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S&P 500   5,137.08
DOW   39,087.38
QQQ   445.61
Lawyers who successfully argued Musk pay package was illegal seek $5.6 billion in Tesla stock
Critical asset just had biggest fall on record (Ad)
Sports analytics may be outnumbered when it comes to artificial intelligence
Chicago 'mansion' tax to fund homeless services stuck in legal limbo while on the ballot
Critical asset just had biggest fall on record (Ad)
Norway's hospitalized king gets a pacemaker in Malaysia after falling ill during vacation
Head Start preschools aim to fight poverty, but their teachers struggle to make ends meet
Critical asset just had biggest fall on record (Ad)
What to watch for as China's major political meeting of the year gets underway
South Korean doctors hold massive anti-government rally over medical school recruitment plan
S&P 500   5,137.08
DOW   39,087.38
QQQ   445.61
Lawyers who successfully argued Musk pay package was illegal seek $5.6 billion in Tesla stock
Critical asset just had biggest fall on record (Ad)
Sports analytics may be outnumbered when it comes to artificial intelligence
Chicago 'mansion' tax to fund homeless services stuck in legal limbo while on the ballot
Critical asset just had biggest fall on record (Ad)
Norway's hospitalized king gets a pacemaker in Malaysia after falling ill during vacation
Head Start preschools aim to fight poverty, but their teachers struggle to make ends meet
Critical asset just had biggest fall on record (Ad)
What to watch for as China's major political meeting of the year gets underway
South Korean doctors hold massive anti-government rally over medical school recruitment plan
S&P 500   5,137.08
DOW   39,087.38
QQQ   445.61
Lawyers who successfully argued Musk pay package was illegal seek $5.6 billion in Tesla stock
Critical asset just had biggest fall on record (Ad)
Sports analytics may be outnumbered when it comes to artificial intelligence
Chicago 'mansion' tax to fund homeless services stuck in legal limbo while on the ballot
Critical asset just had biggest fall on record (Ad)
Norway's hospitalized king gets a pacemaker in Malaysia after falling ill during vacation
Head Start preschools aim to fight poverty, but their teachers struggle to make ends meet
Critical asset just had biggest fall on record (Ad)
What to watch for as China's major political meeting of the year gets underway
South Korean doctors hold massive anti-government rally over medical school recruitment plan

FLEETCOR Technologies Q4 2021 Earnings Call Transcript


Listen to Conference Call View Latest SEC 10-K Filing

Participants

Corporate Executives

  • Jim Eglseder
    Head of Investor Relations
  • Ron Clarke
    Chief Executive Officer and Chairman of the Board of Directors
  • Charles Freund
    Chief Financial Officer

Presentation

Operator

Greetings. Welcome to the FLEETCOR Technologies, Inc. Fourth Quarter 2021 Earnings Conference Call. [Operator Instructions]

I will now turn the conference over to your host, Jim Eglseder, Head of Investor Relations. Thank you. You may begin.

Jim Eglseder
Head of Investor Relations at FLEETCOR Technologies

Good afternoon, everyone, and thank you for joining us today for our Fourth Quarter and Full Year 2021 Earnings Call. With me today are Ron Clark, our Chairman and CEO; and Charles Freund, our CFO. Following the prepared comments, the operator will announce the queue will open for the Q&A session. It is only then that you can get in line for questions. Please note our earnings release and supplement can be found under the Investor Relations section of our website at fleetcor.com. Now throughout this call, we will be discussing organic growth.

As a reminder, organic revenue growth neutralizes the impact of year-over-year changes in foreign exchange rates, fuel prices and fuel spreads, and includes pro forma results for acquisitions closed during the two years being compared. We will also be discussing non-GAAP financial metrics, including revenues, net income and net income per diluted share, all on an adjusted basis. These measures are not calculated in accordance with GAAP and may be calculated differently than at other companies.

Reconciliations of the historical non-GAAP to the most directly comparable GAAP information can be found in today's press release and on our website. I do need to remind everybody that part of our discussion today may include forward-looking statements. These statements reflect the best information we have as of today. All statements about our outlook, new products and expectations regarding business development and future acquisitions are based on that information.

They are not guarantees of future performance, and you should not put undue reliance upon it. We undertake no obligation to update any of these statements. These expected results are 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 on Form 8-K and in our annual report on Form 10-K filed with the Securities and Exchange Commission. These documents are available on our website and at sec.gov.

Now with that out of the way, I will turn the call over to Ron Clarke, our Chairman and CEO. Ron?

Ron Clarke
Chief Executive Officer and Chairman of the Board of Directors at FLEETCOR Technologies

Okay. Jim, thanks. Good afternoon, everyone, and thanks for joining our Q4 earnings call. So upfront here, I plan to cover three subjects: so first, provide my view of Q4, along with full year 2021 results; second, lay out our 2022 guidance and priorities for the year; and then lastly, I'll share my thoughts on the company's midterm imperatives. Okay. Let me make the turn to our Q4 results, which were quite good. So we reported revenue of $802 million, up 30% and cash EPS of $3.72, that's up 24%, both record highs for the company.

Revenue came in quite hot, almost $40 million higher than the revenue guidance we provided 90 days ago. Organic revenue growth for Q4, good up 17%, also up 7% against Q4 of 2019, every line of business, double-digit organic revenue growth in the quarter. Our Q4 trends continued quite good, Record sales in the quarter, up 40% versus prior year. Steady revenue retention at 93%. Same-store sales healthy at plus 6%. We have had some notable call out since we spoke last. We formalized our partnership with the largest bank in Brazil, which will help distribute our toll products, so we expect a lift there.

We launched formally our Corpay One SMB platform business, so getting our corporate payments business into the SMB space. We just completed another investment in an EV software company. We upsized our term loan of $750 million. We repurchased over 3 million FLT shares in Q4 and in January. And we completed the rebranding of our corporate payments business, all the brands now under Corpay. So, in summary, really a good finish to the year better than we expected and the trend's helpful as we look into 2022. Okay. Let me turn to 2021 full year. I think we characterize 2021 really as a comeback year where we moved ahead of our 2019 pre-pandemic baseline.

Really good financial results. 2021 revenue up $2.8 billion, up 19%. Cash EPS of $13.21, also up 19%. Both of those results, record highs for the company. We did open 2021 with an initial guide of $12.31 of cash EPS at the midpoint, so now finishing $0.90 better than that in initial guide. So clearly a better year than expected. Organic revenue growth for 2021, up 12%. That's the highest organic revenue growth that we've ever reported. 2021 sales, super good, record levels, up 46% versus 2020, and up 19% versus 2019. We've added 175,000 new clients. 175,000 new clients to our books in 2021 across the world.

So, strong demand for our services. We did close two accretive acquisitions in 2021 and expect together those to deliver $0.50 to $0.60 of incremental cash EPS here in 2022. So all-in-all, a meaningful recovery from 2020. All right. Let me cover now our initial thoughts on 2022 guidance along with the priorities for the year. We've mentioned before our stated mid-term objectives for the company are to grow sales 20% plus, to grow organic revenue 10% plus, and to grow cash EPS 15% to 20%. Good news, our 2022 guidance meets all three of these objectives, so here it goes.

For revenue in 2022, at the midpoint, $3.22 billion, that's up 14%; cash EPS of $15.25 at the midpoint, up 15%; organic revenue growth overall, up 10%; and sales growth just over 20%. This guidance does not include any forward capital allocation beyond deleveraging. There is no real macro help in these numbers. We're basically outlooking the macro to be neutral. Yes, higher fuel prices, but really offset by some weaker FX. We have assumed about a 1% COVID recovery in our same-store sales client base coming back this year in 2022. Confidence, pretty high in these numbers.

About half of the expected year-over-year performance improvement is already in our exit rate or run rate coming into the year, so that helps. Our recent sales and retention trends support the forecast. Most of the synergies for the two big acquisitions are really already baked, so we expect to get that accretion. And we have repurchased about 6.5 million shares from a year ago, so obviously going to be quite accretive. In terms of priorities, we have picked a few things that we'll invest in incrementally this year. So digital sales, we're expecting a big increase in digital sales production in 2022, and are making thus incremental investments in digital advertising and staff.

IT, big investments in IT transformation to accelerate our move to the cloud. And this platform business that I spoke of, where we're joining up our walk-around services with our central AP services, going to push those platforms pretty hard and get a read on demand. So all in all, a pretty ambitious year. Okay. So last up today, I'd like to talk about our midterm prospects and the imperatives for the company. I thought it might be helpful to rewind just a bit for anyone new on the call, just to remind everyone who FLEETCOR is and what we're trying to do.

So in a nutshell, FLEETCOR provides B2B specialty payment solutions. Really, all intended to do one thing, which is to help businesses, our clients, spend less, primarily by controlling what they buy and what they pay for. Our differentiation kind of really comes in two forms. First, our products are highly specialized. We target certain kinds of clients with very specialized needs, so our products would look different for trucking firms than they would look for plumbing firms. Our travel services would look different for blue collar travelers than they would for white collar travelers. So very dialed-in kind of product line.

And second, we operate more than 15 proprietary acceptance networks. That allows us to capture very unique data at the point of sale. We also enjoy very favorable economics, which we share with our clients. So this focused or a specialized approach, coupled with a two-side of business model has allowed us to deliver consistent growth over a long period of time. So let me turn to the three imperatives, the big things that we're on that we think are critical to driving sustained growth over the long term. So first up is EV. We're working EV and the energy transition hard.

We do feel like we've made a lot of progress so far. So both here and in Europe, we've added public acceptance networks for EV, so public charge points or recharge points. We've invested in EV software companies that facilitate at-home recharging and reimbursement. We signed up a few hundred clients to our EV service to get feedback on the service. And initially here, we're seeing the revenue or the economics from our service, EV service, roughly in line with our more traditional refueling services. So look, we're on this EV, we'll manage along with the transition and continue to report out.

Second imperative is digital, where companies are working super hard to make the digital transition, accelerated by COVID. So the first thing I'd say is sales has really made the pivot. So last year, over 50% of our global Fuel Card sales came in digitally, and over half of those processing end-to-end with no human intervention. On the marketing front, we've moved our focus to top of the funnel, so we're using digital advertising, ABM technology to identify prospects interested in our services. On the client experience front, we've really advanced our UIs and their capability to allow our clients to do more themselves. So faster and easier than ever before.

And at the point of sale, we've added new ways to transact with us beyond cards. So including mobile phones, RFID technology, even connected cars. So a lot of progress on the digital front. So last up is diversification, transitioning our portfolio to bigger TAMs into higher-growth segments. So you've heard us speak of beyond -- going beyond in which we extend each of our existing businesses into adjacent market segments to create more opportunity. So just a few examples there, so our corporate payments business, traditionally a middle markets business now entering the SMB space.

Our traveler lodging business, really a workforce. Our blue collar-focused business has recently added airline or lodging for crews and displaced homeowners or homeowner's insurance companies really to extend the potential of that business. In Brazil, historically, a toll-centric, highway-centric client base, we're now adding hundreds of thousands of urban or city dwellers to our expanded offering. So look, over time, we do expect these adjacencies to increase the opportunity for each of our businesses.

Platform business, I mentioned we will join up our specialized payment solutions in the one comprehensive platform in which a single business or client could use, for example, our smart business cards, our travel solutions, and our online bill pay services, all from the same UI and all from us. So this platform concept really combines our capabilities for employee walk around kinds of purchases along with central bill pay. So we think the platform idea has big potential and can be quite additive to the specialized payment services that we offer now.

As a result of these extensions, we are expecting our global fleet card business to account for about 40% of the company's revenue this year. That's down from about 50% five years ago. So, again, repositioning for faster growth. So we do plan to work these three mid-term imperatives hard: EV, digital and diversification, of course, we'll report progress as we go.

So, in conclusion today, back to Q4, again, better than we expected and good trends coming into this year. 2021, really, again, a comeback year finishing much, much better than we thought at the outset. This year, 2022, another guide to growth -- organic growth of expected a 10%, earnings expected to be up 15%, so a lot of distance from our pre-pandemic baseline. And the mid-term, again, we're pretty focused on these three imperatives that I just outlined, key to sustainable growth for the company.

So with that, let me turn the call back over to Chuck to provide some additional details on the quarter. Chuck?

Charles Freund
Chief Financial Officer at FLEETCOR Technologies

Thanks, Ron. So jumping into the product category details behind our 17% organic revenue growth in Q4, corporate payments was up 18%, with another quarter of strong performance in full AP, which was up over 50% yet again. Our card products, virtual and multi-card, were up 16% cross-border was up 14%, which is normalized for the AFEX acquisition we closed in June. In cross-border, we completed the final customer migrations from AFEX's systems to our Corpay cross-border platform in December, and we'll continue with the integration of back-office systems and processes throughout this year.

Our thesis are holding, with synergies and accretion in line with our expectations. I'd like to give a big shout out to our integration team as it's due to their hard work and dedication that the conversion has been so seamless and successful. Fuel was up organically 12% with growth in every geography, largely as a result of our digital sales efforts and strong retention rates. Our ability to sell and retain fuel card customers around the world demonstrates the attractiveness of our offers, the competitiveness of our products and the effectiveness of our technology.

We continue to make good progress in developing and marketing our EV charge management solutions, particularly in Europe, where we now have over 5,000 clients with EV-enabled cards or fobs. We've also been actively expanding the on-road network acceptance of our EV solutions with approximately 6,500 charge points in the UK now accepting our products. This represents about 22% coverage of all publicly available charge points in the country.

On the continent, we've got around 85% coverage as our products are accepted at roughly 190,000 charge points. We've built a dedicated organization to advance our EV efforts and will continue to support our fuel card customers as they slowly migrate to EVs. Tolls was up 17% compared with last year as strong new sales up 20% and some new retention initiatives are really paying off. We made tremendous progress to expand our toll business this year. We doubled our fuel locations year-over-year to nearly 1,200, and we had nearly 0.5 million active fuel users as of year-end. We recently signed Mitsubishi, Hyundai, Toyota and Kia to install our tags on vehicles before they leave the factories. And as Ron mentioned earlier, we completed our joint venture with CAIXA, Brazil's largest bank.

Our lodging business continued to perform well, up 39%. Workforce lodging has improved with higher volume. And airlines especially outperformed, with organic growth over 100%, as domestic air travel rebounded from COVID lows. The integration of ALE Solutions, a provider of lodging services to displaced policyholders of major insurance companies, is going quite smoothly and we're increasingly confident in the value it will deliver. Gift organic growth was 19% year-over-year, as the new efforts we've discussed on the last several calls continue to produce results, especially the retailer online sales channel.

We also saw a pickup in card replenishment orders, which had been delayed due to COVID concerns. Now looking further down the income statement, operating expenses of $462 million represented an increase over prior year, primarily due to the addition of the AFEX and ALE operations, as well as higher deal and integration-related costs, increases tied to higher volumes across our businesses, stock compensation and new sales generation activities and investments to drive future growth. Bad debt expense was $18.5 million or five basis points, as credit losses have returned to more historical levels.

Interest expense decreased 9% year-over-year due to a slight decline in LIBOR rates and the offset of higher interest rates applied to customer deposits and cash balances in certain foreign jurisdictions. We incurred $9.9 million of cost during the quarter associated with the incremental $750 million in Term B debt we added in December. On the Term B increase, the rate was the same as our existing facility, at LIBOR plus 175 basis points and matures in April 2028. Our ratings and leverage remained effectively unchanged, reflecting the strength and earnings power of our company.

Our effective tax rate for the quarter was 25.6% versus 20.3% last year, with the increase driven primarily by the lack of excess tax benefit on stock option exercises. Now turning to the balance sheet. We ended the quarter with over $1.5 billion in unrestricted cash, and we had $1.1 billion available on our revolver. There was $4.9 billion outstanding on our credit facilities, which included the incremental $750 million Term B debt I just mentioned. Finally, we had $1.1 billion borrowed in our securitization facility.

All in, as of December 31, our leverage ratio was 2.71 times trailing 12-month adjusted EBITDA, as calculated in accordance with our credit agreement. As Ron mentioned, in the quarter, we repurchased roughly 2.3 million shares. And in total, we repurchased about 5.5 million shares during 2021. We also bought 1.1 million shares in January under our 10b5-1 plan. You may have seen in our press release that our Board authorized another $1 billion in repurchases. So taking all of that into account, we still have almost $1.4 billion authorized for repurchases as of today.

We believe we have ample liquidity to pursue any near-term M&A opportunities and continue to buy back shares when it makes sense. I think it's important to remind everyone of the power that our earnings and cash flow gives us. Recapping 2021, we repurchased 5.5 million shares for $1.36 billion. Our guidance for share count for 2022 is down 7 million shares from what we guided a year ago. We spent $950 million on deals which will generate incremental earnings of $0.50 to $0.60 per share next year and continue to provide growth in future years.

We also raised an additional $1.55 billion of Term B debt, $800 million in Q2 and $750 million in Q4 at very attractive rates and terms, and our leverage barely changed. We believe the combination of our strong position, the structure of our business model and high recurring revenues will enable us to deliver consistent quality growth year after year after year. Now, let me share some thoughts on our Q1 outlook and our full year assumptions. Looking ahead, we're expecting Q1 2022 revenue to be between $740 million and $760 million and adjusted net income per share to be between $3.45 and $3.55, which at the midpoint is approximately $0.68 or 24% higher than what we reported in Q1 of 2021.

You may notice the midpoint of our Q1 guide is also approximately $0.22 or 6% lower than what we reported in Q4 of 2021. This is largely due to revenue seasonality where certain businesses such as gift and tolls have strong fourth quarters, while fuel and lodging tend to have soft first quarters due to weather and holidays. As such, the first quarter tends to be the lowest in terms of both revenue and profit for our company. I'd like to note a few assumptions underlying the full year 2022 guidance Ron provided earlier.

We expect bad debt to be about $30 million higher than 2021 levels as we see a return to more normalized credit losses, due in part to increasing sales production. Our interest expense guidance of $90 million to $100 million assumes three 25 basis point rate increases throughout the year. And our tax rate is also expected to be higher at between 24% and 26% as we expect any excess tax benefit from stock option exercises to remain low relative to the last few years. The effects of these higher expenses will be partially offset by the lower share count resulting from our repurchase activity over the past 13 months. The rest of our assumptions can be found in our press release and supplement.

Now, let's move beyond the results and the outlook. Since we last spoke, our new ESG report was published and is available in the Investor Relations section of our website. Some highlights you will find in the document are more details around our workforce advantage, including our comprehensive employee development and training programs; and our adoption of the Rooney Rule for all Vice President and above positions; as well as some reporting on our global data centers, including the significant reduction in power usage and footprint, which are down 40% and 62%, respectively, over the last five years. Finally, I would like to thank our nearly 10,000 employees around the world who helped us deliver a strong finish to a great year and who will be the driving force to even greater heights in 2022.

Thank you for your interest in FLEETCOR. And now operator, we'd like to open the line for questions.


Questions and Answers

Operator

Thank you. [Operator Instructions] Our first question comes from the line of Pete Christiansen with Citi. Please proceed with your question.

Pete Christiansen
Analyst at Smith Barney Citigroup

Good evening...

Ron Clarke
Chief Executive Officer and Chairman of the Board of Directors at FLEETCOR Technologies

Hey, Pete.

Pete Christiansen
Analyst at Smith Barney Citigroup

...which is good to see. Ron, looking at the outlook, which...

Ron Clarke
Chief Executive Officer and Chairman of the Board of Directors at FLEETCOR Technologies

Hey, Pete, we're struggling to hear you.

Pete Christiansen
Analyst at Smith Barney Citigroup

I'm sorry. Can you hear me?

Ron Clarke
Chief Executive Officer and Chairman of the Board of Directors at FLEETCOR Technologies

Yes. We can't get you now. Hey, Pete, if you could dial back in. We can take the next question.

Pete Christiansen
Analyst at Smith Barney Citigroup

Okay.

Operator

Thank you. Our next question comes from the line of Ramsey El-Assal with Barclays. Please proceed with your question.

Ramsey El-Assal
Analyst at Barclays

Hi. Thanks for taking my questions and I appreciate it. And congratulations on solid results in the fourth quarter here. I wanted to ask about capex as a percentage of revenue. It looks like it moved up to 4% from 3% where it's been for quite some time. Now I know Ron called out a lot of critical business investment. But I'm just wondering, should we view the investment you're making as more kind of cyclical in nature? And meaning you'll kind of finish with this investment cycle and maybe capex as a percentage of revenue will tick back down again? Or is this sort of what we should expect in terms of a new level of business investment going forward?

Ron Clarke
Chief Executive Officer and Chairman of the Board of Directors at FLEETCOR Technologies

Hey, Ramsey, it's Ron. I'd say probably the latter, probably think about this level, this 4%-ish level. And the two drivers kind of new things in the last couple of years would be that Brazil network buildout that we've referenced before. So a fair amount of cost in getting those incremental few thousand stations up.

And then two, we've earmarked a fair amount of kind of incremental money to the IT transformation. So not just enhancing obviously, the systems we have and effectively building new ones in parallel. So I'd say those couple of things would have at least probably a couple more years to run and then it may bottom back down a bit.

Ramsey El-Assal
Analyst at Barclays

Thank you for that. And on capital deployment or balance sheet deployment more generally, maybe Ron, if you could give us your view on the appetite for sort of a, first, buybacks versus M&A? And then on the M&A side, I'm really curious to see whether you're seeing more opportunities emerge? Or the deal pipeline increasing just because the valuation environment seems to have shifted down quite a bit? It might be a little too soon, but I'm just curious what you're seeing out there?

Ron Clarke
Chief Executive Officer and Chairman of the Board of Directors at FLEETCOR Technologies

Yes. Good question. So I'd say that our priorities are unchanged, Ramsey, right? We're first M&A, if we like it for capabilities and/or it's accretive. But as you can tell from Chuck's comments earlier, we -- what do we say, 6.5 million shares we bought back in the last 12 months. So we've had a bit of an appetite for our own stock, which we think is appropriate.

In terms of the M&A, we did press the pause button, call it, three months ago when we saw the volatility, both in our own stock and in some of the others in our category. And so literally post this, we're going to kind of reach back out to some of those things that are super late in the pipeline and test where sellers are basically. We've got a view of where we are now. So I'd say ask me again in 30 days whether sellers have got the message that things are volatile and maybe at a lower price that they'll take.

Ramsey El-Assal
Analyst at Barclays

Okay, Ron, thanks so much. That was really helpful. Appreciate it.

Operator

Thank you. [Operator Instructions] Our next question comes from the line of Darrin Peller with Wolfe Research. Please proceed with your question.

Darrin Peller
Analyst at Wolfe Research

Hey. Thanks, guys. Nice end to the year. When we look forward on the fuel segment, on a stack basis, you're running in the low single-digit range now. But I think embedded in your outlook is definitely an acceleration. Can you talk through that a bit in terms of the OTR side versus the fleet, the local fleets? And really how you're going to bridging from the run rate now to a higher level of growth? And then, I just have a quick follow-up on the corporate payments side.

Ron Clarke
Chief Executive Officer and Chairman of the Board of Directors at FLEETCOR Technologies

Yeah, Darrin, hey, it's Ron. Yes. I'd say, the guide, embedded in the guide for 2022 would be high single digits for fuel cards, so off of obviously more normalized comps this year. And part B, yes, the OTR, which is, I don't know, call it, 30% of our business globally across here, Europe and Brazil continues to run softer, right? The COVID impact, the getting drivers to soften that business more. So I think it's inside of our high single-digit, that thing would be a smidge softer than the local or partner business.

Darrin Peller
Analyst at Wolfe Research

Okay. And you've had decent sales [Indecipherable], that's probably flowing through to you right now.

Ron Clarke
Chief Executive Officer and Chairman of the Board of Directors at FLEETCOR Technologies

Yeah. This is -- you kind of cut out a bit. But if you said, we had decent sales, I mean, we've had literally record sales in the Fuel Card business.

Darrin Peller
Analyst at Wolfe Research

Right. Yeah, I figure that's flowing through, starting now. Just a quick follow-up on the corporate payment side. I mean, really, I'm trying to figure out when the cross-sell, you think, is going to really kick into full gear for Corpay, right? When we think about the opportunity in really the software and Nvoicepay side versus the virtual card alone, but really the holistic offering, where do you think we're going to be? When do you think we're going to be in a full scale effort around that initiative, which sounds like I know there's been a lot of good industry chatter on it, but that could probably flow through to some meaningful trends. Thanks guys.

Ron Clarke
Chief Executive Officer and Chairman of the Board of Directors at FLEETCOR Technologies

Yeah, another good question. I'd say probably another quarter or so and let me tell you why. So we started out, call it, in the second half testing, going out to, call it, 1,000 clients, 2,000 clients, putting them on a new payment platform, seeing if they had an interest in our new platform, bill pay solution, saw some decent reaction to it. And so -- what we've decided to do is kind of be careful in changing the payment platform and basically presenting a new service at the same time.

We want to be super cautious around not upsetting, if you will, the golden goose of these fuel card clients. So we're moving to put that platform in against a broader set of clients, get them comfortable using that and then effectively present higher this add-on for them. So my guess is probably somewhere in Q2, we'll be able to report out on it.

Darrin Peller
Analyst at Wolfe Research

That's great. That's good to hear, Ron. Thanks, guys.

Operator

Our next question comes from the line of Sanjay Sakhrani with KBW. Please proceed with your question.

Sanjay Sakhrani
Analyst at KBW

Thanks. Good evening. Just a question on the expense growth. Obviously, very strong coming out of the pandemic, sort of deflationary there. Could you just talk about how much is driven by inflationary pressure versus more investments you're making? And kind of what you're assuming that's going to translate to in terms of top line growth?

Charles Freund
Chief Financial Officer at FLEETCOR Technologies

Yeah, Sanjay, this is Charles. So the expense growth you're seeing coming from a couple of different areas. One, we've got the AFEX and ALE acquisitions that are rolling in, so that's number one. Two, we've got the normalization of credit losses. We expect that, debt to be quite a bit higher some extra stock comp in there. Also related to the deals we've got ongoing integration costs. The AFEX integration is probably the most advanced we'll have taken as a company, so really move them off their systems, close redundant offices, etc.

So it's a multiyear journey there, and we're spending money to basically create synergies for the future. So that's also kind of baked in both in the fourth quarter here as well as into our guide for next year. We are seeing some inflationary pressure predominantly around staffing. So wages in some of the call centers and such, we've taken measures to remedy that. As it relates to vendors a little bit, but I'd say that, that will help us eventually as it flows through to vendor payments in, say, our corporate payments arena. So it's a tale of two cities, right? We're going to have some additional costs from inflation, but we'll also get some benefit from it on the revenue side.

Ron Clarke
Chief Executive Officer and Chairman of the Board of Directors at FLEETCOR Technologies

Hey, Sanjay, it's Ron. Let just jump on the last thing Chuck said, which would be some of the increment is really directed by us, choice that we made around EV capabilities and sales. And again, some testing and advertising things and even in IT to really better position the business. We like to like the profit number we got to. So in addition to the factors that Chuck just laid out, I do want you to hear that we've chosen to chase some things that help the company on a forward basis.

Sanjay Sakhrani
Analyst at KBW

Understood. And I actually have a follow-up question on the EV point. I'm just curious, Ron, like how you think the distribution channels are going to look like in the future? Some payment processors that partnered with like the auto manufacturers? And I'm just curious how unconventional the partnerships that you're trying to forge are going forward? I know you have some of them, but maybe you can just speak to what you're targeting? Thanks.

Ron Clarke
Chief Executive Officer and Chairman of the Board of Directors at FLEETCOR Technologies

Yeah. I think it's actually been the other way so far. I think that we announced again follow-on in kind of a new investment in software companies. I think companies that are working on software see people like us in leasing companies as the best distribution pipe in the fleet, particularly as their mix and stuff. And so we continue to like our chances, both offering that back to our client base because we're first to see if they're moving off of a fuel of internal combustion approach to something else, so we could spot it in our client base.

And then b, we've got obviously lots of coverage generally right to bring new clients into the fold. And so I'd say, for sure, our distribution capabilities are probably as good as any. With that said, we did mention the Brazil thing, which is a bit of a case study where we've now basically put tags, effectively, toll tags in with three or four partners literally as those cars come off the line. So when you buy your new Kia, or whatever the heck it is, Nissan, in Brazil, it's got a Sem Parar tag when you come out. So look, we think over time, these cars will finally coming off the line connected where they're sending data every couple of seconds.

And so we mostly want to be set up just to grab that relationships where we have access to that connected counter information. And can then help, again, the client, whether he's at a public location or work location or at home basically pay for the thing. So I would say, I said earlier in the office, we are just so much smarter on this transition now and how to play and how we're advantaged or not and what help we need. So I don't know if we're communicating it well, but we are just in a way better spot than we were.

Operator

Thank you. Our next question comes from the line of Trevor Williams with Jefferies. Please proceed with your question.

Trevor Williams
Analyst at Jefferies Financial Group

Great. Thanks. Good afternoon. I wanted to ask another one on expenses, kind of similar to what Sanjay was getting after. But -- so margins in Q4 were down about 300 basis points from the third quarter despite all the revenue upside. I mean is this kind of a new stepped up level of spend that's just kind of rebased higher that we should just expect to run through 2022.

Just kind of as we're thinking about how much leverage you can get from you're guiding to 14% revenue growth next year, if you do better than that, if we get kind of another light back just on some of the piece of the revenue pie that are still kind of lagging versus 2019. So just give us a sense for kind of what your -- or how we should be thinking about operating leverage going forward? Given that you've already, it seems like in the last couple of quarters, there's been a stepped-up level of investment to kind of prepare for the new go-to-market strategy. Thanks.

Charles Freund
Chief Financial Officer at FLEETCOR Technologies

Yes. Trevor, it's Charles. I'd say that it is a bit of a reset. So some of the acquisitions that we bought to operate at slightly lower margins. So they're dealing with big airlines or insurance companies, right? They are very, very focused on the rates they pay. And they also require a very, very high levels of service. And so we need to make investments. And as the airline volumes of revenue is pouring back and we need to staff up to accommodate those service level requirements. So I think the 54% is probably a good assumption going for next year. And as Ron mentioned, we are continuing to make investments for future growth. And so it's a operating margin should hold at that level for the remainder for this year.

Trevor Williams
Analyst at Jefferies Financial Group

Okay. Got it. And then, Charles, just to follow-up on interest expense. It sounds like you guys have free hikes built into what you're guiding to for 2022. Can you give us a sense just -- and even if it's not an exact number, that's fine? But if we end up at five or six hikes what the interest expense sensitivity could look like in that scenario? Thanks.

Charles Freund
Chief Financial Officer at FLEETCOR Technologies

We've got about $5.9 billion that would flow with LIBOR. So for every 25 basis points, you're looking at kind of $14 million to $15 million of incremental annualized expense you see -- you got to lay that in over time. On the flip side, we do have customer deposits and cash balances that sit around the world. We're earning pretty good interest on those. And so if interest rates continue to rise around the world, we might actually see enough benefit.

Trevor Williams
Analyst at Jefferies Financial Group

Got it. Okay. Perfect. Thank you.

[Technical Issues]

Jim Eglseder
Head of Investor Relations at FLEETCOR Technologies

Okay. Thanks, Trevor. I apologize for technical difficulties. It looks like we're going to take Tien-Tsin next, except I can't promote. Alex, we take Tien-Tsin? All right, guys, let's see if we can do the next one. Now, they hear us? Okay. Yes, they can hear us, but I don't know where the operator went. Hey, guys, give us just a minute to try to get this sorted.

Okay. Well, while we wait for that gets squared away. Pete, the questions from earlier were, how should we think about expectations on the Corpay One SMB initiative factoring into the guide? Trying to understand if there's upside opportunity versus normalized corporate payments growth expectations. I don't know --

Ron Clarke
Chief Executive Officer and Chairman of the Board of Directors at FLEETCOR Technologies

Yeah, can people hear us?

Jim Eglseder
Head of Investor Relations at FLEETCOR Technologies

Yes. They can hear us.

Ron Clarke
Chief Executive Officer and Chairman of the Board of Directors at FLEETCOR Technologies

Pete, I don't think you can hear, but its Ron. So I kind of answered a bit of this earlier that we're going a bit slower to be cautious on the cross-sell, and we are obviously selling to new prospects in the market, so I'd say, it would be pretty minimal. So if you look at our overall corporate payments guide for the year, the SMB piece would still be relatively small, again, mostly because we're trying to be careful and make sure we have the acquisition economics, right?

So in terms of upside, I think, yes, since we don't have scalable views of that yet. I'd say, as we get into the second half and get through some of the testing that's going to go on, there could be some upside. We could step on the gas there a bit if we like what we're seeing, and maybe lift the growth rate in the second half.

Jim Eglseder
Head of Investor Relations at FLEETCOR Technologies

Okay. And then another question is, can you flush out the Brazilian banking relationship a bit? How you see this impacting the value prop? And how could this impact user revenue growth going forward?

Ron Clarke
Chief Executive Officer and Chairman of the Board of Directors at FLEETCOR Technologies

Yes. So we completed the joint venture with CaixaBank, it's the largest bank in Brazil, tends to focus a bit more down market. So if you look at our historic Sem Parar business, we've tend to focus a bit more on, I won't say, affluent, but kind of more middle class users and such. And with Caixa, we'll be able to, one, move a bit down market and leverage all of the distribution capabilities. So all the branches, their ATMs, etc. And so we view it as extensive distribution, but also reaching slightly different segments around the country that we just weren't as focused on historically.

Charles Freund
Chief Financial Officer at FLEETCOR Technologies

Yeah. Let me just jump on, Jim. Hey, it's Ron. I would just add to it that we love how incremental different distribution channels are. So when we bought the business, I can't remember, 70% or 80% of all new sales came through the stores, kiosks and put in the stores and in toll booths where people were waiting in line, and we diversified that into digital hang things to retail, outbound sales, etc, and then a whole slew of partners, including the manufacturers that Chuck referenced.

So what I'd say most is we just love the incremental nature of a bank and those accounts and those relationships and being in that channel. So we haven't put a ton into the guide yet because that thing just lifted off, I think, a couple of months to three months ago. But we are super excited about it because it is the single largest bank, largest set of account holders in the titer country and so we're super hopeful again that, that will be additive and at Chuck's point, because its targets a slightly different set of user than the traditional one.

Jim Eglseder
Head of Investor Relations at FLEETCOR Technologies

And I think we have Alex back.

Charles Freund
Chief Financial Officer at FLEETCOR Technologies

Alex?

Operator

[Operator Instructions] Our next question comes from the line Tien-Tsin Huang with JPMorgan. Please proceed with your question.

Tien-Tsin Huang
Analyst at JPMorgan Chase & Co.

Hey, Ron, Charles, Jim, it's Andrew actually on for Tien-Tsin. Congrats on the quarter.

Ron Clarke
Chief Executive Officer and Chairman of the Board of Directors at FLEETCOR Technologies

Thanks, Andrew.

Tien-Tsin Huang
Analyst at JPMorgan Chase & Co.

I wanted to ask a question on retention. So obviously, still running strong compared to pre-pandemic, a little bit of a slight quarter-over-quarter. But what I wanted to ask was as you guys started to sell more services and bundled, with the Corpay integration, would there be any lift in terms of retention as you sell potentially stickier products?

Ron Clarke
Chief Executive Officer and Chairman of the Board of Directors at FLEETCOR Technologies

Hey, Andrew, it's Ron. Yeah. We actually have statistics on that. So we look at different cohorts, similar sets of clients and look at whether they have one, two, three kinds of services and your thesis is absolutely right. And as you move beyond one service, you're stickier with clients have a deeper relationship, yes. So to the extent that we get what we call our platform or bundle to work and someone had walked around products and then we were able to get their central bill pay, we do think we'll get a lift and particularly when the bundle could include smart business cards or fuel cards, which is the predominant walk-around.

Tien-Tsin Huang
Analyst at JPMorgan Chase & Co.

Great. Thank you. Just one more quick follow-up. I was just curious, were there any hiring pressures or wage pressures that impacted your clients, whether it be in the fuel or corporate payment side that might have been a little bit of a headwind for results this quarter that could expect to normalize over time? Thank you, guys.

Ron Clarke
Chief Executive Officer and Chairman of the Board of Directors at FLEETCOR Technologies

Yeah. We had a little bit actually. Chuck referred to this earlier in our lodging business, where we have a decent size servicing group, which is one of the lowest wage groups kind of in the company. And so I'd say that's the place that we felt some pressure and responded to that in the fall, both to retain people that we were losing and to add additional people. I think like the rest of corporations in America, we're seeing some pressures in different areas than IT, digital, certain pockets. But we basically have built that in again to the guide. I think it's been going on for, call it, three to six months. So I think we're comfortable with what we plan.

Charles Freund
Chief Financial Officer at FLEETCOR Technologies

And Andrew, just to pick up on that, I think you were talking maybe wage pressure on some of our customers. And what I'd say there is we have seen that in lodging, in particular. And so our workforce lodging business, which has recovered, which is not to the extent that we -- where it could, is that they've had actually small businesses turned down jobs. And I can't travel there and do the work because they can't hire the people.

And so it will be interesting to see as government subsidies and other things fall aside and see what happens to the employment market, but we think there is some upside opportunity there. Having built a whole lot into the plan a little bit, but not a whole lot, but wait and see, maybe truck drivers, too.

Ron Clarke
Chief Executive Officer and Chairman of the Board of Directors at FLEETCOR Technologies

Yep.

Tien-Tsin Huang
Analyst at JPMorgan Chase & Co.

All right. Thank you guys.

Ron Clarke
Chief Executive Officer and Chairman of the Board of Directors at FLEETCOR Technologies

Thank you,

Operator

Our next question comes from the line of Bob Napoli with William Blair. Please proceed with your question.

Bob Napoli
Analyst at William Blair

Hi. Good afternoon and nice job in the quarter. Ron, I guess, could you give some color on your expectations for the growth of the corporate payments business in 2022? And I guess, over the medium-term? And maybe the various pieces, full AP versus cross-border versus other?

Ron Clarke
Chief Executive Officer and Chairman of the Board of Directors at FLEETCOR Technologies

Sure, Bob. I'd say the guide for that business in totality in the high teens. And again, to your point, there's different pieces, the payables portion of that virtual cards, full AP. Chuck mentioned the full AP, I think, grew 50% last quarter, so that will grow a bit faster. The partner business that we called out will grow slower than that and probably the cross-border business would be closer to the mid-teens, so there'll be those different pieces in it.

And you ask me this every time, hey, can you grow it faster? Well, obviously, if we could spend more money, but we -- again, we try to balance what we spend to kind of growth target and a profit target and spend wisely, so that we don't, again, have 50% new people or advertising that doesn't work. So we try again to be disciplined in terms of -- productive in terms of the monies that we spend.

Bob Napoli
Analyst at William Blair

Thank you. Then a follow-up question. Ron, as you called out at the beginning of the call, I mean, FLEETCOR has 15 proprietary acceptance networks, I think, for your fuels card business. Are that many necessary? Is there -- how do you think about those proprietary acceptance networks versus leveraging an open loop network? What benefits are you getting out of that? Is there an opportunity to optimize?

Ron Clarke
Chief Executive Officer and Chairman of the Board of Directors at FLEETCOR Technologies

Yes, that's a great question. So the answer is -- it's not only our fuel card business, it's kind of the underlying core of the company. So it's the same thing in lodging. We've got 15,000 hotels here in the US out of, call it, 45,000 or 50,000, we have super economics again and unique data. We've got a toll network, for example, in Brazil. We have fuel networks in, I don't know, 10 countries, where it's impossible for you or someone to go try to create a proprietary network today.

So I call it out really just to remind new people that those networks and the volume that we run through them and the data that we collect and the economics that we collect are just massively advantageous to us when we turn around to the client side to the business account side and pitch our offer to them. So I was really just trying to let people know that it's not some plain vanilla jumping on someone else's network that everyone else basically has access to.

Bob Napoli
Analyst at William Blair

Right. Thank you. Appreciate it.

Operator

Our next question comes from the line of David Togut with Evercore ISI. Please proceed with your question.

David Togut
Analyst at Evercore ISI

Thank you very much. The lodging business did nicely exceed our forecast for revenue in the quarter. Could you walk through what your forecast is for lodging revenue growth in 2022? And if you could discuss some of the underlying drivers, kind of the domestic business versus the international business? And then talk a little bit about Travelliance which you acquired a couple of years ago. And are you seeing a nice recovery there?

Charles Freund
Chief Financial Officer at FLEETCOR Technologies

Yeah, David, this is Charles. So lodging performing extremely well. We do have some continued recovery to go there, particularly in the airline space. So a lot of the performance you're seeing here is reflective of the domestic air travel. International has still been way, way down versus historic norms due to that kind of swinging back a bit next year.

Workforce has a bit of room to recover, but it's also just chugging along, doing pretty well. ALE business, which was a recent acquisition, accretive, a good buy for us. Still work to do to realize those synergies, but I'd say we're confident that the plans come together, so that looks pretty good. In terms of that specific line of business or product category, I don't have it in front of me.

Ron Clarke
Chief Executive Officer and Chairman of the Board of Directors at FLEETCOR Technologies

Hey, David, hey, it's Ron. I leave it here, as Chuck has talked, and so the guide on that thing is plus 20% organically and obviously crazy high in the 40s on a print basis, because we bought something, I guess, closed in September. And the drivers to get to that are the sales plan is way up. I think the sales plan is up 35% or 40%, it's our plan for 2022. And then what Chuck said that, there's super sensitivity and that one, particularly the airline, for example, about a-quarter of that segment historically of our revenue came from international flights, which in Q4 was still effectively zero.

And so to the extent that the world opens and airlines go back crossing borders, again, let's say, in Q2, we have the contracts, and we're already serving the airlines on the domestic lakes. And so we've assumed a little bit of kind of bounce back in that kind of in the second half. So it's big sales. It's bounced back in the airline thing. It's synergies that are baked into the recent acquisition, it's a big sales plan. There's just a lot of things going right in that business.

David Togut
Analyst at Evercore ISI

Thanks for that. Just a quick final question on capital allocation priorities for 2022. You've been very opportunistic with the stock at the current price, you've also been able to make some solid acquisitions. What's your thought process for the year ahead when you look at your stock at the current price versus what you have in the acquisition pipeline?

Charles Freund
Chief Financial Officer at FLEETCOR Technologies

We're still buyers. I mean, I guess, I mentioned in my opening comments, that not only do we buy a couple of million shares in Q4, but we made the decision with the Board to keep buying at the price into January right through a 10b5. And so I don't know where the stock is going to be, but at this price, we're buyers. And I think Chuck said it super well, Dave, earlier that with the liquidity we have, $1.5 billion, $1.7 billion, depending on what cash we elect to use, we can do a lot of things, right? At this kind of stock price, we can buy back still a lot more of the company. And as I mentioned, we're going to un-pause a set of deals that we worked on in the summer into the fall. And so my guess, if you said to me, hey, we talk in six months, as you see us do both.

David Togut
Analyst at Evercore ISI

Understood. Thank you very much.

Ron Clarke
Chief Executive Officer and Chairman of the Board of Directors at FLEETCOR Technologies

Yeah. Good to talk to you.

Operator

Our next question comes from the line of George Mihalos with Cowen. Please proceed with your question.

George Mihalos
Analyst at Cowen

Hey, guys. Thanks for taking my questions. I guess first just to build off David's, the last one, can you sort of break down for us now the composition of revenue within lodging from your traditional blue collar business in the airlines business now? Just trying to get a sense of how they are in terms of size and how we should be thinking about that bounce back in airlines going forward if it materializes?

Ron Clarke
Chief Executive Officer and Chairman of the Board of Directors at FLEETCOR Technologies

Yeah, that's a good question. So I think we probably get the details of that, but we do think of it in three pieces or three verticals. So we have what we call workforce, which is the original business we've owned for 10 years, which targets blue collar, travelers, a tree-cutting firm that goes when the power lines are down. And then a couple of verticals that we've gotten into the last couple of years of airline crew. So the airlines, again, it's a global business. 10% of the lodging rooms, I think, our crew around the world. So a nice segment for us to be in and then this newest one for us of homeowner insurers basically put people when you have water damage or a fire or something like that, to put people up and then put them into longer-term housing.

So there's super unique things in terms of the systems that we integrate into right into the crew management system or into the claims system in the case of the insurer. The networks are a little bit different than we try to put together depending on who the traveler is. And so I'd say that the two newest things would be circa 40%, just to give you kind of a number relative to the workforce Magella [Phonetic] and the good news is all three of those, again, are growing for the reasons that I outlined a bit ago.

George Mihalos
Analyst at Cowen

Okay. That's super helpful. And just -- hey, can you guys hear me?

Jim Eglseder
Head of Investor Relations at FLEETCOR Technologies

Go ahead, George.

George Mihalos
Analyst at Cowen

Okay. Just a quick follow-up on the expense side. I know it's something that's been -- been talked about here. But if we look at 2022, I mean, certainly, it sounds like there are some expenses that are somewhat more transitory, right? You've got a big increase as the bad debt normalizes and starts to come back. Obviously, you've got some integration costs, but could you just help us think about how much of those are transitory specific to 2022 versus sort of structural over the next several years as you accelerate investments to the cloud into your tech transformation?

Ron Clarke
Chief Executive Officer and Chairman of the Board of Directors at FLEETCOR Technologies

Yes, George, let me -- it's Ron. Let me take this wing and then Chuck can maybe provide a bit more detail. The way that I think about it, we think about it is what I'll call kind of discretionary expense so that we think about the business sitting there to operate and run the book of business we have, we need a set of expenses, right? We need IT to run and calm and people and credit and things like that. And then the big incremental expenses are really sales and IT and then a little bit of management to figure out the way, and so those are gigantic.

They're all those things, I'm talking about $600 million to $700 million of our total expense plan in 2022. So the call for us is really just how much do we spend in those things, which, again, are 50% or more helping 2023 and 2024, right? Because by the time you sell the thing and get it on board and you do it by next Thanksgiving, you don't get the business until the following year, you build an IT thing, you don't roll it out until Christmas. So that's the message I think that you ought to hear is we made the call when we like the revenue and profit guide that we can get to, to basically chase some things that we like, that we think are additive and incremental in the future years.

And so the answer is it depends. If those things go well, we'll double down on it more. If they don't, we'll probably back off. If we need a different profit target, we may back off if we don't. So I'd say that those the ones we kind of keep in our hand on the steering wheel and decide kind of how much we want to do with it. Unless investors told me, hey, they don't care about what our profits are, and then we might do more of it. I haven't heard that yet, so -- but we're still balancing it.

George Mihalos
Analyst at Cowen

Okay. Thank you.

Operator

Our next question comes from the line of Andrew Jeffrey with Truist. Please proceed with your question.

Andrew Jeffrey
Analyst at Truist Financial

Thanks. I appreciate you squeezing me in. Ron, lots of pretty interesting initiatives, I think, first, digital, which you noted is now half of fuel sales and the progress towards the platform selling motion. I'm trying to wrap my head around a little bit, and I don't expect you to speak to anything beyond 2022, but is there anything that we should be thinking about as sort of leaking out of the bottom of the funnel if you're having success with more value-added solutions, maybe expanded spend on fuel cards. I'm not sure you called that out this quarter in particular, but all this stuff collectively, should we think that maybe this business can grow faster at the current margin? Or is there -- I just want to make sure I'm not missing any puts and takes here that you'd want us to focus on.

Ron Clarke
Chief Executive Officer and Chairman of the Board of Directors at FLEETCOR Technologies

Yes, it's a super good question, Andrew. And my answer a little lofty would be it depends. So what I would say to you is this direction we're going of effectively repackaging and integrating a bunch of the products that we have has enormous incremental potential for the company because it will be served up differently, and it will appeal to different businesses than we're targeting today. So the first message I'm trying to get everybody to say is we're on to something that leverages the capabilities we've built over 20 years that it's a 10x kind of opportunity for the company.

The process that we could make is going to be a function of the selling economics of that, which we're just getting into. So if you said to me, hey, how do you think the profit margins will look in two or three years?' My answer is probably pretty similar of the set of businesses that we have, because we've got great experience and history and statistics, and we know the curves. We kind of know what we can produce. I would say, we don't know that answer for some of these platform things.

And so -- if those things sell kind of at a line average or median, even a smidge worse, I think you'll continue to see growth with similar kinds of margins. And if not, then we'll fight that fight when we get there and ask people, hey, would you rather see accelerated revenue, it's slightly lower margins, if that's the conclusion. But it's really just a bit too -- it's a bit too early to call.

Andrew Jeffrey
Analyst at Truist Financial

Okay. That's helpful. And then just philosophically or theoretically as a follow-up, is this a business that at some point you'd like to be simpler? Or do you feel really good about all the businesses you're in? I know, gift has sort of been kind of a mixed bag over the years.

Ron Clarke
Chief Executive Officer and Chairman of the Board of Directors at FLEETCOR Technologies

Yeah. I think we -- it's a great question. I think that it's the old at the vantage point, like we made the great idea of talking to you guys and buy-side people about the way we run the company, and we have these different things and stuff. When we sit around in the company, it's really pretty simple. I tried to say in my opening remarks of basically, we just work for businesses, and we work on their expenses or their spend and we try to reduce it. And the programs that we created control what they buy and what they pay for. So for us, whether it's the lodging room piece of spend or fuel or business card piece spend or a vendor, it all looks like a business expense that we're trying to help control.

And the reason that it seems complicated is, we've made like super specialized ways to do it. So we ended up like talking to everybody, hey, let me tell you about the super secret sauce I use in lodging versus whatever. And I think we're going to start to talk to the marketplace, to your point, a little simpler and just say, hey, look, we're about trying to help you spend less on kind of non-payroll expenses, and we've got super special stuff that we've got kind of more generalized stuff and what's your need and we've got a product line, let's see if we can help you. And maybe get a back off a little bit of all the detail that we provide everybody on how we make the sausage, I think.

Andrew Jeffrey
Analyst at Truist Financial

Yeah. I think that could help a lot. Great. Very insightful, thanks.

Ron Clarke
Chief Executive Officer and Chairman of the Board of Directors at FLEETCOR Technologies

Like, the selling is a perfect example or whatever, like, we use this pivot we've made to digital. We use it everywhere in the company. We figured out how to build the tech stack. We figured out how to advertise. We figured out how to automate bidding. We figured out how to get applications process through the system. We figured out of a credit incident.

We've done like so many things that we can basically print and copy into the other businesses that we have. And so, I think, you'll see more of that as we launch this platform line, you'll see us tucking the things that we have into the platform and they may see more of the same to people than different.

Andrew Jeffrey
Analyst at Truist Financial

Okay. Look forward to that evolution. Thank you. Yeah.

Ron Clarke
Chief Executive Officer and Chairman of the Board of Directors at FLEETCOR Technologies

Yes. You're welcome.

Operator

Thank you. [Operator Instructions] Our next question comes from the line of Ken Suchoski with Autonomous Research. Please proceed with your question.

Ken Suchoski
Analyst at Autonomous Research

Hey, good evening, everyone. Thanks for taking the question. Ron, I wanted to follow up on some of the questions on EV. I think you mentioned in your prepared remarks that the EV economics are roughly in line with traditional fueling services. So can you provide some insight on what the unit economics might look like for the EV offering? It's impressive that the transition to EV is revenue neutral. So I'm just curious what's driving that. Thank you.

Charles Freund
Chief Financial Officer at FLEETCOR Technologies

Hey, Ken, this is Charles. Good question. And I actually had our analyst pull data from the Netherlands, a country that's a little bit further ahead in terms of EV migration in the UK, which is further ahead than the US. And there, we have about 18,000 clients. And we said, okay, let's split those clients into two categories, a group that only buys fuel, it has no EV. So I see internal combustion engine only and then mixed fleets. And what I'd tell you is about 14% of the clients about 2,500 clients are mixed fleets. So they've got both types of vehicles.

And they tend to be larger, so the enterprise level clients are moving even faster. So the mixed fleets average about 20 cards per account or vehicles per account, whereas on the fuel-only fleet, ICE only fleets, there are about five cars per account. When I look at those mixed fleets, the actual revenue per vehicle that we receive on EVs versus fuel, it's actually slightly higher. And part of the reason is that these enterprise-level clients get rebates when they go out in the fuel networks, which we provide to them, which we don't field on the EV reporting side.

And so the economics turn out to be neutral to actually slightly favorable on the EV side. And so without now getting into specifics, client-level type of revenue per, I would tell you that the EV is about 20% higher for these mixed fleets. Now of their cards, they've got about 15% to 20% over to EV already. So we're seeing some real data points here. But that just gives you enough sense of who's moving and the size of accounts that are moving, how far they moved and the economic kind of relationship there and why it is comparable.

Ron Clarke
Chief Executive Officer and Chairman of the Board of Directors at FLEETCOR Technologies

Hey, Ken, it's Ron. It's a super important question, so let me try and chip on to what Chuck said. So to me, there was and is maybe a massive misconception that, hey, when a business moves to EV, you plug in and everything is free. So good buy, FLEETCOR tough pay. So the two things that, I mean, I can't not admit some over years ago, I was worried when I was dumber. But the two things that are clear are: one, it costs way more to recharge an EV vehicle than people thought, certainly, when you do it publicly. There's a huge markup on the electricity, obviously, because the track point versus trying to make money and there's way higher MDR for people like us because they're trying to build up volume. So the first misconception is, oh, it costs $50 to fill-up a van and only $5 to recharge a van. So that's not true.

And then the second thing, which I think we all missed is, most of the recharging is going to happen at home. So there's millions of charge points that we're not in the business today. We only do stuff at gas stations. And so, to me, those are the two things where you go, oh my god, most of the recharging is going to happen at home and it's got to be measured and reimbursed. So who's going to do it?' So I just suffered from the math that Chuck ran through, I just want to stick those concepts in people's heads that it is different than all of the thought coming into the thing. There's more money helping businesses in this thing, and it's going to cost them more than they think when they think about their golf cart.

Ken Suchoski
Analyst at Autonomous Research

Extremely helpful. Thank you guys. Appreciate it.

Operator

Our final question comes from the line of James Faucette with Morgan Stanley. Please proceed with your question.

James Faucette
Analyst at Morgan Stanley

Hey, sorry about that, fumbling with my phone. I wanted to kind of follow-up on that question and just ask on these minority investments that you've made, I think at least in my mind, the case to be made for managing those expenses and the costs associated with as you just highlighted are probably more significant than people may have imagined. But can you talk about strategically why or under what conditions you do the minority investment versus acquisition? What you're expecting that to lead to down the road? And how we should think about that trajectory of relationships and potential contribution directly to FLEETCOR?

Ron Clarke
Chief Executive Officer and Chairman of the Board of Directors at FLEETCOR Technologies

Hey, James. Hey, it's Ron. It's a good question. It's kind of a try before you buy. So the category is new. There's a couple of partners that we called out today, have been working on software pretty hard and stuff. So for us, it's kind of a no-brainer to be supportive to them, give them money to keep kind of bill. And we have obviously commercial agreements that state the economics and the roles of the two companies. And like it. We kind of get -- some people have been working on it here in the US and some people have been working on it in Europe.

We integrated into the stuff we have, and off we go. We've got a product that works and so we can focus on trying to sell this stuff, which is what those two partners are looking for. Honestly, to the extent that thing is a super big deal, and we want to get more of the value chain, we would clearly look at other options and stuff down the road and obviously in other geographies. But initially, we're super pleased with these partners. We screened a lot of them. We like the offerings that we have. And we're still in the mode that I said we can. We're still trying to learn exactly what the clients want and need and to make sure that the products, including the software, are dialed into that. So we didn't want to get out over our skis before we were clearer.

James Faucette
Analyst at Morgan Stanley

That makes sense. And then just as a quick follow-up, you talked a lot about the strength we're seeing in things like hotel and recovery and travel. Can you just give us a little bit of color on what we -- you saw as we went through the Omicron wave and where you're at on a run rate trajectory if there was any impact there? Just trying to measure near-term sensitivity to recent events.

Ron Clarke
Chief Executive Officer and Chairman of the Board of Directors at FLEETCOR Technologies

Yes. Another good question. I'd say a smidge, we, Chuck and I, obviously did a reconnaissance of January with our folks. I think we had a bit more in Europe, again, exiting December and a bit into January, it's a pretty soft month changes for us anyway, so a smidgy impact. Obviously, we've rolled that into our guidance yesterday, we've had our eyes open the whole time.

And I'd say the most recent stop call the last week or two, that smidgy thing is kind of going away. So it's -- I don't want to get over my hope easier, but it's sure feeling like we're coming out a bit into a clearing finally, and again, I just want to reaffirm that the forward numbers we've given for 2022, we're pretty confident and I'm sitting here beginning of February.

James Faucette
Analyst at Morgan Stanley

That's great. Thanks for all the great color, Ron.

Operator

Thank you. Ladies and gentlemen, we have reached to the end of the question-and-answer session. This concludes today's conference and you may...

Jim Eglseder
Head of Investor Relations at FLEETCOR Technologies

Alex, can we make just a quick comment.

Operator

Okay.

Jim Eglseder
Head of Investor Relations at FLEETCOR Technologies

We just want to apologize to those on the call for the technical white-out. Hopefully, it wasn't super confusing. So, as always, appreciate the interest and the support.

Operator

[Operator Closing Remarks]

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