WEX Inc. (NYSE:WEX) Q4 2022 Earnings Call Transcript

We’re focused primarily on the mid and larger customers within our product set right now. And we’ve had some success so far. We had just under 100 new customers come in from that effort. And we are formalizing that by creating the right infrastructure in place so that can happen more fluidly over time. And also, we’re focused around the digital aspects of the offers that we have so that when we think about smaller businesses, we can offer the products much more organically digitally. And so, we’re segmenting the marketplace and thinking those larger customers will be an inherent handoff from one sales person to another. And then the far end of the market will happen more digitally. And again, we’d expect us to build into this that we’re going to continue to do this handoff now which are happening much more manually.

And as we build out that infrastructure have that happen more fluidly and see this pace of cross-selling increase over time.

Operator: Next, we’ll go to James Faucette with Morgan Stanley. Your line is now open.

James Faucette: Thank you, so much. I want to dig in a little bit more on kind of some of the weakness you called out, especially in your smallest customers, et cetera. Build out comp, saw some weakness with Divi’s most recent earnings. And I know you work with them on payments. So can you remind us what percentage of your mix they make up? And if any other partners are seeing similar issues that we should be aware of?

Melissa Smith: Yes, they’d be less than 1%, a small percentage of the mix that we have. And if you look at like — if you go through each of our segments, fleet has a pretty heavy concentration in small businesses. The only area that we’re seeing weakness is the over-the-road customer. So one micro segment within that segment. The rest of the business actually across the board has actually been quite strong. In corporate payments, there’s very little small business that sits in that portfolio. And then in health, there are small businesses that are mixed into that — into the overall segment. Again, we’re not seeing any deviation in trend based on segment size anywhere, but over-the-road small fleet customer.

Jagtar Narula: And James, I would just add in that over-the-road customer, I want to remind you that it’s at kind of the smaller end of that over-the-road, so — and kind of newer customers that are at the smaller end of those over-the-road customers. So it’s a micro segment of a subsegment of our business. Our overall kind of customers within over-the-road, especially ones that have been with us for a while are actually performing well and stable. It’s kind of a subsegment to subsegment.

Operator: Next, we’ll go to Darrin Peller with Wolfe Research. Your line is now open.

Darrin Peller: Thanks. When we look at what you’ve built and put together an assets, whether it’s — some of the other deals, you’ve obviously done some great acquisitions. So Melissa, when you think about strategically what you have now, specifically in corporate being in corporate and travel, but really across the board, love to hear a little bit more about what you see as the next big step for you guys? Probably inorganically is what I’m looking at, but — both. And then just a quick follow-up on the travel side. I know eNett brought you a lot more — a lot more Asia. Maybe just remind us the mix — the geographic mix of the segment. Obviously, it’s important now if reopening China and travel term?