Payment solutions company Wex's travel and corporate
solutions segment purchase volume increased 17 percent year over year to $7.4
billion in the fourth quarter of 2017. Revenue for the segment increased 13
percent to $60.3 million.
CFO Roberto Simon attributed the revenue growth not only to
the increased purchase volume but also to mid-October's acquisition of payments
provider AOC Solutions and to higher international settlement fees. "We
saw very positive trends in revenue diversification with close to 30 percent
[revenue] growth outside the U.S. travel business, led by Europe and
Brazil," he said.
Total-year revenue for the travel and corporate solutions
segment increased 4 percent to $224 million, which CEO Melissa Smith called
"slower than normal." She attributed the growth to stronger and
refined relationships with "top tier" online travel agencies,
including Expedia and HotelTonight. "We saw significant margin improvements,"
she said. "We continue to drive growth outside the U.S., highlighted by a
50 percent purchase volume increase in Europe for the [fourth] quarter.
Similarly we're accelerating growth in Asia as our products gain traction and
grow rapidly in this emerging market."
Wex sees room for growth. "The travel and corporate
payments [segment] is vast. Even with more than $30 billion in Wex purchase
volume last year, we still captured less than 2 percent of the target
market," Smith said.
While an improvement over the past two quarters, Wex's net
interchange rate dropped from 71 basis points in the fourth quarter of 2016 to
53 basis points in the fourth quarter of 2017.
Companywide, revenue increased 14 percent year over year in
the fourth quarter to $331.3 million. Net earnings attributed to shareholders were
$79.8 million. For the full year, revenue increased 23 percent to $1.25 billion
while net earnings attributed to shareholders totaled $160.3 million.
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