01—Abstract
Summary
Summary of the 10-K filed March 1, 2019. Cited figures are marked; the original filing is the authoritative source.
FLEETCOR, operating as CORPAY, INC. (CPAY), is a global provider of commercial payment solutions, simplifying how businesses manage and pay expenses across various categories including fuel, lodging, tolls, and corporate payments.
The company operates in two segments: North America and International, with its largest product line being fuel payment solutions. In 2018, FLEETCOR continued its growth trajectory, driven by organic expansion and strategic acquisitions, although certain new accounting standards (ASC 606) impacted revenue presentation. The company focuses on specialized payment products, proprietary networks, and robust distribution capabilities to maintain its competitive position.
FLEETCOR's business model is characterized by recurring revenue and high EBITDA margins. While the company experienced growth, it also highlighted risks related to fuel price volatility, credit risk, competition, and the impact of macroeconomic conditions.
The company's financial performance demonstrates growth in revenues and operating income, supported by strong performance in both its North America and International segments. FLEETCOR also actively manages its capital structure, including significant share repurchase programs and a robust credit facility, indicating a commitment to enhancing shareholder value.
02—Key points
Key Highlights
- FLEETCOR is a global leader in commercial payment solutions, serving diverse business needs across multiple industries.
- The company operates through two main segments: North America and International, with fuel payment solutions being its largest revenue contributor.
- In 2018, FLEETCOR experienced revenue growth driven by organic expansion and strategic acquisitions, despite the impact of new accounting standards (ASC 606).
- FLEETCOR's business model relies on recurring revenue streams, specialized payment products, and proprietary networks, contributing to high EBITDA margins.
- Key financial metrics show growth in revenues and operating income, supported by strong performance across both geographic segments.
- The company actively manages its capital structure, evidenced by significant share repurchase programs and its credit facility.
- FLEETCOR acknowledges various risks, including those associated with fuel price volatility, credit risk, competitive pressures, and macroeconomic factors.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2018filed March 1, 2019Financial Statements
FY2018 against FY2017
| Line item | FY2018FY2017 | Change |
|---|---|---|
| Revenue | $2.43B$2.25B | +8.2% |
| Operating Income | $1.09B$883.76M | +23.4% |
| Net Income | $811.48M$740.20M | +9.6% |
| EPS (Basic) | $9.14$8.12 | +12.6% |
| EPS (Diluted) | $8.81$7.91 | +11.4% |
| Shares Outstanding (Basic) | 88.75M91.13M | −2.6% |
| Shares Outstanding (Diluted) | 92.15M93.59M | −1.5% |
05—Questions
Frequently Asked Questions
What are FLEETCOR's main business segments and product lines?
FLEETCOR operates in two reportable segments: North America and International. Its primary product lines include Fuel, Lodging, Tolls, Corporate Payments, and Gift cards. Additionally, it offers services like fleet maintenance, employee benefits, and long-haul transportation-related services.
How does FLEETCOR generate revenue?
FLEETCOR generates revenue primarily through transaction fees, card fees, network fees, and other charges from customers and partners. Revenue is also derived from merchants through the difference between the amount charged to the customer and the amount paid to the merchant, as well as network fees. Specific revenue sources include interchange fees, discount fees, fees based on transaction volume or value, and monthly access fees.
What are the key financial performance indicators for FLEETCOR?
Key financial performance indicators highlighted in the report include revenues, net income, earnings per share (both basic and diluted), operating income, and operating margin for each segment. The company also provides 'Adjusted Net Income' and 'Adjusted Net Income Per Diluted Share' as non-GAAP measures to offer a view of core operating performance.
What are the significant risks and challenges faced by FLEETCOR?
FLEETCOR faces several risks, including declines in retail fuel prices affecting revenue, credit risk from its customer base, intense competition across its product lines, dependency on strategic partnerships with major oil companies and merchants, and the impact of general economic conditions, foreign currency fluctuations, and cybersecurity threats.
06—Continue