WEX Inc.
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to provide information that will assist the reader with understanding our financial statements, the changes in key items in those financial statements from year to year, and the primary factors that accounted for those changes, as well as how certain accounting estimates affect our financial statements. The discussion also provides information about the financial results of the three segments of our business to provide a better understanding of how those segments and their results affect our financial condition and results of operations as a whole. Additionally, certain corporate costs not allocated to our operating segments are discussed herein.
Our MD&A is presented in the following sections:
•Executive Overview
•Company Highlights
•Results of Operations
•Liquidity and Capital Resources
•Critical Accounting Policies and Estimates
•Recently Adopted Accounting Standards
This discussion should be read in conjunction with our audited consolidated financial statements as of December 31, 2025, the notes accompanying those financial statements and MD&A as contained in our Annual Report on Form 10–K for the year ended December 31, 2025, filed with the Securities and Exchange Commission on February 13, 2026, and in conjunction with the condensed consolidated financial statements and notes in Part I – Item 1 of this report.
Executive Overview
WEX is a scalable payments and technology platform that simplifies the business of running a business. Every day, businesses manage payments and workflows that are complex, regulated, and mission-critical. Our technology is deeply embedded into customers’ operations to simplify payments, enrich data, and ensure compliance — at scale.
Across multiple enterprise payments categories, including the following three business segments, WEX transforms data into intelligence to deliver value to our customers through tailored spending controls, stronger cash flow visibility, reduced fraud exposure, and data-enriched insights into their business:
•Within our Mobility segment, we are a leading provider of payments and fleet management solutions. We serve diverse fleet needs globally, addressing the marketplace through North American Mobility and Over-the-Road, which are central to the operation of the service and freight economies, respectively, in North America and International Mobility, which is central to the operation of the service economy outside of North America, inclusive of our fleet portfolios in Europe and Asia-Pacific.
•Within our Benefits segment, we provide a broad benefits platform with integrated payments spanning HSAs, FSAs, HRAs, COBRA and benefits enrollment and administration, delivered directly to businesses or through our partner network. WEX Inc. also serves as an IRS-designated non-bank custodian, while WEX Bank provides HSA depository services.
•Our Corporate Payments segment provides comprehensive and secure B2B payments solutions powering mid-sized businesses and global enterprises through our scalable technology. Our capabilities and solutions broadly fall into the categories of Embedded Payments, which seamlessly integrates virtual payment capabilities into existing workflows, empowering a broad range of industries, including online travel, and Direct to Corporate, which automates accounts payable by integrating with enterprise resource planning software systems and accounting workflows to maximize virtual payment usage, addressing corporations of all sizes through direct to customer sales and white-label partnership offerings with financial institutions who license our technology.
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Company Highlights
The following table presents a summarized view of selected results for the three months ended March 31, 2026, shown comparative to the prior year period. The “Other Key Metric” included below is considered by management to be of particular importance to our overall performance as it provides enhanced information and data underlying our financial results. A more extensive list of the key performance indicators regularly used by management to evaluate our performance is included by segment within the Results of Operations section later in this MD&A.
| (in millions, except per share data) | Three Months Ended March 31, | ||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||
| GAAP Measures: | |||||||||||||||||||
| Total revenues | $ | 673.8 | $ | 636.6 | |||||||||||||||
| Net income attributable to shareholders | $ | 77.7 | $ | 71.5 | |||||||||||||||
| Net income attributable to shareholders per diluted share | $ | 2.22 | $ | 1.81 | |||||||||||||||
| Net cash used for operating activities | $ | (330.8) | $ | (481.6) | |||||||||||||||
Non-GAAP Measures(1) | |||||||||||||||||||
| Adjusted net income attributable to shareholders | $ | 145.3 | $ | 138.4 | |||||||||||||||
| Adjusted net income attributable to shareholders per diluted share | $ | 4.15 | $ | 3.51 | |||||||||||||||
| Adjusted free cash flow | $ | 49.5 | $ | 16.2 | |||||||||||||||
| Other Key Metric: | |||||||||||||||||||
Total volume across the Company(2) | $ | 58,119 | $ | 54,057 | |||||||||||||||
(1)Adjusted net income attributable to shareholders, adjusted net income attributable to shareholders per diluted share, and adjusted free cash flow are supplemental non-GAAP financial measures of operating performance. Refer to the sections titled Non–GAAP Financial Measures That Supplement GAAP Measures and Liquidity and Capital Resources later in this MD&A for more information and a reconciliation of the non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with GAAP.
(2)Total volume across the Company includes purchases on WEX-issued accounts as well as purchases on third party-issued accounts using a WEX platform.
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Results of Operations
The following includes information that our management believes is material to an understanding of our results of operations. Any significant changes, unusual or infrequent events, or significant economic changes that materially affect our results of operations are discussed below.
Mobility
Revenues
The following table reflects comparative revenue and key operating statistics within Mobility:
| Three Months Ended March 31, | Increase (Decrease) | |||||||||||||||||||||||||||||||||||||||
| (in millions, except per gallon data) | 2026 | 2025 | Amount | % | ||||||||||||||||||||||||||||||||||||
Revenues(1) | ||||||||||||||||||||||||||||||||||||||||
| Payment processing revenue | $ | 156.8 | $ | 156.4 | $ | 0.4 | — | % | ||||||||||||||||||||||||||||||||
| Account servicing revenue | 53.2 | 49.9 | 3.3 | 7 | % | |||||||||||||||||||||||||||||||||||
| Finance fee revenue | 79.8 | 75.2 | 4.6 | 6 | % | |||||||||||||||||||||||||||||||||||
| Other revenue | 54.7 | 52.3 | 2.4 | 5 | % | |||||||||||||||||||||||||||||||||||
| Total revenues | $ | 344.6 | $ | 333.8 | $ | 10.8 | 3 | % | ||||||||||||||||||||||||||||||||
| Key operating statistics | ||||||||||||||||||||||||||||||||||||||||
| Total volume | $ | 19,890.6 | $ | 18,750.9 | $ | 1,139.7 | 6 | % | ||||||||||||||||||||||||||||||||
| Payment processing transactions | 130.4 | 134.5 | (4.1) | (3) | % | |||||||||||||||||||||||||||||||||||
Payment processing $ of fuel(2) | $ | 12,706.8 | $ | 12,017.9 | $ | 688.9 | 6 | % | ||||||||||||||||||||||||||||||||
| Payment processing gallons | 3,428.3 | 3,527.7 | (99.4) | (3) | % | |||||||||||||||||||||||||||||||||||
| Average U.S. fuel price ($USD/gal) | $ | 3.60 | $ | 3.32 | $ | 0.28 | 8 | % | ||||||||||||||||||||||||||||||||
Net payment processing rate(3) | 1.23 | % | 1.30 | % | (0.07) | % | (5) | % | ||||||||||||||||||||||||||||||||
| Net late fee rate | 0.50 | % | 0.53 | % | (0.03) | % | (5) | % | ||||||||||||||||||||||||||||||||
Credit losses, in basis points(4) | 19.2 | 11.5 | 7.7 | 67 | % | |||||||||||||||||||||||||||||||||||
(1)Consumer fuel prices in our European market are typically set on Fridays for the week ahead. Due to the high volatility and rapid increase in the price of fuel as a result of the war in the Middle East, resultant unfavorable European fuel price spreads more than offset the benefits of higher domestic fuel prices arising from the same conflict, resulting in a $2.1 million unfavorable impact on revenue for the three months ended March 31, 2026, as compared to the prior year. Foreign currency exchange rate fluctuations had a $2.8 million favorable impact on revenue for the three months ended March 31, 2026.
(2)Payment processing $ of fuel increased for the three months ended March 31, 2026, as compared to the same period in the prior year due primarily to higher domestic fuel prices.
(3)Our net payment processing rate decreased for the first quarter of 2026 as compared to the same period in the prior year due primarily to decreased revenue as a result of unfavorable European fuel price spreads, which do not similarly impact payment processing volumes, partly offset by the net impact of pricing initiatives.
(4)We generally measure our loss performance by calculating fuel-related losses as a percentage of total fuel expenditures on payment processing transactions. Refer to provision for credit losses discussion later in this section for more information.
Total Mobility revenues increased for the three months ended March 31, 2026, as compared to the same period of the prior year. Increases in account servicing revenue were primarily the result of higher fees charged on certain programs as a result of pricing initiatives. While domestic payment processing revenues increased largely as a result of higher average U.S. fuel prices, these revenue gains were offset by a reduction in international payment processing revenues due to the unfavorable fuel price spreads mentioned above.
Finance fee revenue, which is comprised of the following components, is discussed below.
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| Three Months Ended March 31, | Increase (Decrease) | |||||||||||||||||||||||||||||||||||||
| (in millions) | 2026 | 2025 | Amount | % | ||||||||||||||||||||||||||||||||||
| Late fee revenue | $ | 64.2 | $ | 63.7 | $ | 0.4 | 1 | % | ||||||||||||||||||||||||||||||
| Factoring fee revenue | 15.7 | 11.5 | 4.2 | 36 | % | |||||||||||||||||||||||||||||||||
| Finance fee revenue | $ | 79.8 | $ | 75.2 | $ | 4.6 | 6 | % | ||||||||||||||||||||||||||||||
Finance income primarily consists of late fees charged for receivables not paid within the terms of the customer agreement based upon the outstanding customer receivable balance and, to a lesser degree, by finance charges earned on revolving portfolio balances. Late fee revenue is earned when a customer’s receivable balance becomes delinquent and is calculated using the greater of a minimum charge or a stated late fee rate multiplied by the outstanding balance that is subject to a late fee charge. Changes in the absolute amount of such outstanding balances can generally be attributed to: (i) changes in fuel prices; (ii) customer specific transaction volume; and (iii) customer specific delinquencies. Late fee revenue can also be impacted by: (i) changes in late fee rates and (ii) increases or decreases in customer overdue balances.
Factoring fee revenue is comprised primarily of fees calculated at a negotiated percentage of the receivable balance that we purchase.
Factoring fee revenue increased for the three months ended March 31, 2026, as compared to the same period of the prior year, due to an increase in factored invoices, including impacts from the January 2025 purchase of a factoring portfolio, and higher average invoice size resulting from carrier supply capacity constraints.
Concessions to certain customers experiencing financial difficulties may be granted and are limited to extending the time to pay, placing a customer on a payment plan or granting waivers of late fees. There were no material concessions granted to customers experiencing financial difficulties during the three months ended March 31, 2026 and 2025.
Operating Expenses
The following table compares line items within operating income and presents segment adjusted operating income and segment adjusted operating income margin for Mobility:
| Three Months Ended March 31, | Increase (Decrease) | |||||||||||||||||||||||||||||||||||||
| (in millions) | 2026 | 2025 | Amount | % | ||||||||||||||||||||||||||||||||||
| Cost of services | ||||||||||||||||||||||||||||||||||||||
| Processing costs | $ | 76.9 | $ | 77.0 | $ | (0.1) | — | % | ||||||||||||||||||||||||||||||
| Service fees | $ | 1.8 | $ | 1.9 | $ | (0.1) | (4) | % | ||||||||||||||||||||||||||||||
| Provision for credit losses | $ | 25.6 | $ | 13.9 | $ | 11.6 | 83 | % | ||||||||||||||||||||||||||||||
| Operating interest | $ | 18.7 | $ | 18.7 | $ | — | — | % | ||||||||||||||||||||||||||||||
| Depreciation and amortization | $ | 16.0 | $ | 15.6 | $ | 0.4 | 2 | % | ||||||||||||||||||||||||||||||
| Other operating expenses | ||||||||||||||||||||||||||||||||||||||
| General and administrative | $ | 30.9 | $ | 29.4 | $ | 1.4 | 5 | % | ||||||||||||||||||||||||||||||
| Sales and marketing | $ | 67.0 | $ | 60.6 | $ | 6.4 | 11 | % | ||||||||||||||||||||||||||||||
| Depreciation and amortization | $ | 18.0 | $ | 17.2 | $ | 0.8 | 5 | % | ||||||||||||||||||||||||||||||
| Operating income | $ | 89.7 | $ | 99.4 | $ | (9.7) | (10) | % | ||||||||||||||||||||||||||||||
Segment adjusted operating income(1) | $ | 124.5 | $ | 131.4 | $ | (7.0) | (5) | % | ||||||||||||||||||||||||||||||
Segment adjusted operating income margin(2) | 36.1 | % | 39.4 | % | (3.3) | % | (8) | % | ||||||||||||||||||||||||||||||
(1)See “Non-GAAP Financial Measures That Supplement GAAP Measures” later in this Item 2 for a reconciliation of operating income to total segment adjusted operating income. See also Part I – Item 1 – Note 17, Segment Information, to our condensed consolidated financial statements for more information regarding our segment determination.
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(2)Segment adjusted operating income margin is calculated by dividing segment adjusted operating income by segment revenue. Such margin decreased during the three months ended March 31, 2026, as compared to the same period in the prior year, due primarily to an increased provision for credit losses coupled with the impact of sales and product development investments, as further discussed below.
Cost of services
Provision for credit losses, which includes estimates for both credit and fraud losses, increased during the three months ended March 31, 2026, as compared to the same period in the prior year. Contributing to the increase was higher accounts receivable balances at the end of the first quarter 2026 as a result of increased spend and the impact from higher loss rates during the first quarter of 2026 compared to the first quarter of 2025.
Other operating expenses
Sales and marketing expenses increased for the three months ended March 31, 2026, as compared to the same period in the prior year, primarily resulting from the sustained investments tied to sales initiatives made throughout 2025, a growth in partner commissions, and higher stock-based compensation primarily due to an increase in estimated attainments.
Benefits
Revenues
The following table reflects comparative revenue and key operating statistics within Benefits:
| Three Months Ended March 31, | Increase (Decrease) | |||||||||||||||||||||||||||||||||||||
| (in millions) | 2026 | 2025 | Amount | % | ||||||||||||||||||||||||||||||||||
| Revenues | ||||||||||||||||||||||||||||||||||||||
| Payment processing revenue | $ | 33.0 | $ | 29.7 | $ | 3.2 | 11 | % | ||||||||||||||||||||||||||||||
| Account servicing revenue | 114.5 | 115.9 | (1.4) | (1) | % | |||||||||||||||||||||||||||||||||
| Finance fee revenue | — | — | — | NM | ||||||||||||||||||||||||||||||||||
| Other revenue | 68.6 | 53.6 | 15.0 | 28 | % | |||||||||||||||||||||||||||||||||
| Total revenues | $ | 216.2 | $ | 199.3 | $ | 16.9 | 8 | % | ||||||||||||||||||||||||||||||
| Key operating statistics | ||||||||||||||||||||||||||||||||||||||
| Purchase volume | $ | 2,496.7 | $ | 2,329.9 | $ | 166.8 | 7 | % | ||||||||||||||||||||||||||||||
| Total volume | $ | 3,988.7 | $ | 4,196.4 | $ | (207.7) | (5) | % | ||||||||||||||||||||||||||||||
| Average number of SaaS accounts | 22.4 | 21.5 | 0.8 | 4 | % | |||||||||||||||||||||||||||||||||
| HSA Yield | 4.95 | % | 4.85 | % | 0.1 | % | 2 | % | ||||||||||||||||||||||||||||||
| Average HSA custodial cash assets | $ | 5,154.2 | $ | 4,608.9 | $ | 545.3 | 12 | % | ||||||||||||||||||||||||||||||
NM - Not meaningful
Total Benefits revenue increased for the three months ended March 31, 2026, as compared to the same period in the prior year, substantially due to higher other revenues from an increase in average HSA deposit balances held by WEX Bank and higher payment processing revenues on increased purchase volumes. Higher account servicing revenues earned as a result of an increase in average number of SaaS accounts were offset by a decrease in program fees earned on custodial services from lower HSA deposits held by third-party depository banks as a result of deposits being transferred to WEX Bank.
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Operating Expenses
The following table compares line items within operating income and presents segment adjusted operating income and segment adjusted operating income margin for Benefits:
| Three Months Ended March 31, | Increase (Decrease) | |||||||||||||||||||||||||||||||||||||
| (in millions) | 2026 | 2025 | Amount | % | ||||||||||||||||||||||||||||||||||
| Cost of services | ||||||||||||||||||||||||||||||||||||||
| Processing costs | $ | 67.9 | $ | 69.8 | $ | (1.9) | (3) | % | ||||||||||||||||||||||||||||||
| Service fees | $ | 19.8 | $ | 20.9 | $ | (1.1) | (5) | % | ||||||||||||||||||||||||||||||
| Provision for credit losses | $ | (0.6) | $ | (1.0) | $ | 0.5 | NM | |||||||||||||||||||||||||||||||
| Operating interest | $ | 1.4 | $ | 1.2 | $ | 0.2 | 12 | % | ||||||||||||||||||||||||||||||
| Depreciation and amortization | $ | 12.8 | $ | |||||||||||||||||||||||||||||||||||
Next expected filings
- ~2026-07-23 10-Q expected by 2026-08-05 (in 83 days)
- ~2026-10-29 10-Q expected by 2026-11-11 (in 181 days)
- ~2027-02-12 10-K expected by 2027-02-16 (in 287 days)
- ~2027-04-22 10-Q expected by 2027-05-05 (in 356 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-04-23 10-Q Quarterly Report
- 2026-04-22 8-K Earnings Release; Financial Statements and Exhibits
- 2026-02-13 10-K Annual Report
- 2026-02-04 8-K Earnings Release; Financial Statements and Exhibits
- 2026-01-12 8-K Officer/Director Change; Regulation FD Disclosure
- 2025-10-30 10-Q Quarterly Report
- 2025-10-29 8-K Earnings Release; Officer/Director Change; Financial Statements and Exhibits
- 2025-07-24 10-Q Quarterly Report
- 2025-07-23 8-K Earnings Release; Financial Statements and Exhibits
- 2025-05-20 8-K Officer/Director Change; Shareholder Vote Results; Financial Statements and Exhibits
- 2025-05-01 10-Q Quarterly Report
- 2025-04-30 8-K Earnings Release; Financial Statements and Exhibits
- 2025-03-06 8-K Material Agreement Entered; Material Financial Obligation; Financial Statements and Exhibits
- 2025-02-27 8-K Other Events; Financial Statements and Exhibits
- 2025-02-25 8-K Other Events; Financial Statements and Exhibits