Corpay Inc Q3 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: John Davis - Raymond James - Analyst : Hey, good afternoon guys. Peter, maybe just first on Corporate Payments organic growth. I think you guys said mid-teens despite an incremental float headwind. Obviously, you have a very tough comp from the year ago quarter. So maybe just talk about the drivers that give you confidence in that organic growth outlook for the fourth quarter, specifically in Corporate Payments.

Question: John Davis - Raymond James - Analyst : Fair enough. Fair enough. All right. So I'll continue on the guidance here. Ron, as you think about next year, you guys have consistently said 10% organic. You're guiding to that next year. There's a little bit of a choppy macro backdrop. You saw some nice acceleration in North America fleet in the quarter. Obviously, Corporate Payments is strong. Maybe just talk about what gives you confidence? And what, if any, of that organic growth outlook next year comes from synergies from Paymerang and some other of the prior corporate payments deal that now will flow through to organic growth.

Question: Sanjay Sakhrani - Keefe Bruyette & Woods Inc - Analyst : Thank you. Maybe just to follow on some of the questions asked before. Obviously, next year is setting up pretty strong. You've got this Mastercard investment and then some of the pipeline that's building associated with that partnership, the synergies from Alpha. Could you just talk, Ron, a little bit of how you're figuring for that in that preliminary outlook?

Question: Sanjay Sakhrani - Keefe Bruyette & Woods Inc - Analyst : Like how much of that is driving sort of the preliminary view on revenue growth for next year?

Question: Sanjay Sakhrani - Keefe Bruyette & Woods Inc - Analyst : Got it. Okay. And then, Peter, could you just drill down just a little bit more on that breakdown that you had. So if I think about the fourth quarter revenue outlook, how much does Alpha specifically add to that? And then on that $0.75 of upside for next year, like how much of it is Alpha versus Avid?

Question: Tien-Tsin Huang - JPMorgan Chase & Co - Analyst : Good afternoon. Good to event wanted to ask on 26 again. Just thinking about the segments and the growth and how growth might be different than what we saw in '25 at a high level. Any interesting call-outs there. You've got the new sales performance up 20-plus percent retention is a little bit better. I know the deals are getting layered in. But just at a high level, how is '26 going to be different than --?

Question: Tien-Tsin Huang - JPMorgan Chase & Co - Analyst : And my quick follow-up, just thinking about -- I mean, you have a lot on your plate thinking about, again, the acquisitions, divestitures. I'm sure there are other deals in the pipe as well. Just think about Ron, does it feel tougher to sort of regenerate some of the sales performance that you've seen? Just curious where you see opportunity versus risk going into the end of the year here and going into next year.

Question: Mihir Bhatia - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Let me also add nice results here. Maybe to just -- I want to go back to the monetization rate discussion a little bit in the Corporate Payments segment. I guess just trying to understand, was there anything unusual in 3Q in terms of the number of large transactions or onboarding some of these enterprise accounts? What I'm really trying to understand is, should we expect the monetization to increase back like the monetization rate to bounce back up in 4Q? Or have you unlocked something where you're just going to be doing more of these volumes and you've signed some of these big enterprise accounts. So it's more of a volume story than a monetization story?

Question: Mihir Bhatia - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Got it. That is helpful. And then maybe just thinking about '26 broadly, you've laid out some pretty interesting upside or optionality in corporate payments, whether it's from the Mastercard of just selling more. And then similarly on US vehicle payments, you were talking about the turnaround being there and being the sales increasing. Lodging, it sounds like it's stabilized and likely heading better. So I guess I'm asking, where is the risk? And could that 9% to 11% growth actually look closer to 11% to 13% or something like that?

Question: James Faucette - Morgan Stanley & Co Ltd - Analyst : Ron, I want to follow up on questions around the -- around the stablecoins. I really appreciate all the work you guys are doing to build an infrastructure there. You made interesting comments about where you may see some utility. Just wondering if you can give more specific example. I think you mentioned you thought maybe there'd be some interest in things like after hours or weekend type transfers, et cetera. But have you seen any specific cases where, hey, that makes a lot of sense or at least you could imagine the kinds of transactions that you may be looking at?

Question: James Faucette - Morgan Stanley & Co Ltd - Analyst : Got it. And maybe again, just following up on that 1 point, is that -- you mentioned the G20 and not seeing a lot of activity there. Can you just talk about like why that might be? Or what would change that? Because I have heard that from others saying, hey, this is going to be more an artifact for emerging market currencies, et cetera. But I guess I'd love to hear from your perspective, like if that's a permanent thing or just requires time and development.

Question: Trevor Williams - Jefferies LLC - Analyst : I wanted to ask another on '26. So within the 9% to 11% organic growth, Ron, it sounded like not much different than what we're seeing this year or at least in the second half. For Corporate Payments, can you be more specific on what you're assuming for the fully loaded growth rate there? And within that, how you're thinking about the puts and takes between float and then the revenue synergies from Alpha, if we can think about those 2 potentially netting each other out in fiscal '26?

Question: Trevor Williams - Jefferies LLC - Analyst : Okay. Fair enough. And then to piggyback on Alpha and the accretion, at least within the initial $0.50 when you had announced the deal, it seemed like there was a fair amount of conservatism embedded in that number. So maybe just within the accretion that you're baking in within the $0.75 in total with Avid, can you give us some more specifics on what the obvious easy early synergies are from Alpha and then maybe beyond that, what you -- at least today, what you feel confident in being able to realize eventually, but maybe you don't have it in the numbers, at least initially, that would be helpful.

Question: David Koning - Robert W. Baird & Co Inc - Analyst : Good job. Capital return question, really getting back kind of to the last question. Is the $0.75, is that fully self-funding, meaning the profits are fully covering the interest expense of what you're borrowing and you can use all your cash flow to do capital return over the next year. Just want to make sure I understand that how the accretion was looked at.

Question: David Koning - Robert W. Baird & Co Inc - Analyst : Good. And then just a quick follow-up -- go ahead.

Question: David Koning - Robert W. Baird & Co Inc - Analyst : Okay. I'm glad we're on the same page. A quick follow-up. Interest expense, Q4, $115 million, $120 million, something in that range, up just a tick next year per quarter just because we'll have a full quarter of the borrowing from -- since you're into the quarter already when you bought Alpha. But just -- is that the way to think about it using a little higher than $115 million to $120 million per quarter?

Question: Kenneth Suchoski - Autonomous Research - Analyst : Maybe just on US Vehicle, the acceleration there. I think you called out higher approval rates as one of the drivers. Can you just comment on what you're seeing in terms of new acquisition and where that's coming from? It sounds like you're comfortable with the credit trends that you're seeing if you're approving more customers there.

Question: Kenneth Suchoski - Autonomous Research - Analyst : And then maybe just -- sorry, go ahead. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 05, 2025 / 10:30PM, CPAY.N - Q3 2025 Corpay Inc Earnings Call

Question: Kenneth Suchoski - Autonomous Research - Analyst : Sorry about that. Just on the margins for next year, I mean, lots of moving parts with acquisitions and efficiencies. Just how are you thinking about margins? I think I saw the comment on expecting incremental margin expansion from some initiatives.