Higher B2B Payments Volumes, More SaaS Accounts Boost WEX Despite Overall Lower 3Q
FinTech WEX lost $57.7 million, or $1.49 a share, on revenue of $382.1 million for the three months ended Sept. 30, compared with posting a profit of $42.4 million, or 34 cents a share, on revenue of $460 million during the year-ago third quarter, the company reported in an earnings release.
WEX’s offerings fall into three broad categories, according to the company’s website: fleet management, including GPS tracking of vehicles and the providing of cards drivers can use for refueling; corporate payment products; and systems for administering healthcare benefits.
By segment, “Fleet Solutions” revenue for the latest quarter, compared with the year-ago quarter, fell 17.6 percent; “Travel and Corporate Solutions” revenue fell 35.1 percent; and “Benefits Solutions” revenue increased 7 percent.
“While demand remained muted due to global uncertainty around COVID-19, spend volumes across all segments steadily recovered as we progressed through the quarter,” CEO and Chairwoman Melissa Smith said in a letter that accompanied the earnings release. “Notably, our corporate payments customers and U.S. health business experienced year-over-year top-line growth, driven by the recovery of B2B payments volumes and increased [Software-as-a-Service] SaaS accounts. We were also encouraged by sequential improvement in the fleet segment, driven by positive over-the-road volume trends.”
She continued: “We remain focused on positioning WEX for sustained long-term growth once market conditions recover. This includes selectively investing in areas of our business that are growing and building upon our technology position by growing our platform of services allowing us to enhance value-added offerings to customers, which is key to our differentiation in the marketplace.”
Smith said WEX’s “sales momentum continues to be strong.”
WEX reported a $400 million investment from Warburg Pincus in June. Smith stated in a news release at the time: “The combination of this investment and the recent credit agreement amendment put us in an even stronger financial position with additional financial flexibility, improved liquidity and increased cash on hand. This better positions us to remain focused on our long-term strategic initiatives to drive our future success, and capitalize on the economic recovery when market conditions improve.”