Summary of CorPay (CPAY) Q2 2026 Earnings Call

1Key Financial Results and Metrics

Revenue: $1.34 billion, up 21% year-over-year, exceeding expectations by $45 million.

Cash EPS: $7.00, a 36% increase, marking an all-time company earnings record.

Organic Revenue Growth: 10%, with Corporate Payments segment growing by 16% and Vehicle Payments by 8%.

Retention Rate: Steady at 93%.

Sales Growth: New bookings increased by 30%, with same-store sales up 1%.

Adjusted EBITDA Margin: 57.3%, up approximately 100 basis points year-over-year.

Leverage Ratio: 2.55x, with $1.6 billion of available capacity under the revolving credit facility.

Share Repurchases: $321 million spent on repurchasing approximately 1 million shares.

2Strategic Updates and Business Highlights

Acquisitions: The Alpha acquisition and Avid investment contributed $0.39 to cash EPS accretion.

Divestitures: Announced the sale of EPICS, a non-core asset, expected to close by September 1, 2026, which will reduce revenue by $40 million but will not impact adjusted EPS due to planned share repurchases.

Growth Focus: Plans to simplify the company by divesting smaller businesses and focusing on three primary areas: spend management, vehicle payments, and cross-border transactions.

Technological Advancements: Investment in AI models to enhance vendor selection and pricing decisions for clients, aiming to provide more value in expense management.

3Forward Guidance and Outlook

2026 Revenue Guidance: Raised to $5.31 billion, reflecting a 17% year-over-year growth.

Cash EPS Guidance: Increased to $27.35, representing a 28% growth year-over-year.

Q3 Revenue Guidance: Expected at $1.35 billion, growing 16% year-over-year, with organic growth projected between 9% to 11%.

Long-term Growth Targets: Aiming for 10%+ organic revenue growth, low teens PBT growth, and over 20% cash EPS growth.

4Bad News, Challenges, or Points of Concern

Interest Rate Risks: A slight provision for higher credit losses due to rising fuel prices and potential impacts on fleet operators.

Divestiture Impact: The sale of EPICS will reduce revenue but is viewed as a strategic move to streamline operations.

Market Competition: The ongoing need to maintain underwriting standards in vehicle payments despite competitive pressures.

5Notable Q&A Insights

Credit Risk Management: CFO Peter Walker emphasized that while there is a higher risk of credit losses due to rising fuel prices, the company will not compromise on underwriting standards.

M&A Strategy: The company remains open to future acquisitions, with a focus on larger, strategic targets rather than smaller businesses.

Cross-Border Transactions: The partnership with Mastercard is progressing well, with a significant pipeline of financial institutions (FIs) engaged.

Growth in Corporate Payments: Retention rates in the Corporate Payments segment are higher than the company average, indicating strong customer loyalty and sales performance.

Global Banking Initiatives: The company is building out its global banking offerings, which are expected to enhance revenue significantly in the coming years. Overall, CorPay reported strong financial performance in Q2 2026, with solid growth metrics and a clear strategic focus on simplifying operations and enhancing core business areas. However, the company is mindful of potential credit risks and competitive pressures as it navigates its growth trajectory.