10-QPeriod: Q1 FY2017

CORPAY, INC. Quarterly Report for Q1 Ended Mar 31, 2017

Filed May 9, 2017For Securities:CPAY

Summary

FleetCor Technologies, Inc. (CPAY) reported a strong first quarter for 2017, with total revenues increasing by 25.6% year-over-year to $520.4 million. This growth was driven by significant contributions from acquisitions made in 2016, particularly in the International segment, which saw a 72.1% revenue increase. Organic growth also remained robust, contributing approximately 10% to overall revenue growth, demonstrating the company's ability to expand its core business alongside strategic acquisitions. Net income also saw a healthy increase of 11.3% to $123.7 million, translating to a diluted EPS of $1.31, up from $1.17 in the prior year. The company's liquidity position remains strong, with substantial cash and cash equivalents, and ample availability under its credit facilities. Looking ahead, FleetCor announced a significant acquisition of Cambridge Global Payments for approximately $675 million, further bolstering its corporate payments segment.

Financial Highlights

48 data points
Beta

Revenue

$520.43M

Net Income

$123.69M

23.8% Net Margin

EPS (Diluted)

$1.31

Total Assets

$10.01B

Cash & Equivalents

$546.56M

Free Cash Flow

$58.70M

Financial Statements
Beta
Revenue$520.43M
Operating Income$195.07M
Net Income$123.69M
EPS (Basic)$1.34
EPS (Diluted)$1.31
Shares Outstanding (Basic)92.11M
Shares Outstanding (Diluted)94.56M

Key Highlights

  • 1Total revenues grew by 25.6% to $520.4 million in Q1 2017, driven by acquisitions and organic growth.
  • 2International segment revenue surged by 72.1%, largely due to acquisitions like STP and Travelcard.
  • 3Net income increased by 11.3% to $123.7 million, with diluted EPS rising to $1.31.
  • 4The company announced a significant agreement to acquire Cambridge Global Payments for $675 million, expanding its corporate payments capabilities.
  • 5Operating income increased by 10.9% to $195.1 million, though operating margin decreased slightly to 37.5% due to higher amortization and stock-based compensation expenses.
  • 6The company ended the quarter with $735.0 million in cash and cash equivalents, including $188.4 million in restricted cash.
  • 7FleetCor continues its strategic acquisition approach, with over 70 acquisitions completed since 2002.

Frequently Asked Questions

FleetCor's revenue growth was primarily driven by the successful integration of acquisitions completed in 2016, which contributed approximately $56 million in additional revenue, particularly in the International segment. Organic growth also played a significant role, contributing approximately 10% of the overall revenue increase through growth in both transaction volume and revenue per transaction.

The planned acquisition of Cambridge Global Payments for approximately $675 million signifies FleetCor's commitment to expanding its corporate payments footprint. Cambridge's expertise in B2B international payments is expected to further enhance FleetCor's offerings in this growing segment.

FleetCor maintained a strong liquidity position with $735.0 million in total cash and cash equivalents, of which $188.4 million was restricted. The company also had approximately $467 million available under its Credit Facility and $77 million under its Securitization Facility, indicating sufficient resources to meet its obligations and fund operations for at least the next twelve months.

While revenue and net income saw solid growth, operating expenses, particularly depreciation and amortization, increased significantly (78.6%) due to acquisitions like STP and Travelcard. General and administrative expenses also rose due to acquisition-related costs and higher stock-based compensation. The company expects its general and administrative expenses to decrease as a percentage of revenue over the long term as revenue increases.