On February 8, 2024, WEX Inc (WEX, Financial), a leading provider of corporate payment solutions, released its 8-K filing, detailing financial results for the fourth quarter and full year of 2023. WEX operates across three segments: Fleet Solutions, Travel & Corporate Solutions, and Health & Employee Benefit Solutions, with the largest market in the United States.
The company's Q4 revenue reached a record $663 million, a 7% increase from the previous year, driven by significant growth in the Benefits and Corporate Payments segments. Despite economic headwinds, including lower fuel prices and higher interest rates, WEX's adjusted net income per diluted share rose by 11% to $3.82. The company's GAAP operating income margin was 23.9%, with an adjusted operating income margin of 39.6%.
WEX's financial achievements, particularly in adjusted free cash flow and net income, underscore the company's resilience and strategic focus on high-margin, scalable platforms and cost savings from technology investments. These factors are crucial for software companies like WEX, where efficient capital allocation and technological edge play pivotal roles in maintaining competitive advantage.
Key financial metrics from the income statement include a 6% increase in total volume to $56 billion and a 33% growth in Corporate Payments' purchase volume to $22.8 billion. The balance sheet reflects a strong cash position with $975.8 million in cash and cash equivalents. The cash flow statement shows $907.9 million in net cash provided by operating activities for the year.
CEO Melissa Smith commented on the company's robust sales engine and optimization efforts, which are expected to drive momentum into 2024. CFO Jagtar Narula highlighted the company's financial performance and confidence in delivering solid growth and adjusted free cash flow in the coming 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."
For 2024, WEX anticipates revenue between $2.70 billion and $2.74 billion and adjusted net income between $679 million and $700 million, or $15.90 to $16.40 per diluted share. These projections consider various factors, including U.S. retail fuel prices and increased financing interest expenses.
WEX's performance reflects a company adept at navigating economic challenges while capitalizing on strategic acquisitions and technological advancements. The company's focus on scalable solutions and cost efficiency, coupled with a strong balance sheet, positions it well for continued growth in the dynamic corporate payments industry.
For further details on WEX's financial performance and future outlook, investors and interested parties can access the full earnings release and accompanying slides on the WEX website or join the conference call hosted by the company.
Investor contact: WEX, Steve Elder, 207-523-7769, [email protected]
Explore the complete 8-K earnings release (here) from WEX Inc for further details.
