Q1 2016: U.S. Fleet Card Issuer Performance Snapshot


Navigator Edition: June/July 2016
By: Brian Rutland

As the only two fleet card issuers currently publicly owned, FleetCor and WEX financials provide a lens into fleet card performance. As shown in Figure 1, First Annapolis tracks various metrics to analyze the performance of their fleet card programs. In the first quarter of 2016, aggregate revenue and operating income for WEX and FleetCor decreased from Q1 2015, primarily due to a 23% decrease in the average domestic price per gallon of fuel in 2016 as compared to 2015.

Figure 1: Fleet Card Issuer Performance Q1 2016

Fig-1_-Fleet-Card-Issuer-Performance-Q1-20161 Unless otherwise noted, FleetCor figures represent the North America segment only.
2 Unless otherwise noted, WEX figures represent the Fleet Solutions segment only.
3 FleetCor figures excludes SVS business from the Comdata acquisition, calculated by taking revenue per transaction excluding SVS ($2.83) * number of transactions excluding SVS (92.5 million); Total revenue including SVS = $304 million.
4 FleetCor transactions exclude 342 million SVS transactions.
5 Charge-off values are annualized, and represent the entire business. FleetCor Charge-offs include international business. FleetCor Charge-off calculation is Write-offs / the sum of Gross Domestic AR, Gross Domestic Securitized AR, and Gross Foreign AR. WEX Charge-off calculation is Charge-offs / AR.
6 FleetCor Operating Margin includes SVS business.
Note: Some growth rates may differ slightly from rates seen in the public filings due to rounding.
Source: FleetCor and WEX public filings.

FleetCor: FleetCor’s North America fleet card revenues increased more than 2% from the three months ended March 31, 2015 to $262 million in the three months ended March 31, 2016. This increase was driven by increases in both volume and revenue in certain businesses. These increases offset a decrease in revenue per transaction, which arose primarily due to lower fuel prices and lower fuel spread margins during the quarter versus the same quarter in 2015.

FleetCor’s operating margin also increased more than 2% from the three months ended March 31, 2015, to the three months ended March 31, 2016, primarily due to a decrease in depreciation and amortization expense.

WEX: WEX’s Fleet Solutions revenues decreased nearly 6% from the three months ended March 31, 2015, to $121 million in the three months ended March 31, 2016. This decrease, primarily due to the decrease in the average domestic price per gallon of fuel in 2016, was partially offset by an increase in payment processing volume related to a large customer portfolio converting from an unfunded to a fully funded relationship in the beginning of 2016 and additional price modernization initiatives in the small fleet market.

WEX’s operating margin decreased 32% in the three months ended March 31, 2016, due to (1) lower revenues and (2) increased service fees compared to the prior year primarily due to merger and acquisition expenses associated with the pending acquisition of EFS.

For more information, please contact Brian Rutland, Consultant, brian.rutland@firstannapolis.com, specializing in Commercial Payments.

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