and earnings-related data on Wex, Inc. (WEX) click here.

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