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WEX Inc. (NYSE: WEX), the Portland-based technology provider for global commerce, on Thursday posted fourth-quarter earnings and revenue results that beat market expectations, and the company issued financial guidance the year ahead.
Adjusted net income attributable to shareholders was $163.9 million, or $3.82 per diluted share, up 11% from $152.8 million, or $3.44 per diluted share, a year earlier. The EPS figure surpassed the $3.72 per share consensus forecast of analysts polled by Zacks Investment Research.
Over the last four quarters, the company has surpassed consensus EPS estimates each time.
Fourth-quarter revenue rose 7% to a record $663.3 million, driven by 27% growth in the company's benefits segment and 22% growth in corporate payments. The revenue total also exceeded the Zacks consensus estimate by 1%.
The $44.7 million increase includes a net $24.9 million unfavorable impact from fuel prices and spreads and a $300,000 favorable impact from foreign exchange rates, the company said in a news release.
“WEX had another outstanding year as we continued to drive profitable growth, generate strong adjusted free cash flow, and demonstrate our resiliency,” said CEO Melissa Smith. “Our leading offerings and highly recurring revenue position us for success throughout market cycles."
The company is a financial technology services provider to businesses in the areas of fleet mobility and fueling, corporate payments, travel industry payments and employee and member benefits.
WEX posted revenue increase in all business segments except for mobility, where revenues dropped 7% due to fuel prices and foreign exchange rates, according to an earnings presentation.
WEX shares were up 3.03% Thursday morning at $208.52, giving the stock a market value of around $8.9 billion. Shares are trading 11.75% higher than a year ago.
WEX also issued financial guidance for the first quarter and all of 2024.
For the first quarter of 2024, WEX said it expects revenue in the range of $650 million to $660 million and adjusted net income in the range of $144 million to $148 million, or $3.40 to $3.50 per diluted share.
For the full year, WEX expects revenue in the range of $2.7 billion to $2.74 billion and adjusted net income in the range of $679 million to $700 million, or $15.90 to $16.40 per diluted share.
Those projections are based on several assumptions related to fuel prices, increased financing interest expense from exiting interest rate swap contracts, an adjusted net income effective tax rate of 25% for the first quarter and the full year and around 42.7 million fully diluted shares outstanding for the full year.
“We enter 2024 with great momentum following a strong 2023 financial performance in line with our long-term targets,” said Jagtar Narula, WEX's chief financial officer. “Despite the macroeconomic headwinds in 2023 of significantly lower fuel prices and higher interest rates, we grew both revenue and earnings and clearly demonstrated the resiliency of our business model.”
“Looking ahead,” he added, “we continue to have great confidence in our ability to win new customers, expand with existing customers and bring new products to market. Accordingly, we expect to deliver solid growth and adjusted free cash flow in 2024.
"As we integrate the strategic acquisitions we made in 2023, we expect to deploy a portion of our adjusted free cash flow toward share repurchases in 2024, all while maintaining a healthy balance sheet.”
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