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WEX topped Q2 2026 earnings and revenue estimates, supported by higher fuel prices and segment growth.
WEX raised full-year 2026 revenue & adjusted EPS guidance on resilient demand & prudent capital allocation.
WEX expanded adjusted operating margin, improved leverage & plans to direct most free cash flow to buybacks.
WEX (WEX - Free Report) reported impressive second-quarter 2026 results, with earnings and revenues beating the respective Zacks Consensus Estimate.
WEX’s adjusted earnings (excluding $2.24 from non-recurring items) were $5.35 per share, which surpassed the Zacks Consensus Estimate by 5.3% and increased 35.4% year over year. Revenues were $753.5 million, topping the Consensus Estimate by 1.8% and rising 14.2% year over year.
Higher fuel prices, solid execution across the business and broad-based segment growth drove these positive results. Total volume across all segments increased 15.7% year over year to $68.9 billion, highlighting continued customer activity.
Segments Drive Revenue Growth
The Mobility segment remained WEX's largest contributor, generating $422.4 million in revenues, up 22.0% from the prior-year quarter. Management attributed much of the outperformance to higher U.S. fuel prices, while payment processing transactions edged up 0.1% to 139.3 million.
The Benefits segment generated $206.0 million in revenues, increasing 5.6% year over year. Average Software-as-a-Service accounts rose 2.2% to 21.7 million, while average HSA custodial cash assets climbed 11.1% to $5.2 billion.
Corporate Payments revenues increased 5.8% to $125.1 million. Purchase volume declined 3.6% to $19.8 billion, although total volume processed increased 4.5% to $38.6 billion.
Margin Expansion Supports Earnings Growth
GAAP net income increased to $3.11 per share, up 57.1% year over year. Adjusted operating income margin expanded to 39.6% from 36.8% in the year-ago quarter, while GAAP operating margin improved to 27.0% from 23.8%.
Management noted that higher fuel prices contributed meaningfully to revenues and earnings outperformance. Excluding the impacts of fuel prices and foreign exchange, revenue grew 4.2%, while adjusted earnings per share increased 10.1%, reflecting solid underlying execution.
The company highlighted progress across its strategic initiatives, including AI-driven productivity improvements, pricing actions within Mobility and continued momentum in Corporate Payments and Benefits.
Cash Flow, Leverage Improve
WEX ended the quarter with a leverage ratio of 2.9X, improving from 3.1X at the end of the first quarter.
Net cash used in operating activities totaled $77.6 million, compared with $264.6 million in operating cash provided in the prior-year quarter, primarily reflecting higher receivable balances associated with elevated domestic fuel prices. Adjusted free cash flow improved to $219.0 million from $194.3 million a year earlier.
The company repurchased approximately $60 million of shares during the second quarter, with an additional $33 million repurchased through July 20. Management indicated that most of the adjusted free cash flow will be directed toward share repurchases in the near term.
WEX’s Q3 & Full Year 2026 Outlook
For the third quarter of 2026, WEX expects revenues to be in the range of $733 million to $753 million. The Zacks Consensus Estimate for the same is pegged at $733.3 million.
Adjusted earnings are expected to be $5.45-$5.65 per share. The consensus estimate for the same is pegged at $5.41.
The company raised its full-year 2026 guidance to $2.86 billion-$2.90 billion, up from the previous outlook of $2.82 billion-$2.88 billion. The Zacks Consensus Estimate for the same is pegged at $2.85 billion.
Adjusted earnings are projected to be in the range of $19.68-$20.08 per share compared with the earlier forecast of $18.95-$19.55. The consensus mark for the same is pegged at $19.29.
The updated guidance assumes average U.S. retail fuel prices of $3.91 per gallon for full-year 2026 and does not include any potential future impacts from European fuel spreads. Management said strong fuel prices, resilient demand across all three operating segments and disciplined capital allocation supported the improved outlook.
Waste Connections, Inc. (WCN - Free Report) reported impressive second-quarter 2026 results. WCN’s adjusted earnings of $1.50 per share outpaced the consensus mark by 11.1% and rose 16.3% from the year-ago quarter. WCN’s total revenues of $2.56 billion surpassed the consensus mark by 1.1% and increased 6.4% year over year.
Rollins, Inc. (ROL - Free Report) posted unimpressive second-quarter 2026 results. ROL’s adjusted earnings of 32 cents per share missed the Zacks Consensus Estimate by 5.9% but rose 6.7% year over year. Total revenues of $1.08 billion fell short of the consensus estimate by 1.7% but increased 7.9% from the year-ago quarter.
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WEX's Q2 Earnings & Revenues Surpass Estimates, Increase Y/Y
Key Takeaways
WEX (WEX - Free Report) reported impressive second-quarter 2026 results, with earnings and revenues beating the respective Zacks Consensus Estimate.
WEX’s adjusted earnings (excluding $2.24 from non-recurring items) were $5.35 per share, which surpassed the Zacks Consensus Estimate by 5.3% and increased 35.4% year over year. Revenues were $753.5 million, topping the Consensus Estimate by 1.8% and rising 14.2% year over year.
WEX Inc. Price, Consensus and EPS Surprise
WEX Inc. price-consensus-eps-surprise-chart | WEX Inc. Quote
Higher fuel prices, solid execution across the business and broad-based segment growth drove these positive results. Total volume across all segments increased 15.7% year over year to $68.9 billion, highlighting continued customer activity.
Segments Drive Revenue Growth
The Mobility segment remained WEX's largest contributor, generating $422.4 million in revenues, up 22.0% from the prior-year quarter. Management attributed much of the outperformance to higher U.S. fuel prices, while payment processing transactions edged up 0.1% to 139.3 million.
The Benefits segment generated $206.0 million in revenues, increasing 5.6% year over year. Average Software-as-a-Service accounts rose 2.2% to 21.7 million, while average HSA custodial cash assets climbed 11.1% to $5.2 billion.
Corporate Payments revenues increased 5.8% to $125.1 million. Purchase volume declined 3.6% to $19.8 billion, although total volume processed increased 4.5% to $38.6 billion.
Margin Expansion Supports Earnings Growth
GAAP net income increased to $3.11 per share, up 57.1% year over year. Adjusted operating income margin expanded to 39.6% from 36.8% in the year-ago quarter, while GAAP operating margin improved to 27.0% from 23.8%.
Management noted that higher fuel prices contributed meaningfully to revenues and earnings outperformance. Excluding the impacts of fuel prices and foreign exchange, revenue grew 4.2%, while adjusted earnings per share increased 10.1%, reflecting solid underlying execution.
The company highlighted progress across its strategic initiatives, including AI-driven productivity improvements, pricing actions within Mobility and continued momentum in Corporate Payments and Benefits.
Cash Flow, Leverage Improve
WEX ended the quarter with a leverage ratio of 2.9X, improving from 3.1X at the end of the first quarter.
Net cash used in operating activities totaled $77.6 million, compared with $264.6 million in operating cash provided in the prior-year quarter, primarily reflecting higher receivable balances associated with elevated domestic fuel prices. Adjusted free cash flow improved to $219.0 million from $194.3 million a year earlier.
The company repurchased approximately $60 million of shares during the second quarter, with an additional $33 million repurchased through July 20. Management indicated that most of the adjusted free cash flow will be directed toward share repurchases in the near term.
WEX’s Q3 & Full Year 2026 Outlook
For the third quarter of 2026, WEX expects revenues to be in the range of $733 million to $753 million. The Zacks Consensus Estimate for the same is pegged at $733.3 million.
Adjusted earnings are expected to be $5.45-$5.65 per share. The consensus estimate for the same is pegged at $5.41.
The company raised its full-year 2026 guidance to $2.86 billion-$2.90 billion, up from the previous outlook of $2.82 billion-$2.88 billion. The Zacks Consensus Estimate for the same is pegged at $2.85 billion.
Adjusted earnings are projected to be in the range of $19.68-$20.08 per share compared with the earlier forecast of $18.95-$19.55. The consensus mark for the same is pegged at $19.29.
The updated guidance assumes average U.S. retail fuel prices of $3.91 per gallon for full-year 2026 and does not include any potential future impacts from European fuel spreads. Management said strong fuel prices, resilient demand across all three operating segments and disciplined capital allocation supported the improved outlook.
WEX currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Earnings Snapshots
Waste Connections, Inc. (WCN - Free Report) reported impressive second-quarter 2026 results. WCN’s adjusted earnings of $1.50 per share outpaced the consensus mark by 11.1% and rose 16.3% from the year-ago quarter. WCN’s total revenues of $2.56 billion surpassed the consensus mark by 1.1% and increased 6.4% year over year.
Rollins, Inc. (ROL - Free Report) posted unimpressive second-quarter 2026 results. ROL’s adjusted earnings of 32 cents per share missed the Zacks Consensus Estimate by 5.9% but rose 6.7% year over year. Total revenues of $1.08 billion fell short of the consensus estimate by 1.7% but increased 7.9% from the year-ago quarter.