FLEETCOR Reports Third Quarter 2022 Financial Results

Completes Three Capability Acquisitions

FLEETCOR Technologies, Inc. (NYSE: FLT), a leading global business payments company, today reported financial results for its third quarter ended September 30, 2022.

“We reported another strong quarter, with revenues and adjusted net income per share growth of 18% and 21%, respectively,” said Ron Clarke, chairman and chief executive officer, FLEETCOR. “Organic revenue growth was 13% for the quarter, driven by more than 20% growth in both corporate payments and lodging. We completed three capability acquisitions, including EV, corporate payments and an international lodging tuck-in.”

Financial Results for Third Quarter of 2022:

GAAP Results

• Total revenues increased 18% to $893.0 million in the third quarter of 2022, compared to $755.5 million in the third quarter of 2021.
• Net income increased 6% to $248.9 million in the third quarter of 2022, compared to $234.0 million in the third quarter of 2021.
• Net income per diluted share increased 18% to $3.29 in the third quarter of 2022, compared to $2.80 per diluted share in the third quarter of 2021.

Non-GAAP Results¹

• Adjusted net income¹ increased 9% to $320.7 million in the third quarter of 2022, compared to $294.4 million in the third quarter of 2021.
• Adjusted net income per diluted share¹ increased 21% to $4.24 in the third quarter of 2022, compared to $3.52 per diluted share in the third quarter of 2021.

“Our third quarter results came in ahead of the expectations we provided in August for revenue, which grew 21% at constant currency, and also adjusted net income per share compared to prior year,” said Alissa Vickery, interim chief financial officer, FLEETCOR. “Our businesses continued the positive trends from the first half of the year, with the majority of the third quarter outperformance coming from organic growth. We repurchased $500 million of FLEETCOR stock in the quarter.”

Updated Fiscal Year 2022 Outlook:

“We are raising full-year 2022 revenue guidance slightly, to reflect our outperformance in the third quarter and maintaining full-year adjusted net income per share guidance, despite unfavorable exchange rates, higher interest and bad debt expense,” concluded Vickery.

For fiscal year 2022, FLEETCOR's updated financial guidance¹ is as follows:

• Total revenues between $3,400 million and $3,420 million;
• Net income between $939 million and $959 million;
• Net income per diluted share between $12.24 and $12.44;
• Adjusted net income between $1,216 million and $1,236 million; and
• Adjusted net income per diluted share between $15.85 and $16.05.

FLEETCOR’s guidance assumptions are as follows for the fourth quarter:

• Weighted average U.S. fuel prices equal to $4.25 per gallon;
• Market spreads favorable to the fourth quarter of 2021;
• Approximately 74.5 million fully diluted shares outstanding;
• A tax rate of 27.0% to 28.0%; and
• Foreign exchange rates equal to the month-to-date average as of October 26, 2022.

FLEETCOR’s guidance assumptions are as follows for 2022:

• Interest expense between $157 million and $167 million for 2022, which assumes an average reference rate of 3.75% for the fourth quarter;
• Approximately 77 million fully diluted shares outstanding for 2022; and
• No impact related to acquisitions not already closed.

Conference Call:

The Company will host a conference call to discuss third quarter 2022 financial results today at 5:00 pm ET. Hosting the call will be Ron Clarke, chief executive officer, Alissa Vickery, interim chief financial officer and Jim Eglseder, investor relations. The conference call can be accessed live via webcast from the Company's investor relations website at http://investor.fleetcor.com. A replay will be available one hour after the call and can be accessed by dialing (844) 825-9789 or (412) 317-5180 for international callers; the conference ID is 10172757. The replay will be available until Wednesday November 9, 2022. Prior to the conference call, the Company will post supplemental financial information that will be discussed during the call and live webcast.

Forward-Looking Statements:

This press release contains forward-looking statements within the meaning of the federal securities laws. Statements that are not historical facts, including statements about FLEETCOR’s beliefs, assumptions, expectations and future performance, are forward-looking statements. Forward-looking statements can be identified by the use of words such as “anticipate,” “intend,” “believe,” “estimate,” “plan,” “seek,” “project” or “expect,” “may,” “will,” “would,” “could” or “should,” the negative of these terms or other comparable terminology.

These forward-looking statements are not a guarantee of performance, and you should not place undue reliance on such statements. We have based these forward-looking statements largely on preliminary information, internal estimates and management assumptions, expectations and plans about future conditions, events and results. Forward-looking statements are subject to many uncertainties and other variable circumstances, such as regulatory measures, voluntary actions, or changes in consumer preferences, that impact our transaction volume, including social distancing, shelter-in-place, shutdowns of nonessential businesses and similar measures imposed or undertaken in an effort to contain and mitigate the spread of the coronavirus (including any variants thereof, “COVID-19”) or new outbreaks thereof, including in China; the impact of vaccine mandates on our workforce in certain jurisdictions; adverse changes or volatility in fuel prices and spreads and the current inflationary environment; adverse changes in program fees or charges we may collect, whether through legal, regulatory or contractual changes; adverse outcomes with respect to current and future legal proceedings or investigations, including without limitation, the FTC lawsuit, or actions of governmental, regulatory or quasi-governmental bodies or standards or industry organizations with respect to our payment cards; delays or failures associated with implication of, or adaption to, new technology, changes in credit risk of customers and associated losses; failure to maintain or renew key business relationships; failure to maintain competitive product offerings; failure to complete, or delays in completing, acquisitions, new partnerships or customer arrangements; and to successfully integrate or otherwise achieve anticipated benefits from such acquisitions, partnerships, and customer arrangements; failure to successfully expand and manage our business internationally; and other risks related to our international operations, including the impact of the conflict between Russia and Ukraine on our business and operations, the potential impact to our business as a result of the United Kingdom’s referendum to leave the European Union; the impact of foreign exchange rates on operations, revenues and income; and the failure or compromise of our data centers and other information technology assets; as well as the other risks and uncertainties identified under the caption "Risk Factors" in FLEETCOR's Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission (“SEC”) on March 1, 2022 and subsequent filings with the SEC made by us. These factors could cause our actual results and experience to differ materially from any forward-looking statement made herein. The forward-looking statements included in this press release are made only as of the date hereof and we do not undertake, and specifically disclaim, any obligation to update any such statements as a result of new information, future events or developments, except as specifically stated or to the extent required by law. You may access FLEETCOR’s SEC filings for free by visiting the SEC web site at www.sec.gov.

About Non-GAAP Financial Measures:

This press release includes non-GAAP financial measures, which are used by the Company as supplemental measures to evaluate its overall operating performance. The Company’s definitions of the non-GAAP financial measures used herein may differ from similarly titled measures used by others, including within our industry. By providing these non-GAAP financial measures, together with reconciliations to the most directly comparable GAAP financial measures, we believe we are enhancing investors’ understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing strategic initiatives. See the appendix for additional information regarding these non-GAAP financial measures and a reconciliation to the most directly comparable GAAP measure.

Adjusted net income is calculated as net income, adjusted to eliminate (a) non-cash share based compensation expense related to share based compensation awards, (b) amortization of deferred financing costs, discounts, intangible assets, and amortization of the premium recognized on the purchase of receivables, (c) integration and deal related costs, and (d) other non-recurring items, including unusual credit losses occurring largely, but not necessarily exclusively, due to COVID-19, the impact of discrete tax items, impairment charges, asset write-offs, restructuring costs, gains due to disposition of assets/businesses, loss on extinguishment of debt, and legal settlements and related legal fees. We adjust net income for the tax effect of non-tax items using our effective income tax rate, exclusive of discrete tax items. We calculate adjusted net income and adjusted net income per diluted share to eliminate the effect of items that we do not consider indicative of our core operating performance.

Adjusted net income and adjusted net income per diluted share are supplemental measures of operating performance that do not represent and should not be considered as an alternative to net income, net income per diluted share or cash flow from operations, as determined by U.S. generally accepted accounting principles, or U.S. GAAP. We believe it is useful to exclude non-cash share based compensation expense from adjusted net income because non-cash equity grants made at a certain price and point in time do not necessarily reflect how our business is performing at any particular time and share based compensation expense is not a key measure of our core operating performance. We also believe that amortization expense can vary substantially from company to company and from period to period depending upon their financing and accounting methods, the fair value and average expected life of their acquired intangible assets, their capital structures and the method by which their assets were acquired; therefore, we have excluded amortization expense from our adjusted net income. Integration and deal related costs represent business acquisition transaction costs, professional services fees, short-term retention bonuses and system migration costs, etc., that are not indicative of the performance of the underlying business. We also believe that certain expenses, discrete tax items, recoveries (e.g. legal settlements, write-off of customer receivable, etc.), gains and losses on investments, and impairment charges do not necessarily reflect how our investments and business are performing. We adjust net income for the tax effect of each of these non-tax items using the effective tax rate during the period, exclusive of discrete tax items.

Organic revenue growth is calculated as revenue growth in the current period adjusted for the impact of changes in the macroeconomic environment (to include fuel price, fuel price spreads and changes in foreign exchange rates) over revenue in the comparable prior period adjusted to include or remove the impact of acquisitions and/or divestitures and non-recurring items that have occurred subsequent to that period. We believe that organic revenue growth on a macro-neutral, one-time item, and consistent acquisition/divestiture/non-recurring item basis is useful to investors for understanding the performance of FLEETCOR.

Management uses adjusted net income, adjusted net income per diluted share and organic revenue growth:

• as measurements of operating performance because they assist us in comparing our operating performance on a consistent basis;
• for planning purposes, including the preparation of our internal annual operating budget;
• to allocate resources to enhance the financial performance of our business; and
• to evaluate the performance and effectiveness of our operational strategies.

About FLEETCOR®

FLEETCOR Technologies (NYSE: FLT) is a leading global business payments company that helps businesses spend less by providing innovative solutions that enable and control expense-related purchasing and payment processes. The FLEETCOR portfolio of brands automate, secure, digitize and manage payment transactions on behalf of businesses across more than 100 countries in North America, Latin America, Europe, and Asia Pacific. For more information, please visit www.FLEETCOR.com.