Q2 2014 U.S. Fleet Card Issuer Performance Snapshot
As the only two fleet card issuers currently publicly owned, FleetCor and WEX financials provide a lens into fleet card performance. As seen in Figure 1, First Annapolis tracks various metrics to analyze the performance of their fleet card programs.
FleetCor: FleetCor’s North American business experienced solid growth in Q2 2014, primarily driven by organic growth due to increases in both purchase volume and revenue per transaction. FleetCor’s 2013 acquisition of NexTraq, a GPS fleet management solution provider, also contributed to its growth as NexTraq provides higher per revenue transaction products. The impact of all of FleetCor’s 2013 acquisitions contributed approximately $9 million in additional revenue in the three months ended June 30, 2014 over the comparable 2013 period. While some of FleetCor’s operating expenses increased (e.g., merchant commissions, processing costs), they were offset by revenues increasing at a faster rate.
In August, 2014, FleetCor signed a definitive agreement to acquire Comdata Inc. from Ceridian LLC for $3.45 billion. The deal is expected to be completed in Q4 2014 and will expand FleetCor’s North American fuel card business into the Over-the-Road fleet market and the virtual payments space.
WEX: WEX’s fleet payment solutions business line grew 11.3% from Q2 2013. Growth was driven primarily through organic growth in the domestic fleet business, an increase in WEX Telematics Unit Service revenue, and higher minimum late fees charged to customers. WEX operating expenses increased 14% from Q2 2013, primarily driven by a $3.5 million increase in service fees. This increase was a result of acquisition related expenses incurred during the second quarter of 2014, expenses associated with the startup of WEX’s European commercial fuel card program, and fees related to the increase in the number of WEX Telematics units being serviced. Even with the increase in expenses, WEX operating income increased as revenue grew at a higher rate.
Fleet Card Issuer Performance Q2 20141 FleetCor revenues are for the North America segment only.
2 WEX revenues are for the Fleet Payment Solutions segment only.
3 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.
Note: some growth rates may slightly differ from rates seen in the public filings due to rounding.
Source: FleetCor and WEX public filings.
For more information, please contact Brian Rutland, Senior Analyst, specializing in Commercial Payments, firstname.lastname@example.org.
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