Corpay drives Q1 23 growth for Fleetcor, with rebrand considered

Corpay drives Q1 23 growth for Fleetcor, with rebrand considered

Fleetcor has published its Q1 2023 earnings, reporting a 14% YoY climb in revenues to $901.3m and a 17% increase in EBITDA to $460m, giving it a Q1 margin of 51%. Its Corporate Payments division, which covers its B2B payments-focused subsidiary Corpay, was a key contributor to this growth, seeing a 24% increase in revenues for the quarter to $227.2m. The results, which were at the top end of projections, were met with a positive response from investors.

Corpay helps drive Fleetcor's growth in Q1 2023
Fleetcor revenue and EBITDA margin, with Corpay share, 2019-22 and '23 est.

This quarter, Fleetcor has revised how it reports its business segments. It previously divided the company into Fuel, Corporate Payments, Tolls, Lodging and Gift, but from Q1 23 it is reporting using the segments Fleet, Corporate Payments, Lodging and Brazil. This is in part recognition of the company’s Brazil business, which has broadened from a toll-focused product to a broader vehicle payments business, as well as a wider project to simplify how Fleetcor is presented. Under this new division, Lodging was the biggest driver of growth, with a 29% YoY revenue increase, with Corporate Payments coming in second (24%), followed by Brazil (19%) and Fleet (6%).

As part of its simplification project, the company also said that it was actively exploring the sale of some segments, and was considering rebranding the entire company to Corpay to “better reflect the broad set of corporate payments solutions” that it now offers. It intends to confirm action on this within three months. Fleetcor also provided an update on the divestiture of its Russian business, which is in the process of being sold to a local company and is currently awaiting regulatory approvals.

On Corporate Payments’ Q1 results, the segment’s Corpay payables business increased 30%, while cross-border revenue increased by 21%. The company also provided an update on its acquisition of Global Reach, which completed in January, with 90% of the acquiree’s revenue already migrated to the Corpay platform.

Looking to its FY 2023, Fleetcor anticipates organic revenue growth for the rest of the year to sit between 9-11%, with Corporate Payments seeing growth “in the high teens”.

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