Fleetcor reports ‘record retention and sales’ for Q2

Global commercial fuel card and business payments company Fleetcor Technologies Inc. (NYSE: FLT) on Wednesday reported total revenue for the second quarter grew 27% year-over-year to $667 million. Net income increased by 24% year-over-year, totaling $196 million in the second quarter.

After slightly lower earnings in the first quarter, Fleetcor’s adjusted earnings per share (EPS) reached $3.15 for the second quarter, a 38% year-over-year increase from $2.28. The company expected adjusted EPS to fall between $2.80 and $3 for the quarter.

“We posted record retention and record sales levels,” Ron Clarke, chairman and CEO, said in a release. “Our outlook is improving, and we now expect the second half of the year results to once again reach new all-time highs in revenues and profits.”

Clarke noted that Fleetcor is “finally moving past [its] pre-pandemic baseline,” during the earnings call. He said the fuel card business retention rate reached an all-time high of 92% for the quarter.

“We’re really embracing EV [electric vehicles] as an opportunity and in no way see it putting an end to our fuel card business,” Clarke said, noting that the economics with EVs are similar to combustion engines.

In regard to the future, Clarke said, “We’re launching a bill pay cross-sale opportunity to our fuel card clients by turning our existing fuel UI [user interface] into a broader payment platform.”

The Atlanta-based company reported fuel transaction revenue of $295 million, an 18% year-over-year increase. Revenue per fuel transaction remained steady for Q2 compared to 2020 at $2.50 per transaction.

“Our second-quarter results were excellent,” Charles Freund, chief financial officer, said in the release. “We’ve continued to manage expenses in line with revenues, and are experiencing strong credit performance. Our active share repurchase program was increased by $1 billion by the board on July 27, 2021, and we now have $1.6 billion of repurchase capacity.”

2021 and third-quarter outlook

“We are raising our full-year revenues and our adjusted net income per diluted share guidance to $2.765 [billion] and $12.90 at the midpoint, respectively, to reflect our second-quarter results, the benefit from the AFEX transaction and the improved macro outlook. We currently expect continued recovery of volumes from COVID levels for the remainder of the year and the benefit of the acceleration of new sales to continue to drive momentum in the second half of 2021,” Freund said.

The company said it expects adjusted net income per diluted share to fall between $3.35 and $3.55 for the third quarter.