Corpay outlines $4.5B revenue target and $21 cash EPS for 2025 while expanding corporate payments and stablecoin initiatives

Earnings Call Insights: Corpay, Inc. (CPAY) Q3 2025

MANAGEMENT VIEW

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CEO Ronald F. Clarke highlighted strong Q3 performance, stating, "We reported both revenue and cash EPS growth of 14% in the quarter. Our overall organic revenue growth finished up 11%." He emphasized, "Particularly pleased there that higher volume and higher spend is driving the organic growth, so durable." Clarke also noted, "Our Vehicle Payments segment grew 10%. And inside of that, our U.S. Vehicle Payment segment accelerated to 5%." The Corporate Payments segment grew 17%, even with a point of flow compression, and retention improved slightly to 92.4%.

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Clarke announced a revision to Q4 guidance: "We're now outlooking Q4 revenue of $1.235 billion and cash EPS of $5.90 at the midpoint." He indicated both numbers are "helped by the Alpha acquisition that closed October 31, along with our strong Q3."

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Clarke provided an early 2026 preview, stating, "We're also expecting incremental margin expansion as a result of some AI productivity and vendor rationalization initiatives."

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Clarke spotlighted the Corporate Payments business: "We're out looking over $2 billion in revenue next year, and that representing about 40% of the company." He detailed four solutions within this segment—spend management, AP automation, cross-border risk management, and global bank accounts—and shared ambitions to grow the business fivefold.

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On M&A, Clarke reported, "We have closed the Avid mid-market AP automation investment... We have closed Alpha, which is the European cross-border business, on October 31." He also disclosed upcoming divestitures: "We are in the market with 2 divestitures, hoping to fetch up to $1.5 billion."

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Clarke discussed progress in stablecoin initiatives: "We have contracted with some partners, including Circle to provision the coin, the rails and the digital wallet," describing three prongs to their approach and underscoring the company's readiness for stablecoin adoption.

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CFO Peter Walker stated, "Q3 revenue was $1.172 billion, overperforming the midpoint of our guidance range." He added, "Q3 adjusted EPS of $5.70 per share overperformed the midpoint of our range and grew 14% year-over-year due to strong top line performance and solid expense management."

OUTLOOK

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Updated Q4 2025 guidance: revenue of $1.235 billion and cash EPS of $5.90 at the midpoint.

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Clarke projected, "our full year 2025 will finish above $4.5 billion in revenue. That will be up 14% and above $21 in cash EPS."

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For 2026, Clarke stated, "still outlooking organic revenue growth in the 9% to 11% range expecting incremental accretion of at least $0.75 from the combined Alpha and Avid deals."

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The company expects Q4 organic revenue growth of approximately 10%, maintaining Vehicle segment organic growth at 10% and projecting Corporate Payments segment to finish mid-teens, with a 3% float revenue headwind.

FINANCIAL RESULTS

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Q3 revenue was $1.172 billion, with 14% year-over-year growth.

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Q3 adjusted EPS was $5.70 per share, representing 14% growth year-over-year.

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Corporate Payments spend volume reached just over $68 billion in Q3, with a run rate north of $250 billion annually.

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Operating expenses were $649 million, up 16% versus Q3 last year, primarily due to acquisitions, divestitures, FX, and a 2024 disposition true-up. Excluding these, operating expenses increased 8%.

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Adjusted EBITDA margin was 57.7%. Liquidity stood at $3.5 billion with a leverage ratio of 2.4x.

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The company purchased approximately 600,000 shares for $192 million, with $1 billion remaining authorized for repurchases.

Q&A

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John Davis, Raymond James: Asked about Corporate Payments organic growth and Q4 drivers. Walker explained core Corporate Payments expected to be around 16% with a 100 basis point float drag; Alpha adds about $55 million in Q4 revenue.

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Davis inquired about confidence in 2026 organic growth. Clarke responded that trends, new business, and loss rates give confidence for vehicle and corporate payments to reach targeted growth.

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Sanjay Sakhrani, KBW: Probed on the impact of the Mastercard partnership and Alpha synergies on 2026 outlook. Clarke indicated, "not a lot" of the preliminary view is driven by these, with most outlook based on core businesses.

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Tien-Tsin Huang, JPMorgan: Asked about segment growth differences in 2026. Clarke noted, "it's really more of the same, right, than different," with some acceleration in vehicle and sustained double-digit corporate payments growth.

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Andrew Jeffrey, William Blair: Explored stablecoin opportunity and infrastructure build-out. Clarke described a two-part opportunity: serving crypto providers and enabling stablecoin wallets for large merchant payouts and institutional clients, stating, "the fascinating question is, what will the take rate be?"

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Darrin Peller, Wolfe Research: Sought updates on divestitures and U.S. fleet growth sustainability. Clarke said, "these are decent businesses...they will sell. The question is, are we going to like the price," and explained structural improvements in U.S. Vehicle make growth easier.

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Christopher Svensson, Deutsche Bank: Asked about Avid integration and gift card business. Clarke confirmed profit improvements at Avid and high confidence in double-digit gift card growth for 2026.

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Mihir Bhatia, BofA: Asked about monetization rates in Corporate Payments. Clarke clarified, "the normal book of business is still pricing basically in the same kind of range," with big one-time enterprise transactions impacting rates.

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Abigail Rudder, Oppenheimer: Asked about AP automation adoption hurdles. Clarke explained inertia is the main challenge, but the value proposition is compelling once meetings occur.

SENTIMENT ANALYSIS

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Analysts' tone was generally positive, with repeated acknowledgment of strong results and future prospects, but focused questioning on sustainability of growth, integration of acquisitions, and monetization rates indicated some underlying skepticism.

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Management maintained a confident tone during prepared remarks—"we're super excited about the long-term prospects"—and in Q&A, emphasizing strong business fundamentals and readiness for new payment rails. Clarke’s responses were detailed and direct, rarely defensive, and frequently used phrases such as "we're confident" and "we think."

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Compared to the previous quarter, both analysts and management exhibited increased confidence, with fewer concerns about macro or segment-specific headwinds.

QUARTER-OVER-QUARTER COMPARISON

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Q3 guidance and actuals were revised upward versus Q2, with increased revenue and EPS targets for the full year.

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Corporate Payments continued double-digit organic growth, but the growth rate moderated from 18% in Q2 to 17% in Q3. Vehicle Payments organic growth increased from 9% in Q2 to 10% in Q3.

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Management’s tone shifted from "right on expectations" in Q2 to "very pleased with the quarter" and "clean" results in Q3.

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Analysts in Q3 focused more on accretion from acquisitions, stablecoin opportunities, and divestitures, while Q2 had more questions about macro, segment sustainability, and cash flow.

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Lodging segment weakness persists, but stabilization was noted this quarter. Gift card business growth and AP automation progress were highlighted more in Q3.

RISKS AND CONCERNS

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Clarke noted the lodging business remains weak but is stabilizing; "Now we just need to sell more."

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Float revenue headwinds persist in Corporate Payments, with management expecting a 3% drag in Q4.

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Execution risk exists for integrating recent acquisitions and realizing projected accretion.

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The company is actively pursuing divestitures, with uncertainty around transaction pricing.

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Stablecoin adoption is in early stages, and management acknowledges unknowns around take rates and client utilization.

FINAL TAKEAWAY

Corpay, Inc. delivered a strong third quarter, reporting 14% growth in both revenue and cash EPS, and raised full-year 2025 guidance above $4.5 billion in revenue and $21 in cash EPS. The company is advancing its corporate payments and stablecoin strategies, integrating new acquisitions, pursuing selective divestitures, and investing in growth initiatives, while maintaining a confident outlook for continued double-digit organic growth into 2026.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/cpay/earnings/transcripts]

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