WEX Inc.

Previous 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.

Current wording

The following table presents a summarized view of selected results for the three and six months ended June 30, 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 compared to the prior year decreased revenue by $8.5 million for the three months ended March 31, 2025.

Current wording

(1)Lower domestic fuel prices compared to the prior year decreased revenue by $15.9 million and $24.4 million for the three and six months ended June 30, 2025, respectively.

Previous wording

(2)Total volume and payment processing $ of fuel decreased for the three months ended March 31, 2025 as compared to the same period in the prior year due primarily to lower domestic fuel prices.

Current wording

(2)Total volume and payment processing $ of fuel decreased for the three and six months ended June 30, 2025 as compared to the same periods in the prior year due primarily to lower domestic fuel prices, and in smaller part by a decline in same-store sales, which is a measure of fuel gallons purchased by customers who joined the Company prior to the preceding calendar year, adjusted for the number of business days in the period. The Company believes that the same-store sales metric is a reflection of the economic demand environment and the decrease is reflective of a long-term trend of better vehicle fuel efficiency.

Previous 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.

Current wording

Total Mobility revenue decreased $13.4 million and $18.5 million for the three and six months ended June 30, 2025, respectively, as compared to the same periods in the prior year, driven primarily by lower average domestic fuel prices, and in smaller part by a decline in same-store sales.

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 experiencing financial difficulties during the three months ended March 31, 2025 and 2024.

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 six months ended June 30, 2025 and 2024.

Previous 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.

Current wording

(2)Segment adjusted operating income margin is calculated by dividing segment adjusted operating income by segment revenue. Such margin decreased during the three and six months ended June 30, 2025, as compared to the same periods in the prior year, due primarily to the impact of lower average domestic fuel prices, combined with the impact of 2025 sales and product development investments, as further discussed below.

Previous 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.

Current wording

Provision for credit losses, which includes estimates for both credit and fraud losses, decreased $3.3 million and $10.0 million for the three and six months ended June 30, 2025, respectively, as compared to the same periods in the prior year driven primarily by continued maturation of our capabilities for managing credit and fraud losses and the reduction in payment processing $ of fuel as a result of the decline in average fuel prices. 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 13.5 and 12.5 basis points of fuel expenditures for the three and six months ended June 30, 2025, respectively. For the three and six months ended June 30, 2024, provision for credit losses was 13.5 and 14.4 basis points of fuel expenditures, respectively.

Previous wording

Depreciation and amortization increased $2.9 million for the three months ended March 31, 2025, compared to the prior year comparable period, due in part to increased capital expenditures for new product development in support of growth.

Current wording

Depreciation and amortization increased $3.2 million and $6.0 million for the three and six months ended June 30, 2025, respectively, compared to the prior year comparable periods, due in part to increased capital expenditures for new product development in support of growth.

Previous 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.

Current wording

Total Benefits revenue increased $15.3 million and $23.4 million for the three and six months ended June 30, 2025 as compared to the same periods in the prior year, primarily due to a rise in average HSA deposit balances held by WEX Bank, on which we earn investment income, coupled with SaaS account growth.

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 months ended March 31, 2025 as compared to the prior year comparable period.

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 and six months ended June 30, 2025 as compared to the prior year comparable periods.

Previous wording

Service fees increased by $5.1 million for the three months ended March 31, 2025, as compared with the same period in the prior year, primarily resulting from higher merchant and other related fees.

Current wording

Service fees increased by $3.4 million and $8.5 million for the three and six months ended June 30, 2025, respectively, as compared with the same periods in the prior year, primarily resulting from higher merchant and other related fees.

Previous wording

General and administrative expense decreased $4.2 million for the three months ended March 31, 2025 as compared to the same period in the prior year, due in part to a reduction of Ascensus Acquisition integration costs and in part to a change in estimated attainment of performance-based employee stock-based compensation.

Current wording

General and administrative expense decreased $4.3 million and $8.5 million for the three and six months ended June 30, 2025 as compared to the same periods in the prior year, primarily due to a reduction in employee compensation costs.

Previous 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.

Current wording

(1)Our net interchange rate has increased during the three and six months ended June 30, 2025 compared to the same periods of the prior year, substantially due to customer volume mix.

Previous wording

Total Corporate Payments revenue decreased $19.0 million for the three months ended March 31, 2025 as compared to the same period in the prior year, primarily due to a second quarter 2024 contract renegotiation for a large travel customer. This contract renegotiation was the primary cause of the decline in purchase volume for the same period, as the customer has transitioned to a new operating model. To a lesser extent, the decrease in first quarter revenues year-over-year was due to changes in the timing of customer purchase volumes between calendar quarters and a reduction in interest revenue earned on restricted cash balances, primarily as a result of a decline in average balances as a result of the lower purchase volumes.

Current wording

Total Corporate Payments revenue decreased $15.8 million and $34.9 million for the three and six months ended June 30, 2025, respectively, as compared to the same periods in the prior year, primarily due to a second quarter 2024 contract renegotiation for a large travel customer. This contract renegotiation was the primary cause of the decline in purchase volume for the same periods, as the customer has transitioned to a new operating model. Revenue under this new operating model is reflected within account servicing revenue. Impacts from the above mentioned travel contract change began during the third quarter of 2024, therefore, we expect little continuing impact for the remainder of 2025. To a lesser extent, the decrease in revenues year-over-year was due to a reduction in interest revenue earned on restricted cash balances, primarily as a result of a decline in average balances as a result of the lower purchase volumes.

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 months ended March 31, 2025 and 2024.

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 six months ended June 30, 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 three months ended March 31, 2025 did not remain comparable to those of the comparable 2024 period 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 and six months ended June 30, 2025 did not remain comparable to those of the comparable 2024 periods are described hereafter.

Previous 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.

Current wording

Sales and marketing expense increased $3.6 million and $7.0 million during the three and six months ended June 30, 2025, respectively, as compared to the same periods 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 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.

Current wording

During the three and six months ended June 30, 2025, unallocated corporate expenses decreased $8.5 million and $15.3 million, respectively, as compared to the same periods of the prior year, due primarily to decreased employee compensation costs as a result of lower headcount and a reduction in estimated attainment of performance-based employee stock-based compensation.

Previous wording

The decrease in financing interest expense, net of financial instruments during the three months ended March 31, 2025, as compared to the same period in the prior year, is primarily due to lower interest rates, offset in part by higher average debt balances.

Current wording

The increase in financing interest expense, net of financial instruments during the three and six months ended June 30, 2025, as compared to the same periods in the prior year, is primarily due to increased borrowings transacted during the first quarter of 2025 from the issuance of the Senior Notes and Incremental Term B-3 loans, offset in part by lower interest rates.

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 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.

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 six months ended June 30, 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. Net gains incurred during the three months ended June 30, 2025 were due to a second quarter strengthening of many foreign currencies relative to the U.S. dollar, including the euro, Canadian and Australian dollars and British pound sterling.

Previous 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.

Current wording

The decrease in income tax provision for the three months ended June 30, 2025, as compared to the same period of the prior year, is due primarily to a decrease in the Company’s pre-tax book income. The Company’s effective tax rates for the three and six months ended June 30, 2025 were 27.0 percent and 27.9 percent, respectively, compared to 27.5 percent and 27.2 percent for the three and six months ended June 30, 2024, 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.

Previous wording

During the three months ended March 31, 2025, we completed a private offering of $550.0 million in aggregate principal amount of 6.500% senior unsecured notes due in March 2033 (the “Senior Notes”) and entered into an amendment to our Credit Agreement which, among other things, established an incremental tranche of senior secured tranche B term loans in an aggregate principal amount of $450.0 million, both of which were used to (i) fund the Company’s Tender Offer, (ii) repay $250.0 million outstanding under the Revolving Credit Facility, and (iii) pay related fees and expenses, with any amounts remaining thereafter to be used for general corporate purposes. As of March 31, 2025, we had cash and cash equivalents of $610.3 million, including Corporate Cash of $162.6 million, and remaining borrowing availability of $606.6 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

On March 6, 2025, we completed a private offering of $550.0 million in aggregate principal amount of 6.500% senior unsecured notes due in March 2033 (the “Senior Notes”) and entered into an amendment to our Credit Agreement which, among other things, established an incremental tranche of senior secured tranche B term loans in an aggregate principal amount of $450.0 million, both of which were used to (i) fund the Company’s Tender Offer, (ii) repay $250.0 million outstanding under the Revolving Credit Facility, and (iii) pay related fees and expenses, with any amounts remaining thereafter to be used for general corporate purposes. As of June 30, 2025, we had cash and cash equivalents of $772.6 million, exclusive of the $6.8 million of cash classified within prepaid expenses and other current assets. At June 30, 2025, Corporate Cash was $133.8 million and we had a remaining borrowing availability of $782.3 million under the Revolving Credit Facility, along with access to various sources of funds, including uncommitted federal funds lines of credit from other banks.

Previous wording

(1)As of March 31, 2025 the Company had outstanding term loan principal borrowings of $2,689.9 million, borrowings of $954.3 million on the Revolving Credit Facility, letters of credit of $39.1 million drawn against the Revolving Credit Facility and $550.0 million of outstanding Senior Notes principal. See Part I – Item 1 – Note 10, Financing and Other Debt, to our condensed consolidated financial statements for more information regarding our Credit Agreement and Senior Notes.

Current wording

(1)As of June 30, 2025 the Company had outstanding term loan principal borrowings of $2.7 billion, borrowings of $778.2 million on the Revolving Credit Facility, letters of credit of $39.5 million drawn against the Revolving Credit Facility and $550.0 million of outstanding Senior Notes principal. See Part I – Item 1 – Note 10, Financing and Other Debt, to our condensed consolidated financial statements for more information regarding our Credit Agreement and Senior Notes.

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 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.

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 June 30, 2025, we had $5.1 billion 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 $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.

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 $92.7 million of securitized debt under these facilities as of June 30, 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 $46.5 million borrowed against these participation agreements as of March 31, 2025.

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 $70.0 million borrowed against these participation agreements as of June 30, 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 $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.

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 $170.0 million of outstanding borrowings under these lines of credit as of June 30, 2025. The Bank is also a member of the FHLB of Des Moines, which provides them collateralized short-term funding. As of June 30, 2025, WEX Bank had $1.1 billion of advances outstanding, secured by $1.4 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

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.

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 June 30, 2025, the Company could borrow up to a maximum amount of $146.6 million. WEX Bank had no borrowings outstanding on this line of credit as of June 30, 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 June 30, 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

Cash used for operating activities for the three months ended March 31, 2025 increased $328.3 million as compared to the same period in the prior year primarily due to a greater increase in accounts receivable balances during the first quarter of 2025 compared to the first quarter of 2024. This increase was due in part to the March 2025 purchase of a portfolio of factoring accounts receivable and in part to an increase in first quarter 2025 domestic travel spend volumes compared to those of the fourth quarter of 2024.

Current wording

Cash used for operating activities for the six months ended June 30, 2025 increased $56.7 million as compared to the same period in the prior year primarily due to a greater increase in accounts receivable balances during the first half of 2025 compared to the first half of 2024, including impacts from the factoring portfolio acquired during the first quarter of 2025.

Previous wording

Net cash from financing activities during 2025 decreased $35.7 million as compared to the prior year primarily due to a reduction in our restricted cash payable resulting from a shift in customer usage of our prepaid business model, offset in part by an increase in Funding Activity. Share repurchases increased during the first quarter of 2025 as compared to the first quarter of 2024, due to the completion of the Tender Offer. We funded the Tender Offer with $450.0 million of gross borrowings from a new Term Loan B-3 facility under our Credit Agreement and through gross proceeds of $550.0 million from a new offering of Senior Notes. The excess of proceeds received through these borrowings over the amounts paid to repurchase shares under the Tender Offer were used to repay borrowings on the Revolving Credit Facility. As a result, these transactions collectively had little net impact on cash flows from financing activities.

Current wording

Net cash from financing activities during 2025 increased $513.7 million as compared to the prior year primarily due to an increase in HSA deposits transferred from third-party depositories to WEX Bank during the second quarter of 2025. Share repurchases increased during the six months ended June 30, 2025 as compared to the comparable six months of 2024, due to the completion of the Tender Offer. We funded the Tender Offer with $450.0 million of gross borrowings from a new Term Loan B-3 facility under our Credit Agreement and through gross proceeds of $550.0 million from a new offering of Senior Notes. The excess of proceeds received through these borrowings over the amounts paid to repurchase shares under the Tender Offer were used to repay borrowings on the Revolving Credit Facility. As a result, these transactions collectively had little net impact on cash flows from financing activities.

Previous wording

Adjusted free cash flow during the three months ended March 31, 2025 was generally consistent with the prior year comparable period.

Current wording

Adjusted free cash flow during the six months ended June 30, 2025 was generally consistent with the prior year comparable period.

Previous 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.

Current wording

With the exception of the new borrowings discussed earlier in this Liquidity and Capital Resources section, there were generally 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.