10-QPeriod: Q1 FY2021

CORPAY, INC. Quarterly Report for Q1 Ended Mar 31, 2021

Filed May 10, 2021For Securities:CPAY

Summary

CORPAY, INC. (CPAY) reported its first quarter 2021 financial results on May 10, 2021. The company experienced a decrease in consolidated revenues of 7.9% year-over-year, primarily attributed to the ongoing impacts of the COVID-19 pandemic on transaction volumes and the macroeconomic environment. Despite the revenue decline, net income saw a significant increase of 25.3% to $184.2 million, largely due to a substantial reduction in processing expenses, including a significant year-over-year decrease from a large customer receivable write-off in the prior year's comparable period. The company also benefited from lower interest expenses and strategic acquisitions. Management highlighted continued strategic progress, including the acquisition of Roger (CorpayOne) to enhance its accounts payable solutions. Looking ahead, CORPAY is focused on navigating the economic recovery, managing foreign exchange fluctuations, and integrating its recent acquisitions. The company maintains a strong liquidity position and is proceeding with its planned acquisition of Associated Foreign Exchange (AFEX), expected to close in the second quarter of 2021.

Financial Highlights

48 data points
Beta

Revenue

$608.62M

Net Income

$217.95M

35.8% Net Margin

EPS (Diluted)

$2.15

Total Assets

$11.43B

Cash & Equivalents

$958.32M

Free Cash Flow

$58.32M

Financial Statements
Beta
Revenue$608.62M
Operating Income$265.96M
Net Income$217.95M
EPS (Basic)$2.21
EPS (Diluted)$2.15
Shares Outstanding (Basic)83.47M
Shares Outstanding (Diluted)85.76M

Key Highlights

  • 1Consolidated revenues decreased by 7.9% to $608.6 million in Q1 2021 compared to Q1 2020, impacted by COVID-19 and macroeconomic conditions.
  • 2Net income increased by 25.3% to $184.2 million, driven by significant reductions in processing expenses and a lower year-over-year comparison due to a large receivable write-off in Q1 2020.
  • 3Processing expenses saw a substantial decrease of 50.2%, largely due to the absence of a significant customer receivable write-off from the prior year.
  • 4Interest expense decreased by 20.0% due to lower borrowings and LIBOR rates, partially offset by increased use of the securitization facility.
  • 5The company completed the acquisition of Roger (CorpayOne) in January 2021, strengthening its accounts payable solutions.
  • 6CORPAY is progressing with the acquisition of Associated Foreign Exchange (AFEX), anticipated to close in Q2 2021.
  • 7The company maintained a strong liquidity position with approximately $1.96 billion in total liquidity at the end of Q1 2021.

Frequently Asked Questions

The primary reason for the decrease in consolidated revenues by 7.9% to $608.6 million in the first quarter of 2021 was the ongoing impact of the COVID-19 pandemic on transaction volumes and the broader macroeconomic environment. Acquisitions completed in 2020 provided a partial offset.

Net income increased by 25.3% to $184.2 million primarily due to a significant reduction in processing expenses. This reduction was largely influenced by the absence of a large customer receivable write-off that occurred in the first quarter of 2020. Additionally, lower interest expenses and a favorable comparison against prior period legal settlement costs contributed to the net income growth.

CORPAY signed a definitive agreement to acquire Associated Foreign Exchange (AFEX) for approximately $450 million in September 2020. The transaction is expected to close in late the second quarter of 2021, subject to regulatory approval and customary closing conditions.

Foreign exchange rates had an unfavorable impact of approximately $11 million on consolidated revenues and approximately $8 million on Brazil segment operating income during the first quarter of 2021 compared to the prior year. However, favorable foreign exchange movements positively impacted the International segment revenues by approximately $5 million. The company actively hedges its foreign currency exposures from customer contracts.