WEX WEX Inc

Total Revenue for the Quarter Increased 13%

WEX Inc. (NYSE:WEX), a leading provider of corporate payment solutions, today reported financial results for the three months ended September 30, 2017.

Third Quarter 2017 Financial Results

Total revenue for the third quarter of 2017 increased 13% to $324.0 million from $287.8 million for the third quarter of 2016. During the quarter, higher fuel prices positively impacted revenue by $8.0 million when compared to the prior year period.

Net earnings attributable to shareholders on a GAAP basis increased $14.3 million to $34.0 million, or $0.79 per diluted share, compared with $19.7 million, or $0.46 per diluted share, for the third quarter of 2016. The Company's adjusted net income attributable to shareholders, which is a non-GAAP measure, was $61.5 million for the third quarter of 2017, or $1.43 per diluted share, up 14% from $1.25 per diluted share for the same period last year. See Exhibit 1 for a full explanation and reconciliation of adjusted net income attributable to shareholders and adjusted net income attributable to shareholders per diluted share to the comparable GAAP measures.

"I am pleased to announce another strong quarter in which we delivered ahead of our expectations, making this our fifth quarter in a row with double digit revenue growth." said Melissa Smith, WEX’s president and chief executive officer. "Our growth engine remains strong, due to contributions from all of our business segments, and we are delivering against our strategic initiatives which have resulted in growing earnings and profitability."

Smith continued, "We continue to build upon our successful track record of competitive wins, reflecting the strength of our innovative product sets meeting customer needs in a diverse set of markets. I am particularly encouraged by the organic nature of our growth this quarter, which sets us up for a strong close to 2017."

Third Quarter 2017 Performance Metrics

• Average number of vehicles serviced worldwide was approximately 11.0 million, an increase of 6% from the third quarter of 2016.
• Total fuel transactions processed increased 4% from the third quarter 2016 to 132.0 million. Payment processing transactions increased 7% to 110.0 million.
• Average expenditure per payment processing transaction was $69.87, which represents an increase of 9% from the third quarter of 2016.
• U.S. retail fuel price increased 12% to $2.51 per gallon from $2.24 per gallon in the third quarter of 2016.
• Total Travel and Corporate Solutions card purchase volume grew 21% to $8.7 billion, from $7.1 billion in the third quarter of 2016.
• Total Health and Employee Benefits Solutions purchase volume increased 9% to $955.7 million in the third quarter of 2017.

Financial Guidance and Assumptions

The Company provides revenue guidance on a GAAP basis and earnings guidance on a non-GAAP basis, due to the uncertainty and indeterminate amount of certain elements that are included in reported GAAP earnings.

• For the full year 2017, the Company expects revenue in the range of $1.24 billion to $1.25 billion and adjusted net income in the range of $228 million to $231 million, or $5.31 to $5.38 per diluted share.
• For the fourth quarter of 2017, WEX expects revenue in the range of $317 million to $327 million and adjusted net income in the range of $60 million to $63 million, or $1.40 to $1.47 per diluted share.

"We continue to strengthen our underlying foundation for profitable growth. Through our debt refinancing finalized during the quarter, we stand to save an estimated $11 million of financing interest on an annual basis. This quarter we also added $100 million of capacity to our revolver, providing additional financial flexibility to help us navigate an evolving market. Importantly, our diligence and execution has started to pay off with regards to fraud losses from card skimming, which have continued to trend lower each month this quarter after hitting its high point last quarter, as we expected," said Roberto Simon, WEX's chief financial officer.

Fourth quarter 2017 guidance is based on an assumed average U.S. retail fuel price of $2.53 per gallon. The fuel price referenced above is based on the applicable NYMEX futures price. Our guidance assumes approximately 43 million shares outstanding for the fourth quarter.

The Company's guidance also assumes that fourth quarter 2017 fleet credit loss will range between 19 and 24 basis points.

The Company's adjusted net income guidance, which is a non-GAAP measure, excludes unrealized gains and losses on derivative instruments, net foreign currency remeasurement gains and losses, non-cash adjustments related to tax receivable agreement, acquisition-related intangible amortization, other acquisition and divestiture related items, stock-based compensation, restructuring and other costs, an impairment charge, debt restructuring and debt issuance cost amortization, similar adjustments attributed to our non-controlling interest and certain tax related items. We are unable to reconcile our adjusted net income guidance to the comparable GAAP measure without unreasonable effort because of the difficulty in predicting the amounts to be adjusted, including but not limited to foreign currency exchange rates, unrealized gains and losses on derivative instruments, and acquisition and divestiture related items, which may have a significant impact on our financial results.

Additional Information

Management uses the non-GAAP measures presented within this news release to evaluate the Company's performance on a comparable basis. Management believes that investors may find these measures useful for the same purposes, but cautions that they should not be considered a substitute for, or superior to, disclosure in accordance with GAAP.

WEX historically used fuel-price derivative instruments to mitigate financial risks associated with the variability in fuel prices in North America. Starting with the second quarter of 2016, there were no longer any fuel price related derivatives outstanding.

To provide investors with additional insight into its operational performance, WEX has included in this news release in Exhibit 2, a table illustrating the impact of foreign currency translations and fuel prices for each of our operating segments for the three and nine months ended September 30, 2017 and 2016, and in Exhibit 3, a table of selected non-financial metrics for the quarter ended September 30, 2017 and four preceding quarters. The Company is also providing selected segment revenue information for the three and nine months ended September 30, 2017 and 2016 in Exhibit 4.

Conference Call Details

In conjunction with this announcement, WEX will host a conference call today, November 1, 2017, at 9:00 a.m. (ET). As previously announced, the conference call will be webcast live on the Internet, and can be accessed at the Investor Relations section of the WEX website, http://www.wexinc.com. The live conference call also can be accessed by dialing (866) 334-7066 or (973) 935-8463. The Conference ID number is 90476316. A replay of the webcast will be available on the Company's website.

About WEX Inc.

WEX Inc. (NYSE: WEX) is a leading provider of corporate payment solutions. From its roots in fleet card payments beginning in 1983, WEX has expanded the scope of its business into a multi-channel provider of corporate payment solutions representing 11 million vehicles and offering exceptional payment security and control across a wide spectrum of business sectors. WEX serves a global set of customers and partners through its operations around the world, with offices in the United States, Australia, New Zealand, Brazil, the United Kingdom, Italy, France, Germany, Norway, and Singapore. WEX and its subsidiaries employ more than 3,000 associates. The Company has been publicly traded since 2005, and is listed on the New York Stock Exchange under the ticker symbol “WEX.” For more information, visit www.wexinc.com and follow WEX on Twitter at @WEXIncNews.

Forward-Looking Statements

This news release contains forward-looking statements, including statements regarding: management’s expectations for future corporate performance; financial guidance; and, assumptions underlying the Company's financial guidance. Any statements that are not statements of historical facts may be deemed to be forward-looking statements. When used in this news release, the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such words. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially, including: the effects of general economic conditions on fueling patterns as well as payment and transaction processing activity; the impact of foreign currency exchange rates on the Company’s operations, revenue and income; changes in interest rates; the impact of fluctuations in fuel prices; the effects of the Company’s business expansion and acquisition efforts; potential adverse changes to business or employee relationships, including those resulting from the completion of an acquisition; competitive responses to any acquisitions; uncertainty of the expected financial performance of the combined operations following completion of an acquisition; the ability to successfully integrate the Company's acquisitions, including Electronic Funds Source LLC's operations and employees; the ability to realize anticipated synergies and cost savings; unexpected costs, charges or expenses resulting from an acquisition; the Company's failure to successfully operate and expand ExxonMobil's European and Asian commercial fuel card programs; the failure of corporate investments to result in anticipated strategic value; the impact and size of credit losses; the impact of changes to the Company's credit standards; breaches of the Company’s technology systems or those of our third-party service providers and any resulting negative impact on our reputation, liabilities or relationships with customers or merchants; the Company’s failure to maintain or renew key agreements; failure to expand the Company’s technological capabilities and service offerings as rapidly as the Company’s competitors; failure to successfully implement the Company’s information technology strategies and capabilities in connection with its technology outsourcing and insourcing arrangements and any resulting cost associated with that failure; the actions of regulatory bodies, including banking and securities regulators, or possible changes in banking or financial regulations impacting the Company’s industrial bank, the Company as the corporate parent or other subsidiaries or affiliates; the impact of the Company’s outstanding notes on its operations; the impact of increased leverage on the Company's operations, results or borrowing capacity generally, and as a result of acquisitions specifically; the incurrence of impairment charges if our assessment of the fair value of certain of our reporting units changes; the uncertainties of litigation; as well as other risks and uncertainties identified in Item 1A of our Annual Report for the year ended December 31, 2016, filed on Form 10-K with the Securities and Exchange Commission on March 6, 2017 and our Quarterly Report on Form 10-Q for the three months ended March 31, 2017 filed with the Securities and Exchange Commission on May 8, 2017. The Company's forward-looking statements do not reflect the potential future impact of any alliance, merger, acquisition, disposition or stock repurchases. The forward-looking statements speak only as of the date of this earnings release and undue reliance should not be placed on these statements. The Company disclaims any obligation to update any forward-looking statements as a result of new information, future events or otherwise.

 

WEX INC.CONDENSED CONSOLIDATED STATEMENTS OF INCOME(in thousands, except per share data)(unaudited)

     

Three months ended September 30,

 

Nine months endedSeptember 30,

2017   2016 2017   2016 Revenues Payment processing revenue $ 145,702 $ 146,182 $ 423,434 $ 383,319 Account servicing revenue 71,322 58,815 198,538 150,770 Finance fee revenue 50,879 36,138 136,336 92,348 Other revenue 56,099   46,621     160,935   101,184   Total revenues 324,002 287,756 919,243 727,621 Expenses Salary and other personnel 92,321 76,706 261,717 206,778 Restructuring 4,639 2,531 6,799 7,626 Service fees 41,205 53,415 115,306 136,098 Provision for credit losses 19,614 9,489 47,927 19,849 Technology leasing and support 13,628 12,517 40,245 34,525 Occupancy and equipment 6,526 7,271 19,352 19,096 Depreciation and amortization 51,229 46,008 150,428 91,381 Operating interest expense 7,382 2,599 16,694 5,490 Cost of hardware and equipment sold 1,066 859 3,193 2,429 Impairment charge — — 16,175 — Other expenses 22,669   21,793     69,351   57,018   Total operating expenses 260,279   233,188     747,187   580,290   Operating income 63,723 54,568 172,056 147,331 Financing interest expense (25,754 ) (35,064 ) (81,449 ) (87,040 ) Net foreign currency gain 14,611 5,932 33,578 17,233 Net unrealized loss on interest rate swap agreements (150 ) — (849 ) — Net realized and unrealized gain on fuel price derivatives — — — 711 Non-cash adjustments related to tax receivable agreement —   (168 )   —   (168 ) Income before income taxes 52,430 25,268 123,336 78,067 Income taxes 18,570   6,065     43,760   23,730   Net income 33,860 19,203 79,576 54,337 Less: Net loss from non-controlling interest (111 ) (493 )   (886 ) (1,013 ) Net earnings attributable to shareholders $ 33,971   $ 19,696     $ 80,462   $ 55,350   Net earnings attributable to WEX Inc. per share: Basic $ 0.79 $ 0.46 $ 1.87 $ 1.38 Diluted $ 0.79 $ 0.46 $ 1.87 $ 1.38 Weighted average common shares outstanding: Basic 43,014 42,788 42,963 40,126 Diluted 43,101 42,871 43,092 40,199    

WEX INC.CONDENSED CONSOLIDATED BALANCE SHEETS(in thousands, except per share data)(unaudited)

 

September 30, 2017

 

December 31,2016

Assets Cash and cash equivalents $ 251,118 $ 190,930 Accounts receivable (net of allowances of $32,712 in 2017 and $20,092 in 2016) 2,595,371 2,054,701 Securitized accounts receivable, restricted 150,845 97,417 Income taxes receivable 12,904 10,765 Available-for-sale securities 23,584 23,525

Property, equipment and capitalized software (net of accumulated depreciation of $264,098 in2017 and $228,336 in 2016)

185,350 167,278 Deferred income taxes, net 8,462 6,934 Goodwill 1,813,805 1,838,441

Other intangible assets (net of accumulated amortization of $375,004 in 2017 and $254,143 in 2016)

1,155,631 1,265,468 Other assets 344,058   341,638   Total assets $ 6,541,128   $ 5,997,097   Liabilities and Stockholders’ Equity Accounts payable $ 849,326 $ 617,118 Accrued expenses 318,402 331,579 Deposits 1,091,530 1,118,823 Borrowed federal funds 28,462 — Securitized debt 122,475 84,323 Revolving line of credit facilities and term loans, net 1,727,472 1,599,291 Deferred income taxes, net 149,605 152,906 Notes outstanding, net 396,085 395,534 Other debt 166,264 125,755 Amounts due under tax receivable agreement 38,375 47,302 Other liabilities 20,178   18,719   Total liabilities 4,908,174 4,491,350 Commitments and contingencies Stockholders’ Equity

Common stock $0.01 par value; 175,000 shares authorized; 47,349 shares issued in 2017 and47,173 in 2016; 42,921 shares outstanding in 2017 and 42,841 in 2016

473 472 Additional paid-in capital 561,155 547,627 Non-controlling interest

8,446

8,558 Retained earnings 1,324,994 1,244,271 Accumulated other comprehensive loss

(89,772

) (122,839 ) Treasury stock at cost; 4,428 shares in 2017 and 2016 (172,342 ) (172,342 ) Total stockholders’ equity 1,632,954   1,505,747   Total liabilities and stockholders’ equity $ 6,541,128   $ 5,997,097       Exhibit 1

Reconciliation of GAAP Net Earnings Attributable to Shareholders to Adjusted Net Income Attributable to Shareholders(in thousands, except per share data) (unaudited)

   

Three Months Ended September 30,

2017   2016        

per dilutedshare

     

per dilutedshare

Net earnings attributable to shareholders $ 33,971 $ 0.79 $ 19,696 $ 0.46 Unrealized losses on derivative instruments

150

— — — Net foreign currency remeasurement gain (14,611 ) (0.34 ) (5,932 ) (0.14 ) Non-cash adjustments related to tax receivable agreement — — 168 — Acquisition-related intangible amortization 38,510 0.89 33,855 0.79 Other acquisition and divestiture related items 1,006 0.02 13,100 0.31 Stock-based compensation 8,483 0.20 5,199 0.12 Restructuring and other costs

6,024

0.14 3,767 0.09 Debt restructuring and debt issuance cost amortization 4,287 0.10 9,106 0.21 ANI adjustments attributable to non-controlling interest (207 ) — (339 ) (0.01 ) Tax related items (16,130 ) (0.37 )   (25,214 ) (0.59 ) Adjusted net income attributable to shareholders $ 61,483 $ 1.43 $ 53,406 $ 1.25  

Nine Months Ended September 30,

2017   2016      

per dilutedshare

   

per dilutedshare

Net earnings attributable to shareholders $ 80,462 $ 1.87 $ 55,350 $ 1.38 Unrealized losses on derivative instruments

849

0.02 5,007 0.12 Net foreign currency remeasurement gain (33,578 ) (0.78 ) (17,233 ) (0.43 ) Non-cash adjustments related to tax receivable agreement — — 168 — Acquisition-related ticking fees — — 30,045 0.75 Acquisition-related intangible amortization 114,603 2.66 59,066 1.47 Other acquisition and divestiture related items 3,380 0.08 19,694 0.49 Stock-based compensation 22,354 0.52 14,312 0.36 Restructuring and other costs

10,169

0.24 11,689 0.29 Impairment charge 16,175 0.38 — — Debt restructuring and debt issuance cost amortization 8,450 0.20 10,649 0.26 ANI adjustments attributable to non-controlling interest (1,162 ) (0.03 ) (1,200 ) (0.03 ) Tax related items (53,131 ) (1.23 )   (53,505 ) (1.33 ) Adjusted net income attributable to shareholders $ 168,571 $ 3.91 $ 134,042 $ 3.33  

The Company's non-GAAP adjusted net income excludes unrealized gains and losses on derivatives, net foreign currency remeasurement gains and losses, non-cash adjustments related to tax receivable agreement, acquisition-related ticking fees, acquisition-related intangible amortization, other acquisition and divestiture related items, stock-based compensation, restructuring and other costs, debt restructuring and debt issuance cost amortization, similar adjustments attributed to our non-controlling interest and certain tax related items. In addition, for the nine months ended September 30, 2017, we have excluded an impairment charge related to the insourcing of certain technology functions from a third party.

Although adjusted net income is not calculated in accordance with generally accepted accounting principles (GAAP), this non-GAAP measure is integral to the Company's reporting and planning processes and the chief operating decision maker of the Company uses adjusted operating income to allocate resources among our operating segments. The Company considers this measure integral because it excludes specified items that the Company's management excludes in evaluating the Company's performance. Specifically, in addition to evaluating the Company's performance on a GAAP basis, management evaluates the Company's performance on a basis that excludes the above items because:

• Exclusion of the non-cash, mark-to-market adjustments on derivative instruments, including fuel price related derivatives and interest rate swap agreements, helps management identify and assess trends in the Company's underlying business that might otherwise be obscured due to quarterly non-cash earnings fluctuations associated with these derivative contracts.
• Net foreign currency gains and losses primarily result from the remeasurement to functional currency of cash, receivable and payable balances, certain intercompany notes denominated in foreign currencies and any gain or loss on foreign currency hedges relating to these items. The exclusion of these items helps management compare changes in operating results between periods that might otherwise be obscured due to currency fluctuations.
• The Company considers certain acquisition-related costs, including certain financing costs, ticking fees, investment banking fees, warranty and indemnity insurance, certain integration related expenses and amortization of acquired intangibles, as well as gains and losses from divestitures to be unpredictable, dependent on factors that may be outside of our control and unrelated to the continuing operations of the acquired or divested business or the Company. In prior periods not reflected above, the Company has adjusted for goodwill impairments and acquisition related asset impairments. In addition, the size and complexity of an acquisition, which often drives the magnitude of acquisition-related costs, may not be indicative of such future costs. The Company believes that excluding acquisition-related costs and gains or losses of divestitures facilitates the comparison of our financial results to the Company's historical operating results and to other companies in our industry.
• Stock-based compensation is different from other forms of compensation, as it is a non-cash expense. For example, a cash salary generally has a fixed and unvarying cash cost. In contrast, the expense associated with an equity-based award is generally unrelated to the amount of cash ultimately received by the employee, and the cost to the Company is based on a stock-based compensation valuation methodology and underlying assumptions that may vary over time.
• Restructuring and other costs are related to employee termination benefits from certain identified initiatives to further streamline the business, improve the Company's efficiency, create synergies, and to globalize the Company's operations, all with an objective to improve scale and increase profitability going forward. We exclude these items when evaluating our continuing business performance as such items are not consistently occurring and do not reflect expected future operating expense, nor provide insight into the fundamentals of current or past operations of our business.
• Impairment charge represents a non-cash asset write-off related to our strategic decision to in-source certain technology functions. This charge does not reflect recurring costs that would be relevant to our continuing operations. The Company believes that excluding this nonrecurring expense facilitates the comparison of our financial results to the Company's historical operating results and to other companies in our industry.
• Debt restructuring and debt issuance cost amortization are non-cash items that are unrelated to the continuing operations of the Company. Debt restructuring costs are not consistently occurring and do not reflect expected future operating expense, nor provide insight into the fundamentals of current or past operations of our business. In addition, since debt issuance cost amortization is dependent upon the financing method which can vary widely company to company, we believe that excluding these costs helps to facilitate comparison to historical results as well as to other companies within our industry.
• The adjustments attributable to non-controlling interests, including adjustments to the redemption value of a non-controlling interest, and the non-cash adjustments related to tax receivable agreement have no significant impact on the ongoing operations of the business.
• The tax related items are the difference between the Company’s U.S. GAAP tax provision and a pro forma tax provision based upon the Company’s adjusted net income before taxes as well as the impact from certain discrete tax items. The methodology utilized for calculating the Company’s adjusted net income tax provision is the same methodology utilized in calculating the Company’s U.S. GAAP tax provision.

For the same reasons, WEX believes that adjusted net income may also be useful to investors as one means of evaluating the Company's performance. However, because adjusted net income is a non-GAAP measure, it should not be considered as a substitute for, or superior to, net income, operating income or cash flows from operating activities as determined in accordance with GAAP. In addition, adjusted net income as used by WEX may not be comparable to similarly titled measures employed by other companies.

The table below shows the impact of certain macro factors on Reported revenue:

  Exhibit 2

Segment Revenue(in thousands)(unaudited)

    Fleet Solutions  

Travel and CorporateSolutions

 

Health and EmployeeBenefit Solutions

  Total WEX Inc. Three months ended September 30, 2017   2016 2017   2016 2017   2016 2017   2016 Reported revenue $ 212,078 $ 184,758 $ 61,026 $ 63,315 $ 50,898 $ 39,683 $ 324,002 $ 287,756 FX impact (favorable) / unfavorable (1,131 ) — (478 ) — (235 ) — (1,844 ) — PPG impact (favorable) / unfavorable (8,020 ) —   —   —   —   —   (8,020 ) —   Nine months ended September 30, 2017 2016 2017 2016 2017 2016 2017 2016 Reported revenue $ 603,205 $ 449,791 $ 163,739 $ 161,795 $ 152,299 $ 116,035 $ 919,243 $ 727,621 FX impact (favorable) / unfavorable

(684

) — 1,455 — (2,813 ) —

(2,042

) — PPG impact (favorable) / unfavorable (31,598 ) —   —   —   —   —   (31,598 ) —  

To determine the impact of foreign exchange translation (“FX”) on revenue, revenue from entities whose functional currency is not denominated in U.S. dollars, as well as revenue from purchase volume transacted in non-U.S. denominated currencies, were translated using the weighted average exchange rates for the same period in the prior year.

To determine the impact of price per gallon of fuel (“PPG”) on revenue, revenue variable to changes in fuel prices was calculated based on the average retail price of fuel for the same period in the prior year for the portion of our business that earns revenue based on a percentage of fuel spend. For the portions of our business that earns revenue based on margin spreads, revenue was calculated utilizing the comparable margin from the prior year.

The table below shows the impact of certain macro factors on Adjusted Net Income:

 

Segment Estimated Earnings Impact(in thousands)(unaudited)

    Fleet Solutions  

Travel and CorporateSolutions

 

Health and EmployeeBenefit Solutions

Three months ended September 30, 2017   2016 2017   2016 2017   2016 FX impact (favorable) / unfavorable $ (251 ) $ — $ (244 ) $ — $ (54 ) $ — PPG impact (favorable) / unfavorable (4,641 ) — — — — —   Nine months ended September 30, 2017 2016 2017 2016 2017 2016 FX impact (favorable) / unfavorable $ (130 ) $ — $ 277 $ — $ (477 ) $ — PPG impact (favorable) / unfavorable (18,169 ) — — — — — Realized gain on hedge settlement —     3,636     —     —     —     —  

To determine the estimated earnings impact of FX, revenue and expenses from entities whose functional currency is not denominated in U.S. dollars, as well as revenue and variable expenses from purchase volume transacted in non-US denominated currencies, were translated using the weighted average exchange rates for the same period in the prior year, net of tax and non-controlling interest where applicable.

To determine the estimated earnings impact of PPG, revenue and certain variable expenses impacted by changes in fuel prices, were adjusted based on the average retail price of fuel for the same period in the prior year for the portion of our business that earns revenue based on a percentage of fuel spend, net of applicable taxes. For the portions of our business that earn revenue based on margin spreads, revenue was adjusted to the comparable margin from the prior year, net of non-controlling interest and applicable taxes.

 

Exhibit 3Selected Non-Financial Metrics(unaudited)

    Q3 2017   Q2 2017   Q1 2017   Q4 2016   Q3 2016 Fleet Solutions – Payment Processing Revenue:         Payment processing transactions (000s) 110,047 108,134 102,765 99,662 102,947 Gallons per payment processing transaction 26.4 26.9 27.0 27.4 27.0 Payment processing gallons of fuel (000s) 2,905,700 2,907,875 2,775,590 2,731,994 2,776,622 Average US fuel price (US$ / gallon) $ 2.51 $ 2.41 $ 2.40 $ 2.30 $ 2.24 Average Australian fuel price (US$ / gallon) $ 3.78 $ 3.65 $ 3.76 $ 3.50 $ 3.45 Payment processing $ of fuel (000s) $ 7,688,750 $ 7,399,901 $ 7,080,117 $ 6,672,281 $ 6,593,406 Net payment processing rate 1.17 % 1.18 % 1.22 % 1.23 % 1.26 % Payment processing revenue (000s) $ 90,270 $ 87,678 $ 86,262 $ 81,767 $ 83,132 Travel and Corporate Solutions – Payment Processing Revenue: Purchase volume (000s) $ 8,662,533 $ 7,676,935 $ 6,599,797 $ 6,351,741 $ 7,138,956 Net interchange rate 0.51 % 0.52 % 0.53 % 0.71 % 0.74 % Payment processing revenue (000s) $ 44,177 $ 40,276 $ 34,875 $ 45,390 $ 52,551 Health and Employee Benefit Solutions: Purchase volume (000s) $ 955,652 $ 1,126,854 $ 1,347,219 $ 803,045 $ 875,598  

Definitions and explanations:

Payment processing transactions represents the total number of purchases made by fleets that have a payment processing relationship with WEX.

Payment processing gallons of fuel represents the total number of gallons of fuel purchased by fleets that have a payment processing relationship with WEX.

Payment processing dollars of fuel represents the total dollar value of the fuel purchased by fleets that have a payment processing relationship with WEX.

Net payment processing rate represents the percentage of the dollar value of each payment processing transaction that WEX records as revenue from merchants less any discounts given to fleets or strategic relationships.

Purchase volume in the Travel and Corporate Solutions segment represents the total dollar value of all transactions that use WEX corporate card products and virtual card products.

Net interchange rate represents the percentage of the dollar value of each transaction that WEX records as revenue less any discounts given to customers.

Purchase volume in the Health and Employee Benefit Solutions segment represents the total US dollar value of all transactions where interchange is earned by WEX.

 

Exhibit 4Segment Revenue Information(in thousands)(unaudited)

Fleet Solutions                                  

Three months endedSeptember 30,

  Increase (decrease)  

Nine months endedSeptember 30,

  Increase (decrease)     2017   2016   Amount   Percent   2017   2016   Amount   Percent Revenues         Payment processing revenue $ 90,270 $ 83,132 $ 7,138 8.6 % $ 264,210 $ 216,133 $ 48,077 22.2 % Account servicing revenue 44,858 37,414 7,444 19.9 % 122,238 90,400 31,838 35.2 % Finance fee revenue 40,773 33,230 7,543 22.7 % 113,754 85,841 27,913 32.5 % Other revenue   36,177     30,982     5,195     16.8 %   103,003     57,417     45,586     79.4 % Total revenues $ 212,078 $ 184,758 $ 27,320 14.8 % $ 603,205 $ 449,791 $ 153,414 34.1 %                  

Travel and CorporateSolutions

                               

Three months endedSeptember 30,

Increase (decrease)

Nine months endedSeptember 30,

Increase (decrease)     2017   2016   Amount   Percent   2017   2016   Amount   Percent Revenues Payment processing revenue $ 44,177 $ 52,551 $ (8,374 ) (15.9 )% $ 119,328 $ 130,372 $ (11,044 ) (8.5 )% Account servicing revenue 206 242 (36 ) (14.9 )% 528 852 (324 ) (38.0 )% Finance fee revenue 87 115 (28 ) (24.3 )% 469 336 133 39.6 % Other revenue   16,556     10,407     6,149     59.1 %   43,414     30,235     13,179     43.6 % Total revenues $ 61,026 $ 63,315 $ (2,289 ) (3.6 )% $ 163,739 $ 161,795 $ 1,944 1.2 %                  

Health and Employee Benefit Solutions

                               

Three months endedSeptember 30,

Increase (decrease)

Nine months endedSeptember 30,

Increase (decrease)     2017   2016   Amount   Percent   2017   2016   Amount   Percent Revenues Payment processing revenue $ 11,255 $ 10,499 $ 756 7.2 % $ 39,896 $ 36,814 $ 3,082 8.4 % Account servicing revenue 26,258 21,159 5,099 24.1 % 75,772 59,518 16,254 27.3 % Finance fee revenue 10,019 2,793 7,226 258.7 % 22,113 6,171 15,942 258.3 % Other revenue   3,366     5,232     (1,866 )   (35.7 )%   14,518     13,532     986     7.3 % Total revenues $ 50,898 $ 39,683 $ 11,215 28.3 % $ 152,299 $ 116,035 $ 36,264 31.3 %  

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WEX Inc.News media:Jessica Roy, 207-523-6763Jessica.Roy@wexinc.comorInvestors:Steve Elder, 207-523-7769Steve.Elder@wexinc.com