We really appreciate having you both with us today. Look, guys, I mean, FLEETCOR is a name that I've known and worked on for many, many years. It goes back to actually doing the IPO when I was at Barclays years ago. You know, I also know Ron very well. It's a great company, great story, and it's obviously seen its fair share of chaos in the world and the market, notwithstanding the most recent weeks. I guess before we even get into the weeds, I'd love to just hear your thoughts on the latest developments on the SVB side and anything you could share on what you're seeing in the market. Sure. I would first say, you know, I'm not sure you're real fintech if you didn't bank with SVB. Yeah. I would also say that, you know, we're very well diversified amongst tier one, tier two, tier three banks. As far as our portfolios go, we feel like we're well situated. I would also add that, you know, we have historically used SVB for our disbursements of our AP product, and we have since moved that to Fifth Third. We feel like we're in a good position. Okay, good. Now that we got that out of the way, maybe you guys can introduce yourselves. I should have started there. Sorry. It was on my mind. Sure. My name is Alissa Vickery. I am the Interim CFO at FLEETCOR. I've been with the company a little over 12 years now. Thanks. In varying roles and varying degrees of escalation. Okay. Yep. Thanks. Mark? Mark Frey. I'm the President of Corpay Cross-Border. Been with the firm since FLEETCOR acquired the Cambridge business in 2017. Yep. Prior to that was with Cambridge since 2011. We also have Jim here from, head of investor relations. Thank you guys for being with us. Maybe we just start off with some of the recent trends. You know, whether it's you exited fourth quarter, I guess, at 7% growth. Clearly, Corpay continues to be one of the standouts with 20% growth rates. I think you had 14% or 15% in lodging, and then tolls was 6%, 2% in fuel, just based on the numbers here. Mm-hmm. You're guiding though to 10% 2023 growth. Maybe just start off with that. It's a question we're getting a lot from investors. What gives you the conviction and the guy in the 10% acceleration off of the 7% from fourth quarter? Sure. It's a good question. I would say, first off, we are very granular in our businesses in terms of how we plan, how we run them, and then how we pivot in the event that it's needed. I would say too, that our convictions are further solidified by just the general recurring nature of a lot of our revenue streams. I'd remind everyone that we retain somewhere in the range of 90%-92% of revenue from the prior year. If you roll into the next year, you've got 90% of the base. You have generally half of the impact of the prior year sales rolling into the next year. Yep. Half generally of your next year sales rolling into that year as well. Combined with that, some impact of same store sales, it really is a model that we can plan off of and have confidence in regardless of the product set. Okay. All right. For bottoms up analysis gives you the conviction. It really is. What was it about fourth quarter that was a bit of a, you know, 300 basis points slower growth rate than you're seeing this year? Yeah. I would say. I think there may have been some comps, right? There were. I would say prior year had some difficult comps going into it. Combined with that, just some of the impact of the macro and specifically our micro SMB customer base within our fuel product. You know, it tended to struggle in the second half of 2022 from what the world was doing to them. The impact of higher fuel prices, combined with just the tougher world we lived in because there was no longer any more free money to help facilitate and lift those customers up, we saw them start to go bad. Okay. Some of that was driven by us involuntarily attriting them. We kicked them out because we don't wanna put good money after bad, combined with retargeting the sales engine so that we were really focused on a slightly larger SMB customer. Think 10 plus cards as opposed to less than 5, 'cause less than 5 tend to behave a little bit more like a consumer, even though they are a commercial business. As we pivot away from that customer type in our fuel space, specifically, we do believe it provides a catalyst for growth as the 10 plus comes online, as our sales engines get smart, and we're able to pivot into the second half of 2023. Okay. That's helpful. You know, when we think about the year ahead, it's great to hear that you have the conviction from the bottoms up on the guidance on the top line. Obviously, there's an uncertain macro. In the case that things are very different than you anticipated or built in, what kind of levers do you have on the OpEx side? You guided $17 EPS. I know that was pre-divestiture- Mm-hmm. Russia or whatever. Regardless, you know, just touch on the flexibility. Yeah. I would say, first off, you know, we're planning and building a business that will sustain into the future, not just for the next 12 months, right? Right. We were very purposeful when we completed our budget cycle to make sure that we would continue to invest in the core, but pulling back on some of the discretionary levers that maybe we purposefully, intentionally overspent in 2022 because we could afford to do so. Right. As we moved into 2023, being cautiously optimistic, directing dollars to the products that we believe are the most revenue generating and have the greatest TAM, like Cross-Border and Corpay, but then furthermore, making sure that we're investing in the accretive or sorry, in the capability plays around recent acquisitions, specifically in our EV space and in corporate payments. Okay. Mark, sticking on the macro theme, I mean, are you seeing anything from an SMB standpoint or a, you know, B2B standpoint that's changing in the way of behavior from your customers? Yeah. For our customers in the Corpay segments, in corporate payments, we're not seeing a lot of change ultimately in who our customers are. I think it's important to understand in corporate payments, our customers skew much more to the mid to large corporates. They're not small business, micro businesses, where we are seeing volume. Yeah erosion. In the mid-market space, we're not seeing that at all. Those segments, both in terms of the domestic business and cross-border, have held up rather nicely. We've also seen some expansion to our institutional business in the cross-border space, where we're servicing tier one, tier two financial institutions that are making payments to the Southern Hemisphere. It's an important part of our franchise and continues to grow nicely. Staying on the Corpay side, just maybe you could explain the segment to folks. It's one of the areas that we think is a gem in the business. frankly, we talk about some of the parts now more and more around it with a higher valuation assigned to it. Just help us understand the mix of the business, if you can, percentage mix maybe, and the growth algorithm of the business. Corpay or Corpay core payments, we sort of separate into two separate halves ultimately. There's a domestic business that is geared towards the U.S. market that is a full invoice automation AP outsourcing engine that is focused primarily on mid to large corporates. That business offers a virtual card offering and a check disbursement offering, where we're really automating back office processes and commercializing those payments through the virtual card. That business has a channel partner business, and the direct sales business continues to grow nicely. We pivoted a little bit more to the direct sale business 'cause we like the economics, we like the return- Yeah in terms of new sales and the ability to maintain and enhance pricing over time. That business continues to do well, and those customers are incredibly sticky. You're looking at a name retention rate of 99%+ year on year, really attractive from that perspective. Cross-border business, a little bit different, again, we're paying B2B invoices ultimately all around the world. Our business is very much a mid to large corporate space. We do have an institutional business that we make payments to in emerging markets that I mentioned previously, and again, skews towards the higher end of the mid-market. You know, we see volumes hold up very nicely in that segment. We continue to be very excited about the geographic expansion of the cross-border business. What was once a very North American-centric business is now growing, you know, tremendously in the UK, Europe, and Asia Pacific is now the sort of new growth engine going forward. Really excited about what we see there in terms of the products that we're bringing to market as well and how that's beginning to build more of a competitive moat around our business and further differentiating us from both the fintechs and the large financial institutions. When we think about the growth rate, though, 20% is obviously a healthy number. It, you know, seems similar to what we've seen at some other, some of the other B2B offerings in the market that are both public and private. Talk about the similarities competitively between your Corpay business and the collection of businesses and some of the other offerings around accounts payable software, maybe a Bill.com, maybe an AvidXchange. Maybe just touch on that. I think in the domestic side, in the full AP, it's ultimately it's the revenue retention, customer retention that greatly inherit or contributes to the growth of that business. You know, for everything that we sell is a net new accretion. Yeah to the top and bottom line. That business continues to run really well, and I think it's very well differentiated. The last acquisition we did with Accrualify, sort of bolting on that invoice automation capability on the front end, we believe has really rounded out the product capability and made it best in class in terms of the platform as it competes in the marketplace. In the cross-border space, you know, we continue to benefit from geographic expansion, where we're seeing significant growth in Southern Europe and in the Nordic region. We've just launched in the Benelux region for the first time with boots on the ground, so significant geographic expansion opportunity that we see across Western Europe and Asia Pacific as well. Singapore is a brand-new market for us that more than doubled in 2022, that we think will probably double again this year. Wow See lots of runway in that particular market. In our core markets of U.S. and Canada, Australia, U.K., continuing to grow, near 20% in most of those markets, a little bit over 20 in others. Even though those markets are maturing, you know, realistically, we look at it and we understand that we've still got less than 2% market share in every geography in which we operate. Yeah continue to compete very well, both against the fintechs and the large financial institutions. Nine out of 10 of our takeaways are from banks. We feel like the product, the capability competes very well against both tier one, tier two banks. We think we're very well positioned. That's great. It's certainly an area that I think is still being analyzed and probably underappreciated by a lot of folks in the market. Alissa, maybe we shift back now to Fleet for a moment and just talk a little bit about the business segment in terms of, you know, how it operates, what it's really providing for its customers, and then if you can help us understand, you know, the branded side of it, the closed loop side of it. Maybe help explain that dynamic in percentages terms as well. Sure. I would say first and foremost, Fleet is a solution that enables fleet operators to quickly manage and control spend. Fuel is one of the top theft items that companies who don't have a control spend product. Inherently, having a card or other payment modality, maybe it's an app, that is locked down to certain codes so that the driver can't utilize it to purchase things outside of the fuel category is fundamentally the value prop. That and the ability to track your fleet, see how efficient they are with their time, with their fuel, with their routes, and ultimately with their spend. I think also remembering that in the fleet space, we're agnostic to what the fuel type is, whether it's ICE or EV. Fundamentally, we're there to serve the customer regardless of what their fleet may look like. Yeah. Whereas increasingly, obviously, we're seeing in the UK specifically, some mixed fleets coming into play, where EV is a little bit further ahead than the rest of the world. The open loop versus closed loop. Open loop really is focused on how the network works. In an open loop network, we are the issuer or the acquirer or the settlement institution, we own the full economics effectively other than, you know, the bank side of it. Right. Which really gives us pricing power, if you will, both on the merchant side and the customer side, because we're able to offer incremental discounts off of the retail price of fuel to those fleet operators if they direct their drivers to those specific stations. In return, the merchants will then provide the discounts, right? It produces a highly profitable business model, quite frankly, when you own most of the economic inputs to the process. On the open loop side, this is where you're running on someone else's rail. Primarily Mastercard in the U.S. and Visa in Europe. Here it's primarily an interchange play. When we think about trends in this business, some of this is gonna be driven by the health of the macro and the health of the SMBs that actually have the fleets. You have a range of SMB and large, larger fleets crossing over to OTR. Just curious to hear your thoughts on what you're seeing more lately. I would say, you know, we do have a mixed fleet environment in terms of, large enterprise and mid-market. In North America, you know, we do have a concentration of some SMB customers as well. What I would remind us all is that the SMB segment is continuously strong. The challenges we're seeing primarily relate to our micro SMB customers, primarily in North America. What we've done is try to very, in a targeted way, manage credit terms, make sure we continue to analyze the data around what we see in that space. Right. -as well as retargeting some of our digital sales channels to go towards those kind of broader and bigger customers. That was built into your outlook, though, right? It is. There's nothing new in that sense. No, no. I would say that the year tends to be trending based on what we, what we planned. What you thought. Mm-hmm. Good. Then in terms of back to that credit discussion again, I mean, I know you talked about being a little bit stricter with underwriting on some of these businesses that are newer, right? Right. What does that mean for the, you know, investments versus growth opportunity in terms of the next 12 months and then longer term? Yeah. I still think the value prop is there for the customer, from an investment perspective, we're gonna continue to grow that business. We're gonna continue to invest in sales. We're gonna continue to target those customers, just that tend to be a little bit healthier. Okay. I would also say on the existing base, because that's the other half of it, right? It's not just the new sales, it's how do you treat your existing customers. It's just having a little bit more focus on credit lines, and credit terms, making sure that there's not too many days outstanding to where it puts us in an inopportune position. We believe that we're striking the right balance in terms of providing the value prop to the customer as well as protecting FLEETCOR's best interests. Just one question for both of you, I guess, is the crossover between fleet and corporate or the potential crossover. I know it's an opportunity for you to sell corporate services into the fleet customer base, but it seems like it's been a little slower, to be honest with you, than I expected. Some of it may just be trial and error. Yeah, I think that's fair. I think it is picking up some energy and some resource investment in the firm today, though, too. We think increasingly that our fleet business will become more like a corporate payments business as we begin to reposition those customers to the corporate payments product, both domestically and cross-border from an overall perspective. Yep. We think a lot more resource, a lot more focus across the organization to cross-sell more to the same set of customers ultimately. Okay. I'll add, I think that it's going to the target customer and identifying who has the spend. It does you no good to sell the product to a customer who's primarily has fuel, which you're already helping them with, and maybe payroll, right? Sure. If you target the right customers with the right spend and going at it in a slightly different way with a more like a two-in-one product. "Hey, here's your fuel product. You're gonna pay via our UI," which also helps to pitch the corporate payment side of the product, should it make sense for your business, right? Okay. It's being a little bit more purposeful and quite frankly, making sure we're targeting the right people. Do you think that we're gonna see success on the cross-sell this year, next year? I think time will tell. I don't know that it's something we're building into our plans necessarily. Right. as much as making sure that we're shifting and pivoting in the right direction. Alissa, EV's always been a hot topic around whether or not, you know, your business model has got sustainable growth on fleet, right? Mm-hmm. On the fleet side of things, which is, I think, expected to grow mid to high single digits for many years. Right. You know, I think if you ask the average person about what they see, an EV vehicle doing, they imagine it, you know, getting charged at home. Right. help us understand the model for a moment and how you envision FLEETCOR's you know, place in it. Sure. I would say as we too, for I think a little while, were trying to figure out what it was gonna look like, right? Initially, maybe were a little more defensive than we are today. What we did is we spent some time, we made some incremental investments initially to identify what the right point in the process it made sense for us to be a part of. I'm specifically speaking to the U.K. and Europe. Once we identified where we thought the value prop was- Yep. we've now acquired those assets to where they're a full slate of the, of the fleet solution in the U.K. specifically. In the U.K., what we have is what we call our three-in-one solution. What that means is, hey, we have this product called Mina that allows the fleet operator to allow their driver to take the vehicle home, assuming they have a garage and the ability to charge the vehicle and plug it in. What we'll do is we've already partnered with all the utilities in the U.K. Sure. which then enables us to capture that piece of spend specifically related to the professional vehicle and bill it directly to the fleet manager, so that the fleet driver, who may or may not be able to afford that float associated with, let's call it a 100 incremental GBP of utility bill, that goes directly to their employer. Super big benefit for the driver, super big benefit for the employer. Yeah. We've also got the over-the-road charge point operator network, where we have signed up the entire network or as much of the network that exists today and enabled charging and payment also to that same vehicle so that the fleet manager can again track route, come up with sort of where you're gonna go next, how do you manage the overall productivity and efficiency of the vehicle that day, depending on what it's hauling. Potato chips, maybe you can go a lot further than if you're hauling. Right. air conditioning units, per se. Right. Also continuing to serve the traditional ICE vehicle. That's pretty cool. Yes. I mean, has it been well received? It's actually been very well received. Today we have about 60,000 customers in the U.K. About 1,100-1,200 of them have a mixed fleet today. Those fleet operators are ecstatic because they have the ability to continue to go to one place, track their fleet, manage spend, manage routes, all the same things they do today with their ICE vehicle. What it also had the benefit of is those fleets who may not have traditionally picked us as their provider of fleet solutions is they're actually picking us today because of where they know their fleet's going in the future. They know that we can already service that mixed fleet profile, they know they're gonna be there. They're not there today. They're gonna pick us today because they won't have to change providers at that point. That's clearly an area of investment just based on the deals you've done, in the fleet side of the business, I imagine, right? Yeah. We're super bullish on it. I would tell you our people are excited. The product is sort of evolutionary, if you will. Yeah. We're leading the way in the market, and, you know, we do think it is the future. Mark, in terms of investment in Corpay, where's the priorities? Where are the new dollars going? Our focus over the last little while, if I look at the domestic side of the business, is been rounding out that technology value proposition platform. The Accrualify acquisition to bolt on the front end was really, we think, completing that platform vision. On the Corpay or the cross-border side of the business, we see a lot of runway for deals like Global Reach, like AFEX, that are pretty straight down the fairway portfolio plays that allow us to break into new geographies with licensing or with boots on the ground in terms of us being able to add our acumen, capability and product to help grow sales aggressively. Every one of those deals comes with some incremental capability that we can bolt on to the broader network because our focus and our strategy every time we do an acquisition is to lift that entire portfolio of customers, pull it across to the Corpay platform, replatform the entire business, drive much better economics and sales, and synergize the rest of the cost base. Sure. In and so doing AFEX and Global Reach, we now believe we've got a model that we can replicate that, and we can continue to roll up that segment with a deal every 12-18 months, with there being a significant runway of targets that fit that profile as well. When we think about the opportunity for that business to actually be, you know, directly more competitive with some of the offerings that are more multinational, what's the next step? I mean, is there, is there a need for further acquisitions for Corpay in international markets also, or is it gonna end up being more domestic focused? So I- Cross-Border side obviously aside. I don't think that there's additional capability that we need to deploy. We actually have a few exciting products that we're going to be rolling out that have been purpose-built within the business organically this year. Yeah. We've got a Banking-as-a-Service cross-border product, which, you know, the simple way to think about it is if you're a U.S.-based corporate entity and you're doing business all around the world or you, or are expanding into international markets, you're banking with Bank of America or Citibank here, we can become the international bank to provide you a bank account in every jurisdiction in the world in which you wanna collect revenues from and/or have a current account to store value and do disbursements and do payroll. We can become your international bank of choice from one relationship, one point of technology, all that sits on our technology stack that you're already using as a customer. We think that that is a rather significant increase to the overall network and the capability. We also have, you know, SWIFT gpi, which we have taken in term as our Payments GPS product that is traditionally very geared towards just corporate SWIFT. We've taken that same idea and taken that sort of FedEx tracking capability, and I'm deploying it across the entirety of our proprietary network as well. If we're sending an in-country payment in Thailand or India, we can still provide that same level of tracking detail versus a SWIFT payment that we might be making domestically in the United States, which is a significantly differentiating capability that just doesn't exist in the market. Okay. in a consolidated fashion today. I think the final thing that we're really focused on doing is we've, for some time now, had a very robust Latin American capability that we sold to tier one financial institutions. In 2021 and 2022, we expanded that to Africa and did really well with that expansion, building out that correspondent network and that proprietary network of pay in countries and capabilities. Now expanding that to Asia. Now we can open up new corridors even amongst our existing tier one bank customers. You think of the tier one money institutions around the world, they come to us looking for liquidity in Brazil, Colombia, Chile, Peru, Nigeria, and increasingly, they're coming to us for Asia as well. With each one of those names that are very valuable when they come on board, but with each corridor that we open up for them and create a single pipe where we capture all of their transactions, those are typically sort of seven-figure revenue opportunities each and every corridor. Expanding to Asia, we think is the next significant leap forward for that business, will allow us to win more new names and significantly expand share within existing. Alissa, thinking about the businesses we didn't really touch on yet for a moment. Within the company, you obviously have the hospitality side and you have, you know, Brazil, which, excuse me, if you don't mind, just a quick update on the trends on both. I mean, Brazil is an area that I think is a little bit more opaque for some investors. Hospitality and, you know, CLC, I guess, has been generally thought of as an area that was very complimentary to fleet. Right. Maybe just give us a sense of what you're seeing in both. Sure. I'd say on the lodging side, which I think you're referring to as the hospitality side. Yeah. Sorry. That's mid high. We expect that to grow organically in the mid-high teens this year. As a reminder, this is primarily in North America, but with a little bit in the UK as well. We have a combination of a workforce solution. Hey, my driver is out on the road, his vehicle is utilized as part of his job, and therefore like, think about like a utility truck, for instance. While he's out, he also needs lodging, he'll utilize my solution. That product continues to grow phenomenally. The airlines piece of it, which is our distressed passenger product, continues to grow in, I think the high teens. We expect that to continue to into 2023, primarily as we go to market with incremental new products. Yep. We have a new app tool that the airlines are really excited about, which allows automatic rebooking. If you think about it from an airline perspective as well as the customer's perspective, it allows them to immediately have at least some form of satisfaction, regardless of the fact that their flight was just canceled. Maybe they rebook to the next flight or into their hotel room for the night, or both. Third is our insurance vertical. What I would say across that entire piece is it is run by 1 leader, and we're able to leverage now for the first time, really the scale of our lodging network, specifically in North America, to really facilitate fortuitous pricing across all 3 bases. Yep. of the business or all three verticals. In Brazil, it's always interesting to me when we talk about Brazil, because I think for the longest time we thought about it in the context of beyond tolls, right? Or beyond. I think where we've finally gotten to now is it's not just beyond. Brazil has morphed into a full vehicle and mobility solution that we have active marketing in the hand of the user. So we have 3 million distinct app users for 6 million discrete toll tags. What you should hear is the ability to be a single source solution for all vehicle needs. Yeah. Whether it's going on toll roads, which you know, was the initial product. We realized that the urban user may never go on the toll road. Facilitating that same toll tag to access all the parking facilities that exist throughout the major cities. QSRs. In Brazil, you can't park for free. You can't go to the grocery store and park for free. You can't go to your condo and park for free. Oh, wow. You can't go to work and park for free. It's all these uses that already that we've signed up in our proprietary network to create a single source functionality, in addition to selling them insurance on a sort of a spot basis because, oh, I'm going to go on a trip across the country. I need insurance for the next five days. I don't really utilize this type of insurance solution for my day-to-day driving. Different market. So they can literally tap in the app and buy the service. That's cool. In addition to continuing to sell the product through banking partners, we've partnered with two of the largest banks in Brazil, Caixa Bank and Santander, who basically are resellers of our product to their massive customer bases, which we've seen, I'll call it penetration rates in the 30,000-50,000 new accounts per month in just three months of reselling. It's really amazing. We're super excited. What we really envision is that the single source solution as a vehicle mobility hotspot, if you will, in your hand, becomes the model for the rest of the geographies in which we serve. Just to wrap it up, we're almost out of time here, but, you know, I think, Alissa, you've changed focus a bit from buybacks to more debt paydown. What are the dynamics there and just the broader view of capital allocation and M&A going forward? Sure. I would say, you know, we've spent some time walking that back. Yeah. I think what Ron, our CEO, was saying was, "Hey, it's not as obvious of a answer today to use excess capital to go buy back our shares only because of what the interest rates have done in the last 12 months." Right? Yep. We were effectively in a 1%-2% rate market, today is not 1%-2%. I will say, first and foremost, our first use of capital will be a buyback deal. Sorry, to buy accretive businesses by earnings. It will be more in the sense of the straight down the runway deals that we've done historically, where we're able to to Mark's business, where we've acquired GRG this year, lift it, take a underperforming asset, layer it into our infrastructure, and have a fundamentally stronger business 12 months down the road, and basically move something that might be a 20% margin to a 50% margin, right? Those are the type businesses we're looking for. Secondarily, will be buybacks. We will continue to buy back our own shares, and the third will be the debt lever. Okay. guys, we're gonna take questions from the audience in one minute. last one for me, though, is just when you look out a year from now or even three years from now, maybe both of you can answer this. What do you look to be proud of on what you accomplished with Fleet and with Corpay? Yeah. Do you wanna go first? Yes. I think it's continuing to deliver for us in Corpay on that 20%+ revenue growth organically. I think that is building the differentiated product, building the network, and I think that's an underappreciated element of our business. It is very much a network play. Continuing to work within that mid to large corporate space, but moving more into the institutional category, especially for cross-border, where we see- Sure. You know, very differentiated economics and very strong retention rates in economics overall, continuing to do more deals. You know, we think that the M&A pipeline is robust as it's ever been for us, we've clearly established that working model of, you know, buying an underperforming business at a 10%-15% EBITDA margin and moving it to a 50%-55% EBITDA margin in 12-18 months. Having done that once with AFEX in the midst of doing it even faster with Global Reach, we think that there's a lot of targets for us to continue to do that. We see a very robust future for the corporate payments business, with a differentiated platform and continuing to just do what we've been doing. Yeah. I would say broader than that, I think what we're doing in the EV space is just... It's super invigorating. It feels like the next thing. I would say the investments we've made and the purposeful alignment of management, that this is where we're going, we're super excited about that. Yeah. I'm super jazzed to see where we are three to five years from now, not just in the UK, Europe, maybe in the US. We'll see how the market evolves. I would say beyond that, honestly, it's continuing to perform on the fundamentals. We grow revenues, we grow operating income, and we grow Cash EPS. Yeah. That is what we do. 10, 13, and 17, 18, 9. Yeah. Jesus. Jim's looking at me like, "Yes." you know, fundamentally, we drive results. We are operators. We continue to execute on our strategies organically and inorganically, which will fundamentally drive that bottom line number. Makes a lot of sense. Yes. Guys, any, anyone have any questions you'd like to ask? Okay. Guys, thank you very much for joining us. I appreciate it. Thank you.