Hello, and welcome to the WEX Q1 2023 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, it is star one on your telephone keypad. I will now turn the conference over to Steve Elder. Please go ahead. Thank you, operator, and good morning, everyone. With me today is Melissa Smith, our Chair, CEO and President, and Jagtar Narula, our CFO. The press release we issued earlier this morning and a slide deck to walk through our prepared remarks have been posted to the investor relations section of our website at wexinc.com. A copy of the release has also been included in an 8-K we filed with the SEC earlier this morning. I also want to mention that we are renaming our existing segments in connection with the rebranding initiative. The fleet solution segment will now be renamed to Mobility. The travel and corporate solution segment will now be renamed to Corporate Payments, and the health and employee benefits solution segment will now be renamed to Benefits. There are no changes to what is included in each segment. As a reminder, we will be discussing non-GAAP metrics, specifically adjusted net income attributable to shareholders, which we refer to as adjusted net income or ANI, and adjusted operating income and related margin and 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 our press release and the risk factors identified in our annual report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 28, 2023, and subsequent SEC filings. While we may update forward-looking statements in the future, we disclaim any obligations 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'll turn the call over to Melissa. Thank you, Steve, good morning, everyone. We appreciate you joining us today. WEX is off to a great start in 2023. We've continued our long track record of delivering exceptional financial results and performing well across dynamic macroeconomic environments. Revenue for the first quarter came in at $7 million above the midpoint of our guidance, and adjusted net income per share beat the midpoint of our guidance by $0.11. Revenue growth of 18% and adjusted earnings per share growth of 15% this quarter represents the eighth consecutive quarter these metrics each grew 15% or more. Last week, we held our annual SPARK Conference, a customer event which unites leaders across the mobility, corporate payments, and benefit industries to showcase how our platform of specialized solutions can help them overcome complexity and reach their full potential. Spark has historically been focused on our benefits business, but was held as a joint conference across all of our solutions for the first time this year. This highlighted the ongoing transformation of our business as we discussed unifying product themes around data, payments, and digitization. Our message to customers centered on WEX's unique ability to address the challenges they see in their businesses. These challenges are experienced across many industry verticals and include personalizing employee benefits, navigating the complexity of a mixed fleet future, and removing the friction caused by inefficient payment processes and systems. WEX can help simplify these challenges today, and we are innovating to anticipate and address those of tomorrow. We had record attendance at Spark, which shows the importance of our solutions and how they resonate with customers. I'm excited by the positive response and the momentum we're seeing across the business. We continue to invest in our platform to help our customers meet the demands of their markets, employees, and customer base. Our investments in data and advanced analytics, for example, are benefiting customers across our platform and providing critical flexibility that allows them to choose from a suite of customized solutions that best fit the unique needs of their business. At the same time, we've been moving aggressively to the cloud, which increases speed to market of innovation and enhanced scalability for our customers. We currently have approximately 85% of our cloud migration completed. We expect to reach our overall cloud goals later this year, allowing us to further leverage shared technologies across product sets. Before jumping into a performance for the quarter, I'd like to quickly address the recent disruption in the banking industry. First, it's worth noting that the failures of Silicon Valley Bank and Signature Bank had very minimal impact to our business. Neither of these banks were customers or partners of WEX, and we had minimal deposit exposure. They were not a party to our credit facility nor counterparties to our hedging relationship. As the banking industry coped with significant movement in deposit flows since the recent bank failures, our custodial HSA cash deposits and certificates of deposit have shown themselves to be extremely stable. This is thanks in part to contractual limitations to early withdrawals, and it's also evidence that the market for these funding vehicles continues to remain strong. Let's turn to the financial results. Turning to our performance in the first quarter, revenue increased 18% year-over-year to $612 million. This increase of $94 million year-over-year was primarily driven by the growth of 36% in both our corporate payments and benefits segments. On an organic basis, which excludes the impact of fluctuations in fuel prices and foreign exchange rates, revenue in the quarter grew 19% compared to the prior year's period, once again beating our long-term organic growth target of 8%-12%. Strong quarterly revenue paired with the scalability of our business model and a superior funding model resulted in adjusted net income per diluted share of $3.31, an increase of 15% compared to the same quarter last year. Total volume processed across the organization in the first quarter grew 17% year-over-year to $52.3 billion, driven by strong performance in our corporate payments and benefits segments. During the quarter, we repurchased approximately 525,000 shares of WEX stock for roughly $93 million, resulting in a small EPS benefit in the quarter. I'd like to recap our business highlights in the quarter. On the benefits front, we completed a very positive open enrollment season. We signed one of the largest administrators of multi-employer benefit funds in the Midwest. This administrator made the move to WEX in order to offer the benefits of our card programs and their long-time clients for their health reimbursement arrangement plan. This administrator has more than 100 multi-employer clients, allowing for a large market reach. In corporate payments, we signed a part of one of the largest healthcare systems in the United States. As you may recall, we've added to our direct sales force in this business and are starting to see a positive return with more than 40 deals signed in the 1st quarter. We also continue to benefit from a rebound in travel volume globally. Benchmarked against 2019, we are seeing improvement versus Q4 in all regions, with the largest gains coming from Europe. Overall, travel-related purchase volume pro forma for the eNett acquisition was up 29% versus 2019, with approximately half of the growth to the number of transactions and half to the value of each transaction. In mobility, we recently signed a renewal with one of the most populous states in the country, showcasing that our array of products continues to be a leading value proposition. I'm proud of our strong execution this quarter and believe we remain well-positioned for the future as we deliver on our strategic priorities. Let me start with an update on our electric vehicle initiatives. We've been listening closely to the evolving needs of our commercial customers. They're asking us for simplified solutions to manage their mixed fleets and are looking for a single card or app on a single credit line on a single data set, all managed and controlled through a single view. This feedback has informed our electric vehicle strategy, which consists of giving fleet managers the tools to plan their energy transition, manage their vehicles in the mixed fleet environment, and help ensure their EVs can be conveniently controlled and charged across a distributed environment. To this end, our mobility team is currently expanding our DriverDash mobile app, which helps fleets find fueling locations on the go, to include EV charging stations in Europe. This furthers our goal of putting tools in the hands of drivers that simplify the process of determining where, when, and how to charge. We'll build on this launch by focusing on learnings and rapidly innovating our offerings for U.S.-based customers. More broadly, as we drive our strategy of simplification and convenience in the EV space, the first phase of our EV product rollout is focused on en route charging. We have a solution that is live in Europe and the United States. We've also signed acceptance agreements with five of the 10 largest public charging networks in the U.S., all of which are in various stages of implementation. Our objective is to create a universal network of EV charging stations similar to our fuel acceptance network. We believe these new agreements will be a win-win for WEX and our network partners, given the significant relationships we have with the government and large fleets. Our next phase will turn to at-home reimbursement. We'll be piloting an at-home reimbursement product this quarter and expect to have a broader rollout in the second half of this year. This is consistent with our strategy of ensuring electric vehicles can be charged conveniently while simplifying payments and reimbursement for organizations. There's a significant pipeline in development beyond that, with an overall vision of enabling managers to grow their fleets and have a unified experience using our products no matter how their vehicles are powered. We're also encouraged by early cross-sell conversations as we begin the new year. Our focus on cross-sell continues to gain traction with more than 60 signed contracts during Q1. Most of these expanded relationships are mobility customers to whom we were able to sell a benefit solution. Let me turn to our operational improvements. We remain focused on enhancing the scalability of our platform and are on track to capture $100 million in run rate operating efficiencies by the end of 2024, with approximately half of these savings being reinvested in the business. As part of this initiative, we've been looking closely at a number of areas of our company using improved processes, data, and technology. One of the areas I am excited about is the planned improvement in the customer experience by creating a more seamless digital journey, which has the added benefit of saving costs. We have a dedicated leader for this initiative with dozens of cross-functional teams inside of WEX who are focused on execution and has the full support of me and my entire management team. Finally, before turning the call over to Jagtar, I wanted to highlight that we will host an investor event to provide an in-depth understanding of our benefits segment, including the product set, opportunity, and financial profile. As you will hear from Jagtar, we had terrific results in benefits this quarter, and we're excited to share more about this sizable, fast-growing, and profitable business with you on June first. Registration for the webcast of the event will be available on the investor relations section of our website in the coming weeks. With that, I'll turn it over to Jagtar to walk you through this quarter's financial performance in more detail. Thanks, Melissa. Good morning, everyone. We started off the year with a solid first quarter, achieving strong top-line growth while delivering with the dependable execution that our employees, partners, customers, and shareholders have come to expect. As with prior quarters, this quarter showed the strength of our global commerce platform, the competitiveness of our offerings, and the power of our business model. Let's start with the quarter results. For the first quarter, total revenue exceeded the midpoint of our guidance by $7 million due to a combination of strong corporate payments purchase volume and a very good open enrollment season in our benefits segment. Total revenue came in at $612 million, an 18% increase over Q1 2022, with more than 80% of revenue for the quarter recurring in nature. As a reminder, we define recurring revenue as payment processing and account servicing revenue from our factoring business, transaction processing fees, and other smaller items. In total, adjusted operating income margin for the company was 37.6%, which is down from 39.2% last year, largely driven by much higher margins in both the corporate payments and benefits segments, offset by lower margins in the mobility segment. From an earnings perspective, on a GAAP basis, we had net income attributable to shareholders of $68 million in Q1. Non-GAAP adjusted net income was $145.8 million or $3.31 per diluted share. This represents a 15% increase over the prior year. Let's move to segment results, starting with mobility. Mobility revenue for the quarter was $342.3 million, a 7% increase over the prior year, powered by solid volume growth from new customer wins and renewals, and an increase in the interchange rate earned on payment processing transactions. Payment processing transactions were up 4% year-over-year. We saw solid mid-single digit growth from our local customers in the U.S., while we had a small decline in over-the-road transactions due to freight market conditions. The freight market is an area we continue to watch closely. As you've seen our metrics, the net late fee rate was up slightly versus the prior year, mostly as a result of the new ExxonMobil small business portfolio added late last year. We had anticipated the trend of higher late fee rates that we saw at the end of last year to continue in Q1. That did not materialize. Overall, finance fee revenue was up only 3%, which includes a 33% slowdown in our factoring revenue, which is related to the freight market conditions I just mentioned. The domestic fuel price in Q1 2023 was $3.86 versus $3.95 in Q1 2022. We estimate the year-over-year impact of fuel prices increased segment revenue by approximately $1 million, including a benefit of approximately $6 million for European fuel price spreads. The net interchange rate in the mobility segment was 1.21%, which is up 10 basis points from Q4 of last year. We saw higher rates earned from a number of merchants due to renewals at favorable terms. The impact of interest rate escalator clauses contained in various merchant contracts and the rate impact from a reduction in fuel prices versus Q4. The segment adjusted operating income margin for the quarter was 40.5%, down from 50.2% in Q1 2022. Higher credit losses versus the prior year were the primary reasons for the lower margin. Let me briefly address the increased credit losses, which were within our guidance range at 32 basis points of spend volume, including approximately 4 basis points for fraud losses. The elevated loss rates in the OTR trucking business that we have seen over the past two quarters are starting to abate. The delinquency rates are improving, and we expect loss rates to trend down going forward. The local fleet customers in the U.S. continue to have marginally elevated loss rates compared to the last couple of years, but are in a relatively normal range. Delinquencies here also continue to improve. Fraud losses in the segment, which we've spoken about a bit in prior quarters, were down 39% from Q4 of last year and continue to improve. The fraud remediation activities that I've spoken about in prior quarters, which include working with the truck stop operators, continuing to enhance our fraud detection tools, and releasing fraud-focused product enhancements appear to be delivering a fraud reduction impact as intended. We are pleased with this result and are working diligently to continue on this track. Turning now to corporate payments. Total segment revenue for the quarter increased 36% to $104.8 million. Purchase volume issued by WEX was $18.6 billion, which is an increase of 58% versus last year. The net interchange rate in the segment was down 10 basis points sequentially, predominantly due to the timing of incentives for the networks in Q4 last year, as well as travel customers contributing a larger percentage of total purchase volume in Q1. Breaking down this segment further, travel-related customer volume represented approximately 71% of the total spend and grew 84% compared to last year. Revenue from travel-related customers was up 87% versus Q1 2022. This reflects continued strength in the consumer travel demand. We are very pleased with these results. Non-travel-related corporate payments customer volume grew 17% versus last year. Revenue was up 4%. This was led by continued growth in the partner channel. We also saw volume growth in our direct channel. We are pleased to sign more than 40 new direct corporate payment customers in the quarter. The corporate payment segment delivered an adjusted operating income margin of 46.9%, up from 36.7% in Q1 last year. There has been significant improvement in these margins as volume accelerates. Our business model here is very strong and revenue drop-through for this segment is high given our relatively fixed cost base. Finally, let's take a look at the benefits segment. We continue to drive strong growth resulting in Q1 revenue of $164.9 million. The $43.8 million increase represents 36% over the prior year. We were very pleased with our SaaS account growth, which was up 14% in Q1 versus the prior year. A reminder that we view this as an important metric since it represents the underlying growth and usage of the platform and drives other areas of the business, such as payment processing and HSA deposit growth. Benefits segment purchase volume increased 18%, leading to an 18% increase in payment processing revenue. We also realized approximately $37 million in revenue from the custodial HSA cash deposits that were invested by WEX Bank and funds held at third-party banks, compared to $9.5 million last year. Approximately $26 million of the revenue increase in this segment is due to the average interest rate earned on these balances increasing from 1.24% last year to 3.98% this year. This income makes us less sensitive to interest rates as a company, as the revenue offsets higher interest expense in other parts of the business and serves as a natural hedge. The revenue is highly accretive to earnings, enabling us to perform well across a range of interest rate environments and providing some stability to navigate economic cycles. The benefit segment adjusted operating income margin was 39.1% compared to 29.3% in 2022. The custodial revenue from the invested HSA cash deposits is the primary driver of the increase in margin. If this is excluded from both periods, the core operating margin would still have increased nearly 1%. Shifting gears now, I will provide an update on the balance sheet and our liquidity position. We remain in a very healthy financial position and ended the quarter with $922 million in cash. We have $776 million of available borrowing capacity. In corporate cash of $149 million as defined under the company's credit agreement at quarter end. At the end of the quarter, the total outstanding balance on our revolving line of credit, term loans, and convertible notes was $2.7 billion. The leverage ratio, as defined in the credit agreement, stands at 2.5 times, which is at the bottom end of our long-term target of 2.5-3.5 times. Next, I would like to turn to cash flow. WEX generates a significant amount of cash each year, with Q1 typically being the lowest due to seasonality. Using our definition, adjusted free cash flow was negative $61 million through Q1, which is $16 million better than 2022. The beginning of each year is typically a weak time for cash flow due to the timing of some payments. Also, as we noted last quarter, our deposit balances and, as a result, our reported adjusted free cash flow were about $150 million-$175 million more than we would normally expect, which reversed during Q1. Our primary use of free cash flow this year has been to repurchase shares. We will continue to manage capital allocation between organic investment, M&A, and returning capital to shareholders. Finally, let's move to revenue and earnings guidance for the second quarter and the full year. The first quarter was a very good quarter for us, as a result, I am pleased to share that we are raising our guidance for 2023 to reflect those results, as well as the benefit of share repurchases completed to date. Other than macro factors like fuel prices and interest rates, we are largely maintaining our previous guidance for everything else. Starting with the second quarter, we expect to report revenue in the range of $613 million-$623 million. We expect ANI EPS to be between $3.45 and $3.55 per diluted share. For the full year, we expect to report revenue in the range of $2.45 billion-$2.49 billion. We expect ANI EPS to be between $13.85 and $14.25 per diluted share. These updated ranges represent an increase of $20 million in revenue and $0.25 of EPS compared to the midpoint of our previous guidance. As I complete my prepared remarks, I would like to emphasize how pleased we were with our Q1 results. We have allowed these results to flow through to our guidance increase for the year, while largely maintaining our previous guidance for the remainder of the year. We continue to execute well on both growing revenue and becoming more efficient servicing our customers. With that, operator, please open the line for questions. Thank you. We will now begin the question and answer session. If you have a question, please press star 1 on your telephone keypad. If you wish to remove yourself from the queue, please press star 1 again. Your first question comes from the line of Sanjay Sakhrani with KBW. Please go ahead. Thank you. Good morning. Melissa, appreciate all of the color on business development. Just listening to you and Jagtar talk about the business generally and the first quarter trends, it seems like you're not really seeing any appreciable signs of slowing outside of the over-the-road sort of freight area. Is that a fair statement when we not only look across mobility but just across WEX? Then maybe you could just remind us what you guys are incorporating into the guidance. Sure. Good morning, Sanjay. If you look across the business, I would agree. The over-the-road customers, we're hearing from them certainly continued weakness within their marketplace as spot rates, you know, are continuing to be lower. They're not talking about driver shortages in the way that they have in the past, you know, inferring that there's a slowdown within that customer base. We saw negative 2% same store sales within the over-the-road business. When you migrate across the rest of the portfolio, our fleet mobility customers and our North American fleet business was actually up 2.5%. That's across multiple categories. The biggest piece of that is some of the larger customers. I think some of that is continued rebound of, you know, people going back into the office, sales fleets being out and moving. I think we're continuing to get a little bit of benefit of that. Even the construction trades within our portfolio were up a couple%. We're continuing to see strength within the North American fleet business. As you talk to our customers that are in travel, you know, that continues to be an area of rebound where we see strength there continuing, as well as, if you go into our benefits business. Benefits, it's primarily the conversation is around still employee retention and how we're making sure we're offering benefits within the marketplace that are attractive, and, you know, continue to evolve in the way that the marketplace expects. Really, really strong still, conversations within our customer base. We continue to have the assumption within our guidance that we'd have a slow growth environment in the second half of the year. Again, not necessarily because we're seeing that trend within our portfolio, but consistent with what we had said last quarter, we just held that same assumption. Okay, great. Just one follow-up question for Jagtar. Inside of mobility, I think you mentioned the slowdown in factoring revenue being a big driver of that finance and the late fee yield. Should we think about that as being the predominant sequential change in that yield? I know there's seasonality to the yield, likely. Maybe you could just help us think through that and how should we think about the rebound in terms of this factoring revenue on a go-forward basis? Thanks. Yeah. Thanks, Saj. I think it's a good question. I'd say there were some puts and takes in that, in that finance fee revenue. We've got some benefit from the ExxonMobil portfolio that we had purchased last year. I think that was about $5 million. On the negative side was the factoring item that you mentioned. That we expect... You know, there's been, you know, the ongoing slowdown in the freight industry with spot rates declining. That's brought down both the number of instances on which we factor the number of invoices, as well as the average dollars per invoice. That's brought the whole sort of factoring item down. We're expecting that to continue at least for the next couple of quarters. you know, there seems to be some ongoing spot rate stabilization in the freight industry, but we're expecting these kind of rates going forward. Great. Thank you. Yep. Your next question comes from the line of Tien-Tsin Huang of JP Morgan. Please go ahead. Hi. Good morning. Good results here. I wanted to ask on corporate payments, if that's okay, just thinking about rest of the year. Any callouts with respect to volume and as well as yield? I'm asking because, you know, I'm just always trying to learn the difference between the volume growth and the and the revenue growth. I know the net interchange piece was down a little bit from incentives. Any clarity on how that spread might behave here in the next couple of quarters? Sure. Thanks, Tien-Tsin Huang. It's a good question. You're correct. The take rate was down over last quarter, primarily because of the scheme fees that we called out last quarter. Within that segment, you know, what we'd expect is the normal puts and takes between travel and our non-travel business. We'd expect kind of normal seasonality going into Q2 and Q3 on the travel side. It tends to be, you know, a higher quarter for travel. Overall, as you can see from the charts in the appendix that we posted to our website, travel does have a lower take rate. We expect some volume impacts from that as we go through the next couple of quarters. in terms of what we're assuming from a volume perspective, we are assuming that idea of having a slow growth environment. We are assuming that you see a trail off in travel growth in the second half of the year. it's still, you know, decent growth we have in our underlying assumptions. Yeah. We know that there's still pent-up demand, but coming off the highs that we're seeing in first and second quarter. Got it. No, that's prudent and makes sense. Just my quick follow-up. I know both of you talked about a little bit just the stresses on the banking system and all the banking turmoil and deposit activity. It sounds like you managed it well. Just wanna make sure I understood that no impact on deposit funding from a WEX Bank standpoint. And also from a risk management standpoint, any change in operations, either on the benefit side or the, you know, corporate payment side, you know, given all the cash flow activity that happens naturally there? Thanks. Yeah. I'm going to start for Jagtar to add onto this. We have about $4.5 million worth of deposits that sit on our balance sheet. Those are a combination of CDs, which we use to fund the business, and then HSA deposits are the two largest pieces of that. The CDs, you know, it's interesting, even in 2008 when, you know, there was a real, you know, freeze within the banking marketplace, people moved money into the CD market. It's a really stable source of funding. It's also, if you look across the whole deposit portfolio, we have over 95% of our deposits are FDIC insured. Yeah. Let me add a couple of comments there. You know, one thing I would point out just at top level, you'll see that our deposits increased about $1 billion from the end of Q4 to the end of Q1 this year. That's split roughly evenly between HSA deposits and non-HSA deposits. I think, you know, that provides evidence that our funding sources remain quite strong. When we look at our deposit base, I know a lot of the banking turmoil that we've seen has been basically people worried about, you know, non-FDIC insured deposits. In our case, greater than 95% of our deposits are FDIC insured. I think that gives a lot of comfort to, you know, depositors with us. We've seen, as Melissa's mentioned, you know, pretty robust demand for funding sources. In terms of operational changes, you know, we are closely monitoring the banks that we work with. You know, we've looked at, you know, a range of metrics around the banks we work with from, you know, what's their ratio of insured to uninsured deposits, credit default swaps, things like that, just to make sure that we're prudently managing money and moving it around where appropriate to banks that we're more comfortable with. Perfect. That's great color. Thank you both. Yep. Your next question comes from the line of David Koning with Baird. Please go ahead. Yeah. Hey, guys. Thanks so much. I guess in the mobility segment, the payment processing rate was really high, and I guess I'm wondering if that's sustainable. It seems like also you talked about the late fee impacts and then maybe a little bit of just macro on the fleet business. When you put all that together, can you still get the low end of the 4%-8% that you're kinda talking about for the full year? Yeah. Our interchange rate was up nicely this quarter. I talked about some of the reasons for it in our prepared remarks. You know, we do have some escalator clauses that are built into our contracts. With the rise of interest rates, we saw the impact of that. We've also had some renewals come through, and we've been, you know, very pleased with the renewal rates we're getting, which have been up in certain cases, which also drove the higher interchange rate. You know, there was really, you know, the one-time item in the quarter was really market movement in Europe, which was worth about, you know, 4 basis points of that interchange rate. The rest of it, I would largely expect to be reoccurring in nature, so we should see these kind of interchange levels as we flow through the year. Our expectation right now is that we will continue to grow, you know, ex PPG, ex FX at our target growth rate of 4%-8%. Gotcha. Thank you for that. I guess secondly, travel volume, you know, per your charts looked like, you know, whatever it was, it was big. It was maybe 70%-80% or whatever it looked like. What's it like in April? Kinda how do you think that is gonna go through the year? I assume just the natural progression's not gonna stay, you know, quite that strong. We continue to see travel volumes in April, in line with our forecast. You know, we, you know, this is something we watch closely given, you know, the overall discussion about the macroeconomy. So far in April, things are trending well for us. Gotcha. Thanks, guys. Great job. Your next question comes from the line of Darrin Peller with Wolfe Research. Please go ahead. Hey, guys. If we could touch on the benefits segment for a minute, the account growth there obviously has been strong, mid-teens type growth, and now you're adding the Midwest manager as well. How do we think about, first of all, just if you could reiterate what's really driving that, you know, what the strategy is for that business going forward and the kind of growth profile we can assume into the second half of the year, especially as this Midwest manager comes on as well? You know, as Doug Harris said, we had a really strong open enrollment season. When you think about that business, you do a lot of your onboarding, you know, is before you start the year. It gives you really good visibility in terms of what's gonna play out through the course of the year. You know, we feel good about how we've gone through open enrollment, you know, the combination of the products that we have in the marketplace, the distribution channels that we have. We work across a number of different partners, supporting them and growing their business and then also directly. You can see the benefit of that coming through. We also had a period of time where people were less likely to make changes, you know, because of, you know, what was happening, a bit of an overhang from the pandemic. I think that we've gotten the benefit of that. We have pipelines that are, you know, continuing to fill, and feel good about the close rates we have this year, which will, you know, more largely impact revenue next year. And we've talked about 25%-30% growth for the year for the- Yep ... benefits segment. Okay. I mean, that's obviously impressive. I think you guys have a investor event coming up around that, right? Which will go into more detail. Yeah. Yeah. Yeah. We're excited to be able to really go a bit deeper in that business, make sure that people have the visibility and can really understand the products we have in the marketplace, how we compete. We're excited to do that highlight. Just if you don't mind, just a quick follow-up on the corporate payment side also. I mean, I know that this has been asked a bit, but I just want to understand a little bit more on the strategy of the business outside of the OTAs. You know, obviously, travel's been strong, but moving beyond the travel side again, in terms of what you're doing to really invest there to differentiate and where we see that headed. Thanks again, guys. Yeah, sure. We have two primary products that we have within the corporate payment space. One is the embedded payments product, which is what is used within our travel customer base. Think of that as a customer, typically someone who's highly sophisticated, is embedding an API payment stream within their workflow, and they are taking advantage of either our virtual card technology or other payment modalities. And that product itself, highly tech-enabled, really important that it has strong uptime. We have the ability to settle, you know, throughout the world in a number of different over 20 currencies. There's a number of things that are really important to that customer base. We've had good success in selling that into the fintech community also in the United States. You know, we talked about Avenu Exchange, one of the customers that we had added more recently. Right ... the second product that we have is an AP direct product, where we have just started ramping a direct sales force. Historically, we've sold that product through a partner channel. We started ramping sales people. I talked about the fact that we've had 40 signings in the quarter. We feel good about, you know, considering the amount of capital that we're deploying, into that sales force, the results that we've seen so far, and it's an area that we expect it will continue to ramp. Those are really the predominant products we have in the corporate payment space. Understood. Thanks, guys. Your next question comes from the line of Nik Cremo with Credit Suisse. Please go ahead. Hey, guys. Congrats on the strong results, and thanks for taking my question. Can you discuss your 2023 growth expectations for travel related revenue and corporate payments related revenue separately to arrive at the 7%-11% guide? Should we expect corporate payments to kind of trend in the 4% range? I guess travel to, you know, decelerate materially just from where it's at relative to the guide. Thank you. Yeah. The second half of the year, because we assume there's going to be a slow growth environment again, as we've gone from really accelerated growth rates in Q1, dropping a little in Q2, but still some really strong growth rates in Q2 in our expectation in travel. With that trailing off into, you know, more of what I would say is kind of a traditional growth environment, a little bit elevated still knowing that there's pent-up demand. On the corporate payment space, we are anticipating continuing at that, you know, single-digit growth rate in the course of this year, you know, which is a combination of where we are with ramping up customers and starting this process of adding new customers with the ramp of our direct sales force. I would just add that, reminder that we gave guidance of 10%-15% growth rate of travel and corporate payments or the corporate payments segment overall. I would say that, you know, travel would be the higher of that, and corporate payments would be on the lower side. Thank you. Your next question comes from the line of Robert Napoli with William Blair. Please go ahead. Thank you. Good morning. Just changing the name to Mobility Solutions at this point, Melissa, is there a, you know, a deeper strategic meaning behind that? Well, when we talk about the segments internally in the businesses, you know, we think of it as more mobility plays. As we continue to expand what we're doing, even with our, you know, our traditional fleet customers, as we're moving into this mixed fleet environment, it migrates you into new offerings in that space. It's really indicative of how we're running the business, where we think it's going strategically. Okay. Just, you know, on your B2B payments business, I mean, as you had called out, I know with Flume and, you know, any progress, what you're seeing with the SMB customers. I mean, related, but you had called out weakness in smaller customers within mobility last quarter. Is that weakness the same on the smaller versus the larger? Just, I guess, two questions. Thanks. Yeah. Just to be specific, last quarter we talked about weakness in the over-the-road customer segment- Right for smaller customers. It's SMB, right. Yes. Yeah. No, Jeff started talking about the fact we've seen, that stabilize within our portfolio. We, you know, we saw this kind of runoff of customers that were weak. You know, we think it had kind of this acute issue of a big ramp, within that marketplace where, you know, a bunch of people added new vehicles. That went down, spot rates went down. You know, just people that were newer in business and smaller in size, we hit a very targeted issue within that part of the portfolio. We have, again, seen stability within the portfolio now. We, you know, it looks like that has largely run its course. You know, we are aware and monitoring what's happening within the marketplace and we have made changes with our credit approval processes, both for the over-the-road business and our traditional retail business to tighten credit standards, you know, in keeping with this idea that we're anticipating or planning for a slow growth environment in the second half of the year. I think that we're getting some of the benefit of those earlier moves that we've made and what we're seeing in the portfolio right now. has the Flume or, you know, that effort... Yeah. Yeah. Yeah. Yep. Flume is still, you know, I'd say still early days. You know, we've had, we started this, what? 15 months ago. We have hundreds of customers that are using the product. We continue to add to the product set that we have in the marketplace. I'd say, you know, so far so good in what we're seeing with that business, and it's something we're gonna continue to learn and evolve. It should play into the 1%-2% growth we have slated for new product revenue and our long-term growth framework. Thank you. Your next question comes from the line of Ramsey El-Assal with Barclays. Please go ahead. Hi. Thanks for taking my question. I wanted to ask about in the corporate payment segment, you know, you mentioned a few times building out the direct sales force, inking 40 new deals. I guess, can you help us think through the timing and impact of not only implementing those deals kind of more tactically, but also the degree over the longer term, whether we should expect more of a mix shift to direct, and whether that could have an impact on segment, you know, yields over time, a positive impact? There's a couple things that are happening within that segment. We are continuing to build the direct sales force. We are also continuing to work with the customers that we have on board to make sure that we are continuing to meet the needs that they have in the marketplace and to look for areas that we can further ramp that customer segment. When we think about growth within that part of the business, it's a combination of growth from the existing customer base that we already haveRamping, on this direct side and then continued benefit from the existing partners that we have in the marketplace. We think that it was multiple levers, and the team is focused on each of those areas. When we talk about that segment and kind of the long-term growth rate that we've had for that segment is 10%-15%, and that's really what we're working towards, is we're architecting both the way that we're thinking about go-to-market, but also the product side. Thank you. You asked about rate. You also asked about rate. Yeah. Ramsey, I mean, you know, I think you asked a longer term question. Those direct accounts would come in at, you know, a higher rate, which is one of the reasons we go direct there. To the extent that that becomes a larger mix of the total, you know, you would expect that to be a positive benefit to the rate. As Melissa just mentioned, we also expect the other segments to continue to grow as well. Got it. A follow-up from me is, could you provide just an update on the broader market opportunity in the mobility segment? I mean, for good reason, you're prioritizing electric vehicles. Is that where you see the largest future growth opportunity? Is there a xEV opportunity, I don't know, internationally and even in the U.S. xEV, where there are still compelling opportunities in the market? Yeah, it's been a great part of our business. It is an area that we continue to take market share, and you can see that in the, you know, the growth of vehicles that we've had within our base. we can always start with that as we think even within the existing customer portfolio of products that we have, we will continue to take market share and build on that position. a lot of the focus that we've had has been on building out digital capability, and we've talked about that a lot over the last couple of years. we brought in our chief digital officer, first time we've had one, a little over a year ago. She's doing some amazing work with our technology and commercial teams really looking at how we can, from an end-to-end perspective, look at that customer experience and even greater digitize that experience, which has a super benefit. It's, you know, it's better customer experience. We lose less customers coming through, but also at a lower cost. I, you know, I feel good about the path that we're on because not only would we have the ability to continue to use the sales channels we have now, but to enhance that with further digital capability. To start with that, because I think there's still meaningful opportunity there, both in the United States and outside the United States. On top of that, within the mobility space, this conversion to EV, you know, increasingly we see this as an opportunity. The products that are in the marketplace right now, I talked about in the prepared remarks, are the ability to move our customers, letting them buy as they are on the go, having this charging network reimbursement capability, then eventually depot capability. Those are really for us, the starting points, because we know from talking to our customers, they want one integrated bill, one system of record. They want all that data so that they can really understand the total ownership cost of ownership for their fleet. We see lots of opportunities behind that. There's many different use cases that are emerging even now in this early part of this process that we think that we can help facilitate. We do believe that not only do we have just opportunity nascent within the existing customer base for the products we have, but that where we're building the future, both through digital capability and through this migration to a mixed fleet offering, that's gonna create opportunity for us. Got it. Very helpful. Thank you. Your next question comes from the line of Mihir Bhatia of Bank of America. Please go ahead. Hi. Thank you for taking my questions. Wanted to maybe just start with just your intra-quarter volume trends. Particularly, I think you mentioned some weakness in OTR, but I was curious, are you seeing macro weakness anywhere else? Like, I understand your guidance is for a slowdown in the back half, but have you seen any actual slowdowns yet across your businesses? The only place that we've seen a slowdown is in that over-the-road customer base. I talked about same store sales being negative 2%. That was a place where we were seeing positive same store sales during the, you know, the bulk of the pandemic. You know, it's been negative for a few quarters now. The rest of the portfolio, some of the growth rates are slowing within same store sales. I talked about the fact that a lot of the benefit that we received in the quarter came from some of the larger customers. When you look into the individual SIC codes, like construction still grew same store sales 2% year-over-year. I wouldn't describe it as weakness. I would say more slowing of the growth instead. Yeah. Mihir, I would just add, like I said, you know, the travel trend into April continues as expected, and we've seen the same thing with fleet gallons as well. It has continued into April in line with our expectations. We're just seeing. Got it. ... you know. Okay. The other question I had was Melissa, you mentioned a couple of big customer signings in your remark. I think the multi-employer administrator and benefits, the large health system and corporate payments. What I wanted to understand was how fast do these signings contribute to revenues? Are we thinking that's like, you know, second quarter or back half of 2023 thing, or is this more likely 2024 contributors? I'm just trying to understand the onboarding process, the ramp when you do some of these big customer signings in different businesses. When we plan the year, we look at what do we have for existing customers so that kind of the run rate of revenue that come into the year. Included in that we look at what do we have for contracts that have been signed but not yet implemented, and so what do we need to actually push through from an implementation perspective. Then what do we need to go get in the course of the year. Some of that impacts 2023, some of that will impact 2024. You know, each of our areas of our business are really focused on each of those things, making sure that we retain our existing customers and are maximizing from that, implementing and then finding new customers. Any of these individual contracts are relatively small in terms of the contribution to 2023. You know, they accumulatively become quite meaningful for our 2024. Yeah, Mihir, I would say that, you know, the contracts that Melissa talked about are factored into the guidance we've given out. For example, the benefits contract that you mentioned, I mean, we've talked about the 25%-30% growth in our guidance. I'd say those contract expectations would have been built into that. Okay. My last question, just on capital allocation. Given the more challenging fundraising environment, are you seeing more interesting opportunities on the M&A side? Can you just talk a little bit about where you are focusing on the M&A side right now? Is it in benefits? Is it corporate payments? Is it finding some kind of adjacency expansion capabilities? Like, how are you thinking about M&A right now? Sure, sure. M&A is something, obviously, we're always active. When we think about opportunities, what we're looking at is either product extensions. We go through a analysis of do we wanna build, partner or buy as we're doing our product evaluation. That's an area where we would look at product or product adjacencies across really any part of the business. We look at scale plays, so the assets that are larger in size, which are more just financially creative, less about the product. We look at geographic extension capabilities. There's an active mix across those categories. We have also been very focused around EV innovation, we have a whole separate work stream that we've added over the last year. Those assets tend to be much smaller in size. Working through those, looking at assets we want to invest in. In terms of what we're seeing from a multiple perspective, there still is a disconnect between what we're seeing in private multiples and public multiples. You know, specifically in the corporate payment space, I'd say it's more acute there than some of the other areas of the business. You know, we keep that in mind as we're working through all of this. We continue to look at assets, move assets through our pipeline, through the same rigor that we have historically. Thank you. Thank you for taking my question. Your next question comes from the line of Andrew Jeffrey with Truist. Please go ahead. Hi, appreciate you squeezing me in. Melissa, I like the color on the direct corporate payments offerings. Can you elaborate a little bit, I guess it's also along the lines of M&A? Do you feel like you have the capabilities internally at this point that you need to grow that direct business? Or do you need to invest at an elevated rate and/or go out and buy technology to really ramp up that direct, I'm thinking about the AP automation and remittance piece specifically? Yeah. With that part of the business, I'd say it's similar to the way that we look at everything else. We are looking at where do we wanna continue to build. We've had a bias of building just again because of what's happened with multiples. We have ramped the investments that we've made in that part of the business over the last couple of years. We're, you know, fine doing that if we see an opportunity within that space. We'll continue to look at where should we build, where should we partner, where should we buy. We're continuing to sell in the marketplace. We have a product roadmap of what we intend to deliver into the marketplace. We will evaluate whether or not we should continue to do that from build perspective or if there are opportunities to buy. I would say that's true across every part of the business. We go through that same process. Okay. It doesn't sound like you have to go out in your mind and buy something to have success there. No, I think that it's a market that will continue to evolve, so we want to make sure that we're continuing to invest in that space. We do feel good about the products that we have. You know, Flume is something that we think is, you know, really interesting in this space, and it's something we continue to build upon as well. With that being much more of a down marketplace within the marketplace, it's an area that we will continue to invest and evolve, I guess is probably the way I'd say it, as opposed to feeling I don't think you're gonna feel like we're done. But we feel like we have a good foundation that we continue to build upon. Okay. If I could just ask one follow-up to that. Just in the benefits business, you've had a couple of really strong open enrollment seasons and obviously these new wins. Are we still early enough in the secular shift to consumer-paid HSA that we can continue to expect big open enrollment seasons that provide momentum and visibility sort of year in and year out in your benefits business? Yeah. When we've talked about the long-term growth rate of that being 15%-20%, a piece of that comes from this continued shift to consumer-directed healthcare. A piece of that is also coming from this anticipation that we'll continue to benefit from the custodial deposits that we have. The growth with movement to HSAs has slowed, but it's still, you know, it's still a strong grower. One of the things that we find interesting about that part of the business is it's also really resilient. It really grows in most any environment because you get the benefit of this movement to consumer-directed healthcare. You've got benefit costs continuing to go up, we continue to build upon our distribution channel. Those things, you know, combined have been a really great contribution to the overall business. Okay. Thanks. Appreciate it. This concludes the question and answer session. I will turn the call to Steve Elder. I just wanted to thank everyone again for hanging with us, as we go a couple minutes long here, and, we'll look forward to speaking with you again in about 3 months. Thank you. This concludes the conference call. You may now disconnect your line.