10-QPeriod: Q2 FY2022

CORPAY, INC. Quarterly Report for Q2 Ended Jun 30, 2022

Filed August 9, 2022For Securities:CPAY

Summary

CORPAY, INC. (CPAY) reported strong revenue growth of 29.1% to $861.3 million for the three months ended June 30, 2022, compared to the prior year, driven by a combination of organic growth and strategic acquisitions. Net income also saw a substantial increase of 33.6% to $262.2 million. The company's diverse segment performance contributed to this growth, with Lodging showing exceptional year-over-year revenue growth of 87.8%. Corporate Payments and Brazil also demonstrated robust revenue increases of 35.1% and 30.5%, respectively. Despite increased operating expenses, particularly in processing, selling, and general & administrative categories, the company managed to improve its operating income by 24.5% to $370.5 million. This indicates effective cost management and operational efficiency in driving profitability alongside top-line growth. While the company faces ongoing macroeconomic uncertainties, including inflation and geopolitical risks such as the conflict in Ukraine, its financial performance in this quarter suggests resilience. Management highlighted a positive impact from macroeconomic factors like fuel prices, though this was partially offset by unfavorable foreign exchange rates. The company maintains a strong liquidity position and continues its share repurchase program, signaling confidence in its future financial health and commitment to shareholder returns.

Financial Highlights

48 data points
Beta

Revenue

$861.28M

Net Income

$262.17M

30.4% Net Margin

EPS (Diluted)

$3.35

Total Assets

$14.71B

Cash & Equivalents

$1.42B

Free Cash Flow

$118.86M

Financial Statements
Beta
Revenue$861.28M
Operating Income$370.48M
Net Income$262.17M
EPS (Basic)$3.42
EPS (Diluted)$3.35
Shares Outstanding (Basic)76.77M
Shares Outstanding (Diluted)78.24M

Key Highlights

  • 1Consolidated revenues increased by 29.1% to $861.3 million for the three months ended June 30, 2022, compared to $667.4 million in the prior year.
  • 2Net income for the quarter rose by 33.6% to $262.2 million, compared to $196.2 million in the prior year.
  • 3Operating income increased by 24.5% to $370.5 million, demonstrating improved profitability.
  • 4The Lodging segment exhibited exceptional growth, with revenues up 87.8% year-over-year.
  • 5Corporate Payments and Brazil segments also showed strong revenue growth of 35.1% and 30.5%, respectively.
  • 6Despite increased operating expenses (up 29.1% in total), the company's robust revenue growth outpaced expense growth, leading to higher net income.
  • 7The company maintains a strong liquidity position with approximately $2.5 billion in total liquidity at June 30, 2022.

Frequently Asked Questions

Corpay's revenue growth in Q2 2022 was driven by a combination of factors, including organic growth (up 17%), the positive impact of macroeconomic environments like higher fuel prices, and contributions from acquisitions completed in 2021 and 2022. Acquisitions contributed approximately $45 million to revenue.

While consolidated operating expenses increased by 29.1% to $537.9 million, this was matched by a 29.1% increase in total revenues, net. This allowed the company to improve its operating income by 24.5% to $370.5 million and its net income by 33.6% to $262.2 million, indicating that revenue growth outpaced expense growth and managed operational efficiency.

The company has noted the conflict in Ukraine creates uncertainty and potential market disruptions. As of June 30, 2022, it had reclassified $223 million of cash held at its Russian businesses to restricted cash. While no impairment has occurred to date, the conflict could impact the value of assets in Russia. The company is actively monitoring the situation and refining its business continuity plan.

The allowance for credit losses on accounts and other receivables increased to $124.8 million at June 30, 2022, from $98.7 million at December 31, 2021. The 'Provision for credit losses' on the cash flow statement shows an increase to $52.7 million for the six months ended June 30, 2022, compared to $8.5 million in the prior year. This increase is attributed to higher customer spend driven by fuel prices and strong new sales, which tend to have a higher loss rate.