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DATE

Thursday, April 23, 2026 at 10 a.m. ET

CALL PARTICIPANTS

  • Chair and Chief Executive Officer — Melissa D. Smith
  • Chief Financial Officer — Jagtar Narula
  • Corporate Vice President, Investor Relations — Steven Alan Elder

TAKEAWAYS

  • Total Revenue -- $673.8 million, up 5.8%, exceeding the high end of the guidance range provided last quarter.
  • Adjusted Net Income per Diluted Share -- $4.15, increasing 18.2% with a 19.4% rise excluding fuel prices and foreign exchange effects.
  • Segment Revenue Growth -- Mobility up 3.2% with a 0.2% benefit from fuel prices and FX; Benefits up 8.5% to $216.2 million; Corporate Payments up 9.3% to $113 million.
  • HSA Accounts -- 9.4 million Health Savings Accounts on the platform, an 8% increase; average custodial cash assets up 11.8% and custodial investment revenue up 14.2%.
  • Corporate Payments Travel Revenue -- Travel-related revenue grew approximately 12% in the quarter; non-travel customer revenue grew mid-single digits.
  • Direct Accounts Payable Volume -- Comprised about 20% of Corporate Payments segment sales; direct AP purchase volume grew in line with prior quarter and is expected to remain around 15% for the year.
  • Payment Processing Rate (Mobility Segment) -- 1.23%, representing a 10 basis point sequential decline mainly due to European market movements and U.S. fuel price changes.
  • Adjusted Operating Income Margin -- Declined 50 basis points year over year, primarily from increased credit losses (12 basis points to 19 basis points), but would have expanded 130 basis points when normalizing for credit loss and fuel pricing effects.
  • Adjusted Free Cash Flow -- $671 million on a trailing twelve-month basis, a 14% increase.
  • Leverage Ratio -- Ended the quarter at 3.1 times, unchanged from Q4, within long-term range, targeting midpoint in the second half of the year.
  • 2026 Cost Savings Plan -- $50 million in cost-saving actions planned through automation and modernization, with part reinvested and the rest to boost margins.
  • Return on Invested Capital -- WEX Inc. noted improvement in ROIC calculated by excluding WEX Bank due to incomparable funding sources; details provided in the current earnings presentation.
  • Fuel Price Sensitivity -- A $7.6 million revenue headwind from European spreads offset a $5.5 million revenue benefit from U.S. fuel prices, producing "a very noisy quarter in the macro."
  • 2026 Guidance Update -- Full-year revenue now projected between $2.82 billion and $2.88 billion; adjusted net income per diluted share between $18.95 and $19.55, reflecting increases of $120 million and $1.70 at the midpoints, mainly from revised fuel price assumptions ($4.30/gallon for Q2, $3.70/gallon full year).
  • AI and Productivity -- Integration of AI is credited with accelerating product innovation, automating routine work, and reducing claims reimbursement times by more than 98% in Benefits.
  • SMB Strategy (Mobility Segment) -- Ongoing investments in AI-powered risk tools and marketing for small and medium business customers, supported by improving LTV-to-CAC ratios and steady portfolio performance.
  • Travel Customer Renewal -- WEX Inc. entered a multiyear renewal with a large travel customer; economics fully reflected in guidance and current results.
  • Middle East Travel Exposure -- Management acknowledged softness in Middle Eastern travel corridors representing about $3 million quarterly revenue, quantified in the Q2 outlook.

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RISKS

  • Jagtar Narula stated, "Q1 adjusted operating income margin declined 50 basis points, driven primarily by an increase in credit losses from 12 basis points to 19 basis points."
  • Rapid European fuel spread movements led to a $7.6 million revenue headwind within Mobility, offsetting U.S. fuel price gains and causing unpredictable macro conditions.
  • Smith noted, "On the over-the-road marketplace, we are hearing from our customers that the smaller customers are certainly getting pinched by fuel prices. On the positive side, they are seeing increases in spot rates, and so they are earning more as they are making deliveries. But that is getting eaten up in large part by the increase in fuel prices."
  • Smith explained, "We are seeing a small impact to travel volume trends leading into the second quarter that we are reflecting in our guidance," attributing this to changes in the Middle East corridor.

SUMMARY

WEX Inc. (WEX 17.02%) achieved above-guidance growth in revenue and adjusted earnings per share, driven by solid execution across all business segments and increased productivity from technology investments. Management highlighted the tangible impacts from AI integration and automation on product innovation and operating efficiency—citing claims processing acceleration and a year-over-year headcount reduction. The company updated 2026 guidance to reflect higher expected fuel prices, embedded $50 million in targeted annual cost savings, and outlined a continued focus on leveraging a diversified, scale-driven business model. Capital allocation priorities shifted from M&A to debt reduction, with the leverage ratio held at 3.1 times and plans to reach the range midpoint later in the year. Outlook for the remainder of 2026 assumes no macroeconomic recovery, with fuel price volatility and narrow travel corridor softness managed through disciplined guidance updates.

  • A multiyear renewal with a large travel customer strengthens the Corporate Payments division and is fully captured within current results and guidance.
  • Continued momentum in the direct accounts payable offering targets ongoing double-digit volume growth and mid-market expansion, with new client signings expected to drive a weighted increase in volumes later in the year.
  • Recent completion of the BP conversion is expected to steadily benefit the Mobility segment, especially in Q2 and beyond, solidifying partner contributions into 2027.
  • Deposit migration to WEX Bank from third-party banks has largely concluded, yielding a 50-100 basis point economic benefit per dollar held in-house, with limited further tailwind expected for the year.

INDUSTRY GLOSSARY

  • HSA: Health Savings Account, a tax-advantaged account for eligible health expenses managed on WEX Inc.'s platform and generating custodial revenue and investment income.
  • Direct AP: Direct Accounts Payable solution, a mid-market-focused, automated platform for processing supplier payments, comprising a growing share of Corporate Payments revenue.
  • BP Conversion: Transition and integration of BP (British Petroleum) customer/partner accounts onto WEX Inc.'s Mobility platform, referenced as an operational milestone impacting future segment revenue.
  • LTV-to-CAC: Ratio measuring Customer Lifetime Value to Customer Acquisition Cost, used to assess profitability and efficiency in customer growth strategies, especially in small and medium business portfolios.

Full Conference Call Transcript

Melissa D. Smith, our Chair and CEO, and Jagtar Narula, our CFO. The press release and supplemental materials issued yesterday, including a slide deck to walk through prepared remarks, have been posted to the Investor Relations section of the website at wexinc.com. A copy of the press release and supplemental materials has been included in an 8-K filed with the SEC yesterday afternoon. As a reminder, we will be discussing non-GAAP metrics, specifically adjusted net income, we sometimes refer to as ANI, adjusted net income per diluted share, adjusted operating income and related margin, as well as adjusted free cash flow during our call.

Please see Exhibit 1 of the press release for an explanation and reconciliation of these non-GAAP measures. The company provides revenue guidance on a GAAP basis and earnings guidance on a non-GAAP basis, due to the uncertainty and the indeterminate amount of certain elements that are included in reported GAAP earnings. I would also like to remind you that we will discuss forward-looking statements under the Private Securities Litigation Reform Act of 1995.

Actual results may differ materially from those forward-looking statements as a result of various factors, including those discussed in the press release, recently filed annual report, the supplemental materials, and the risk factors identified in the most recent Annual Report on Form 10-K and subsequent quarterly reports on Form 10-Q and other subsequent SEC filings. While we may update forward-looking statements in the future, we disclaim any obligation to do so. You should not place undue reliance on these forward-looking statements, all of which speak only as of today. With that, I will turn the call over to Melissa.

Melissa D. Smith: Thank you, Steven, and good morning, everyone. We appreciate you joining us. The first quarter marked a strong start to the year for WEX Inc. We exceeded the high end of our guidance range for both revenue and adjusted net income per diluted share, and we did that with strong execution across the organization. After record revenue and adjusted net income per diluted share in 2025, we continued to build on our momentum in 2026. Revenue for the quarter was $673.8 million, an increase of 5.8% year over year. Excluding fuel prices and foreign exchange, revenue grew 5.4%, which was above the midpoint of our prior guidance. Adjusted net income per diluted share was $4.15, up 18.2% year over year.

Excluding fuel prices and foreign exchange, adjusted EPS grew 19.4%. Importantly, these results were not driven by just one segment. Benefits and Corporate Payments continued to perform well, and we delivered better-than-expected results in Mobility amid a still challenging market. We are seeing the benefits of our scale, our increasing productivity, and the strength of WEX Inc.’s operating model. At WEX Inc., we simplify the business of running a business. Every day, our customers manage payments and workflows that are complex, regulated, and mission critical. Too often, they still have to stitch together disconnected systems across spending, payments, reimbursement, reporting, and controls. That makes decisions slower, oversight harder, and risk more difficult to manage.

That complexity is only increasing, and that is exactly why we believe WEX Inc. is well positioned to thrive. What makes our model powerful is that across Mobility, Benefits, and Corporate Payments, our businesses share common technology, data, compliance, and financial infrastructure, including WEX Bank. That allows us to uniquely solve customer problems in vertically specialized ways while also scaling capabilities across the enterprise. It is why our strategy is focused on the customer and driven by three priorities: amplifying our core, expanding our reach, and accelerating innovation. The work we have done over several years to strengthen that shared operating foundation is translating into tangible business results. In 2025, we increased product innovation by more than 50%.

And in 2026, we are focused on converting that velocity into better experiences and outcomes for our customers and stronger productivity, growth, and operating leverage for WEX Inc. A large part of our accelerated product innovation is being driven by AI, which is helping us in two ways. First, it enables us to deliver better products and make smarter and faster decisions. We are able to use our data, workflows, and domain expertise to improve things like claims, spend visibility, service, credit, and payment outcomes. Second, it is helping us redesign how things get done inside WEX Inc. by both automating routine work and improving speed and accuracy, allowing our teams to focus on higher value decisions for customers.

AI is not a separate initiative but something that is being integrated into our operations to improve customer outcomes and increase efficiency. In 2026, we plan to deliver $50 million in cost-saving actions, including savings from automation and modernization, with a portion of the proceeds to be reinvested in the business and the remainder to flow through to margins. Let me spend a few minutes on the momentum we are seeing across the business and how that momentum reflects the strategy we are executing, starting with Mobility. Within Mobility, which represents roughly half of our revenue, we are executing well and delivering improved results even as the market and macroeconomic environment remains challenging.

While our outlook does not anticipate a macro recovery, we are making progress in the areas we can control: pricing, sales productivity, product expansion, and customer execution. That strong execution is reflected in our financial results in the first quarter. Mobility revenue increased 3.2% year over year. Higher U.S. fuel prices were a tailwind, but that benefit was offset by international fuel spreads. Payment processing transactions were down 3%, so this is not a story of the market suddenly snapping back. Rather, it is a story of improving execution. We are closely monitoring energy price volatility related to the Middle East conflict. At this point, we have not seen a meaningful impact on customer demand or volumes in Mobility.

We are seeing a small impact to travel volume trends leading into the second quarter that we are reflecting in our guidance. We are confident in the progress of our growth levers. We are encouraged by the early traction in 10-4 by WEX Inc., where we are growing active users and have earned very high ratings in both the Apple and Google app stores. This product expands our reach into a large and underpenetrated part of the market while creating a path to deepen relationships over time. Lastly, on Mobility, I am proud of our team for completing the complex BP conversion, which will create a small benefit in the second quarter.

Most importantly, it solidifies the BP contribution we expect in 2026 and into 2027. As a reminder, we won this important contract from the strength of our enhanced acceptance product. Let me now shift to Benefits, which represents 30% of our revenue. In Benefits, our momentum continued during the first quarter. We came through a strong open enrollment season, and that positioned us well for the remainder of the year. Benefits revenue increased 8.5% in the quarter. HSA accounts on our platform were up 8% year over year to 9.4 million HSA accounts in Q1. Here, WEX Bank continues to be an important differentiator, allowing us to earn attractive yields on HSA assets.

Benefits is one of the clearest examples of how our technology investments are creating value for customers. We have talked before about our early results in reducing claims reimbursement times by more than 98%, and we continue to increase integration and automation across the platform. We are leveraging technology to create better customer and partner experiences and drive durable growth. Finally, let me turn to Corporate Payments, which represents approximately 20% of our revenue. Corporate Payments revenue increased 9.3% in the quarter. In Corporate Payments, we are strengthening the core while continuing to expand the reach of the business across industries, geographies, and workflows. We continue to bring new customers onto our platform and our pipeline is building momentum.

We are excited to announce today that we entered into a long-term renewal with a large and strategically important travel customer. This renewal reinforces the value proposition of our platform: reliability, compliance, workflow integration, and the ability to handle complex payment flows at scale. Consistent with what we said on our fourth quarter call, the economics of the renewal are already contemplated in our guidance and are fully reflected in our Q1 results. At the same time, we continue to see progress outside of travel. Our direct accounts payable solution leverages our Corporate Payments platform and has focused on the underserved mid-market, enabling it to deliver outsized growth.

Direct accounts payable purchase volume increased in line with last quarter, and this book of business represents approximately 20% of annual segment sales. Broadening our opportunity set outside of travel represents a practical long-term growth opportunity for the segment. We entered 2026 with momentum, and our first quarter results reinforce that our strategy is working. In the third quarter of last year, I mentioned we had reached an inflection point. Since then, we have seen both revenue and adjusted EPS grow, as we illustrate on Slide 5 of our earnings presentation. This momentum is driven by the strength of our pipeline, improving productivity, and the pace of product innovation.

Our investments over the last several years are producing results, and we are now moving to a phase of scaling those investments to deliver increasing operating leverage and drive meaningful margin expansion over time. We are combining our increased efficiency and scale with a disciplined capital allocation framework. As we illustrate on Slide 14 of our earnings presentation today, our returns on invested capital have been increasing on a NOPAT basis as a result of our strong execution and thoughtful capital deployment. As the environment has changed, we have shifted our capital allocation priorities accordingly, pivoting from accretive M&A to share repurchases.

Today, we are prioritizing debt reduction, until our leverage ratio is below three times, while continuing to invest in the business. I know some of you may have questions regarding the proxy. I will be discussing this in more detail with our lead independent director designee, Dave Voss, during a webcast fireside chat on Monday, April 27. I hope you will be able to join us for that discussion. In the meantime, you can read more about our strategy and progress and our thoughts on the proxy contest in the comprehensive investor presentation that we published on our Investor Relations website last week.

With that, I will turn it over to Jagtar to walk through our financial performance and updated outlook in more detail. Jagtar?

Jagtar Narula: Thank you, Melissa, and good morning, everyone. Before I begin, I want to remind you that unless otherwise noted, all comparisons are year over year. We delivered solid revenue growth and strong earnings performance in the first quarter, while continuing to build momentum and strengthen the operational foundation that positions us for accelerating growth and profitability in 2026. Total revenue in the quarter was $673.8 million, up 5.8%, and above the top end of the guidance range we provided last quarter. The impact of foreign exchange rates and fuel prices increased revenue growth by 0.4%. Excluding these macro impacts, revenue was slightly above the midpoint of the guidance range we provided last quarter.

Adjusted earnings per share was $4.15, an increase of 18.2%, partially offset by a decrease of 1.2% related to the net negative impact from fuel prices and foreign exchange rates. Excluding these macro impacts, adjusted EPS was above the high end of the guidance range we provided in February. Let me walk you through the macro impacts in the quarter in more detail and how they may have deviated from your expectations given the sensitivities we provide. There are three key things to remember when we talk about sensitivities and fuel price guidance, especially in periods of high price volatility like we saw in Q1.

First, the European market we operate in tends to move opposite of our U.S. fuel price exposure. Extreme price volatility in Q1 led to an unfavorable $7.6 million revenue impact from these spread movements that offset the favorable $5.5 million revenue impact from U.S. fuel prices. Second, the sensitivity we provide assumes that gasoline and diesel prices move in tandem. In Q1, diesel prices moved much higher than unleaded gasoline prices, so the sensitivity was not as accurate. Our OTR customers primarily buy diesel fuel, where our revenue stream is more tied to fixed fees per transaction.

Our local customers are primarily buying unleaded gasoline, which is predominantly tied to percentage-based fees and is therefore more sensitive to changes in fuel prices. When there is a large disconnect in the price between diesel and unleaded gasoline, as we saw in Q1, the sensitivity is less accurate. Finally, there is a timing factor with late fees in our sensitivities, as we recognize late fee revenue based on balances in prior months at prior fuel prices. This means when prices rise rapidly, the benefit to late fees will trail by about a month.

Overall, we did not see the fuel price impact that we would have normally expected in Q1 because of the very sudden increase and the timing at the end of the quarter. However, we are confident we will see this normalize as we anticipate fuel price volatility levels out for the remainder of the year. One last point on the macro is regarding FX. We also had a favorable $5.1 million revenue impact from FX gains in the quarter. Overall, this was a very noisy quarter in the macro. But the real story is a solid performance across the business that is positioning us well for the remainder of 2026.

Before I move on to the segments, I want to update you on our sales and marketing efforts broadly, where we are seeing encouraging results. In the first quarter, new business added about 1% to our revenue growth rate versus last year. Our returns are coming in as planned, and we continue to expect new business growth to outpace last year. Turning now to the segments. Mobility revenue increased 3.2%, driven by our strategic initiatives taking hold and a small benefit of 0.2% related to fuel prices and changes in foreign exchange rates.

This exceeded our expectations and demonstrates the momentum we are building through both new sales and pricing increases that you can see coming through our account servicing revenue. Our payment processing rate was 1.23%, a decrease of 10 basis points sequentially. The sequential decrease in the net interchange rate is due primarily to the impact of European market movements, which I mentioned earlier, and the higher fuel price in the U.S. As a reminder, last year gallons in OTR were pulled forward into Q1 due to territories, which created a tougher comp for Q1 this year that we were able to overcome.

I would add that on the local fleet side of the business, we also saw a quarter-over-quarter improvement in same-store sales, which is another encouraging sign. In our Benefits segment, total revenue of $216.2 million rose 8.5%, reflecting the strong open enrollment season Melissa mentioned earlier. Overall, SaaS account growth was 3.8% in the quarter. While this was slightly lower than what we guided, it was due to shutting down a non-core product that was not delivering the returns we expected, which added a 2% drag to account growth in the quarter. The impact is immaterial to both revenue and income.

Importantly, this deliberate action aligns with our strategic focus to amplify our core by investing in products that deliver appropriate returns for the business. The Benefits segment continues to capitalize on both the scale we have built and the value derived from our investment portfolio at WEX Bank, which allows us to deliver industry-leading returns on our HSA assets. Average HSA custodial cash assets grew 11.8% in the quarter and custodial investment revenue grew 14.2%. HSA accounts also grew 8%, as Melissa noted earlier. Overall, we are very pleased with the performance of the segment.

Finally, in Corporate Payments, revenue of $113 million increased 9.3% at the high end of our expectations with our net interchange rate expanding three basis points year over year. Purchase volume also increased 3.6%, reflecting continued strength in our travel customers. Travel-related revenue grew approximately 12% in the quarter, supported by the strength of our partnerships. Revenue from non-travel customers grew in the mid-single digits. Within that, our direct AP business grew in line with Q4. We are still in early innings here, and while there is higher volatility in growth rates given the size of the portfolio, seasonal trends from customers, and impacts of legacy businesses included in the mix, we remain excited by the long-term opportunity.

Moving to margins. Year over year, Q1 adjusted operating income margin declined 50 basis points, driven primarily by an increase in credit losses from 12 basis points to 19 basis points, within the range we guided you to last quarter. Normalizing for the unfavorable 200 basis point impact of higher credit loss and fuel price differences, our adjusted operating margin would have expanded 130 basis points as a result of efficiency gains through technology and AI, pricing actions, and the operating leverage we are seeing from higher organic growth by the investments we have made in innovation in 2025.

For 2026, we are expecting margin expansion of 75 basis points on a macro-neutral basis, and that is embedded in the midpoint of our guide. With that, let me transition to the balance sheet. WEX Inc. is a business that generates strong recurring revenue, which in turn produces reliable free cash flow. On a trailing twelve-month basis, we have generated $671 million of adjusted free cash flow, a 14% increase over the same period last year. This is a strength in all periods, but especially in times of economic uncertainty. It gives us significant capital deployment optionality. We also benefit significantly from WEX Bank, which provides low-cost funding through deposits and Federal Home Loan Bank lines.

It is important to note that the bank gives us a lower cost of funding versus alternatives such as securitizing our receivables. In addition, as we have mentioned before, WEX Bank also helps us drive higher yields in our HSA assets through its investment portfolio. Touching on leverage, we ended Q1 with a leverage ratio of 3.1 times, flat from the end of Q4 as expected and within our long-term range of 2.5 to 3.5 times. We remain on trajectory to reach the midpoint of our leverage range in the second half of the year. Let me shift to capital allocation, a focus of every investment decision we make at WEX Inc.

Each step of our disciplined capital allocation process is grounded by a clear objective to maximize long-term shareholder value, and every investment decision we make is weighted against returning capital to our shareholders, including internal investments in our segments. As we think about deploying capital externally through M&A or share repurchases, we start by prioritizing a safe and strong balance sheet as measured by maintaining a leverage ratio below the midpoint of our target range at three times. Because of that, we expect to continue to reduce leverage through Q2. While M&A is not at the forefront today, we will assess opportunities that strengthen our strategic position.

I also want to point you to our new disclosure on return on invested capital that Melissa mentioned earlier. We calculate this by looking at our equity and corporate debt excluding working capital funding at WEX Bank—that includes deposits and borrowings from the Federal Home Loan Bank—against our net operating income after tax. We exclude WEX Bank for ROIC because its funding sources are not comparable to operating capital. As Melissa mentioned, we are very pleased to see this important metric continue to improve. You can find more detail on the calculation in the earnings presentation we posted today.

One final point on capital allocation: our strategy remains consistent, and you should expect any excess cash from higher fuel prices to drop through to reduce leverage near term. Now let us move to earnings guidance for the second quarter and the full year. In Q2, we expect to generate revenue in the range of $727 million to $747 million. We expect adjusted net income per diluted share to be between $4.93 and $5.13. For the full year, we now expect to report revenue in the range of $2.82 billion to $2.88 billion. We expect adjusted net income per diluted share to be between $18.95 and $19.55.

Compared to the midpoints of the previous ranges, these represent increases of $120 million in revenue and $1.70 in EPS. You should think of these increases as largely driven by updating our fuel price assumption to $4.30 per gallon in Q2 and $3.70 per gallon for the full year. Lastly, on the interest rate side, we are no longer assuming any rate cuts for the rest of the year in guidance. This change had an immaterial impact to full-year guidance. In closing, our first quarter results underscore the strength of our diversified model and the discipline of our execution. We remain focused on executing our strategy to deliver results that drive sustainable, long-term shareholder value.

With that, operator, please open the line for questions.

Operator: We will now open the call for questions. If you would like to withdraw your question, simply press 1 again. We ask that you please limit yourself to one question and one follow-up. Your first question comes from the line of David John Koning from Baird. Your line is open.

David John Koning: Yeah, hey, guys. Good job. When I look at probably the most important metric, the Mobility acceleration was really good in the quarter. I mean, 3% growth on an organic, constant currency, constant macro basis, best in five quarters. But you called out tariff impacts were still a headwind, and some things are emerging. I guess I am wondering, between tariffs going away, BP coming on, late fees getting a lagged benefit, ISM getting better, are all those kind of emerging benefits that growth actually accelerates from Q1 after a good Q1?

Melissa D. Smith: Well, first of all, thank you. We are really proud of the execution we had in the quarter. And you are right, you are putting a bunch of factors together. Last year, we had to pull forward, as you mentioned, that affected some of the growth rate comparisons in the over-the-road business. And we have rolled on BP. We have done a bunch of pricing work. We are feeling good about the trajectory that we are on. When we actually contemplated the guide, we ran through the benefit that we saw in the first quarter and we held the rest of the year to what we had previously guided.

But I think that is really just more to reflect that there are a lot of factors that are happening in the world right now, and we just want to be cautious about it. But you are right to point out, we have a number of really positive things that are going our way right now, and we feel really good about the trajectory we have for the business.

David John Koning: Thank you. And maybe just as a follow-up, Mobility EBIT was actually down year over year. I guess I am wondering, is that mostly just sales and marketing? And maybe, Jagtar, could you kind of put some numbers around it a little bit? Like, how much of that was simply sales and marketing going up, and maybe core EBIT actually grew? Maybe talk through that a little bit.

Jagtar Narula: Yeah, Dave. So the two pieces year over year are sales and marketing and credit losses. Remember, credit losses have gone up year over year in this segment. We talked a little bit about that last quarter in the Q4 call. It was related to some new offers we had put in the market and tested. We pulled those offers away, but we saw higher credit losses coming through associated with them, which is why we pulled the offers away. We saw that roll through in the quarter. That actually added about two percentage points to, as Melissa mentioned in her prepared remarks, about 200 basis points to operating margin impact in the quarter.

So, if you adjust for that piece, margins would have actually been up quarter to quarter for the company. For the Mobility segment, it was about 360 basis points in the segment. So if you adjusted for that, you would have been roughly flat year over year.

David John Koning: Gotcha. Thank you, guys.

Operator: Your next question comes from the line of Ramsey El-Assal from Cantor Fitzgerald. Your line is open.

Ramsey El-Assal: Hi, thank you for taking my question this morning. I have two questions, I will ask you both at once. Both of them are about fuel prices. I guess the first one is, are you seeing any downstream impact on, or do you anticipate any downstream impact on, credit performance because of higher fuel prices? Are you seeing that pressuring your customers in any notable way? And then the second part of the question is, what are you seeing in terms of fuel spreads as we enter the second quarter here? I was a little surprised that spreads were as impactful as they were given that is a smaller part of your business.

I am just curious, are spreads settling down, or is there still a risk that you could see some fuel price spread volatility that offsets some of the benefit of higher retail prices?

Melissa D. Smith: Yeah, it does make sense. Let me start with the first part of your question. In 2022, fuel prices were just under $4.50, so we have seen spikes in fuel prices before. We are not seeing it impact credit quality, but we are paying attention to that. And we are not seeing it affect customer behavior patterns, with the exception of the fact that we see people more interested in ways to create efficiency. We think that is drawing them into our tools. We certainly see more demand for our 10-4 app, and we have seen really strong demand for that.

So on the fringe, you would see more behavior patterns where they are looking for efficiency, but not really having much of an impact overall in the portfolio. And then the spread question: our business in Europe operates off spreads; it is the predominant model there. When you have rapid changes in prices is when you see these kind of meaningful changes in spreads. Because it was such a rapid movement and it happened so fast in the first quarter, it had a sizable impact in Q1. We expect the rest of the year, in the way that fuel prices are forecasting, that we are not going to have a similar type of thing.

And just to note, when we snap fuel prices, as you might guess, they have been moving around quite a bit. We took kind of a mid view of the futures curve. Knowing that it has been moving up and down, we took kind of a midpoint.

Ramsey El-Assal: Got it. Thank you so much. I appreciate it.

Operator: Your next question comes from the line of Mihir Bhatia from Bank of America. Your line is open.

Mihir Bhatia: Hi, good morning. Thanks for taking my questions. Maybe just wanted to start with adjusted operating margin and just understand exactly what is embedded in your guide for the year on adjusted operating margin relative to last year?

Jagtar Narula: We are expecting, for the year, adjusted margins to increase about 130 basis points. A piece of that is the fuel price change that we made in the current quarter for the full year. So if you exclude the fuel price impact, you are getting about a 75 basis point improvement in operating income margin for the full year.

Mihir Bhatia: Got it. That is helpful. Thank you. And then, sticking with Mobility, you have the organic growth, right? You have 3% organic growth year over year. Can you talk about some of the factors that are driving that? Transactions are still down. You obviously have the interchange effect this year. So what is driving the organic growth? And then, as we think about the next few quarters, should the interchange rate bounce back up? Are we through the fuel price impact and the European spreads impact? Will that reverse in Q2? I think that was six of the 10 basis points decline. What is a good interchange rate to think about for the rest of the year?

Melissa D. Smith: When we think about managing the business, we think about new customers we are bringing on, retention rates, as well as pricing. In the Mobility business itself, Jagtar talked about the fact we saw a 1% increase in new sales coming through. New sales are better and are taking across the portfolio, including Mobility. They are driven by the work we did in our sales and marketing investments. You can actually see that coming through pretty rapidly. The second thing, retention looks similar to what it did last year. Pricing is up, and pricing has had a positive impact on revenue growth and is probably the primary driver. And then the last thing, Jagtar mentioned that same-store sales improved slightly.

It is still negative, but it is getting a little bit better, which is a positive, we think, for the course of the year.

Jagtar Narula: On the payment processing rate, you are right. We did see a roughly 10 basis point reduction quarter over quarter from the market move predominantly in Europe and then fuel price changes. As we go into next quarter, you will see the full-quarter impacts. Our interchange rate and fuel prices are inversely related because of the fixed-fee component of how we charge customers. So as you go into the second quarter, you will get the full-quarter impact of the higher fuel prices. You should expect to see interchange rates roughly remain flat to the first quarter. And then, as we go through the year, we are assuming that fuel prices decline in the third and fourth quarters.

You will start to see interchange rates rise again as fuel prices decline.

Mihir Bhatia: Alright. Thank you.

Operator: Your next question comes from the line of Rayna Kumar from Oppenheimer. Your line is open.

Rayna Kumar: Good morning. Thanks for taking my question. I want to go back to Mobility for a second. It obviously came in better than you were expecting. I want to understand exactly what came in better than you were anticipating, and how sustainable is that going forward? And then just on the Benefits segment operating margin, what exactly drove that increase, and how sustainable is that expansion for the remainder of 2026?

Melissa D. Smith: It was a little bit of everything. If you go across, volume came in pretty much as we expected. Late fees were a little bit better and pricing was a little bit better. So it is a little bit good across the portfolio that was slightly better than we expected.

On operating margins at a macro level, one of the things that Jagtar mentioned earlier is that if you look at our operating margins in the first quarter, reported they are down, and there was a really big impact on margins for the company because of credit losses, which is a bit of a timing issue that will play out more favorably as you go through the course of the year. But underneath that, there is 130 basis points of improvement in operating margin, which is really tied to the work we have been doing over the last few years around using AI to modernize the way that we are operating as a company.

You can see that really coming through. Benefits is a piece of that. Overall, we actually have 8% fewer employees at the end of 2025 than we did at the end of 2023. We are really reimagining how work can get done. AI has been a huge tool that we are using associated with that. We have a disproportional number of employees dedicated in our Benefits business, and so part of why you see that benefit coming through and looking like it is quite scalable.

Jagtar Narula: As we go through the year, the impacts to Benefits operating margin are really going to be related to rates. While we are no longer assuming any rate reductions, the year-over-year compares will get more difficult as you go through the year, somewhat related to maturities in the portfolio and reinvestment. You will start to see some moderation of operating margin as you go through the year related to that. But we still feel pretty good about where we are as a company. I think we have been executing well, as Melissa mentioned.

Rayna Kumar: Super helpful. Thanks for the details.

Operator: Your next question comes from the line of Christopher Nathaniel Svensson from Deutsche Bank. Your line is open.

Christopher Nathaniel Svensson: Hoping you can discuss pricing opportunities within the Mobility business. Clearly, lots of ongoing discussion about this. Feels like we have seen hundreds of slides on that topic in the last couple of weeks. And, Melissa, I think you briefly alluded to pricing in your prepared remarks and a couple of the answers here in Q&A. Hoping you can just put a finer point around pricing, maybe both from a philosophical point of view—how you think about pricing generally—and then more tactically, if and how you plan to improve pricing in Mobility going forward?

Melissa D. Smith: Pricing is actually one of the levers that we have been using over the last decade, and certainly over the last few years. We had about $70 million worth of pricing actions that we took in 2024 and 2025, with more that are coming through this year. The way that we think about it is, as we are looking at pricing, we are balancing the effect to customer attrition with pricing actions, and we look at both of those things. To the extent that we can increase on price because of the value that we are providing to our customers and not create a customer attrition issue, we are doing that. We have done it in different ways.

We have looked at our merchant contracts and renegotiated those. We have increased late fees and customer fees across the portfolio. It is really just an embedded part of how we operate now, and we have had some pretty sizable increases over the last three years.

Christopher Nathaniel Svensson: The other thing I wanted to ask: in your prepared remarks, Melissa, you talked about the impact of travel on the guide for the rest of the year. Hoping for some more color on that. I think you have a few million dollars in quarterly revenue in Corporate Payments from Middle Eastern travel specifically. One, is that correct? Two, anything beyond that direct exposure that you are calling out, either with regards to the impact for March numbers or for the outlook for the rest of the year and Q2 and beyond?

Melissa D. Smith: You nailed it. It really is the Middle East that we are seeing soft. If you look at Q1, volume was very normal. If you look at our overall growth in Corporate Payments, we feel really good, and travel volume growth was really quite strong across the portfolio. What we saw starting in April is that the Middle East corridor was starting to look softer. It is on the order of about $3 million a quarter for us. We reflected that in our Q2 guide. We think it is a very narrow sliver of travel volume. But just to be thoughtful, it is a trend that we are seeing in the portfolio.

The rest of the portfolio looks like it is operating as normal, and that is what we reflected in our guide.

Christopher Nathaniel Svensson: Helpful. Thanks, Melissa.

Operator: Your next question comes from the line of Tien-Tsin Huang from JPMorgan. Your line is open.

Tien-Tsin Huang: Just to follow up on that last point there, Melissa and team. On the segment outlooks, have they changed at all between Corporate Payments and Mobility, given what you saw in April and the comments there?

Jagtar Narula: No. We continue to hold to the guidance that we have given earlier this year. We do not adjust segment-level guidance quarter by quarter. We continue to maintain where we started the year.

Tien-Tsin Huang: Okay, perfect. Just want to make sure. And then I know the prior full-year outlook embedded the $50 million in cost savings, some of which you said would be reinvested. A quarter in now, have you started that process? Has that changed at all in terms of magnitude or timing? I am trying to get a sense if that is creating a little bit of flexibility for you on the margin front.

Melissa D. Smith: The $50 million has not changed. It is still embedded in our guidance. We have seen really good progress in that. I will point back to the fact that we saw 130 basis points of margin expansion in Q1, excluding some of the noise we have in credit losses. All the work that we have done over the last few years, you are actually seeing that come through in terms of productivity across the organization, and it is reflecting in our numbers already. We talked about the fact we are reinvesting a portion of that, but we are dropping through 75 basis points at the midpoint of our guide on a macro-neutral basis into operating margin expansion.

We talked about last year being this investment year, and this year being a scaling year. You can see the scale of the investments coming through in revenue, and the scale is coming through in our operating margin.

Tien-Tsin Huang: Good. I know that was a focus for you, Melissa. Thanks for the update.

Operator: Your next question comes from the line of Sanjay Harkishin Sakhrani from KBW. Your line is open.

Sanjay Harkishin Sakhrani: Thank you. Good morning. First question is on Mobility. I think, Melissa, you said same-store sales are still slightly negative. Through the quarter and year to date, we have heard some cautious optimism on over-the-road and it is coming back. Is that what you see or hear? Is that not linking through your numbers, or is it just still quite volatile there? Then maybe tag along on that—David’s first question talked about improving trends over the year. Could you give us a little bit more on what is on the comp as we move through the year?

Melissa D. Smith: On the over-the-road marketplace, we are hearing from our customers that the smaller customers are certainly getting pinched by fuel prices. On the positive side, they are seeing increases in spot rates, and so they are earning more as they are making deliveries. But that is getting eaten up in large part by the increase in fuel prices. The mid and large customers are able to tack on fuel price surcharges and so are less impacted by the overall fuel price environment. In general, there have been fewer operators in the marketplace—more people have left the market—creating an overall better environment in terms of profitability for those who are surviving and thriving. We are seeing changes in the over-the-road market.

We are not seeing a big increase in demand yet, which is when we will start to see more of a benefit, but we are seeing dynamics that are hopeful and make the marketplace look like it is improving from a financial perspective.

Jagtar Narula: On your question about growth trends in Mobility, we expect trends within what we have guided to. In the early part of the year, we expanded our factoring portfolio last year; we have gotten some growth benefit from that and will lap that as we go through the year. Other than that, as Melissa talked about, we are not assuming any change in the macroeconomic environment, so we are expecting current trends to continue.

Sanjay Harkishin Sakhrani: Maybe just one follow-up on travel. You think that weakness in April you mentioned was isolated to the Middle East. American Express talked about seeing it more broadly, and refunds were up. If you have not seen it now, is some of that factored into your outlook? And then secondly, on the renewal of that large partner, I know it is in the guidance number. Is there any take-rate optics that we need to be thinking about? Is there a greater impact next year versus this year? I just want to make sure we are tied on the optics of it.

Melissa D. Smith: Let me talk about that renewal first. I am super excited. It is a renewal with a partner that we have been co-innovating with for years on embedded payments. I think it is validation of the value prop that we have—the ability to do workflow integration, handle complicated payments at scale, and have that industry expertise. It is a multiyear agreement and fully reflected in the first quarter results. That should not have an incremental impact to next year. It is already baked into the first quarter results.

In terms of broader travel trends, what we are seeing right now is very isolated in terms of the specific customers that we are working with that have exposure in the Middle East. We are not seeing something that is broad-based across our portfolio right now. We reflected some softness in the second quarter related to what we are seeing but not broad softness, because that is not what we are seeing right now.

Jagtar Narula: On take rates, I would refer to what we talked about last quarter. We are expecting take rates for the year to be roughly flat to last year, with some slightly down in travel, slightly down in non-travel, more mix of travel. All the dynamics of that renewal are baked into the guide we gave previously.

Operator: Your next question comes from the line of Analyst from Raymond James. Your line is open.

Analyst: Hi, good morning, and thanks for taking the questions. I wanted to start on SMB strategy. Any color on SMB sales trends for the quarter? And, bigger picture, how do you think about scaling that business over the medium term to become a bigger part of Mobility?

Melissa D. Smith: SMB is attractive because it is a relatively unpenetrated part of the marketplace. We have been on a multiyear journey to focus on it, first starting with our risk tools. We talked a couple of years ago about all the work we did adjusting the tools using AI, and then we went into marketing and really made changes to the way that we are marketing and adjusted the tools as well. We had to do a lot of foundational work before we started going after this phase, and we have seen really good results.

The customers are coming in; our LTV-to-CAC calculations are holding to what we expected, and we are monitoring two key assumptions in this portfolio: the accounts, and what happens with credit and with lifetime value. So far, everything is coming in pretty much on the models. We continue to focus on how we can refine the motions that we are making, learn about how we are bringing those customers in to become more efficient, and I would say we are having success—each quarter, we get a little bit better, and then continue to scale the business. That is in the North American Mobility portfolio. We feel like we have a good pipeline. That pipeline will continue to build.

We are learning from it and we are getting better. The second part for us in the small business arena is the 10-4 app that we rolled out last year. We rolled it out with the same idea: it is an underpenetrated part of the marketplace. These are owner-operators that we are not going to extend credit to, so they are not going to be capable of really buying into our core products, but we are exposing them to our discount network of fuel. They are downloading an app and using that application to buy fuel at a discount, which is really important to them, particularly right now.

They are saving money, having a good user experience, and we are seeing those users come back month after month. We think of that as a community that we can continue to build and then sell more into over time. Small business is an area that we can continue to build and mature, and we are seeing success so far.

Analyst: Okay, awesome. Then I want to switch gears to the direct AP business. You mentioned volumes in line with 4Q at about 15%. Hoping you could put a finer point on your expectations for volume growth there for the year and if double digits is still the right way to think about it. Thank you.

Melissa D. Smith: On the AP Direct side, which is about 20% of the business, as you know, we are going after the mid-market. We continue to build out the sales team there. It has operated pretty much according to plan. Those salespeople are bringing new customers; they implement quite rapidly. We are expecting, through the course of the year, to stay in that 15% range on the AP Direct spend volume, about 20% of the segment. The other part of note, Jagtar mentioned that there are some parts of the business in Corporate Payments that are not growing as fast. Our FI business and our bill pay business are slower growers. We have also been focused on embedded payments outside of travel.

We have had a number of customer signings. Those are longer implementations, so we expect that volume to be coming through more weighted to the second half of the year. The net of all of that is you should expect outside-of-travel volume growing throughout the course of the year and more back-end weighted as the embedded payments customers kick in.

Operator: Your next question comes from the line of Analyst from Wolfe Research. Your line is open.

Analyst: Hi, thanks. This is Daniel on for Darren. Just wanted to ask a quick one on the full-year EPS guide. It seems like you chose not to pass through the Q1 beat and are only raising based on fuel prices. Could you maybe walk through that decision and any potential sources of conservatism you have embedded there? Thank you.

Jagtar Narula: Hey, Daniel. That is actually incorrect. We passed through the first quarter beat as well as changes in fuel prices, FX, and interest rates.

Analyst: Got it. It just raised by $1.70 at the midpoint, and that was the fuel price adjustment as well. I will look into it. Thank you.

Operator: Your next question comes from the line of Michael Infante from Morgan Stanley. Your line is open.

Michael Infante: Hi, guys. Thanks for taking my question. Just on the Mobility same-store sales front, can you provide a little bit more color on why local fleet same-store sales have been structurally weaker than OTR? Given what I assume is an improving exit rate within Mobility, what is your expectation on gallons and volumes from here? And does that spot rate improvement in the freight market give you an opportunity to open up the credit box? Thank you.

Melissa D. Smith: The same-store sales has rather converged for both OTR and North American Mobility over the last quarter. You are right—historically, over the last year, NAM same-store sales were a little bit worse than OTR. That has gotten a little bit better, and OTR had gotten a little bit worse, so those two things have come in line. As we build out through the course of the year, we will have a more positive comp next quarter in terms of volume because of the pull-forward activity that is negatively affecting us this quarter. We would expect to see volume naturally get better because of that.

We are continuing to see strong sales, so that should help as well, and then BP coming on. All of those things should help build our transaction and gallon growth, going from negative in the first quarter to moving to positive as you go through the year.

Michael Infante: That is helpful. Then just a quick follow-up on Benefits—some of the deposit economics. You obviously called out the deposit migration from third-party banks. Can you remind us on the differential in unit economics for $1 held at WEX Bank versus a third party, and how much runway there still is for that migration? Thanks again.

Jagtar Narula: We will typically get about 50 to 100 basis points better if we move it from third-party banks to WEX Bank. We have moved a lot of the money that we expected to move over from third-party banks to WEX Bank. We still have roughly $400 million at third-party banks, but a lot of that is used for operational purposes. I would not expect continued movements of that to be a tailwind for us for the rest of the year.

Operator: That concludes our question and answer session. I will now turn the call back over to Steven Alan Elder for closing remarks.

Steven Alan Elder: Thank you, Rob. We appreciate everyone’s time today, and the company looks forward to chatting with you again at the end of the second quarter.

Operator: This concludes today’s conference call. Thank you for your participation. You may now disconnect.