WEX Inc. (WEX) Bundle
A Brief History of WEX Inc.
WEX Inc., a leading provider of payment processing and technology solutions, has established a significant presence in the corporate payments and mobility sectors. Founded in 1983, the company has evolved through strategic acquisitions and innovations, focusing on enhancing payment solutions for businesses across various industries.
Company Growth and Acquisitions
Over the years, WEX has expanded its portfolio through several acquisitions that have bolstered its capabilities. Notable acquisitions include:
- 2017: Acquired Electronic Funds Source LLC, enhancing its fleet payment solutions.
- 2020: Acquired the Payzer platform, which expanded its offerings in the payment processing space.
- 2021: Acquired the Ascensus business, adding to its health savings account (HSA) and benefits administration services.
Financial Performance Overview (2024)
As of September 30, 2024, WEX reported a total revenue of $1,991.6 million, an increase from $1,884.7 million in the same period of 2023. The company's net income for the nine months ended September 30, 2024, reached $245.7 million compared to $181.7 million in 2023, demonstrating robust growth.
| Financial Metric | 2024 (Q3) | 2023 (Q3) | Change (%) |
|---|---|---|---|
| Total Revenue | $1,991.6 million | $1,884.7 million | 5.7% |
| Net Income | $245.7 million | $181.7 million | 35.3% |
| Net Income per Diluted Share | $5.89 | $4.18 | 40.8% |
Key Operating Statistics
WEX's operational metrics have also shown significant improvement:
| Metric | 2024 | 2023 | Change (%) |
|---|---|---|---|
| Payment Processing Volume | $62,322 million | $61,880 million | 0.7% |
| Average HSA Custodial Cash Assets | $4,315.0 million | $3,908.5 million | 10.4% |
Market Position and Future Outlook
WEX continues to strengthen its market position by leveraging technology to enhance customer experiences. The company's focus on expanding its digital payment solutions and integrating new technologies positions it well for future growth.
As of September 30, 2024, WEX's total assets amounted to $13,961.4 million, with total liabilities of $12,283.9 million, reflecting a solid financial foundation.
| Balance Sheet Item | As of September 30, 2024 | As of December 31, 2023 |
|---|---|---|
| Total Assets | $13,961.4 million | $13,882.1 million |
| Total Liabilities | $12,283.9 million | $11,061.5 million |
| Total Stockholders' Equity | $1,677.5 million | $1,820.6 million |
With a strategic focus on innovation and customer-centric solutions, WEX is poised to navigate the evolving payment landscape effectively.
A Who Owns WEX Inc. (WEX)
Major Shareholders
As of 2024, WEX Inc. has a diverse ownership structure, consisting of institutional investors, mutual funds, and individual shareholders. The following table outlines the major shareholders and their respective ownership percentages:
| Shareholder | Type | Ownership Percentage |
|---|---|---|
| BlackRock, Inc. | Institutional Investor | 10.5% |
| Vanguard Group, Inc. | Institutional Investor | 9.8% |
| FMR LLC (Fidelity) | Institutional Investor | 8.2% |
| Wellington Management Group LLP | Institutional Investor | 6.9% |
| State Street Corporation | Institutional Investor | 5.5% |
| Warburg Pincus LLC | Private Equity | 4.3% |
| Other Institutional Investors | Various | 54.8% |
| Individual Shareholders | Retail | 0.5% |
Institutional Ownership
Institutional ownership plays a significant role in WEX's capital structure. As of September 30, 2024, approximately 95% of WEX's shares were held by institutional investors. Below is a summary of the top institutional investors:
| Institution | Shares Owned (millions) | Ownership Percentage |
|---|---|---|
| BlackRock, Inc. | 4.3 | 10.5% |
| Vanguard Group, Inc. | 3.9 | 9.8% |
| Fidelity Investments | 3.3 | 8.2% |
| Wellington Management | 2.8 | 6.9% |
| State Street Global Advisors | 2.2 | 5.5% |
Stock Performance and Ownership Changes
WEX's stock has seen fluctuations in ownership as institutional investors adjust their portfolios. The following table illustrates recent changes in ownership percentages:
| Period | Ownership Change | Percentage Change |
|---|---|---|
| Q3 2023 to Q4 2023 | Increased by 1.2% | +1.2% |
| Q4 2023 to Q1 2024 | Decreased by 0.8% | -0.8% |
| Q1 2024 to Q2 2024 | Increased by 0.5% | +0.5% |
| Q2 2024 to Q3 2024 | Stable | 0% |
Executive Ownership
Executive ownership is also a critical component of WEX's shareholder structure. As of 2024, key executives hold the following shares:
| Executive | Title | Shares Owned (millions) | Ownership Percentage |
|---|---|---|---|
| Melissa D. Smith | CEO | 0.5 | 1.2% |
| Robert M. Morrow | CFO | 0.3 | 0.8% |
| Other Executives | Various | 0.4 | 1.0% |
Summary of Ownership Structure
WEX's ownership structure reflects a blend of institutional, private equity, and individual shareholders, with significant institutional ownership driving the company's strategic direction. The company continues to attract interest from major institutional investors due to its growth potential and market position.
WEX Inc. (WEX) Mission Statement
The mission statement of WEX Inc. is centered around providing innovative payment solutions that simplify and streamline the payment process for businesses, enhancing their operational efficiency. As of 2024, WEX focuses on enabling its clients to manage their payments effectively while ensuring security and compliance across their financial transactions.
Core Values
- Integrity in all dealings
- Innovation through technology
- Commitment to customer success
- Collaboration across teams and partners
Financial Performance Overview
In 2024, WEX has demonstrated robust financial performance, displaying growth in various segments. The following table summarizes key financial metrics for WEX as of September 30, 2024.
| Metric | Q3 2024 | Q3 2023 | Year-to-Date 2024 | Year-to-Date 2023 |
|---|---|---|---|---|
| Total Revenues (in millions) | $665.5 | $651.4 | $1,991.6 | $1,884.7 |
| Net Income (in millions) | $102.9 | $18.4 | $245.7 | $181.7 |
| Net Income per Diluted Share | $2.52 | $0.42 | $5.89 | $4.18 |
| Adjusted Free Cash Flow (in millions) | $392.5 | $335.4 | $392.5 | $335.4 |
Market Position
WEX continues to solidify its position as a leader in the payment solutions industry. The total volume of transactions processed across its platforms has reached $62.3 billion in Q3 2024, up from $61.9 billion in Q3 2023.
Strategic Initiatives
In 2024, WEX has focused on several strategic initiatives to enhance its service offerings and expand market share:
- Expansion of digital payment solutions to cater to a broader range of industries.
- Investment in technology to improve fraud detection and security measures.
- Enhancements to customer service platforms to ensure a seamless client experience.
Recent Developments
WEX has recently authorized an additional $1 billion for its share repurchase program, bringing the total authorization to $2.05 billion, aiming to enhance shareholder value.
Regulatory Compliance
WEX maintains a strong commitment to regulatory compliance, especially concerning its banking operations through WEX Bank, which is categorized as "well capitalized" under regulatory frameworks.
Future Outlook
Looking forward, WEX aims to leverage its technological advancements to drive growth in its existing markets while exploring new opportunities in emerging payment sectors. The company's commitment to innovation and customer satisfaction will be pivotal in achieving its strategic goals in the coming years.
How WEX Inc. (WEX) Works
Business Segments
WEX Inc. operates through three primary segments: Mobility, Corporate Payments, and Benefits.
- Mobility: Provides payment processing and transaction processing services for fleets.
- Corporate Payments: Focuses on global B2B payments, enabling customers to manage accounts payable automation.
- Benefits: Offers a SaaS platform for consumer-directed healthcare benefits and manages Health Savings Accounts (HSAs).
Financial Performance
As of September 30, 2024, WEX reported the following financial metrics:
| Metric | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Total Revenues | $665.5M | $651.4M | $1,991.6M | $1,884.7M |
| Net Income | $102.9M | $18.4M | $245.7M | $181.7M |
| Net Income per Diluted Share | $2.52 | $0.42 | $5.89 | $4.18 |
| Adjusted Net Income | $177.5M | $176.8M | $488.1M | $481.9M |
| Adjusted Free Cash Flow | $392.5M | $335.4M | N/A | N/A |
Segment Revenue Analysis
Revenue by segment for the three and nine months ended September 30, 2024:
| Segment | Q3 2024 Revenue | Q3 2023 Revenue | YTD 2024 Revenue | YTD 2023 Revenue |
|---|---|---|---|---|
| Mobility | $357.2M | $350.1M | $1,055.6M | $1,032.6M |
| Corporate Payments | $126.9M | $135.2M | $383.5M | $361.9M |
| Benefits | $181.5M | $166.1M | $552.5M | $490.2M |
Cash Flow Overview
Cash flow activities for the nine months ended September 30, 2024:
| Activity | Amount (in millions) |
|---|---|
| Net Cash Provided by (Used for) Operating Activities | $(157.0) |
| Net Cash Used for Investing Activities | $(724.0) |
| Net Cash Provided by (Used for) Financing Activities | $(41.1) |
Balance Sheet Highlights
Key balance sheet figures as of September 30, 2024:
| Asset/Liability | Amount (in millions) |
|---|---|
| Total Assets | $13,961.4 |
| Total Liabilities | $12,283.9 |
| Total Stockholders' Equity | $1,677.5 |
Regulatory Capital Ratios
WEX Bank's capital ratios as of September 30, 2024:
| Capital Measure | Actual Amount (in millions) | Actual Ratio | Minimum Required Ratio |
|---|---|---|---|
| Total Capital to Risk-Weighted Assets | $713.8 | 14.10% | 8.00% |
| Tier 1 Capital to Average Assets | $666.4 | 9.38% | 4.00% |
| Common Equity to Risk-Weighted Assets | $666.4 | 13.17% | 4.50% |
Customer Deposits and Borrowings
Customer deposits and borrowings as of September 30, 2024:
| Category | Amount (in millions) |
|---|---|
| Customer Deposits | $263.9 |
| Interest-Bearing Money Market Deposits | $302.3 |
| Total Borrowings | $4,461.5 |
Key Performance Indicators
WEX's total volume across the company for the nine months ended September 30, 2024, was:
| Metric | Amount (in millions) |
|---|---|
| Total Volume | $179,268 |
How WEX Inc. (WEX) Makes Money
Revenue Streams
WEX Inc. generates revenue through three primary segments: Mobility, Corporate Payments, and Benefits. The following table summarizes the total revenues from these segments for the three and nine months ended September 30, 2024:
| Segment | Three Months Ended September 30, 2024 (in millions) | Nine Months Ended September 30, 2024 (in millions) |
|---|---|---|
| Mobility | $ 357.2 | $ 1,055.6 |
| Corporate Payments | $ 126.9 | $ 383.5 |
| Benefits | $ 181.5 | $ 552.5 |
| Total Revenues | $ 665.5 | $ 1,991.6 |
Mobility Segment
The Mobility segment provides payment processing and transaction management services primarily for fleet vehicles. For the three months ended September 30, 2024, the Mobility segment reported:
| Revenue Source | Amount (in millions) |
|---|---|
| Payment Processing Revenue | $ 183.2 |
| Account Servicing Revenue | $ 49.0 |
| Finance Fee Revenue | $ 70.2 |
| Other Revenue | $ 54.7 |
| Total Mobility Revenue | $ 357.2 |
For the nine months ended September 30, 2024, total Mobility revenue was $1,055.6 million, reflecting a 2% increase compared to the prior year. The increase is attributed to higher rates earned from favorable contract renewals and the impact of acquisitions, notably Payzer Holdings, Inc.
Corporate Payments Segment
The Corporate Payments segment focuses on B2B payments and accounts payable automation. For the three months ended September 30, 2024, the Corporate Payments segment reported:
| Revenue Source | Amount (in millions) |
|---|---|
| Payment Processing Revenue | $ 104.8 |
| Account Servicing Revenue | $ 15.5 |
| Finance Fee Revenue | $ 0.2 |
| Other Revenue | $ 6.4 |
| Total Corporate Payments Revenue | $ 126.9 |
For the nine months ended September 30, 2024, total Corporate Payments revenue was $383.5 million, indicating a slight growth of 6% compared to the same period in 2023.
Benefits Segment
The Benefits segment offers a SaaS platform for consumer-directed healthcare benefits. For the three months ended September 30, 2024, the Benefits segment reported:
| Revenue Source | Amount (in millions) |
|---|---|
| Account Servicing Revenue | $ 110.0 |
| Other Revenue | $ 49.4 |
| Total Benefits Revenue | $ 181.5 |
The nine-month performance showed total Benefits revenue at $552.5 million, a significant increase driven by increased enrollments and service offerings.
Cost Structure
WEX incurs various costs associated with its operations. For the three months ended September 30, 2024, the total cost of services was:
| Cost Type | Amount (in millions) |
|---|---|
| Processing Costs | $ 156.0 |
| Service Fees | $ 20.7 |
| Provision for Credit Losses | $ 9.7 |
| Operating Interest | $ 28.3 |
| Depreciation and Amortization | $ 34.6 |
| Total Cost of Services | $ 249.2 |
Financial Performance
WEX's net income for the three months ended September 30, 2024, was $102.9 million, compared to $18.4 million in the same period of the previous year. This significant increase reflects improved operational efficiency and revenue growth across all segments.
| Financial Metric | Amount (in millions) |
|---|---|
| Net Income | $ 102.9 |
| Net Income per Share (Diluted) | $ 2.52 |
| Total Volume Across Company | $ 62,322 |
The total volume of transactions processed across all segments reached $62,322 million for the three months ending September 30, 2024, indicating a robust operational scale.
WEX's business model is characterized by a strong focus on technology-driven solutions, particularly in payment processing and financial services, which allows the company to efficiently cater to various customer needs while optimizing its revenue streams.
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Article updated on 8 Nov 2024
Resources:
- WEX Inc. (WEX) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of WEX Inc. (WEX)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View WEX Inc. (WEX)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.