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    CPAY
    Earnings call· Jun 2026(Q2 FY26)

    CORPAY Q2 FY26 earnings call CPAY

    Aug 5, 2026 Source

    Executive summary

    Corpay Q2 FY26 — Record Earnings & Raised Full-Year Guidance

    Corpay delivered an outstanding second quarter, driven by strong organic growth across its core segments and favorable macro conditions, leading to record cash EPS. The company raised its full-year guidance, reflecting confidence in its compounding model and strategic focus on simplifying its portfolio to double down on spend management, vehicle, and cross-border businesses, with a long-term vision for significant expansion.

    Highlights

    5

    • Q2 revenue of $1.34 billion, up 21% YoY, beating expectations by $45 million.

    • Cash EPS of $7.00, up 36% YoY, setting an all-time company record.

    • Overall organic revenue growth of 10%, led by Corporate Payments at 16% and Vehicle Payments at 8%.

    • New bookings grew 30% YoY, with retention steady at 93% and same-store sales up 1%.

    • Full-year 2026 cash EPS guidance raised to $27.35 at the midpoint, implying 28% YoY growth.

    Concerns

    3

    • Float revenue compression of 180 basis points in Corporate Payments due to lower interest rates YoY.

    • Epyx divestiture expected to reduce 2026 revenue by $40 million, though EPS impact is neutral due to share repurchases.

    • Operating costs increased 9% due to sales investments and modestly higher credit losses, including a $100 million settlement charge for the FTC matter.

    Guidance & targets

    14
    CategoryTargetConfidence
    Full-year 2026 Revenue
    $5.310 billion at the midpoint
    high materiality
    High
    Full-year 2026 Organic Revenue Growth
    approximately 10%
    high materiality
    High
    Full-year 2026 Cash EPS
    $27.35 at the midpoint
    high materiality
    High
    Full-year 2026 Cash EPS Growth
    28%
    high materiality
    High
    Full-year 2026 Cash EBITDA
    approximately $3 billion
    medium materiality
    High
    Full-year 2026 Free Cash Flow
    $1.8 billion
    medium materiality
    High
    Q3 2026 Revenue
    $1.355 billion at the midpoint
    high materiality
    High
    Q3 2026 Organic Revenue Growth
    9% to 11%
    medium materiality
    High
    Q3 2026 Adjusted EPS
    $7.15 at the midpoint
    high materiality
    High
    Midterm Organic Revenue Growth
    10% plus
    high materiality
    High
    Midterm PBT Growth
    low-teens
    medium materiality
    High
    Midterm Cash EPS Growth
    over 20%
    high materiality
    High
    Available Capital
    approximately $15 billion
    high materiality
    High
    Full-year 2026 Adjusted EPS raise
    $0.20
    medium materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Corporate Payments
    Delivered strong organic growth, driven by robust performance in cross-border and payables. Alpha integration is progressing exceptionally well. Avid, a minority investment, also performed strongly.
    Organic spend increase: 43% to $95 billionAlpha integration: over 80% of corporate volume migrated to global tech platformAvid sales growth: more than 30%Avid EBITDA: more than doubling YoY
    		—16%——
    Vehicle Payments
    Organic growth was in line with high-single-digit expectations, with strong performance in Brazil and Europe. U.S. growth is consistent with the strategy of reallocating sales investment to Corporate Payments.
    		—8%——
    Lodging
    In line with expectations, showing sequential organic revenue growth improvement after lapping tough comps from episodic events last year. Expected to accelerate in the second half.
    		——2% sequential organic revenue growth improvement—

    Operational metrics

    45
    Q2 Revenue Beat
    $45 millionabove expectations
    Q2 FY26

    We reported revenue of $1.34 billion. That's up 21%, coming in $45 million above our expectations.

    Q2 Cash EPS
    $7.00up 36% YoY
    Q2 FY26

    We reported cash EPS of $7 on the button. That's up 36%, setting an all-time company earnings record.

    Alpha and Avid EPS Accretion
    $0.39spot on target
    Q2 FY26

    Our 2 biggest corporate payments deals, the Alpha acquisition and the Avid investment, contributed $0.39 of cash EPS accretion in the quarter, spot on our target.

    Overall Organic Revenue Growth
    10%
    Q2 FY26

    Overall organic revenue growth, 10%.

    Corporate Payments and Vehicle Payments Combined Organic Growth
    12%consistent with Q1
    Q2 FY26

    So taken together, our 2 biggest segments delivered 12% organic growth.

    Retention Rate
    93%steady
    Q2 FY26

    Retention remaining steady at 93%.

    New Bookings Growth
    30%YoY
    Q2 FY26

    Year-over-year sales or new bookings, terrific, growing 30%.

    Same-Store Sales
    1%in the plus column
    Q2 FY26

    and same-store sales in the plus column, plus 1%.

    Full-year 2026 Revenue Growth
    17%YoY
    FY26

    This higher full year 2026 guidance implies good things: 17% full year revenue growth

    Full-year 2026 Cash EPS Increase from 2025
    $6up
    FY26 vs FY25

    cash EPS for '26 up about $6 from 2025

    Q4 Cash EPS Exit Rate
    over $29
    Q4 FY26

    cash EPS exit rate in Q4 exiting over $29

    Full-year Free Cash Flow Yield
    7%approximately
    FY26

    $1.8 billion of full year free cash flow, which is approximately a 7% yield.

    Organic Revenue Growth Streak
    5 consecutive quarters
    trailing

    we've now delivered double-digit organic revenue growth for 5 consecutive quarters

    Organic Revenue Growth (5 of 6 years)
    10%
    5 of last 6 years

    and 10% organic growth in 5 of the last 6 years.

    Corporate Payments Float Revenue Compression
    180YoY
    Q2 FY26

    including 180 basis point drag from float revenue compression driven by lower interest rates year-over-year.

    Avid EBITDA Growth
    more than doublingYoY
    Q2 FY26

    EBITDA more than doubling year-over-year to a record level.

    Operating Costs Increase
    9%
    Q2 FY26

    Operating costs increased 9%, excluding the impact of FX, M&A, stock compensation, amortization and a settlement charge.

    FTC Settlement Charge
    $100 million
    Q2 FY26

    The settlement charge of $100 million relates to the FTC matter and is subject to final Commission approval.

    Adjusted EBITDA Margin
    57.3%up approximately 100 bps YoY
    Q2 FY26

    Adjusted EBITDA margin of 57.3% was up approximately 100 basis points over the prior year, primarily due to operating leverage and flow-through of macro benefit.

    Adjusted Effective Tax Rate
    25.3%YoY decrease
    Q2 FY26

    Our adjusted effective tax rate for the quarter was 25.3%. The year-over-year decrease in the tax rate was driven by our improved mix of earnings.

    Leverage Ratio
    2.55x
    Q2 FY26 end

    Our leverage ratio finished at 2.55x

    Revolving Credit Facility Available Capacity
    $1.6 billion
    Q2 FY26 end

    and we had approximately $1.6 billion of available capacity under our revolving credit facility.

    Share Repurchases Executed
    $321 million
    Q2 FY26

    During the quarter, we repurchased $321 million worth of stock, retiring approximately 1 million shares.

    Remaining Share Repurchase Authorization
    $1.4 billion
    Q2 FY26 end

    As of quarter end, we still had roughly $1.4 billion remaining under our current share repurchase authorization.

    Revolver Size Increase
    $1 billion
    Q2 FY26

    increasing the size of our revolver by approximately $1 billion to $3.7 billion

    Term Loan B Paydown
    $1 billion
    Q2 FY26

    while paying down our Term Loan B by $1 billion.

    Debt Stack Refinancing Period
    9 months
    trailing

    Over the past 9 months, we've successfully refinanced our entire debt stack

    Floating Rate Debt Hedge (Natural)
    85%
    Q2 FY26

    with approximately 85% of our exposure naturally offset during the second quarter.

    Floating Rate Debt Hedge (Total)
    more than 120%
    Q2 FY26

    Including our interest rate swaps, we were effectively more than 120% hedged.

    Epyx Divestiture Revenue Impact
    $40 millionreduction
    FY26

    The transaction is expected to reduce 2026 revenue by approximately $40 million or roughly $10 million per month

    Epyx Divestiture EPS Impact
    neutral
    FY26

    but is not expected to have an impact on adjusted EPS because we intend to redeploy the proceeds into share repurchases.

    Q2 Cash EPS Beat
    $0.45beat
    Q2 FY26

    we'll flow through our Q2 cash EPS beat of $0.45

    Q3 Revenue Growth
    16%YoY
    Q3 FY26

    Our Q3 revenue guide is $1.355 billion at the midpoint, growing 16% year-over-year.

    Q3 Adjusted EPS Growth
    26%YoY
    Q3 FY26

    We expect adjusted EPS of $7.15 at the midpoint, growing 26% year-over-year.

    Long-term Revenue Potential
    $50 billion
    long-term

    it certainly gives us the potential to at least 10x this company to say, $50 billion over time.

    Hypothetical Business Growth (example)
    $110 millionfrom $100 million
    null

    growing $100 million business to $110 million is not getting us there.

    Client Indirect Expense (example)
    $800 million
    null

    I've got, in our case, $800 million of indirect expense

    Client Indirect Expense (example)
    $750 million
    null

    Do I have $750 million in expense and should I have these people I have.

    Absolute EPS Growth (Q1 to Q4)
    over $1.50
    Q1 to Q4 FY26

    absolute EPS is growing, call it, over $1.50 from Q1 to Q4.

    Avid Earnings Growth
    50%over prior year
    last quarter (Q1 FY26)

    their earnings last quarter, about 50% over the prior year.

    Corporate Payments Sales Growth
    circa close to 40%YoY
    Q2 FY26

    crazy circa close to 40% sales growth in the Corporate Payments segment.

    Vehicle Sales Growth
    high teensYoY
    Q2 FY26

    We did kind of high teens year-over-year in the Vehicle

    Mastercard FI Channel Wins
    10
    current

    We're now at 10 FIs that have been closed.

    Mastercard FI Channel Pipeline
    100
    current

    we've got 100 active additional FIs in the pipeline.

    JPM Private Blockchain Transactions
    40,000
    to date

    I think we've done 40,000 transactions already over the JPM private blockchain.

    Industry KPIs

    1
    MetricValueDetails
    Capital returns$321 millionUSD

    Deals & partnerships

    4
    EpyxSale of a noncore vehicle payments asset.

    Corpay signed a definitive agreement to sell Epyx, a noncore vehicle payments asset, as part of its strategy to simplify the company and focus on core businesses.

    AlphaAcquisition contributing to Corporate Payments segment.

    The Alpha acquisition is one of Corpay's two biggest corporate payments deals, with over 80% of Alpha's corporate volume already migrated to Corpay's global tech platform.

    AvidMinority investment in a payables business.

    Avid is a minority investment that continues to execute well under new ownership, showing strong sales and volume growth.

    MastercardCollaboration to penetrate the Financial Institution (FI) channel for cross-border services.

    The partnership leverages Mastercard's relationships with banks and Corpay's cross-border expertise, proving effective in expanding reach into the FI market.

    Risks & headwinds

    3
    Float revenue compressionQ2 FY26

    180 basis point drag

    Mitigation: Not explicitly stated, but the company's overall performance and hedging strategy (120%+ hedged) help mitigate interest rate sensitivity. (Context: Corporate Payments delivered 16% organic growth for the quarter, including 180 basis point drag from float revenue compression driven by lower interest rates year-over-year.)

    Higher credit lossesQ2 FY26

    modestly higher

    Mitigation: Peter Walker stated they "taken a provision for that within the quarter" and "we're not going to weaken our underwriting standards to gain business here."

    FTC settlement chargeQ2 FY26

    $100 million

    Mitigation: Subject to final Commission approval.

    What to watch in Q3 FY26

    5

    Epyx Divestiture Completion

    September to October 2026
    CurrentSigned definitive agreement
    TargetClosed transaction

    Why it matters

    Completion of the divestiture is key to the company's portfolio simplification strategy and allows for redeployment of proceeds into share repurchases, maintaining EPS neutrality.

    We signed a definitive agreement to sell Epyx, a noncore vehicle payments asset. We expect the transaction to close this fall, likely between September and October.

    Q&A highlights

    7

    With healthy freight prices, is Corpay considering loosening credit underwriting standards in Vehicle Payments to drive incremental growth?

    Corpay will not weaken underwriting standards to gain business, despite experiencing a slight provision for higher credit risk due to rising fuel prices.

    “So what I would say is we're not going to weaken our underwriting standards to gain business here.”

    asked by Ramsey El-Assal · answered by Peter Walker

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Portfolio Repositioning

    Corpay is actively simplifying its portfolio by divesting subscale businesses, such as the recently announced Epyx sale, to focus on three primary areas: spend management (card and AP businesses), advantaged fleet businesses embedded into the spend management platform, and cross-border payments. This strategy aims to expand the company's total addressable market to $600 billion, with a long-term vision to potentially grow the company to $50 billion.

    02

    "Go Left" Strategy for Expense Management

    The company is developing a "Go Left" strategy to assist clients with indirect expense decision-making *before* payments are approved. This involves providing benchmarking data, spend insights, and guidance on vendor selection, pricing, terms, and renewal negotiations. This initiative leverages AI models to enhance corporate procurement and contract management, aiming to bring more value to clients and potentially accelerate revenue.

    03

    Cross-Border Innovation and Global Banking

    Corpay is investing in new real-time private blockchain rails and building out a global banking and deposit offering, which it views as "game changers" for middle-market companies. The global banking initiative focuses on enabling clients to open multiple local foreign bank accounts and linking them for consolidated management, with an enhanced product version expected in Q4. This is expected to significantly improve speed and cost for cross-border transactions.

    04

    Mastercard FI Channel Partnership Progress

    The partnership with Mastercard to penetrate the Financial Institution (FI) channel for cross-border services is progressing better than expected. Corpay has closed 10 FI wins and has 100 additional FIs in the pipeline. The collaboration leverages Mastercard's relationships with banks and Corpay's cross-border expertise, with management remaining bullish on its potential despite longer sales cycles.

    05

    Capital Allocation Strategy

    Corpay expects to generate approximately $15 billion in available capital over the forecast period through annual free cash flow and increased debt capacity. This capital will be deployed for EPS acceleration, either through significant share repurchases (potentially buying back half of CPAY) or disciplined, accretive M&A targeting other corporate payment companies, based on relative returns.

    06

    Vehicle Payments Segment Evolution

    The Vehicle Payments segment, particularly in the U.S., has seen a reallocation of sales investment towards higher-return opportunities in Corporate Payments. Despite this, the segment maintains high single-digit organic growth, supported by strong performance in Brazil and Europe. The company has improved retention and same-store sales in the U.S. fleet business by changing its business mix, making it a "straight sales game" now.

    AI-generated summary of the company’s earnings call. Not investment advice.