Corpay Q2 2025 Earnings Report

Corpay EPS Results

• Actual EPS: $5.13
• Consensus EPS: $5.11
• Beat/Miss: Beat by +$0.02
• One Year Ago EPS: $4.55

Corpay Revenue Results

• Actual Revenue: $1.10 billion
• Expected Revenue: $1.09 billion
• Beat/Miss: Beat by +$7.59 million
• YoY Revenue Growth: +12.90%

Corpay Announcement Details

• Quarter: Q2 2025
• Date: 8/6/2025
• Time: After Market Closes
• Conference Call Date: Wednesday, August 6, 2025
• Conference Call Time: 5:30PM ET

Corpay (NYSE:CPAY) operates as a payments company that helps businesses and consumers manage vehicle-related expenses, lodging expenses, and corporate payments in the United States, Brazil, the United Kingdom, and internationally. The company offers vehicle payment solutions, which include fuel, tolls, parking, fleet maintenance, and long-haul transportation services, as well as prepaid food and transportation vouchers and cards. It also provides corporate payment solutions consisting of accounts payable automation; virtual cards, cross-border solutions; and purchasing and travel and entertainment card products, as well as lodging payments solutions for employees who travel overnight for work purposes; traveling crews and stranded passengers from airlines and cruise lines; and insurance policyholders displaced from their homes due to damage or catastrophe. In addition, the company offers gifts and payroll cards. It serves business, merchant, consumer, and payment network customers. The company was formerly known as FLEETCOR Technologies, Inc. and changed its name to Corpay, Inc. in March 2024. Corpay, Inc. was founded in 1986 and is headquartered in Atlanta, Georgia.

Corpay Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: We delivered 13% Q2 revenue growth to $1.102 billion and 13% cash EPS growth, driven by 11% organic revenue growth including 18% in Corporate Payments and 9% in Vehicle Payments.
• Positive Sentiment: Full year 2025 guidance was raised to $4.445 billion in revenue (+12%) and $21.06 EPS (+11%), reflecting favorable FX tailwinds partly offset by lodging softness.
• Positive Sentiment: Corporate Payments momentum continued with high-teens organic growth, including a $1 billion spend run rate from a new enterprise client and strategic logos from the Mastercard and Alpha deals.
• Negative Sentiment: Lodging segment remained under pressure, with a 2% organic revenue decline in Q2 and no recovery expected in the second half of the year.
• Neutral Sentiment: Key M&A initiatives (Paymerang, GPS, ZapPay/Gringo) are on track, and non-core divestitures are targeted to generate $1.5 billion to refocus on core, larger businesses.

Presentation

[Operator]

Good I'd like to welcome everyone to CorPay Second Quarter twenty twenty four Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.

[Operator]

Today's call is being recorded. I will now turn the call over to Jim Eggleseeder. Please go ahead.

[Jim Eglseder, SVP - IR at Corpay]

Good afternoon, and thank you for joining us today for our earnings call to discuss the second quarter twenty twenty five results. With me today are Ron Clark, our Chairman and CEO and Peter Walker, our CFO. Following the prepared comments, the operator will announce that the queue will open for the Q and A session. Today's documents, including our earnings release and supplement, can be found under the Investor Relations section on our website at corpay.com. Throughout this call, we will be covering several non GAAP financial metrics, including revenues, net income and net income per diluted share, all on an adjusted basis.

[Jim Eglseder, SVP - IR at Corpay]

We will also discuss organic revenue growth. Now this metric neutralizes the impact of year over year changes in FX rates, It also includes pro form a results for acquisitions and divestitures or scope changes closed during the two years being compared. None of these measures are calculated in accordance with GAAP and may be calculated differently than at other companies. Reconciliations of the non GAAP to GAAP information can be found in today's press release and on our website. It's important to understand that our comments may include forward looking statements, which reflect the information we have currently.

[Jim Eglseder, SVP - IR at Corpay]

All statements about our outlook, expected macro environment, new products, business development expectations, future acquisitions or synergies are based on that information. They are not guarantees of future performance, and you should not put undue reliance upon them. We undertake no obligation to update any of these statements. These expected results are also subject to numerous uncertainties and risks, which could cause actual results to differ materially from what we expect. Some of those risks are mentioned in today's press release and Form eight ks and in our annual report on Form 10 ks.

[Jim Eglseder, SVP - IR at Corpay]

These documents are available on our website and at sec dot gov. Now I'll turn over the call to Ron Clark, our Chairman and CEO. Ron?

[Ronald Clarke, President, Chairman & CEO at Corpay]

Okay, Jim, thanks. Good afternoon, everyone, and thanks for joining our Q2 twenty twenty five earnings call. With me today here is Peter Walker, our new CFO joining his first earnings call with us. I'm hopeful that you'll get an opportunity to interact with Peter over the coming weeks. At the top here, I'll plan to cover three subjects.

[Ronald Clarke, President, Chairman & CEO at Corpay]

First, provide my take on Q2 results along with rest of the year forecast. Second, I'll provide a brief update on our 2025 top priorities. And then lastly, provide a bit of an update on our M and A activities. Okay, let me begin with our Q2 results. We reported Q2 print revenue of $1,102,000,000 up 13% and cash EPS of 5,130,000,000.00 also up 13%.

[Ronald Clarke, President, Chairman & CEO at Corpay]

Cash EPS would be up 17% on a constant macro basis. The Q2 results really right in line with our expectations, both in terms of revenue and profits. We did enjoy a bit more favorable Q2 macro than expected. But that was mostly offset by both weaker lodging performance and fewer gift card shipments than we had planned, really landing us kind of right back at our Q2 revenue target of $1,100,000,000 Our Q2 overall organic revenue growth 11% in the quarter, that's up 2% sequentially from Q1. Inside of that vehicle payment segment grew 9%, our corporate payment segment grew 18% in the quarter and our lodging segment declined 2% year over year.

[Ronald Clarke, President, Chairman & CEO at Corpay]

Trends in Q2, quite good. Q2 sales finishing up 31%, that's on the back of 36% growth in Q4, and 35% in Q1. So, three consecutive quarters of 30% plus, sales and bookings growth. Again, we think the best indicator of demand. Retention in the quarter ticked up to 92.3%.

[Ronald Clarke, President, Chairman & CEO at Corpay]

That's the highest level we've seen in quite some time. Same store sales really essentially flat in the quarter. So look, in summary, Q2 really finishing right on expectations. We did enjoy accelerating vehicle payments revenue growth, continued high teens corporate payments revenue growth, and again, really solid fundamental trends.

[Ronald Clarke, President, Chairman & CEO at Corpay]

Okay, let me make the turn to our rest of your guidance. So updated full year 2025 guidance today, mostly unchanged. So after Q1, we provided $4,000,000,004.20 in revenue and $21 of cash EPS at the midpoint. So today, we're inching up a full year revenue, $25,000,000 to $4,000,000,000.04 dollars and full year cash EPS to 21,060,000,000.00 So, our second half outlook does reflect a bit more positive macro, particularly more favorable FX. Some of that will be offset by continued lodging revenue softness.

[Ronald Clarke, President, Chairman & CEO at Corpay]

So results in twenty five million of incremental print revenue. Really most everything else in the second half is tracking to plan. We do expect our second half vehicle segment revenue growth to reach 10%. So, hallelujah. And inside of that, our U.

[Ronald Clarke, President, Chairman & CEO at Corpay]

S. Vehicle growth accelerating to mid single digits. Outlook in corporate payments to report high teens organic revenue growth for the full year. So this updated guidance would imply full year print revenue growth of 12% and full year organic revenue growth of 10%. Okay, I'll transition now to our 25 top priorities, which are intended to first, simplify the company, so that it's easier to manage and understand.

[Ronald Clarke, President, Chairman & CEO at Corpay]

And then second, to better position the company for the long term. So first priority, the portfolio, working hard here to have fewer bigger businesses, rotating the portfolio to more corporate payments with the recent Avid and Alpha announcements. And we are expecting the Corporate Payments segment to reach 2,000,000,000, in revenue and represent over 40% of the company next year. A second priority USA sales, we're now live in market with our new our core pay brand advertising that targets CFOs now with our entire solution set. We do have some impressive sales momentum, a streak of three straight quarters with 30% plus sales and bookings growth.

[Ronald Clarke, President, Chairman & CEO at Corpay]

Third priority payable, so, we have successfully implemented the new enterprise client, which I spoke about. That client has reached $1,000,000,000 in spend in the month of July. So now in search of our next enterprise client. Additionally, we have just launched our Corpay complete payables tech platform in The UK. So bringing those capabilities now into the international arena.

[Ronald Clarke, President, Chairman & CEO at Corpay]

And then fourth priority is cross border. We have successfully extended our cross border business to now serve for our market segments. You can see that on page 15 in the supplements. So we've moved beyond, our original core business, serving just middle market corporate accounts, to now also serving, FIs and more aggressively, now with the MasterCard partnership. We're serving and plan to serve more institutional asset managers, as a result of the Alpha acquisition.

[Ronald Clarke, President, Chairman & CEO at Corpay]

And we're beginning to serve digital asset and stable coin providers like Circle and Ripple with our on and off ramp services. Super excited about the Circle partnership we announced earlier, should give us a fast start in the space. In terms of products in cross border, our new, MCA multi currency account product off to a terrific start. We've got 10,000, accounts live now from zero a year ago. And we've reached 1,000,000,000 in deposits in July.

[Ronald Clarke, President, Chairman & CEO at Corpay]

So, clearly, one of the best new product launches in the company. So overall, we're making terrific progress transforming the company into some faster growth categories and across more geographies, should extend the company's runway for years. All right, last subject up. Let me cover the progress on the M and A front, beginning with our twenty twenty four acquisitions. So Paymarang, an AP automation and payment company acquired last July, that's on track to double EBITDA this year. It also extends the verticals that our core payables business conserve. GPS, across border company acquired in December, performing quite well. We have shuttered the GPS IT infrastructure, and also seeing the GPS sales or bookings double, from the same sales group, as a result of them being in our system.

[Ronald Clarke, President, Chairman & CEO at Corpay]

And last is the ZapPay Gringo, Brazil, card debt companies. They are growing literally like crazy. The combined revenue of those two businesses in the first half growing over 50% versus prior year. Additionally, we've cross sold about 4,000,000 of Cardet alerts services to our existing Sempra client base. So, really an exciting new vehicle payments category to ride.

[Ronald Clarke, President, Chairman & CEO at Corpay]

We're advancing our two newest partnerships, Mastercard and Avid. Both of those investments are tracking towards a Q4 closing. The Mastercard partnerships out of the blocks, both companies, we believe taking the opportunity seriously. We've held a number of senior level planning sessions and are literally in market now with our initial set of prospect calls. Avid, our Avid take private investment with TPG, again, tracking to close in Q4.

[Ronald Clarke, President, Chairman & CEO at Corpay]

We've now cleared HSR and still expecting the Avid transaction to be accretive to earnings in 2026. And then Alpha, again, just recently announced our agreement to acquire Alpha, the European cross border company for $2,200,000,000 enterprise value. Couldn't be more excited about the addition of Alpha's global alternative bank account solution. As you might recall, that targets the institutional asset managers, But we think it'd be quite interesting, to the Tier two FI partners, which we can accelerate via the Mastercard partnership. We are reaffirming again that the Alpha acquisition will be at least $0.50 accretive in 2026.

[Ronald Clarke, President, Chairman & CEO at Corpay]

And then last on the M and A front non core divestitures. We have formally teed up to a non core vehicle divestiture candidates. We've hired investment bankers and expect to launch post Labor Day. Both of these are very good businesses. And our divestiture candidates because of their relatedness or lack thereof non performance.

[Ronald Clarke, President, Chairman & CEO at Corpay]

We're hopeful that the net proceeds from these couple of businesses will exceed 1,500,000,000.0, if we can successfully transact. So look, all of this recent, M and A activity, intended to go deeper, not wider, and again, result in fewer bigger businesses. So look, in conclusion today, the story of 2025 is that we plan to basically finish where we started out the year, approximately 4,400,000,000.0 in revenue, approximately 21 of cash EPS. We do expect a bit more favorable macro, but a bit weaker lodging business. The vehicle segment really tracking to plan and expected to accelerate to 10% here in the second half.

[Ronald Clarke, President, Chairman & CEO at Corpay]

Corporate payments business continuing to rock, out looking high teens growth for the full year. Progress, again, lots of progress repositioning the company towards corporate payments. Again, in the payable segment, we've added this upmarket enterprise opportunity. Again, also taking that business internationally to The UK. In cross border, our new MCA product looks like a hit.

[Ronald Clarke, President, Chairman & CEO at Corpay]

We've also added three really brand new customer segments to serve, the FIs, the institutional asset managers, and now here most recently, the digital asset providers via these new partnerships. So look, these moves go a long way to extend the runway and potential of the company. So with that, let me turn the call back over to Peter. He'll provide some additional detail on the quarter and outlook. Peter?

[Peter Walker, CFO at Corpay]

Thanks, Ron, and good afternoon, everyone. I'm thrilled to join CorPay during such an exciting time. The last several weeks have been super busy and a great opportunity to learn the business and meet the team. I look forward to meeting more of our investors and analysts soon. I'm impressed by the exceptional talent and high caliber capabilities that support the organization.

[Peter Walker, CFO at Corpay]

CorPay has a proven track record of generating top line and bottom line growth, and I'm excited to dig in and drive the company forward to achieve our objectives. Now on to some additional details about the quarter. As Ron mentioned, Q2 print revenue of $1,102,000,000 was just above the midpoint of our guide. In the quarter, our print revenue benefited from a favorable FX environment, partially offset by weakness in our lodging business. Print revenue increased 13% year over year, driven by organic revenue growth of 11, a 500 basis point improvement over the prior year.

[Peter Walker, CFO at Corpay]

Q2 adjusted EPS of $5.13 per share increased 13% over the prior year due to strong top line performance paired with solid expense management. Adjusted EPS grew 17% over the prior year on a constant macro basis. The headline for the quarter is double digit top and bottom line growth, excellent organic growth, all while maintaining strong margins. We've also produced significant sales growth this year that will fuel our business over the balance of the year and into next year. All of this puts us halfway down the path to delivering both the revenue and profit targets laid out back in February.

[Peter Walker, CFO at Corpay]

Turning now to our segment performance and the underlying drivers of revenue growth. Corporate Payments delivered 18% organic revenue growth for the quarter with similar results in the payables and cross border businesses. Overall, the performance was driven by growth in spend volumes, which increased 36% on a reported basis and was up 19% organically. Spend volume was just over $58,000,000,000 in Q2, which puts us on pace to be well north of $200,000,000,000 annually. The payables business continues to perform, driven by strong execution on Paymarang synergies and solid progress implementing and ramping enterprise customers.

[Peter Walker, CFO at Corpay]

We remain confident and excited about the future of the business and our laser focus on customer acquisition. Cross border sales were excellent in the quarter, setting a new record high. While there is little incremental clarity on U. S. Trade policy and tariffs, the global coverage and nature of our business is such that markets outside of North America are doing quite well and made up for some softness in North America.

[Peter Walker, CFO at Corpay]

There's no shortage of opportunity in cross border regardless of the macro backdrop. Vehicle Payments delivered 9% organic revenue growth for the quarter, our third quarter in a row delivering high single digit organic growth and a 400 basis point increase over the prior year. U. S. Vehicle Payments organic revenue growth turned positive in the quarter, a significant improvement over prior year.

[Peter Walker, CFO at Corpay]

This was driven by improved sales production, applications and approvals, onboarding new customers and stronger retention. Brazil and international vehicle payments continued to perform well. In Brazil, the combination of 7% tag growth, growth in our extended network, including the car debt offering is driving the strong results. International Vehicle Payments continues to deliver consistent results, driven by strong sales and performance across The UK, Europe and ANZ. The Vehicle Payments segment is tracking to 10% organic growth in the second half of this year.

[Peter Walker, CFO at Corpay]

Lodging organic revenue was down 2% for the quarter. Room nights decreased 1% as lower emergency services and distressed airline rooms offset some improvement in workforce. We feel good about the progress we've made here to position the business for the future, but the recovery is yet to show through in a meaningful way. We don't expect organic revenue to improve in the second half. The other segment was up 18% as the gift business generated significant year over year growth from new gift card orders delivered in the quarter.

[Peter Walker, CFO at Corpay]

Given the pent up demand due to new regulations to upgrade gift card packaging to reduce fraud, we expect continued strong gift card performance in Q3. In summary, we delivered 11% organic growth in Q2 and are pleased with the continued strong high teens corporate payments organic growth and all other segments delivering significant year over year organic revenue growth improvement. Now looking further down the income statement. Second quarter operating expenses of $623,000,000 increased 15% compared to Q2 of last year. Dollars 32,000,000 of the increase was due to the net impact of acquisitions and divestitures compared with Q2 of last year.

[Peter Walker, CFO at Corpay]

Excluding the M and A activity and normalizing for lower FX rates, operating expenses increased approximately 9% versus Q2 of last year. The increase in operating expense was driven by higher transaction volumes, sales activities to drive growth and one time M and A deal fees and integration related expenses. The increase would be 7% if we exclude add backs. Our adjusted EBITDA margin was 56.3%, relatively consistent with the prior year. Our adjusted effective tax rate for the quarter was 27.7%.

[Peter Walker, CFO at Corpay]

The increase in the rate was driven by discrete tax item, Pillar two, and a change in the mix of earnings. Pillar two is effective in 2025 and resulted jurisdictions implementing a minimum tax rate of 15%. Onto the balance sheet. We ended the quarter in excellent shape, continuing to delever and resulting in a leverage ratio of 2.53 times. We have over $3,500,000,000 of cash and revolver availability, which gives us ample flexibility in how we fund our growth, including our recently announced Alpha acquisition.

[Peter Walker, CFO at Corpay]

Capital deployment in the quarter was again limited as we prepared our checkbook for transactions. We did spend $32,000,000 on share buybacks associated with employee option exercises. We continue to work on non core divestitures, including that we are divesting one of our legacy private label fuel card portfolios that will free up 100,000,000 of capital. Executing on non core divestitures will bring focus to our portfolio of businesses and provide additional capacity in preparation for closing the Alpha transaction in Q4. So now some updates and details on our Q3 and full year outlooks.

[Peter Walker, CFO at Corpay]

We're increasing our full year twenty twenty five revenue guidance to $4,445,000,000 at the midpoint, representing print growth of 12%, primarily driven by the continued benefit of improved foreign exchange in the back half of the year. We are also increasing our adjusted EPS guidance to 21.06 per share at the midpoint, representing growth of 11% as a result of our slight Q2 beat and continued expense discipline in the second half of the year. Our organic revenue growth range is updated to 9% to 11% due to the expected weaker performance in our lodging segment that I mentioned earlier. For the third quarter, we expect print revenue of $1,165,000,000 at the midpoint, representing growth of 13% and adjusted EPS of $5.6 per share at the midpoint, representing growth of 12%. We provided additional details regarding our rest of year and third quarter outlook in our press release and earnings supplement.

[Peter Walker, CFO at Corpay]

This concludes our prepared remarks. Operator, please open the line for questions.

[Operator]

Thank We'll take our first question from Andrew Jeffrey with William Blair. Please go ahead.

[Andrew Jeffrey, Equity Analyst - Fintech at William Blair]

Hi, guys. I appreciate taking the question. I guess I wanted to dig in a little bit on corporate payments. It seems like you've built in our building, certainly one of the most complete vertically integrated tech stacks in the market. And when we think about GPS and the very strong sales and the pending acquisition of Alpha and very good performance, could as we think to '26 and '27 that organic revenue growth could even accelerate from these levels?

[Andrew Jeffrey, Equity Analyst - Fintech at William Blair]

Or how are you framing that as you plan out over the next couple of years?

[Ronald Clarke, President, Chairman & CEO at Corpay]

Hey, Andrew, it's Ron. It's a good question. So yeah, we're pretty pleased with the setup. So I think it'll be mostly a function of what we elect to spend. I think we've told you before, we try to design businesses to grow at a certain rate based on the sales and marketing investment, which has been high in that business, which is why it's high teens.

[Ronald Clarke, President, Chairman & CEO at Corpay]

So I don't want get out over my skis, but I'd say assuming that we continue to pour money into that, these incremental segments should be additive. So again, that business will finish high teens this year. I think if we spend enough, we could probably take that up another couple points. Again, we don't overspend where things become unproductive. But the width of the thing I think creates even more runway would be my headline.

[Ronald Clarke, President, Chairman & CEO at Corpay]

I think the diversity of the segments, not just end accounts, but banks, the asset class, the new digital players that to me, that's the super attraction is really the diversity, really, of the client base going forward.

[Andrew Jeffrey, Equity Analyst - Fintech at William Blair]

Okay. That's helpful. It's pretty exciting to watch. And then just on the Circle deal, which I think is also notable. Are they going to be both a customer using on ramp and off ramp? And are you going to be a customer of theirs or a distribution partner of theirs, in terms of incorporating USDC into your MCA product?

[Ronald Clarke, President, Chairman & CEO at Corpay]

Yes. That's the concept. It's kind of a reciprocal partnership. So they've got, as you know, the currency, the rails, the blockchain, and even the wallet. So we'll plan to use that in certain use cases.

[Ronald Clarke, President, Chairman & CEO at Corpay]

And then just what you said, that we would help them in certain geographies on an off ramp. So yep, that's the hope.

[Andrew Jeffrey, Equity Analyst - Fintech at William Blair]

Okay, excellent. Peter, look forward to working with you. Welcome to Corpe.

[Peter Walker, CFO at Corpay]

Thanks, Andrew.

[Operator]

Our next question comes from Darrin Peller with Wolfe Research. Please go ahead.

[Darrin Peller, Managing Director at Wolfe Research, LLC]

Guys, thanks. Maybe we just hit on The U. S. Vehicle acceleration and just help us understand what underpins the acceleration that you're anticipating into the second half and just to hit on whether it contemplates the BP portfolio to you guys. Thanks.

[Ronald Clarke, President, Chairman & CEO at Corpay]

Hey, Darren, it's Ron. So yeah, the couple of drivers of that thing getting a bit better in the second half are retention, which we can see sequentially in report that I'm looking at. So for example, Q2 of this year versus Q2 of the prior year, the retention is up about 130 basis points. And we're out looking at the inch up a bit more as we head into Q3 and Q4. So less businesses will fall away this second half than did last year.

[Ronald Clarke, President, Chairman & CEO at Corpay]

And then number two is the sales are better. Specifically, we have a couple of big elephants like GasBuddy. I think we did announce that back in the spring, which is a pretty big account. And Amazon that were both sold a while ago to kind of beefing up volumes in the second half. So it's really just super basic incremental volume through those new sales and better retention.

[Darrin Peller, Managing Director at Wolfe Research, LLC]

Okay. Ron, that helps. Thanks. Just a quick follow-up on the corporate payment side. Just the contribution of the enterprise domestic payables client to the Corporate Payments segment, was there anything there?

[Darrin Peller, Managing Director at Wolfe Research, LLC]

And then just what were the underlying signs in the segment from a same store sales activity? Just how activity from either domestic or international AP payments as well, if you don't mind? Thanks again, guys. Nice job.

[Ronald Clarke, President, Chairman & CEO at Corpay]

Let me take the first part, and Peter can take the second one. It's crazy exciting, Darren, to me that I think we mentioned this the first time, whatever, ninety days ago that we contracted that account at the end of the year and literally went live and literally moved $1,000,000,000 of spend I don't know if people heard that in the month of July. And now looking at thing as we finish the Halloween month to be at about $1,500,000,000 in spend for the month of October. So it's super big contributor to volume. Obviously, the monetization of the rate's not as good as the rest of the spend, but still super contribution and profit.

[Ronald Clarke, President, Chairman & CEO at Corpay]

I think the key to the thing is really the extensibility now. Now that we've learned we can go to super duper big enterprise accounts through some of these relationships, can we get in the pipeline? We've got a few accounts in the pipeline. Can we get more accounts like this big enterprise to fall, which, again, will create some acceleration in that business. So yes, super pleased with it. You want to take the same store sales?

[Peter Walker, CFO at Corpay]

Yes. So hey, Dan, nice to meet you. I think same store sales was what is our expectation for the rest of the year you're looking for.

[Darrin Peller, Managing Director at Wolfe Research, LLC]

What you're seeing in the underlying trends right now more than anything else in the last quarter and then into this quarter coming up.

[Peter Walker, CFO at Corpay]

Yeah, so for the total same store sales relatively flat year over year, and that's what we've assumed for the rest of the year.

[Ronald Clarke, President, Chairman & CEO at Corpay]

Yeah, hey, Darren, it's Ron. I'm just looking at the page. If you're on corporate payments, it's let's see here, for the period, it's basically pretty steady as she goes over the last few quarters. No big change in same store sales. So again, all the incremental, the growth rate is really just on the ad side.

[Ronald Clarke, President, Chairman & CEO at Corpay]

Losses have actually improved, dispensed. They're 100 basis points better than a year ago even in that business. So really, math there is the sales just massively outpacing the losses and same store sales steady.

[Darrin Peller, Managing Director at Wolfe Research, LLC]

That's great to hear. All right. Very helpful, Ron. Thanks, guys.

[Ronald Clarke, President, Chairman & CEO at Corpay]

For the cheerleading again on the space.

[Operator]

We'll take our next question from Tien Tsin Huang with JPMorgan. Please go ahead.

[Tien-tsin Huang, Senior Analyst at JP Morgan]

Thanks so much, Peter. Welcome to the call. Just on the lodging side, I'm just curious on the visibility there and what could turn out differently than what you're forecasting either on the upside or the downside? I'm sure you've got some plans, I assume, to reenergize growth as well.

[Ronald Clarke, President, Chairman & CEO at Corpay]

Not us, did you? No, no plans. Yeah, on the downside, a couple of things. One is, which is kind of weird to wish for maybe worse weather, but probably half of the softness in the second half versus what we thought back at the turn of the year is basically in what we call kind of the emergency or distressed segment, which shows up for us in the FEMA contract, people run out to a location, or in our airline business when people get stranded and have to hurry into a hotel room. So that's about half of it that that's run softer.

[Ronald Clarke, President, Chairman & CEO at Corpay]

And so we're just out looking at softer. I mean, between us, who knows? But I didn't want to make up a number that's better. And then the other one half is just the sales aren't good enough. I said it before that the positive here, if there is any, is the business has stabilized.

[Ronald Clarke, President, Chairman & CEO at Corpay]

That divot we had a year plus ago, as I had hoped, has stabilized back to the same store sales. And now it's just what goes in the top versus what goes out the bottom. And so the second problem is we're just not selling enough and implementing enough new business. So And again, we built the plan six months ago. We thought implementations of that thing would be high.

[Ronald Clarke, President, Chairman & CEO at Corpay]

I mean, quantum is nothing. It's 100 and something million business per quarter. You're talking about 2,000,000 or $3,000,000 or something in that kind of a range. So when we say it's off of what we thought, to the company, not a material amount. But obviously, it's not working the way we want.

[Ronald Clarke, President, Chairman & CEO at Corpay]

The fix, again, is super clear. It's mostly sales. Now that we've stabilized the base, we've gotten put a bunch of product fixes in to make the product more competitive in the segment that we had problems with. So it's really just harping on the same thing. It's just getting the sales engine to fill the top so that that thing turns positive.

[Ronald Clarke, President, Chairman & CEO at Corpay]

I put more people in. I put a new sales leader in it in the spring. And so like you, we're going to keep an eye on it kick at it a bit harder here. Fortunately, 5% of the play getting the vehicle back the second hit back to 10. I think it was probably four in Q3 or whatever, Q2 of last year.

[Ronald Clarke, President, Chairman & CEO at Corpay]

And keeping the corporate payments thing humming and expanded, I'm glad that the bigger section is working well.

[Tien-tsin Huang, Senior Analyst at JP Morgan]

Got you. Then just my quick follow-up just on the divestitures, Ron. Just on the if you achieve your target EV, I'm assuming that you've got sounds like you guys in target EV mind a billion and a half. Just thinking about the earnings impact and how much flex you have and what you're thinking in achieving your goals there with the divestitures.

[Ronald Clarke, President, Chairman & CEO at Corpay]

Yeah, that's a good question, Tien Tsin. I think the headline I want to give is this is a different assignment than the last time around with the gift business. We're looking at exiting what we would call good businesses that are growing revenues and have futures and stuff, good futures. And so it's really just a function of the multiple. We've laid out a target of net proceeds.

[Ronald Clarke, President, Chairman & CEO at Corpay]

Obviously, we're not selling these assets if the multiples aren't in the teens right against EBITDA. So we penciled out a model where those things are kind of a push. They're not dilutive. So we get out of them. They're kind of a push.

[Ronald Clarke, President, Chairman & CEO at Corpay]

We get the capital back to contribute to the Alpha deal. So I'd say it's obviously just a function of what prices we get to the assets. If we don't get a good enough price, we'll hold them because they're good businesses.

[Tien-tsin Huang, Senior Analyst at JP Morgan]

Got it. Understood. Thank you.

[Ronald Clarke, President, Chairman & CEO at Corpay]

Good talk to you, Scott.

[Operator]

We'll take our next question from Nate Svensson with Deutsche Bank. Please go ahead.

[Nate Svensson, Director, Senior Equity Research Analyst - Payments, Processors & IT Services at Deutsche Bank]

Hey, guys. I know last quarter we were talking a lot about tariffs. So I guess I'm just wondering if there was any impact to 2Q numbers from tariffs, any sort of pull forward, strength in the FX hedging business we talked about last quarter, anything on volume impacts? And then I guess the related question in the prepared remarks, you called out record cross border sales. And so I guess I'm just wondering like given how dynamic the environment is, is this actually helping the go to market motion and your value prop as your end consumer or your end companies that you're serving deal with an environment that's changing on a daily basis?

[Ronald Clarke, President, Chairman & CEO at Corpay]

Hey, Nate, it's Ron. It's a super good question. I mean, I think the summary is it's a mixed bag. I think the tariff situation, uncertainty, whatever you want to call it, is landing differently on different companies, both geographically, like it's landing affected us more here in North America because of the early Canada, Mexico posture. So I'd say those geographies are still a bit softer for us than anticipated, whereas The UK and European and Asian side is stronger.

[Ronald Clarke, President, Chairman & CEO at Corpay]

And then second, I think it's just the individual companies. Some companies are super committed. They have to be international. They're figuring out ways to deal with it. They're looking at risk management ways to deal with the thing.

[Ronald Clarke, President, Chairman & CEO at Corpay]

And then other companies are like, oh my god, it's freezing me. Maybe I should find different suppliers or target customers at different places. So I don't think there's one across the board answer to it because it is uncertain. I mean, to your point, certainly just the volatility, if you will, of currencies is generally a help. We say it probably is a plus 10% in a period of time versus completely flat, non volatile periods.

[Ronald Clarke, President, Chairman & CEO at Corpay]

So I'd say we've gotten a little bit of help, but not a ton. And we're kind of out looking steady as she goes. Some clients will like and come to the table. Others will wait. So again, overall kind of a mixed bag.

[Nate Svensson, Director, Senior Equity Research Analyst - Payments, Processors & IT Services at Deutsche Bank]

That's helpful. Thanks, Ron. For the follow-up, the ZAPE and Gringo growth really stood out. I think you classified it as growing like crazy, Ron. And like leaving aside currency fluctuations, the Brazil business has been a really strong performer.

[Nate Svensson, Director, Senior Equity Research Analyst - Payments, Processors & IT Services at Deutsche Bank]

So maybe you could talk about more about some of the strength you're seeing there and kind of what's embedded in the vehicle payments acceleration outside of The U. S. Vehicle payments that we talked about earlier. And then maybe you could extend that topic to something we've touched on in the past. It's the broader consumer vehicle payment effort.

[Nate Svensson, Director, Senior Equity Research Analyst - Payments, Processors & IT Services at Deutsche Bank]

So any update on how things are progressing in The UK, update on plans in The US, etcetera?

[Ronald Clarke, President, Chairman & CEO at Corpay]

That's a load of them. Let me start with what I could remember the first one of, hey, ZAPE and Gringo growing like crazy. So yes, I think the headline on that for everybody is the core business there, which we started with as a toll business, relies obviously on vehicles in Brazil running over toll roads, which call it is maybe 20,000,000 of the 60,000,000 vehicles registered there. Whereas this vehicle car debt thing, which is, hey, paying for tickets and doing annual registrations, is all $60,000,000 So you start with three times the TAM in this business. And then second, it's just super early days, like this digital idea of how to see you've got a ticket and pay for a ticket or register digitally on a phone.

[Ronald Clarke, President, Chairman & CEO at Corpay]

It's like a super brand new way versus the old fashioned way of going to bank and stuff. And so the market share in this space is super early days. We estimate it's still under 5%. So when you put those two things together, it is just a runaway hit of the service that people there want, both businesses and consumers want. And so we are selling like an absent pile of it, and it's for sure helping the growth rate in Brazil.

[Ronald Clarke, President, Chairman & CEO at Corpay]

So initially, our biggest focus was on Craso, which was also not bad. I think I called out 4,000,000 of those companies' services were sold back by our core business. But the great thing here is this is just an extended vehicle payment category that is just super attractive on its own. We've got a good position. It's early days.

[Ronald Clarke, President, Chairman & CEO at Corpay]

It's growing like a weed. It's getting more profitable. So we're delighted. I want to report back that it's another super good acquisition for us. On the broader question of the consumer thing, I'd say still unknown.

[Ronald Clarke, President, Chairman & CEO at Corpay]

I'd say, obviously, the Brazil experience, including the thing I just spoke to, is reaffirming that extending one service is into many is the world leader in Brazil. Not so much so far in The UK. I wouldn't go maybe all the way to struggling. But I'd say it's a lot of hard work to get that thing stood up and get the first set of customers and stuff across. So we're continuing.

[Ronald Clarke, President, Chairman & CEO at Corpay]

I kind of put the group on the clock. Hey, take the rest of the year, see if you can get this thing humming. If you can, I'm going to redeploy the capital. If you can, hey, we'll stay with you. So I'd say we're still a work in progress on The UK side.

[Nate Svensson, Director, Senior Equity Research Analyst - Payments, Processors & IT Services at Deutsche Bank]

Thanks, Ron. I get paid by the question, so I appreciate you obliging the multi parter.

[Ronald Clarke, President, Chairman & CEO at Corpay]

You got it.

[Operator]

Our next question comes from Sanjay Sakharini with KBW. Please go ahead.

[Sanjay Sakhrani, Managing Director at Keefe, Bruyette & Woods (KBW)]

Thanks. I guess I have a question for Peter and Ron maybe you too. As we the growth is really strong in the setup for the second half for Vehicle and Corporate Payments. Obviously, Corporate Payments with the enterprise relationship coming on in July looks good. But the fourth quarter is a pretty difficult comparison in terms of the growth rate.

[Sanjay Sakhrani, Managing Director at Keefe, Bruyette & Woods (KBW)]

I mean, could you just talk about the cadence of the growth? Like, do we need to worry just about the fourth quarter growth rates? Just trying to think through all of that. Thanks.

[Peter Walker, CFO at Corpay]

Yes. So Sanjay, nice to meet you. So our belief, when we look at the growth rates quarter over quarter on a print basis, delivered 13% this quarter. That's what we're projecting for Q3 and then just a tick up in Q4. So again, pretty consistent on a print basis on growth rates.

[Peter Walker, CFO at Corpay]

And then to your point, vehicle payments, we expect to improve to 10% organic growth and then corporate payments to continue in that high teens arena.

[Sanjay Sakhrani, Managing Director at Keefe, Bruyette & Woods (KBW)]

Okay. So you expect the grow over to be just fine to the fourth quarter?

[Peter Walker, CFO at Corpay]

We do.

[Sanjay Sakhrani, Managing Director at Keefe, Bruyette & Woods (KBW)]

Okay, got it. And just maybe, a follow-up just on same store sales. Obviously, it's ticked down a little bit. Just curious, like is there anything that you're seeing from an economic standpoint that concerns you in terms and what can drive a reacceleration there? And how much of that I know you said you've kind of figured for flat same store sales for the rest of the year, but just trying to think through what the puts and takes there are.

[Ronald Clarke, President, Chairman & CEO at Corpay]

It's a good question, Sanjay. We did study it. And when you go from plus one, I don't think it's exactly zero, it's like plus 0.3 or something like. It is just such fine. I have the reports set up in front of me across all the different categories.

[Ronald Clarke, President, Chairman & CEO at Corpay]

And there's literally barely anything moving. It's almost literally mass. So I wouldn't say, hey, take a lot away from that, hey, that it went from plus one. So yeah, there's no super duper trend in the thing. And I'm looking, again, across all the categories, and they're mostly kind of tracking to where they've been over the prior four or five quarters.

[Ronald Clarke, President, Chairman & CEO at Corpay]

But this whole housing economy, we're not seeing anything, again, significant on that front. I know we all keep looking, but I say whether it's in the fleet business or in the corporate payments, the spend business, or even in the Brazil business, there's nothing we see yet that's material that's given us concern around the health of the clients. Thank you.

[Operator]

You. We'll take our next question from Ramsey El Assal with Barclays. Please go ahead.

[Ramsey El-Assal, Managing Director at Barclays]

Hi. Thank you for taking my question and welcome to you Peter. I wanted to ask about retention. It was another nice result in the quarter. And I'm not implying that necessarily this was the driver of that result, but given the structurally higher retention rates in corporate payments versus some of your other historical businesses, should we expect retention overall company retention rates to climb up over time just given the mix shift to corporate payments?

[Ramsey El-Assal, Managing Director at Barclays]

And then I guess the next logical step is will that have an impact on driving some revenue acceleration as you don't have to churn replace so many clients to churn through? Sort of longer term philosophical questions, but just curious your perspective.

[Ronald Clarke, President, Chairman & CEO at Corpay]

Yeah, Ramsey, that's quite it's Ron. That's quite observant by you. So the best retention in a while is really two things. The first thing that you called out, which is corporate payments mix being higher, and it's got the best in class retention rate. But the second one is the vehicle.

[Ronald Clarke, President, Chairman & CEO at Corpay]

I'm looking at that better, and particularly The US vehicle. And I think it's an old song now, but it's super related to that pivot a couple of years ago of larger clients. And so life is about really the mix of small, medium to large clients in every business. Retention rates are dramatically higher with larger enterprise accounts than in smaller micro. So those are the two mixed things that are happening.

[Ronald Clarke, President, Chairman & CEO at Corpay]

Yes, on your second question of structurally, given those two things, if the vehicle business keeps acquiring a higher mix of bigger clients and corporate payments keep scrolling. Should it go up? Yes. But I'd moderate you. I would say that's not the magic.

[Ronald Clarke, President, Chairman & CEO at Corpay]

Let's use 7% not to hurt our head. Hey, as you think about the mix over the next years, could you maybe get a point? Could you get seven to go to six? Remember, half the losses are us cutting clients off, right? People who don't pay credit issues, mergers, bank, stuff going on that really they're not going somewhere else or quitting us.

[Ronald Clarke, President, Chairman & CEO at Corpay]

So the number is really small. And although I constantly beat our guys up, hey, give me half a point, give me a point of retention, If I'm trying to get 10% or 12% growth rate to gain in sales, I just don't want you guys to miss that. Obviously, have to hold this and try to improve it. But the key to this company's long term growth is really at top of the funnel more than inching this thing up a point.

[Ramsey El-Assal, Managing Director at Barclays]

Got it. Got it. Thank you. A quick follow-up on Gift. I know it's non core.

[Ramsey El-Assal, Managing Director at Barclays]

But Q3, I know there's this reissuance in terms of this tamper proof packaging. And I'm just curious in terms of your visibility to what arrived in Q2 versus what may come in Q3. Are we What inning are we in there? Should we expect kind of a deluge to come? Or are you already sort of past the halfway point with that whole cycle?

[Ronald Clarke, President, Chairman & CEO at Corpay]

Yeah. Although the thing is bumpy because literally they ship Dick's Sporting Goods or Macy's or somebody, hey, wants cards, and they've got some big campaign or something. So ship to the mirror, hey, don't, or whatever. So despite the thing being bumpy, it's quite well. And our forecast for the full year is the thing to be probably somewhere in the mid teens in terms of growth over the prior year.

[Ronald Clarke, President, Chairman & CEO at Corpay]

And it's not only this card improved kind of card, tamper proof packaging thing, it's pretty good new sales. They're on a tear of signing a bunch and implementing a bunch of kind of new gift card clients and stuff. So it's pretty fundamental. So I'm going to go out on a limb here, Ramsey and Zadie. It's probably the best period of gift performance since I bought the thing, whatever it is, like eight or nine years ago.

[Ronald Clarke, President, Chairman & CEO at Corpay]

So it is this tamper proof packaging, but the core underlying part of the business is just way healthier than it was before. And yes, we expect the second half growth over the prior year in that segment to be quite good.

[Ramsey El-Assal, Managing Director at Barclays]

Got it. And by the way, I think you bought the business eleven years ago. So time flies, Ron. You're having fun, time flies. I'm still incorrect. A lot.

[Ronald Clarke, President, Chairman & CEO at Corpay]

You got it.

[Operator]

We'll take our next question from John Davis with Raymond James. Please go ahead.

[John Davis, Managing Director at Raymond James Financial]

Hey, good afternoon, guys. Ron, just want to circle back to lodging. You're not known for owning businesses that don't really grow. So as we think about that segment, the flattish plus or minus growth, how much of that's macro? Like what do you think you can do to reaccelerate growth?

[John Davis, Managing Director at Raymond James Financial]

And if you can't get it back to something that's more reasonable from a growth perspective, Does it make sense to own it? And would you potentially offload it to redeploy capital to corporate payments or a faster growing segment of the business?

[Ronald Clarke, President, Chairman & CEO at Corpay]

Yes, John. I think yes is the answer to your question. The mandate in our company is to be a growth company. And the non negotiable part of that is 10%. I've said that for years here is the floor 10%, 13%, 19%.

[Ronald Clarke, President, Chairman & CEO at Corpay]

I got a 10% organic with little operating leverage and then use cash or buying earnings to get the yield. And so it has to perform. Again, this is not a business that's always been crummy. Like if you looked over the longer history since we've been in that, going back even two, three, four years ago, the thing was growing 20% year after year. So we have the position in the market to be a good business.

[Ronald Clarke, President, Chairman & CEO at Corpay]

We did some bumbling. We took a huge divot that we're digging out of. So what you said is right. It either gets fixed and it gets growing or it goes. And so the question is just how long.

[Ronald Clarke, President, Chairman & CEO at Corpay]

And it is disappointing that half of its miss this year is this emergency weather macro stuff, which obviously the group running it and me have no control over. But it's not an excuse. We have to do better in that thing. I think we will. But if we don't, we will not be in it long term.

[John Davis, Managing Director at Raymond James Financial]

Okay, great. And then just switching to the balance sheet here. So Ron, you laid out kind of a mid to high 2s pro form a kind of leverage at year end, closing Alpha with some of the divestitures. Given kind of the integration of GPS and Alpha, should we expect more buybacks given kind of you do have some balance sheet flexibility, but you are also integrating a couple acquisitions at the same time. Just curious to kind of the appetite for M and A from here, call it over the next twelve months versus buybacks and how we should think about it.

[Ronald Clarke, President, Chairman & CEO at Corpay]

That's a super good follow-up. So the BAU model for us is getting into the low 2s. I think we printed 2.5 here coming out of Q2, call it 2.2, 2.1, 2.2, exiting the year on a BAU basis, which gives us, to your point, a lot of room on our revolver. I think the size is now $1,000,000,000 and change. That will literally be completely undrawn.

[Ronald Clarke, President, Chairman & CEO at Corpay]

So it's really a function of how, what you said, these different deals come together like, hey, when does Alpha close? When does the mascara thing close? When does Ava close? We do have a pipeline. I know we've done a lot of deals.

[Ronald Clarke, President, Chairman & CEO at Corpay]

But once kind of prices reset, we've been back at it. So the answer is our first priority is always to buy attractive growing businesses that strengthen or scale our business if we can make good returns on it. So that's always the first call on capital. But at the stock price that I'm looking at, we're obviously buyers of our stock. And so if our stock were to stay around this level and we've got liquidity, we'll be buying stock back too.

[Ronald Clarke, President, Chairman & CEO at Corpay]

So I think if you look over the last four or five years, we could send the chart out. It's been a pretty balanced set of spending between buying businesses and buying earnings, if you will, and buying the stock back. And we've had a rotation back to M and A over the last, whatever, twelve to eighteen months. So it's a function of liquidity, the pipeline of attractive stuff versus the stock price. And so we're always trying to manage between those sets of factors.

[John Davis, Managing Director at Raymond James Financial]

Okay. Appreciate the color. Thanks, guys.

[Operator]

We'll take our next question from Mihir Bhatia with Bank of America. Please go ahead.

[Mihir Bhatia, Analyst at Bank of America]

Hi. Good afternoon. Thank you for taking my questions, and welcome, Peter. So I wanted to take a step back maybe and ask a question about stablecoins. Just from a big picture perspective, you know, lots of announcements in recent weeks around stablecoins, including from you all.

[Mihir Bhatia, Analyst at Bank of America]

And I was wondering if you could talk a little bit more about everything you're doing there. I'm particularly interested in the opportunities and risks you see to your existing business. And also, if you like, you know, where are things where where what parts of stablecoins are exciting for you? And what parts are where you're looking at it and saying, hey, maybe we need to rejigger the business a little bit to accommodate stablecoins, maybe even talk about the transaction economics with stablecoins versus without? Thank you.

[Ronald Clarke, President, Chairman & CEO at Corpay]

That was a long but interesting question. And I guess it's an important question. So the first thing I'd say is it ain't just stablecoins. To me, it's just it's kind of a bit of a new payment ecosystem, whether it's crypto or stable coins and blockchain and digital wallets, just the different currency and pipe right to move money. And so I kind of think about the things related.

[Ronald Clarke, President, Chairman & CEO at Corpay]

You've got fiat currency going over swift to a traditional bank account. You've got US stable going over blockchain to a digital wallet. And so the way we think about it is we are and will incorporate that incremental or new or modern rail. And we will use it when we are using it. So there'll be use cases with our clients.

[Ronald Clarke, President, Chairman & CEO at Corpay]

To me, the biggest one will be outside of banking hours. I think the biggest edge that the new payment train has here is the 20 fourseven. You could move money after the banks are closed every day. And then selectively, we'll probably use it in some geography, some kind of exotic geography. So the first thing I'd say is we just view it as another tool, another way to move money for our clients that has certain application.

[Ronald Clarke, President, Chairman & CEO at Corpay]

In certain situations, it's better than the traditional rails. But the second one is the opportunity side is it's creating a new set of players that meant the stablecoins and a variety of different blockchain providers and stuff. And so they need help getting their new kind of ecosystem to talk to the traditional one. And so given the fact that we have a big position in the traditional and we're all in the new one, we can play a bit of a role helping money move across between caravan A and B. So something that comes down in stablecoins needs to go over to Fiat or vice versa.

[Ronald Clarke, President, Chairman & CEO at Corpay]

So that's where we think there's real upside is someone has to play that role. We have the compliance to be able to do it. Lots of banks are uncomfortable with a stablecoin bridge across, given who's in it. And so that's our view, that this thing is something we're going to use. We'll figure out what the best use cases are.

[Ronald Clarke, President, Chairman & CEO at Corpay]

There's an upside for this new set of digital asset providers. And so we're generally pretty excited about it because we think ultimately it'll be better for clients.

[Mihir Bhatia, Analyst at Bank of America]

And if we could just touch on transaction economics.

[Ronald Clarke, President, Chairman & CEO at Corpay]

Yeah, the economics, I think people don't get it super good. So if you're in B2B cross border, which we're in, 90% plus of the value creation in our revenue comes from the actual conversion of the currency. Buying and selling dollars into sterling is the actual liquidity. It's the exchange, the conversion. A handful, call it 3% to 5%, is in the moving, is in the rails and stuff.

[Ronald Clarke, President, Chairman & CEO at Corpay]

And so whether you use SWIFT, which is the most expensive way to move global funds or use the proprietary network we have, which is a quarter of the cost, or you use blockchain, which is free, it has a de minimis impact really on the overall kind of revenue equation for us. So we don't see the impact being economic here. We see it being speed. We see it being 20 fourseven. We see the programmability part of it.

[Ronald Clarke, President, Chairman & CEO at Corpay]

There are other aspects of this that we think are more interesting than a few cents cheaper to actually run the rail.

[Mihir Bhatia, Analyst at Bank of America]

Got it. Thank you so much.

[Ronald Clarke, President, Chairman & CEO at Corpay]

Yeah, you're welcome.

[Operator]

We'll take our next question from Trevor Williams with Jefferies. Please go ahead.

[Trevor Williams, Managing Director at Jefferies LLC]

Hey, guys. Thanks for taking the question. I want to go back to corporate payments and the 18% growth. On the Q1 call, sounded like April had been a very strong month. So if you could talk us through what the sequencing and puts and takes looked like from there in May and June.

[Trevor Williams, Managing Director at Jefferies LLC]

I think, Peter, you called out some softness in North America. But any more detail there would be helpful. Thanks.

[Peter Walker, CFO at Corpay]

Yes. So when we think about the 18% organic revenue growth in corporate payments, I'd say it was really the same when we look at the payables business and the cross border business. In the cross border business, what I've shared is we've seen some weakness in North America, but that had been more than offset outside of North America. So overall, we were really pleased with the results for the quarter.

[Ronald Clarke, President, Chairman & CEO at Corpay]

Trevor, it's Ron. Not a lot. I did a little better, I think, in April across board. I think the payables, to Peter's point, was steady as she goes every month. I can't remember whether it was May or June was a smidge softer.

[Ronald Clarke, President, Chairman & CEO at Corpay]

I mean, cross border beat their plan by a bit. So they had a better April, and I think it was a bit softer June. And the other one was steady as she goes. I've seen July, and we're kind of tracking. We try to obviously give them the call.

[Ronald Clarke, President, Chairman & CEO at Corpay]

You're here today, whatever it is, August 6. We've guided to Q3, so we've got July in the tank. And so we're tracking good here, sitting in the one month forward, too.

[Trevor Williams, Managing Director at Jefferies LLC]

Okay, got it. And then just going back to the full year revenue guide, if you could put a finer point on the moving pieces, just within the organic guide, it sounds like it's mostly lodging. That's a part of the one point cut. But the relative sizing of that against the better FX, just how we net to the $25,000,000 full year raise? Thanks.

[Ronald Clarke, President, Chairman & CEO at Corpay]

Yeah, I think just use 1%, Trevor, simplistically. You said, hey, the revenue is ballpark $2,000,000,000 $2,000,000,000 and change in the second half. Hey, 1% happy in macro, 1% sad in lodging. And then remember, if you get two points of revenue from macro, which is the print, you lose half of it back on the cost side, which is why you get no real earnings improvement. So to your point, really the only change from ninety days ago in the second half is macro up, lodging down a point which takes the organic, call it again, dollars 20,000,000 on, 2,000,000,000 a point.

[Ronald Clarke, President, Chairman & CEO at Corpay]

Everything else kind of tracking, and I mostly don't want you to miss that tracking of what we said is up, right? So vehicle getting from whatever it was to then a nine print and then getting to 10 and then particularly The US getting to five, I don't want people to miss it. That is super important to this company for us to sit here today and say, hey, we're headed to get that number and keep corporate payments rocking. That getting the 85% of the company in a good spot and following orders I want to be sure everyone's there is more important to me. I wish the lodging was doing what it was supposed to, but the other two things are, and that's super important to us.

[Trevor Williams, Managing Director at Jefferies LLC]

Yep, Okay. No, I appreciate all that. Thanks, Ron.

[Operator]

We'll take our next question from Ken Swachowski with Autonomous Research. Please go ahead.

[Ken Suchoski, Equity Research Analyst at Autonomous Research]

Hey, Ron and Peter. Thanks for taking the questions. Maybe I'll ask on U. S. Vehicle.

[Ken Suchoski, Equity Research Analyst at Autonomous Research]

I mean, it's nice to see the momentum and the moving in the right direction and getting to mid single digits in the back half. I guess, I'm curious to get your view on whether U. S. Vehicle can be a sustainable sort of mid single digit grower. And then I guess when you think about the drivers behind that mid single digit growth, how you think about the building blocks, whether that's new customer growth, same store sales volume growth, or pricing?

[Ronald Clarke, President, Chairman & CEO at Corpay]

Yeah. Hey, Ken, it's Ron. So yeah, we're pleased to. And yes, it has been a long journey. So the hope in that business would be kind of somewhere where it is, mid single to maybe a smidge better.

[Ronald Clarke, President, Chairman & CEO at Corpay]

Assuming we get there, that's what we're saying we're going to do. So running at that thing would be good. So the main thing is we've got the retention in a better place. And part of that's the mix. So continuing to acquire less micro clients and more kind of small and midsize is the key.

[Ronald Clarke, President, Chairman & CEO at Corpay]

I did mention we had a couple of elephants that came in. And then second, we're still at with some of our new products trying to wrap some corporate payments juice around this huge base. The company started in this US fleet space. We still have a giant client count and a lot of super high quality, midsize accounts there. And so that's the second piece of the idea is get revenue from that.

[Ronald Clarke, President, Chairman & CEO at Corpay]

Take some of these products that are kind of all in one that have the fleet specificity in them, but basically give the client the ability to buy other things in a controlled way and pay for other things in a controlled way. And so keep selling the stuff, sell bigger accounts, keep the retention high, and then wrap and love this thing if it was in corporate payments would be the ingredients.

[Ken Suchoski, Equity Research Analyst at Autonomous Research]

Yeah. No, that makes sense, Ron. And maybe just as my follow-up, I think Sanjay maybe asked about it, but just revisiting that 3Q versus 4Q growth rate. I mean, we look at pretty much every segment has a harder comp on the year over year growth rate in 4Q, even total company I think is like six points harder. So why doesn't that impact the year over year growth in 4Q?

[Ken Suchoski, Equity Research Analyst at Autonomous Research]

Ron, I know you look at the business sort of quarter over quarter, but just optically year over year it looks like it's harder. And then I guess if you could just give us like what is the expectation for organic growth in 3Q versus 4Q, that'd be helpful. Thank you.

[Peter Walker, CFO at Corpay]

Yes. So specifically on the 4Q guide, it's ticking up 14% versus 13%. But last year, we did experience a higher 4Q than 3Q. So it's kind of consistent on trends. And dollar over dollar, it's not a significant dollar amount on the print side. Yeah, I'm not sure if I read the question right. Are you saying, hey, how are we looking organic growth and the difference between Q3 and Q4?

[Ken Suchoski, Equity Research Analyst at Autonomous Research]

Yes. I think the organic growth in 3Q versus 4Q, Ron. But I think one question we're getting is just like the growth in 2024 was so much harder versus 3Q. So if you just look at that like run rate, it sort of implies some acceleration, I feel like, in the fourth quarter.

[Ronald Clarke, President, Chairman & CEO at Corpay]

Yeah, I'd say it's probably actually the other way around. I'd say that the organic guide and the print guide that we're giving you kind of is 10% in the second half and 10% for the full year. If anything, I'd say the organic growth rate in Q3 will be better. So if you said, hey, the second half is 10%, think 10.5% to 11% versus 9.510%. And the main reason is we had some stuff.

[Ronald Clarke, President, Chairman & CEO at Corpay]

We had some one time happy stuff in Q4 last year around the corporate payments business and the payables business related to a transaction. So I'd say it's nothing structurally per se. It's just the prior period. It's just the grow over. So I would have you guys think that it's kind of steady as she goes that the vehicle business is in that, call it, 10% range.

[Ronald Clarke, President, Chairman & CEO at Corpay]

And the other stuff is plus or minus half a point between Q3 and Q4.

[Ken Suchoski, Equity Research Analyst at Autonomous Research]

Okay, great. Thank you, Ron.

[Operator]

We'll take our next question from Dave Koenig with Baird. Please go ahead.

[David Koning, Senior Research Analyst & Associate Director - Research at Robert W. Baird & Co]

Yes. Hey, guys. Thank you. Just one question. Free cash flow looked massive and Q2 looked like your best cash flow ever.

[David Koning, Senior Research Analyst & Associate Director - Research at Robert W. Baird & Co]

And just a question, guess, a lot of companies actually guide to cash flow and a lot have less cash flow than earnings. In your case, you've had better cash flows than earnings. Maybe just philosophically, would you ever guide to that? And then maybe why is your cash flow so strong and is it sustainable?

[Ronald Clarke, President, Chairman & CEO at Corpay]

You want to take it? You want me to? Is that Dave?

[David Koning, Senior Research Analyst & Associate Director - Research at Robert W. Baird & Co]

Yes.

[Ronald Clarke, President, Chairman & CEO at Corpay]

Dave, it's Ron.

[Ronald Clarke, President, Chairman & CEO at Corpay]

Let me try and let Peter sort of some pages here. So there's two ways to look at cash flow. There's the accounting way, which maybe you're looking at, that brings the balance sheet in, which is obviously a function of AR and AP. And the way I look at free cash flow, which is really kind of what I call cash net income, which is really the operating cash. And so the full year, the way I look at it, we're trying to get to $1.5 for the full year of what I call cash net income.

[Ronald Clarke, President, Chairman & CEO at Corpay]

What you're probably seeing I have in front of me, the accounting one that Peter's turned on the pages would be some change really in the working capital in the period that boosted us. So I wouldn't get maybe you can get excited. I don't get super excited about that. I'm just trying to make sure that the real free cash flow generated by operations continues to run hot and grows, which again, that thing is planned to be up 10%, 12% again in 25%, the way we look at it.

[Peter Walker, CFO at Corpay]

Yeah. And just confirming that the accounting methodology is presenting something favorable in the quarter that is accounting methodology driven. Really, the method that Ron points to is the correct one to measure us by, which is an 11% growth of cash EPS year over year.

[Ronald Clarke, President, Chairman & CEO at Corpay]

Yeah, that's great.

[David Koning, Senior Research Analyst & Associate Director - Research at Robert W. Baird & Co]

Thank you.

[Operator]

Thank you. And at this time, I'd like to turn the call back over to our speakers for any final and closing remarks. Thanks,

[Tien-tsin Huang, Senior Analyst at JP Morgan]

Margo, and thanks, everybody, for sticking with us. That's it for us. If you need anything else, please let us know.

[Operator]

Ladies Thank and gentlemen. That does conclude today's conference. We appreciate your participation. Have a wonderful day.

Participants

Executives

• Jim Eglseder, SVP - IR
• Ronald Clarke, President, Chairman & CEO
• Peter Walker, CFO

Analysts

• Andrew Jeffrey, Equity Analyst - Fintech at William Blair
• Darrin Peller, Managing Director at Wolfe Research, LLC
• Tien-tsin Huang, Senior Analyst at JP Morgan
• Nate Svensson, Director, Senior Equity Research Analyst - Payments, Processors & IT Services at Deutsche Bank
• Sanjay Sakhrani, Managing Director at Keefe, Bruyette & Woods (KBW)
• Ramsey El-Assal, Managing Director at Barclays
• John Davis, Managing Director at Raymond James Financial
• Mihir Bhatia, Analyst at Bank of America
• Trevor Williams, Managing Director at Jefferies LLC
• Ken Suchoski, Equity Research Analyst at Autonomous Research
• David Koning, Senior Research Analyst & Associate Director - Research at Robert W. Baird & Co