WEX Inc.

Previous wording

Leveraging these unique capabilities, WEX offers solutions that organizations use to drive efficiencies and manage risk. These solutions, which share and benefit from our underlying capabilities, are provided across the following three business segments: Mobility, Corporate Payments, and Benefits. Within our Mobility segment, we are a leader in fleet vehicle payment solutions, transaction processing, and information management services specifically designed for the needs of fleets of all sizes from small businesses to federal and state government fleets and over-the-road carriers. Our Corporate Payments segment focuses on the complex payment environment of global B2B payments, enabling customers to utilize our payments solutions to integrate into their own workflows and manage their accounts payable automation and spend management functions. Within our Benefits segment, we provide SaaS software with embedded payment solutions and plan administration services for consumer directed health benefits, COBRA accounts, and benefit enrollment and administration. Additionally, WEX Inc. and WEX Bank provide non-bank custodial and depository services, respectively, with respect to HSAs.

Current wording

WEX offers solutions that organizations use to drive efficiencies and manage risk. These solutions, which share and benefit from our underlying capabilities, are provided across the following three business segments:

Previous wording

The following table presents a summarized view of selected results for the three and nine months ended September 30, 2024, shown comparative to the prior year periods. Net cash (used for) provided by operating activities and adjusted free cash flow are presented on a year to-date basis, and shown comparative to the prior year to-date. The other key metric included below provides enhanced information and data underlying our financial results. A recurring, more extensive list of key performance indicators is included by segment within the Results of Operations section later in this MD&A.

Current wording

The following table presents a summarized view of selected results for the three months ended March 31, 2025, shown comparative to the prior year period. The other key metric included below provides enhanced information and data underlying our financial results. A recurring, more extensive list of key performance indicators is included by segment within the Results of Operations section later in this MD&A.

Previous wording

(1)Lower domestic fuel prices decreased revenue by $21.2 million and $47.2 million for the three and nine months ended September 30, 2024.

Current wording

(1)Lower domestic fuel prices compared to the prior year decreased revenue by $8.5 million for the three months ended March 31, 2025.

Previous wording

(2)Our net payment processing rate for the three and nine months ended September 30, 2024 has benefited from lower average domestic fuel prices and higher rates earned from merchant contract renewals at favorable terms.

Current wording

(3)Our net payment processing rate for the three months ended March 31, 2025 was flat year-over-year.

Previous wording

Finance fee revenue, which is comprised of the following components, is discussed below.

Current wording

Total Mobility revenue decreased $5.2 million for the three months ended March 31, 2025 as compared to the same period in the prior year, driven primarily by lower average domestic fuel prices, offset in part by an increase in finance fee revenue. Finance fee revenue, which is comprised of the following components, is discussed below.

Previous wording

The primary source of factoring fee revenue is calculated as a negotiated percentage fee of the receivable balance that we purchase. Factoring fee revenue for the third quarter and nine months ended September 30, 2024 remained consistent with that of the same periods in the prior year.

Current wording

Factoring fee revenue is comprised primarily of fees calculated at a negotiated percentage of the receivable balance that we purchase.

Previous wording

Finance income decreased $7.4 million for the third quarter of 2024 and decreased $16.0 million for the nine months ended September 30, 2024 as compared to the same periods in the prior year. The decrease in finance income for the three and nine months ended September 30, 2024 compared to the prior year periods was driven by a decline in the number of late fee instances, reflective of the tighter credit policies we put in place during mid-2023, and by lower domestic fuel prices, offset in part by increases in contractual late fee rates charged during the three and nine months ended September 30, 2024, as compared to the same periods in the prior year. Concessions to certain customers experiencing financial difficulties may be granted and are limited to extending the time to pay, placing a customer on a payment plan or granting waivers of late fees. There were no material concessions granted to customers experiencing financial difficulties during the three and nine months ended September 30, 2024 and 2023.

Current wording

Concessions to certain customers experiencing financial difficulties may be granted and are limited to extending the time to pay, placing a customer on a payment plan or granting waivers of late fees. There were no material concessions granted to customers experiencing financial difficulties during the three months ended March 31, 2025 and 2024.

Previous wording

(2)Segment adjusted operating income margin is calculated by dividing segment adjusted operating income by segment revenue.

Current wording

(2)Segment adjusted operating income margin is calculated by dividing segment adjusted operating income by segment revenue. Such margin increased marginally during the three months ended March 31, 2025 as compared to the same period in the prior year due primarily to the reduction in credit loss provision, as further discussed below.

Previous wording

Provision for credit losses, which includes estimates for both credit and fraud losses, decreased $4.4 million and $31.3 million for the three and nine months ended September 30, 2024, respectively, as compared to the same periods in the prior year. Stabilization in the over-the-road trucking market, tighter credit policies put in place to reduce losses, and lower than expected charge-offs from macroeconomic factors have all contributed to the reduction in the provision for the three and nine months ended September 30, 2024, as compared to the same periods in the prior year. We generally measure our loss performance by calculating fuel-related losses as a percentage of total fuel expenditures on payment processing transactions. This metric for provision for credit losses was 5.8 and 11.6 basis points of fuel expenditures for the three and nine months ended September 30, 2024, respectively. For the three and nine months ended September 30, 2023, provision for credit losses was 6.8 and 17.8 basis points of fuel expenditures, respectively.

Current wording

Provision for credit losses, which includes estimates for both credit and fraud losses, decreased $6.9 million for the three months ended March 31, 2025 as compared to the same period in the prior year driven primarily by the tighter credit policies put in place during 2023 and 2024 to reduce losses. We generally measure our loss performance by calculating fuel-related losses as a percentage of total fuel expenditures on payment processing transactions. This metric for provision for credit losses was 11.5 basis points of fuel expenditures for the three months ended March 31, 2025. For the three months ended March 31, 2024, provision for credit losses was 15.3 basis points of fuel expenditures.

Previous wording

Total Benefits revenue increased $15.4 million for the third quarter of 2024 and increased $62.3 million for the nine months ended September 30, 2024 as compared to the same periods in the prior year. A rise in average HSA deposit balances held by WEX Bank and interest rates earned on the investment of such balances, as reflected within other revenue, coupled with increased revenues due to the Ascensus Acquisition, substantially contributed to the increase in total revenues for the three and nine months ended September 30, 2024 as compared to the prior year comparable periods.

Current wording

Total Benefits revenue increased $8.1 million for the three months ended March 31, 2025 as compared to the same period in the prior year, primarily due to a rise in average HSA deposit balances held by WEX Bank, on which we earn investment income.

Previous wording

(2)Segment adjusted operating income margin is calculated by dividing segment adjusted operating income by segment revenue. Revenue earned on HSA assets is highly accretive to earnings and is the primary driver of the increase in segment adjusted operating income margin for the three and nine months ended September 30, 2024 as compared to the prior year comparable periods.

Current wording

(2)Segment adjusted operating income margin is calculated by dividing segment adjusted operating income by segment revenue. Revenue earned on HSA assets is highly accretive to earnings and is the primary driver of the increase in segment adjusted operating income margin for the three months ended March 31, 2025 as compared to the prior year comparable period.

Previous wording

(1)Our net interchange rate has increased during the third quarter of 2024 and decreased during the nine months ended September 30, 2024 compared to the same periods of the prior year, primarily due to changes in customer mix.

Current wording

(1)Our net interchange rate has increased during the three months ended March 31, 2025 compared to the same period of the prior year, substantially due to customer volume mix.

Previous wording

Concessions to certain customers experiencing financial difficulties may be granted and are limited to extending the time to pay, placing a customer on a payment plan or granting waivers of late fees. There were no material concessions granted to customers during the three and nine months ended September 30, 2024 and 2023.

Current wording

Concessions to certain customers experiencing financial difficulties may be granted and are limited to extending the time to pay, placing a customer on a payment plan or granting waivers of late fees. There were no material concessions granted to customers during the three months ended March 31, 2025 and 2024.

Previous wording

As a result of owning all of our technology and issuing capabilities, our Corporate Payments segment has a highly scalable and relatively fixed cost base resulting in largely comparable expenses year to year. As a result, changes in revenue similarly impact operating income, segment adjusted operating income and segment adjusted operating income margin. Instances in which our expenses for the third quarter and nine months ended September 30, 2024 did not remain comparable to those of the comparable 2023 periods are described hereafter.

Current wording

As a result of owning all of our technology and issuing capabilities, our Corporate Payments segment has a highly scalable and relatively fixed cost base resulting in largely comparable expenses year to year. As a result, changes in revenue similarly impact operating income, segment adjusted operating income and segment adjusted operating income margin. Instances in which our expenses for the three months ended March 31, 2025 did not remain comparable to those of the comparable 2024 period are described hereafter.

Previous wording

Sales and marketing expenses increased $14.6 million for the nine months ended September 30, 2024 as compared to the same periods in the prior year primarily due to increased employee costs as a result of the Payzer Acquisition along with an increase in costs targeted at driving growth.

Current wording

Sales and marketing expense increased $3.4 million during the three months ended March 31, 2025 as compared to the same period of the prior year due in part to an increase in partner commissions and employee and other costs targeted at driving growth.

Previous wording

During the three months ended September 30, 2024, unallocated corporate expenses decreased $5.4 million as compared to the same period of the prior year due primarily to a reduction in variable compensation and higher professional costs incurred in the prior year period in connection with the Ascensus Acquisition.

Current wording

During the three months ended March 31, 2025, unallocated corporate expenses decreased $6.8 million as compared to the same period of the prior year due primarily to a change in estimated attainment of performance-based employee stock-based compensation.

Previous wording

Our foreign currency exchange exposure is primarily related to the remeasurement of our cash, receivable and payable balances, including intercompany transactions that are denominated in foreign currencies. Losses incurred during the nine months ended September 30, 2024 resulted from the weakening of certain foreign currencies in which we transact, including the Euro, and the Australian and Canadian dollars, relative to the U.S. dollar over the course of the year. However, during the three months ended September 30, 2024, we experienced a gain attributable to the rebound of certain foreign currencies, particularly the Euro and Canadian dollar, relative to the U.S. dollar.

Current wording

Our foreign currency exchange exposure is primarily related to the remeasurement of our cash, receivable and payable balances, including intercompany transactions that are denominated in both U.S. dollar and foreign currencies. The higher losses incurred during the three months ended March 31, 2024 resulted from the weakening of certain foreign currencies in which we transact relative to the U.S. dollar, including the euro, and Australian and Canadian dollars. Losses incurred during the three months ended March 31, 2025 were significantly lower than those of the comparable prior year period due to a March 2025 strengthening of many foreign currencies relative to the U.S. dollar, including the euro, Australian dollar and British pound sterling.

Previous wording

The increase in income tax provision for the three and nine months ended September 30, 2024 as compared to the prior year comparable periods is due primarily to an increase in the Company’s taxable income, offset in part by a decrease in our effective tax rates. The Company’s effective tax rates for the three and nine months ended September 30, 2024 were 27.1 percent and 27.2 percent, respectively, compared to 58.6 percent and 30.2 percent for the three and nine months ended September 30, 2023, respectively. See Part I – Item 1 – Note 14, Income Taxes, to our condensed consolidated financial statements for more information regarding the drivers behind our effective tax rates.

Current wording

The increase in income tax provision for the three months ended March 31, 2025 as compared to the prior year comparable period is due primarily to an increase in the Company’s pre-tax book income, coupled with a tax shortfall arising from stock-based compensation in the current year. The Company’s effective tax rate for the three months ended March 31, 2025 was 28.8 percent, compared to 26.9 percent for the three months ended March 31, 2024. See Part I – Item 1 – Note 14, Income Taxes, to our condensed consolidated financial statements for more information regarding the drivers behind our effective tax rates.

Previous wording

•Net foreign currency gains and losses primarily result from the remeasurement to functional currency of cash, accounts receivable and accounts payable balances, certain intercompany notes denominated in foreign currencies and any gain or loss on foreign currency economic hedges relating to these items. The exclusion of these items helps management compare changes in operating results between periods that might otherwise be obscured due to currency fluctuations;

Current wording

•Net foreign currency gains and losses primarily result from the remeasurement to functional currency of cash, accounts receivable and accounts payable balances, certain intercompany transactions denominated in foreign currencies and any gain or loss on foreign currency economic hedges relating to these items. The exclusion of these items helps management compare changes in operating results between periods that might otherwise be obscured due to currency fluctuations;

Previous wording

•Debt restructuring and debt issuance cost amortization, which for the three and nine months ended September 30, 2023 includes the loss on extinguishment of Convertible Notes, are unrelated to the continuing operations of the Company. Debt restructuring costs are not consistently occurring and do not reflect expected future operating expense, nor do they provide insight into the fundamentals of current or past operations of our business. In addition, since debt issuance cost amortization is dependent upon the financing method, which can vary widely company to company, we believe that excluding these costs helps to facilitate comparison to historical results as well as to other companies within our industry;

Current wording

•Debt restructuring and debt issuance cost amortization are unrelated to the continuing operations of the Company. Debt restructuring costs are not consistently occurring and do not reflect expected future operating expense, nor do they provide insight into the fundamentals of current or past operations of our business. In addition, since debt issuance cost amortization is dependent upon the financing method, which can vary widely company to company, we believe that excluding these costs helps to facilitate comparison to historical results as well as to other companies within our industry;

Previous wording

•The tax related items are the difference between the Company’s GAAP tax provision and a non-GAAP tax provision. Beginning in fiscal year 2024, the Company utilizes a fixed annual projected long-term non-GAAP tax rate in order to provide better consistency across reporting periods. To determine this long-term projected tax rate, the Company performs a pro forma tax provision based upon the Company’s projected adjusted net income before taxes. The fixed annual projected long-term non-GAAP tax rate could be subject to change in future periods for a variety of reasons, including the rapidly evolving global tax environment, significant changes in our geographic earnings mix including due to acquisition activity, or other changes to our strategy or business operations; and

Current wording

•The tax related items are the difference between the Company’s GAAP tax provision and a non-GAAP tax provision. The Company utilizes a fixed annual projected long-term non-GAAP tax rate in order to provide better consistency across reporting periods. To determine this long-term projected tax rate, the Company performs a pro forma tax provision based upon the Company’s projected adjusted net income before taxes. The fixed annual projected long-term non-GAAP tax rate could be subject to change in future periods for a variety of reasons, including the rapidly evolving global tax environment, significant changes in our geographic earnings mix including due to acquisition activity, or other changes to our strategy or business operations; and

Previous wording

The Company’s non-GAAP adjusted free cash flow has historically been calculated as cash flows from operating activities adjusted for net purchases of current investment securities, capital expenditures, net Funding Activity, and certain other adjustments including contingent and deferred consideration paid to sellers in excess of acquisition-date fair value. Such calculation has historically been based on the principle that the net activity in accounts receivable, accounts payable, and investment of HSA deposits would be offset by WEX Bank Funding Activity, however, due to the nature of WEX Bank cash balances, they may be increased or decreased for reasons other than matching operating activity. As a result, beginning with the third quarter of 2024, adjusted free cash flow also includes an adjustment to reflect the change in WEX Bank cash balances and the applicable prior periods have similarly been adjusted to conform to the current presentation.

Current wording

Adjusted free cash flow has historically been calculated as cash flows from operating activities adjusted for net purchases of current investment securities, capital expenditures, net Funding Activity, and certain other adjustments. Such calculation has historically been based on the principle that the net activity in accounts receivable, accounts payable, and investment of HSA deposits would be offset by WEX Bank Funding Activity, however, due to the nature of WEX Bank cash balances, they may be increased or decreased for reasons other than matching operating activity. As a result, beginning with the third quarter of 2024, adjusted free cash flow also includes an adjustment to reflect the change in WEX Bank cash balances and the applicable prior periods have similarly been adjusted to conform to the current presentation.

Previous wording

We fund our business operations primarily via cash on hand, cash generated from operations, the issuance of deposits, and borrowings under our Amended and Restated Credit Agreement. As of September 30, 2024, we had cash and cash equivalents of$535.4 million, including Corporate Cash of$123.2 million, and remaining borrowing availability of$606.3 million under the Revolving Credit Facility along with access to various sources of funds, including uncommitted federal funds lines of credit from other banks.

Current wording

We fund our business operations primarily via cash on hand, cash generated from operations, the issuance of deposits and other borrowings primarily used as part of our accounts receivable funding strategy, and borrowings under our Revolving Credit Facility.

Previous wording

Our short-term cash requirements consist primarily of funding the working capital needs of our business, payments on maturities of deposits, current principal and interest payments on the credit facilities under our Amended and Restated Credit Agreement, and payments on other short-term debt. Our long-term cash requirements consist primarily of amounts owed under our Amended and Restated Credit Agreement and various facilities lease agreements.

Current wording

Our short-term cash requirements consist primarily of funding the working capital needs of our business, current principal and interest payments on the credit facilities under our Credit Agreement, and payments on maturities of deposits and other borrowings used as part of our accounts receivable funding strategy. Our long-term cash requirements consist primarily of amounts owed under our Credit Agreement and any other long-term debt outstanding and various facilities lease agreements.

Previous wording

(2)WEX Bank’s regulatory status enables it to raise capital to fund the Company’s working capital requirements by issuing deposits, subject to various regulatory capital requirements administered by the FDIC and the UDFI. Additionally, WEX Bank holds deposits for the benefit of WEX Inc.’s HSA customers subject to the terms of a deposit agreement. As of September 30, 2024, we had$4,461.5 million in total deposits. See Part I – Item 1 – Note 9, Deposits, to our condensed consolidated financial statements for more information regarding our deposits.

Current wording

(2)WEX Bank’s regulatory status enables it to raise capital to fund the Company’s working capital requirements by issuing deposits, subject to various regulatory capital requirements administered by the FDIC and the UDFI. Additionally, WEX Bank holds deposits for the benefit of WEX Inc.’s HSA customers subject to the terms of a deposit agreement. As of March 31, 2025, we had $4,646.8 million in total deposits. See Part I – Item 1 – Note 9, Deposits, to our condensed consolidated financial statements for more information regarding our deposits.

Previous wording

(3)The Company utilizes securitized debt agreements to finance a portion of our receivables, lower our cost of borrowing and more efficiently utilize capital. The Company had$96.5 million of securitized debt under these facilities as of September 30, 2024. We also utilize off-balance sheet factoring and securitization arrangements to sell certain of our accounts receivable to unrelated third-party financial institutions in order to accelerate the collection of the Company’s cash and reduce internal costs. Available capacity is dependent on the level of our trade accounts receivable eligible to be sold and the financial institutions’ willingness to purchase such receivables. However, the Company is not dependent on them to maintain its liquidity and capital resources. See Part I – Item 1 – Notes 10, Financing and Other Debt and 11, Off-Balance Sheet Arrangements, to our condensed consolidated financial statements for further information about the Company’s securitized debt and off-balance sheet arrangements.

Current wording

(3)The Company utilizes securitized debt agreements to finance a portion of our receivables, lower our cost of borrowing and more efficiently utilize capital. The Company had $95.0 million of securitized debt under these facilities as of March 31, 2025. We also utilize off-balance sheet factoring and securitization arrangements to sell certain of our accounts receivable to unrelated third-party financial institutions in order to accelerate the collection of the Company’s cash and reduce internal costs. Available capacity is generally dependent on the level of our trade accounts receivable eligible to be sold and the financial institutions’ willingness to purchase such receivables. However, the Company is not dependent on them to maintain its liquidity and capital resources. See Part I – Item 1 – Notes 10, Financing and Other Debt and 11, Off-Balance Sheet Arrangements, to our condensed consolidated financial statements for further information about the Company’s securitized debt and off-balance sheet arrangements.

Previous wording

(4)From time to time, WEX Bank enters into participation agreements with third-party banks to fund customers’ balances that exceed WEX Bank’s lending limit to individual customers. There was$57.2 million borrowed against these participation agreements as of September 30, 2024.

Current wording

(4)From time to time, WEX Bank enters into participation agreements with third-party banks to fund customers’ balances that exceed WEX Bank’s lending limit to individual customers. There was $46.5 million borrowed against these participation agreements as of March 31, 2025.

Previous wording

(5)WEX Bank borrows from short-term uncommitted federal funds lines of credit from time to time to supplement the financing of the Company’s accounts receivable. There were $150.0 million of outstanding borrowings under these lines of credit as of September 30, 2024. The Bank is also a member of the FHLB of Des Moines, which provides them collateralized short-term funding. As of September 30, 2024, WEX Bank had$370.0 million of advances outstanding, secured by$420.5 million in fair value of investment securities. See Part I – Item 1 – Note 10, Financing and Other Debt, to our condensed consolidated financial statements for more information regarding these facilities.

Current wording

(5)WEX Bank borrows from short-term uncommitted federal funds lines of credit from time to time to supplement the financing of the Company’s accounts receivable. There were $110.0 million of outstanding borrowings under these lines of credit as of March 31, 2025. The Bank is also a member of the FHLB of Des Moines, which provides them collateralized short-term funding. As of March 31, 2025, WEX Bank had $1,180.0 million of advances outstanding, secured by $1.3 billion in fair value of investment securities. See Part I – Item 1 – Note 10, Financing and Other Debt, to our condensed consolidated financial statements for more information regarding these facilities.

Previous wording

The Amended and Restated Credit Agreement contains various affirmative and negative covenants that, subject to certain customary exceptions, limit the Company and its subsidiaries’ (including, in certain limited circumstances, WEX Bank and the Company’s other regulated subsidiaries) ability to, among other things (i) incur additional debt, (ii) pay dividends or make other distributions on, redeem or repurchase capital stock, or make investments or other restricted payments, (iii) enter into transactions with affiliates, (iv) dispose of assets or issue stock of restricted subsidiaries or regulated subsidiaries, (v) create liens on assets, or (vi) effect a consolidation or merger or sell all, or substantially all, of the Company’s assets. The Amended and Restated Credit Agreement also contains customary financial maintenance covenants, including a consolidated interest coverage ratio and a consolidated leverage ratio. As of September 30, 2024, we were in compliance with applicable covenants. See Part II – Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources and Part II – Item 8 – Note 16, Financing and Other Debt, in our Annual Report on Form 10-K for the year ended December 31, 2023 for more information regarding these covenants.

Current wording

The Credit Agreement contains various affirmative and negative covenants that, subject to certain customary exceptions, limit the Company and its subsidiaries’ (including, in certain limited circumstances, WEX Bank and the Company’s other regulated subsidiaries) ability to, among other things (i) incur additional debt, (ii) pay dividends or make other distributions on, redeem or repurchase capital stock, or make investments or other restricted payments, (iii) enter into transactions with affiliates, (iv) dispose of assets or issue stock of restricted subsidiaries or regulated subsidiaries, (v) create liens on assets, or (vi) effect a consolidation or merger or sell all, or substantially all, of the Company’s assets. The Credit Agreement also contains customary financial maintenance covenants, including that the Company maintain at the end of each fiscal quarter the following financial ratios:

Previous wording

WEX Bank has the ability to borrow funds from the Federal Reserve Bank Discount Window. Borrowing limits fluctuate based on pledged assets, and as of September 30, 2024, the Company could borrow up to a maximum amount of$167.0 million. WEX Bank had no borrowings outstanding on this line of credit as of September 30, 2024. See Part I – Item 1 – Note 10, Financing and Other Debt, to our condensed consolidated financial statements for more information regarding this borrowing arrangement.

Current wording

WEX Bank has the ability to borrow funds from the Federal Reserve Bank Discount Window. Borrowing limits fluctuate based on pledged assets, and as of March 31, 2025, the Company could borrow up to a maximum amount of $144.8 million. WEX Bank had no borrowings outstanding on this line of credit as of March 31, 2025. Also, under an uncommitted borrowing facility, WEX Australia can be advanced up to A$21.3 million from Bank of America in short-term funds. The Company had no borrowings outstanding on this facility as of March 31, 2025. See Part I – Item 1 – Note 10, Financing and Other Debt, to our condensed consolidated financial statements for more information regarding these borrowing arrangements.

Previous wording

(1)The Company’s non-GAAP adjusted free cash flow has historically been calculated as cash flows from operating activities adjusted for net purchases of current investment securities, capital expenditures, net Funding Activity, and certain other adjustments including contingent and deferred consideration paid to sellers in excess of acquisition-date fair value. Such calculation has historically been based on the principle that the net activity in accounts receivable, accounts payable, and investment of HSA deposits would be offset by WEX Bank Funding Activity, however, due to the nature of WEX Bank cash balances, they may be increased or decreased for reasons other than matching operating activity. As a result, beginning with the third quarter of 2024, adjusted free cash flow also includes an adjustment to reflect the change in WEX Bank cash balances and the applicable prior periods have similarly been adjusted to conform to the current presentation. For an updated definition of adjusted free cash flow and a reconciliation to net cash provided by operating activities, the most closely comparable GAAP measure, and the reasons why we believe this is an important financial measure, please refer to the section titled Non-GAAP Financial Measures That Supplement GAAP Measures.

Current wording

(1)Adjusted free cash flow has historically been calculated as cash flows from operating activities adjusted for net purchases of current investment securities, capital expenditures, net Funding Activity, and certain other adjustments. Such calculation has historically been based on the principle that the net activity in accounts receivable, accounts payable, and investment of HSA deposits would be offset by WEX Bank Funding Activity, however, due to the nature of WEX Bank cash balances, they may be increased or decreased for reasons other than matching operating activity. As a result, beginning with the third quarter of 2024, adjusted free cash flow also includes an adjustment to reflect the change in WEX Bank cash balances and the applicable prior periods have similarly been adjusted to conform to the current presentation. For an updated definition of adjusted free cash flow and a reconciliation to net cash provided by operating activities, the most closely comparable GAAP measure, and the reasons why we believe this is an important financial measure, please refer to the section titled Non-GAAP Financial Measures That Supplement GAAP Measures.

Previous wording

Investing cash flows generally consist of capital expenditures, cash used for acquisitions and the investment of custodial cash assets.

Current wording

Investing cash flows generally consist of capital expenditures, cash used for acquisitions and the investment of eligible custodial cash assets.

Previous wording

Financing cash flows generally consist of the issuance and repayment of debt and deposits, changes in restricted cash payable and purchases of our common stock. Repurchases of our common stock may vary based on management’s evaluation of market and economic conditions and other factors.

Current wording

Financing cash flows generally consist of the issuance and repayment of debt and deposits, changes in restricted cash payable and repurchases of our common stock. Repurchases of our common stock may vary based on management’s evaluation of market and economic conditions and other factors.

Previous wording

During September 2024, the Company’s board of directors authorized an amended share repurchase program under which up to an additional $1.0 billion worth of WEX’s common stock may be repurchased by the Company through December 31, 2025, expanding the total authorization from $1.05 billion to $2.05 billion. As of September 30, 2024, there was $1,069.8 million worth of common stock available to be purchased pursuant to the repurchase plan authorization.

Current wording

As of March 31, 2025, there was $173.9 million worth of WEX common stock available to be purchased pursuant to the repurchase plan authorization.

Previous wording

There were no material changes to our contractual obligations from the information previously provided in Item 7 of our Annual Report on Form 10–K for the year ended December 31, 2023.

Current wording

With the exception of the new borrowings discussed earlier in this Liquidity and Capital Resources section, there were no material changes to our contractual obligations from the information previously provided in Item 7 of our Annual Report on Form 10–K for the year ended December 31, 2024.

Previous wording

WEX Bank is subject to a consent order issued by the FDIC on September 20, 2023 (the “2023 Order”), which requires WEX Bank to make certain improvements, which include corrections of certain issues identified in the 2023 Order and general enhancements to WEX Bank’s compliance management program. Customer impact and any resulting harm from the violations detailed in the 2023 Order have been identified and steps have been taken to remediate any such impact and harm. The terms of the 2023 Order will remain in effect and be enforceable until they are modified, terminated, suspended or set aside by the FDIC. The matters identified in the 2023 Order have not had, nor are they expected to have, a material effect on WEX Bank’s operations or the Company’s results of operations, financial condition or cash flows.

Current wording

WEX Bank is subject to a consent order issued by the FDIC on September 20, 2023 (the “2023 Order”), which requires WEX Bank to make certain improvements, which include corrections of certain issues identified in the 2023 Order and general enhancements to WEX Bank’s compliance management program. Customer impact and any resulting harm from the violations detailed in the 2023 Order have been identified and steps have been taken to remediate any such impact and harm. On December 17, 2024, the FDIC assessed a civil money penalty of $650 thousand to WEX Bank, which has been paid in full, in relation to the 2023 Order. The terms of the 2023 Order will remain in effect and be enforceable until they are modified, terminated, suspended or set aside by the FDIC. The civil money penalty and the matters identified in the 2023 Order have not had, nor are they expected to have, a material effect on WEX Bank’s operations or the Company’s results of operations, financial condition or cash flows.