FLEETCOR Sees Q2 Revenue Surge, Eyes More Acquisitions

Fuel and commercial payments company FLEETCOR published its Q2 2019 earnings data on Tuesday (Aug. 6), with results that pleased Chairman and Chief Executive Officer Ron Clarke.

Q2 was “probably one of the best quarters in quite some time,” he said during the company’s earnings call Tuesday evening.

The company surpassed expectations, with an 11 percent year-over-year revenue increase to $647.1 million for the quarter compared to estimates of $634.18 million. Earnings-per-share (EPS) landed at $2.85, surpassing expectations for $2.80 per share.

Clarke said the company’s overall organic revenue growth accelerated “nicely” to 13 percent, marking the “highest organic revenue growth quarter” since the company started reporting like-to-like revenue in 2016. Organic fuel card revenue growth was 9 percent.

FLEETCOR also recently closed two transactions — its Nvoicepay and SOLE Financial acquisitions. The primary rationale behind the Nvoicepay acquisition was to strengthen the company’s position in full accounts payable (AP) or integrated payables. He also said the company made “good progress” in the first 90 days that it has owned Nvoicepay.

Clarke also noted that the company closed its SOLE payroll card acquisition on July 1. The company has historically grown revenue of approximately 30 percent annually. Clarke said it is complementary to the company’s existing business. He also noted that FLEETCOR expects significant synergies via the combination as it consolidates its technology platform and existing bank as well as network relationships.

Moving forward, Clarke said the company’s acquisition pipeline is “still active.” It has three close tuck-in opportunities — one of each in its fuel, lodging and corporate pay businesses. He also noted that the company has plenty of liquidity to pursue them.

FLEETCOR expects to book between 9 percent and 11 percent revenue growth for the rest of the year. However, Clarke noted that the company is expecting a bit more unfavorable macro conditions and slightly higher share count. Those factors, however, will be offset by lower interest expense and likely better acquisition contribution driven by the SOLE deal per Clarke.