10-QPeriod: Q1 FY2023

CORPAY, INC. Quarterly Report for Q1 Ended Mar 31, 2023

Filed May 10, 2023For Securities:CPAY

Summary

Corpay, Inc. (CPAY) reported solid revenue growth of 14.2% year-over-year for the first quarter of 2023, reaching $901.3 million. This growth was driven by strong organic performance across its segments, particularly in Corporate Payments and Lodging, alongside contributions from recent acquisitions. The company demonstrated robust operating income growth of 18.1%, highlighting effective cost management despite increased processing and general and administrative expenses, partly attributed to acquisition integration. While net income saw a slight decrease of 1.4% to $214.8 million, primarily due to a significant increase in interest expense driven by higher interest rates, the company's underlying operational strength remains evident. Corpay continues to manage its liquidity well, with ample cash and borrowing capacity. The company also provided an update on its divestiture of Russian operations and ongoing legal matters, which are being actively managed.

Financial Highlights

49 data points
Beta

Revenue

$901.33M

Net Income

$214.84M

23.8% Net Margin

EPS (Diluted)

$2.88

Total Assets

$15.14B

Cash & Equivalents

$1.27B

Free Cash Flow

$840.93M

Financial Statements
Beta
Revenue$901.33M
Operating Income$375.19M
Net Income$214.84M
EPS (Basic)$2.92
EPS (Diluted)$2.88
Shares Outstanding (Basic)73.52M
Shares Outstanding (Diluted)74.48M

Key Highlights

  • 1Consolidated revenues increased by 14.2% to $901.3 million in Q1 2023, driven by organic growth and acquisitions.
  • 2Operating income grew by 18.1% to $375.2 million, showcasing effective operational management.
  • 3Net income slightly decreased by 1.4% to $214.8 million, impacted by a substantial rise in interest expenses due to higher interest rates.
  • 4Corporate Payments and Lodging segments showed particularly strong revenue growth at 23.6% and 29.3% respectively.
  • 5The company is proceeding with the divestiture of its Russian operations, subject to government approval.
  • 6Corpay announced a $1.0 billion increase to its existing stock repurchase program, with $1.2 billion remaining authorization.
  • 7Interest expense significantly increased due to rising interest rates, impacting overall profitability.

Frequently Asked Questions

Corpay's revenue growth of 14.2% was primarily driven by a combination of strong organic growth across its business segments, particularly in Corporate Payments and Lodging, and the impact of acquisitions completed in 2022 and 2023. Positive macroeconomic factors, such as fuel prices and spreads, also contributed.

Net income saw a slight decrease of 1.4% due to a significant increase in interest expense, which rose by $57.8 million. This was largely driven by higher interest rates on the company's borrowings under its credit facilities.

Corpay has signed definitive agreements to sell its Russian business, which is expected to close near the end of the second quarter of 2023, subject to Russian government approval. The company has reclassified cash held at its Russian businesses to restricted cash.

Corpay has a significant amount of debt and is exposed to interest rate fluctuations. To manage this, the company utilizes interest rate swap contracts designated as cash flow hedges to reduce the variability of interest payments on its variable-rate debt. They also recently amended a swap contract to replace LIBOR with SOFR.