WEX Inc. (NYSE:WEX) Q2 2023 Earnings Call Transcript

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Trevor Williams: Okay. Great. And then maybe just as a follow-up to Darrin’s question on the Mobility segment and growth for the rest of the year, I think you guys had been talking about for the full year being kind of around the 4% level on the ex fuel growth rate. Obviously, you’re above that in the first couple of quarters or at least for the first half of the year. The comps in the back half gets tougher, especially on the late fee rate kind of where your gallon volumes are now. So just maybe if you could give us a sense for the 4% still a reasonable level to kind of anchor to full year and we kind of back into what makes sense then for 3Q and 4Q so long as we’re still going to have 4% for all.

Jagtar Narula: Yes. I think we’re in the ballpark of what we’ve previously guided to. Like I said in that guidance mostly what we’ve raised is travel volumes and scheme fees. The rest of it is largely what we’ve previously guided to.

Operator: Your next question comes from the line of Nate Svensson with Deutsche Bank.

Christopher Svensson: Just following up on something Tien-Tsin asked about earlier in the Benefits segment. So he asked about accounts. And so I think maybe in the Benefit segment, can you talk about growth in the HSA custodial cash assets. So I think it’s a few quarters now consecutively growing in the mid-20%. So I guess just directionally, how should we think about growth in HSA custodial cash assets going forward? Is that going to decelerate? Are we going to lap anything specific? Any color, that would be very helpful.

Jagtar Narula: Yes. I would say for the balance of the year and our guidance, we don’t typically expect cash assets to increase a lot during the course of the year. We tend to see that late in the year and going into next year. So we’ll provide more guidance about 2024 and beyond once we get into our Q4 earnings call next year, but I would say for the balance of the year, we don’t expect big increases in that baked into our guide.

Christopher Svensson: Got it. That makes sense. And then I guess just a follow-up on Darrin’s question earlier. So he asked about electric vehicles. And I guess maybe just thinking about the broader opportunity within mobility ex electric vehicles. So maybe you can talk about potential market share gain opportunities or international growth opportunities within mobility that can help drive organic revenue going forward beyond the sort of strategic steps you’re taking on the EV side?

Melissa Smith: Yes, I would say that’s our bread and butter. We’ve a history of continuing to take market share and we take it from several places, what you would perceive as traditional competitors, but it’s also coming from the cash market still continues to be a place that we’re pulling customers in as well as general purpose credit card. And increasingly, we are getting more sophisticated in how we market to those customers. So we feel good about our continued ability to feed our sales engine, which is highly predictable about closing those leads. And so if you look at how our business is structured, the majority is small customers. While we have products that work really well with very large mobility customers, and we work with some of the largest ones in the world.

We also have products that we’re offering to smaller customers, which might be a local landscaper or contractor, and we’re gearing our sales engines to both of those things. And so we feel really good and very bullish about our ability to continue to take market share both in the over-the-road business and our local businesses.

Operator: This concludes our Q&A for today. I now turn the call back to Steve Elder for closing remarks.

Steven Elder: Thank you, Emma. Appreciate everyone hopping on the call with us today, and all the interest in WEX, and we’ll look forward to sharing our results again in probably late October from the third quarter. Thank you.

Operator: This concludes today’s conference call.

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