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Greetings, and welcome to the Corpay Fourth Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions]. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jim Eglseder, Investor Relations. Thank you, Jim. You may begin.

Good afternoon, and thank you for joining us today for our earnings call to discuss 2024 results both fourth quarter and full year. With me today are Ron Clarke, our Chairman and CEO; and Tom Panther, our CFO. Following the prepared comments, the operator will announce the queue will open for the Q&A session. Today’s documents, including our earnings release and supplement, which can be found under the Investor Relations section of our website at corpay.com. Throughout this call now, we will be covering several non-GAAP financial metrics, including revenues, net income, net income per diluted share, all on an adjusted basis. We will also be covering organic revenue growth. This metric neutralizes the impact of year-over-year changes in FX rates, fuel prices and fuel spreads. It also includes pro forma results for acquisitions and divestitures or scope changes closed during the two years being compared. None of these measures are calculated in accordance with GAAP, so may be different than other companies. Reconciliations of the historical non-GAAP to the most directly comparable GAAP information can be found in today's press release and on our website. It's important to understand that part of our discussion today may include forward-looking statements. These statements reflect the best information we have as of today. All statements about our outlook, expected macro environment, new products, and expectations regarding business development and future acquisitions are based on that information. They are not guarantees of future performance, and you should not put undue reliance upon them. We undertake no obligation to update any of these statements. These expected results are also subject to numerous uncertainties and risks, which could cause actual results to differ materially from what we expect. Some of those risks are mentioned in today's press release on Form 8-K and in our Annual Report on Form 10-K. These documents are also available on our website and at sec.gov. So now, I'll turn the call over to Ron Clarke, our Chairman and CEO. Ron?

Okay, Jim. Thanks. Good afternoon, everyone, and thanks for joining our Q4 2024 earnings call. Up front here, I'll plan to cover four subjects. First, provide my take on Q4 results. Second, I'll hit the highlights for full year 2024. Third, I'll share our 2025 guidance along with the major priorities for the year. And then lastly, I'll provide a bit of an M&A update. Okay. Let me begin with our Q4 results. We reported Q4 revenue of $1,034 million, that's up 10% and cash EPS of $5.36, that's up 21%. Overall, the results really in line with our expectation. Each of our core businesses pretty much coming in as planned with accelerating revenue. The macro turned unfavorable during Q4, compressing our print revenue by about $20 million. But fortunately a favorable tax rate effectively offset the unfavorable FX, really landing us back at our expected Q4 EPS print. Kind of the same thing on the revenue front, we did pick up some unplanned GPS acquisition revenue in the quarter, but that was offset by some delayed gift card shipments. Organic revenue growth accelerating quite nicely in Q4, coming in at 12% overall. Inside of that, our corporate payments line of business finishing at 26% organic revenue growth. Quite importantly, the trends improved significantly in the quarter. Same-store sales finished positive up 1% that compares to minus 3% in Q4 last year. Sales growth crazy good accelerated to 36%, really impressive. That did include some elephant sales in the quarter. And retention remained steady at 92%. So look the wrap on the quarter, the underlying businesses really spot on our expectations. The environment both giveth and taketh and kind of zeroing out in the quarter, and then importantly our revenue, same-store sales, and sales or new bookings trends improving really quite materially in the quarter. Okay. Let me make the turn and call out a few highlights for full year 2024. I characterize it overall as really quite successful. Cash EPS of $19 was up over $2 on a print basis and up 16% versus last year excluding Russia. We did rebrand and simplify the company. Now Corpay, the Corporate Payments Company, we scaled our Corporate Payments line of business adding two acquisitions. Again sales growth for the full year over 20%. We managed credit losses to extremely low levels lower than 2023. We progressed our Vehicle Payments add-on idea, seeing real success with that in Brazil. We have hired a world class USA sales leadership team to take us forward and we have begun the slow turn of our two problem children businesses back in a positive territory. So all in all, we think a pretty good performance. Okay. Let me transition to our 2025 guidance along with our major priorities for the year. So today, we're providing full year 2025 guidance at the mid-point of $4.4 billion in revenue and $21 of cash EPS, so both of those numbers up 11%. The guidance reflects pretty strong underlying business fundamentals. So within the guide, we anticipate organic revenue growth at the mid-point of 11%. That's up a bit from our view 90 days ago. We're planning full year overall sales or new bookings growth of 20% here in 2025 and we're planning macro neutral cash EPS growth of 17%, which is in line with our mid-term earnings target. Unfortunately, we are outlooking a very unfavorable macro at the moment, a combination of weak international currencies along with a much higher tax rate. So taken together, we expect our print revenue to be compressed by over $100 million and our cash EPS to be compressed by about $1.20. Obviously, FX and SOFR forward curves can change, but we're using the January forecasts that are out there. Tom will provide some additional details on the guidance math along with specific Q1 guidance when we get to his prepared remarks. In terms of priorities, we have four major priorities here in 2025, with an emphasis on expanding our Corporate Payments business. So first priority our portfolio, we'll continue to simplify our portfolio. We'll go deeper versus wider. We will look to shed some additional non-core assets and we'll look to add more Corporate Payment assets, so already quite active on this front. Second, USA sales, we are planning a step change improvement in USA sales production this year. We plan to invest more in the Corpay brand, scale our field and zoom sales teams and progress our dedicated cross-sell team. Third, on the Payables front, we'll take our Payables business upmarket to the Enterprise segment, that's in addition to our core middle market focus. We have secured our first big enterprise win, so quite exciting. Additionally, we're going to expand our Payables business into Europe this year and launch our Corpay complete Payables product in the UK. We do have lots of UK assets to help us get going there. And then, finally, the priority in Cross-Border will expand our MCA or Multi-Currency Account Product that holds multiple currencies for our clients as deposits, really making it easier for clients to expand the countries that they participate in. This could be really a game changer to help us compete with banks on the Cross-Border front. So all in all, a pretty exciting set of initiatives planned this year. Okay, last up; let me run through just a brief M&A update. So first, our two 2024 Corporate Payment acquisitions, Paymerang and GPS well underway integrating both of those businesses into our tech environment and executing on our synergy plans. We're still on track to deliver $0.50 of cash EPS accretion from these two deals here in 2025. Second, Gringo, it's our second Brazil mobile payments acquisition. We announced that on Monday. So this acquisition along with last year's

Thanks, Ron, and good afternoon, everyone. Here are some additional details related to the quarter and the full year. It was a very good quarter with all of our businesses exhibiting strong organic revenue growth. For the quarter, organic revenue grew 12% a smidge under our guide due to gift card shipments falling a bit short of our expectations. From a housekeeping perspective, the net benefit from our December acquisition and divestiture activity was offset by a slight shortfall in gift. Our print revenue of $1,034 million was impacted by approximately $20 million of negative macro compared to our November guide, primarily FX resulting from the stronger dollar post the U.S. presidential election. Normalizing for macro revenue would have been $1,055 million, which is in line with our guide. Digging deeper into our revenue results during the quarter, we were encouraged to see our same-store sales turn 1% positive compared to a 3% drag in Q4 2023. Looking down the P&L, we overcame the stiff macro headwind through strong expense management and a lower tax rate contributing to the $5.36 per share in cash EPS that we are reporting. Cash EPS increased 21% versus last year. Looking at the full year, organic revenue grew 8% and cash EPS grew 12%. Excluding our Russia business, which we sold in 2023, cash EPS increased 16%, despite $65 million of negative revenue macro in 2024. These strong year-over-year results are further reinforced by the healthy consistent sequential quarterly growth in revenue, EBITDA, adjusted EBITDA margin, and cash EPS throughout 2024, which positions us well entering 2025. Continuing with our performance highlights, new sales during the quarter and full year were exceptional increasing 36% in Q4 and 22% for the year. For the quarter, Corporate Payments and Vehicle Payments sales increased almost 40% and for the year these two segments grew sales a little over 20%. There is no better testament to the quality and value of our products than to be able to consistently generate sales to new customers. To sum it up, 2024 was a great year as we were able to generate strong top and bottom line growth, increase margins and significantly grow sales. Turning to our segment performance and the underlying drivers of our revenue growth, Corporate Payments revenue was up 26% during the quarter and increased 20% for the year. As expected, some one-time deal related synergies contributed 4 points of growth to the quarter. During the quarter, our direct business grew 28% excluding the one-time synergy led by growth in full AP. Our full suite of high quality payment solutions continue to sell extremely well with sales up 29% this quarter. I want to take a minute to highlight that we won the full AP business of a large global enterprise client that was already using our Vehicle Payments Solutions. This is a terrific example of capturing the overlap in our customer base. In addition, up to now our focus has been selling are full AP solutions to middle market customers, but the addition of this enterprise customer has the potential to unlock additional TAM for us in the Enterprise segment. Lastly, the business' KPI fundamentals remain solid with spend volumes increasing 22% in the quarter and card penetration remaining stable. Cross-Border revenue was up 20% for the quarter and the year, which was led by sales growing 43% for the quarter and 33% for the year. We closed the GPS transaction in December and we continue full steam ahead with those integration plans. The Cross-Border space continues to attract more investor attention and we clearly have a great position in this massive global marketplace. We compete almost exclusively with banks, which control 90%-plus of all international payment flows. We primarily focus on the global middle market where we have better technology, superior sales and customer service, and a proprietary network that allows us to have a very high win rate. We continue to develop new products for our clients and open up new geographies to capture more of the large addressable market. Turning to Vehicle Payments, organic revenue increased 8% during the quarter, which is a 4 point improvement from Q3 and for the year revenue grew 5%. In Brazil, for the quarter, toll tax increased 9% year-over-year with more than a third of our customer revenue coming from extended network. Insurance revenue was up over 130% and we sold nearly 300,000 insurance policies in Q4 alone. We also recently announced signing definitive agreements to acquire Gringo, which is our second deal in the car debt segment. Gringo's super app and national network help consumer and business drivers pay for vehicle taxes, registration and tickets. The car debt market is 3x the size of the toll market and significantly less penetrated, so it gives us enormous runway to grow. The acquisition is expected to close early Q2 and allows us to efficiently use our cash in Brazil in a leveraged neutral manner. We continue to develop and grow our Vehicle Payments strategy in Brazil by selling more tags and providing use cases related to vehicles, all delivered via a comprehensive app. Our strategies and execution are working as evidenced by organic revenue growing 20% for the quarter and 18% for the year. Our brand, sales coverage, and value-added products enable the business to be a meaningful driver of total Vehicle Payments growth going forward. In International Vehicle Payments, revenue grew 12% for the quarter and 11% for the year. This business has been a consistent performer despite some pockets of recent economic softness in Europe. Our consistent strong sales, array of products and channels and geographic diversification drive these consistent results. In the U.S., our digital and field sales efforts are improving as we continue to see growth in applications, approvals and starts. During the quarter sales increased over 60%, which includes significantly expanding our service offering with a large corporate customer. We've now lapped the drag from lower late fees allowing these new sales to flow through into revenue. Lodging organic revenue for the quarter improved to 1% compared to down 5% in Q3. This quarter benefited from an improvement in same-store sales in our workforce business, a trend we expect to continue throughout 2025. During the quarter, room nights increased 23% led by the workforce business, which was particularly active in response to Hurricanes Helene and Milton. Certainly, a significant topic of interest is the impact to our business from the California wildfires that began in early January. We are supporting the FEMA activation in our workforce business and the needs of displaced policy holders through our insurance business. In January alone, we provided approximately 42,000 rooms to emergency workers and displaced home owners. It’s too soon to estimate the impact this catastrophe may have on 2025's results; however, we are focused on making sure our network is able to support the recovery efforts and we extend our support to all of those impacted by this tragic event. In summary, we're super pleased with the performance of our business in 2024. Earlier in the year, we called out our problem children, Lodging and Vehicle Payments, and those businesses are continuing to improve. Meanwhile, our Corporate Payments, Cross-Border, Brazil, and International Vehicle Payments businesses performed exceptionally well which demonstrates our durable earnings growth and cash flow generation. Now looking further down the income statement. Fourth quarter operating expenses of $546 million increased 6% versus Q4 of last year. There were a handful of unusual items recognized in the quarter that essentially net out against each other that I'll quickly tick through. First, during the quarter, we recognized a $120 million pre-tax gain on the sale of our Merchant Solutions business. Second, in connection with our annual goodwill impairment analysis, as required under GAAP, we recorded a $90 million non-cash impairment charge related to the Paycard business, which is part of the Other segment. Third, we recognized $11 million in deal termination fees, and finally, we recorded a $10 million one-time stock comp charge. Note that the after-tax impacts of all of these unusual items are excluded from cash EPS. In addition to these unusual items, this year's acquisitions and divestiture added approximately $30 million of net new operating expense in the quarter. Excluding the unusual items and M&A activity and after normalizing for lower FX rates, operating expenses increased approximately 5% versus Q4 of last year. The increase was driven by higher transaction and sales activities to drive future growth. Bad debt expense was flat versus last year at $22 million, or 4 basis points of spend. Adjusted EBITDA margin in the quarter was 55.2%, up 100 basis points, compared to Q4 2023. On a full year basis, adjusted EBITDA margin increased 120 basis points, excluding our Russia business. Despite the adverse macro environment, we were able to generate significant positive operating leverage driven by solid revenue growth, disciplined expense management, and synergies realized from acquisitions. Interest expense this quarter increased 3% year-over-year, due to higher balances related to capital deployed during the year, partially offset by lower interest rates. Our reported effective tax rate for the quarter was 36.4%. The effective tax rate is approximately 15% higher due to the aforementioned goodwill impairment and sale of our Merchant Solutions business, as well as a non-cash discrete tax provision related to a prior tax planning strategy. Normalizing for these items, our effective tax rate for the quarter was 21% versus 23% in Q4 of last year, with the decline driven primarily by stock option exercises and tax planning strategies. Now turning to the balance sheet. We ended 2024 with the balance sheet in excellent shape, and a leverage ratio at 2.75x, which is flat sequentially despite the acquisition of GPS in December. In January, we expanded our securitization facility to $1.8 billion and extended the maturity by three years, with slightly better pricing. We are also in the process of raising another $500 million of Term Loan B debt, which we are structuring to be interest expense and leverage neutral by using the proceeds to pay down the revolver. Our capital allocation in 2024 was once again balanced, and we deployed $2.6 billion during the year, which is comprised of $1.3 billion for the repurchase of 4.2 million shares, and $1.3 billion related to acquisitions; improving our position in Payables, Cross-Border, and Brazil. Looking forward into 2025, our first priority remains M&A, and the M&A pipeline is robust. We'll look to acquire businesses that deepen our position in our three core operating segments, with a particular focus on Corporate Payments. We have nearly $1.3 billion authorized for share repurchases, which provides ample capacity to repurchase shares. Now let me share some additional information on our 2025 full year and Q1 outlook. We established the fuel, FX, and interest rate macro assumptions based on the respective forward curves when previewing our 2025 earnings on our November earnings call. The January forward curves have significantly worsened since that call. Specifically, fuel prices are approximately 8% lower, interest rates are approximately 25% higher, and the U.S. dollar is significantly higher, as evidenced by the Brazil FX rate being 10% lower. To help gauge the magnitude of these recent moves, if the macro ends up being consistent with the October forward curves, annual revenue would increase $136 million and cash EPS would increase $1.19 per share. While the current lower macro assumptions may be transient as markets adjust to the policies of incoming government administrations in the U.S. and internationally, we maintained our process for estimating the macro by using the January forward curves. Consequently, our outlook in 2025 projects both print and organic revenue growth of 10% to 12%. We're estimating cash EPS to also grow 10% to 12%, which is $21 per share at the mid-point. Normalizing both revenue and cash EPS for the macro headwind I just described, we'd be at our November preview. So to sum up, the only thing that has changed since our last call is that the macro has gotten significantly worse. But on a positive note, our confidence around our core business performance has increased which is why we are maintaining our initial financial estimates, excluding the macro. Below EBITDA, we're expecting net interest expense to be between $350 million and $380 million, the tax rate to be between 25.5% and 26.5%, and weighted average shares to be flat year-over-year. Related to capital allocation, our forecast assumes that approximately $1.5 billion of free cash flow is used to pay down debt, which provides some earnings upside opportunity should we deploy capital for M&A or buybacks. From a segment perspective, we are expecting the following revenue growth rates: Corporate Payments high-20s print and high-teens organic, Vehicle Payments low-single-digits print and high-single-digits organic, Lodging low-single-digits print and organic. Related to the first quarter, we expect print revenue to grow 7% to 9%, organic revenue to grow 8% to 10%, and cash EPS to increase 9% to 11%. On a constant year-over-year macro basis, revenue is growing 13% and cash EPS is increasing 17%, at the mid-point, compared to the first quarter of last year. We're projecting revenue growth to increase in the remaining quarters as we execute our business plans and lap the higher FX rates from the first half of last year. In addition, first quarter revenue growth is impacted by a tough comp. related to last year's Gift revenue. I'll also note that the volatility in FX rates so far this year creates some uncertainty regarding the ultimate macro for the quarter. We provided additional details regarding our full year and first quarter outlook in our press release and earnings supplement. So now operator, we'd like to open the lines for questions. Thank you.

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions]. Thank you. Our first question comes to the line of Tien-Tsin Huang with JPMorgan. Please proceed.

Hey, thanks a lot, good to hear, and I'll say up front, Tom, all the best on the transition to your next role here. On the -- on my questions, it sounds like not a lot of surprise organically, really just gift, a little bit of a push-out if I heard that correctly. But across the segments in 2025, it looks like you're looking for a nice acceleration in Vehicle Payments to the high-single-digits from the mid-single-digits in 2024. So what's driving that? How much visibility do you have? I know sales has been good, but just hoping you could break that down for us a little bit. Thanks.

Hey, Tien-Tsin Huang, good to hear your voice. Yes, you got it right. The guide assumes high-single-digits and it's really two things. One, Brazil still super strong, and two, we kind of turned the corner on the U.S. Vehicle Payments, so that's gotten a smidge better. So it inches up over last year.

Okay. Good. Good to know. And then, really quickly on Gringo, interesting deal triples your TAM, as you said. What more can you tell us about the financial profile of this business? I think you talked about a 30% grower on the release, but any other details you can share here?

Yes, it's a decent size. If you combine it Tien-Tsin, which we will with the think all that pay from last year, together, the revenue will be a little over 10% of Brazil in total, obviously growing much faster. So that's point one. Point two, the exciting thing is both the growth rate and the early days, I think it's 5%, 7% penetration rate of people digitally basically updating registrations to paying for fines. So the runway is super early innings. So the size of it, the early innings to the decent businesses, if you will trying to do the thing. And then the last one is there's 5 million active users per month. So the ability to kind of show them the rest of our stuff is super exciting. So it's -- we think a big upside to Brazil.

No. Sounds like a good fit. No. Thanks for taking my questions.

Thank you. Our next question comes to the line of Sanjay Sakhrani with KBW. Please proceed.

Thank you. Maybe just to follow-up on Tien-Tsin line of questioning. Appreciate like the macro is sort of weighing against the results, but maybe we could just talk about what could drive the upside from here. I know you guys mentioned buyback M&A, but is Gringo in the guide now for 2025 and just any contributions from some of these priorities or initiatives that you mentioned, Ron?

Yes, Sanjay, hey, so no, no is the answer to Gringo. It's not closed, so it's not in, in the numbers yet. So I think you're right. I think the upside here would either be the macro pivots again like it did in the last 60 days for your second point of capital allocation. So the guide we have assumed is really just paying down debt, which we ultimately don't do that. So I'd say those would be the three things adding Gringo, the macro pivoting back a bit our way and us using capital to buy earnings or stock.

And one thing I'd also add is we've been conservative on the same-store sales assumption I think I just assuming that is flat. So the other reason why the dollar is so high and inflation is sticky as the economy has been strong. So that's also something that if we saw same-store sales in the low-single-digits like we did here in Q4, maybe that's additional upside as well.

Great. And then, just a follow-up, maybe on Corporate Payments. I know Ron, you talked about there's still some work to be done in terms of pruning. Maybe we could talk about like sort of where that would might occur, how that could impact the business? And then these initiatives seem really exciting, especially the Multi-Currency Account product. I'm just curious like when does it fully scale to a run rate that's material. Thank you.

Yes. On the pruning question, that's not shockingly would be small or non-core assets that don't fit in Corporate Payments. So I don't want to call them out, Sanjay, scoop folks, but we have two or three assets that we're looking at that may go. Yes and the second thing is the priorities to things that we're on are super exciting. We're in line with that MCA Multi-Currency Account product. We've got it across a bunch of currencies and stuff now and we're selling it. So I think as we get through this year, I mean, yes, it could be a big deal, not only in terms of revenue acceleration, right, as we'll learn flow on the deposits. But again, I think it could attract different kinds of clients. So for example, like institutional clients, right, that in the last large amounts of money around operating funds, for example, internationally. So not only is it good to me to go back to our base selectively, but I think it opens up some latent statement that we haven't done one with so far, so pretty exciting.

Great. Thank you.

Thank you. Our next question comes from the line of Andrew Schmidt with Citi Global Markets. Please proceed.

Hey, Ron. Hey, Tom. Thanks for having me on the call here. Great to see the sales momentum. I was wondering if you're seeing any benefit from some of the sales changes you've made the reorg, the rebranding, obviously hiring a CRO. Those things are relatively recent. But has there been any benefit there? Or is it sort of existing business momentum that's driving things and more to come? I know you mentioned doubling down in the U.S. that seems additive. But just curious on the sales initiatives. Thanks so much.

Yes. Hey, that's a good question. I'd like to give credit, but I would say no. I would say it's still early days. The contribution so far from our new guy has really been the team and staffing. He's already brought across three to four, I think, kind of pros that manage kind of zoom sales and seals and rev of and stuff. So who goes really to upgrading, I think, our staff. The big acceleration, the 36% number actually was kind of -- normally, we target kind of 20%, the budget probably for the quarter was 20%. We actually had three elephant sales that happened in Q4 that you can tell were quite significant. One of them I called out in my script was in the Payables business. We contracted. We signed our first enterprise payables account, which was a pretty big deal in sale. I was kidding before we get on to tell people that, that single new account will have spend equal to the size of our entire Paymerang business that we paid $400 million or $500 million for us. So some of the elephants that we got in the quarter was quite big.

No, that's great to hear. Maybe I could double-click on that. The Payables Enterprise win, to go after that enterprise TAM, are there product adjustments or go-to-market motions that, that need to be updated, maybe walk us through if there are things that need to happen to access that TAM, I know sometimes capabilities can differ between different sized clients. I'm just curious there. Thanks a lot.

Super good question, too. So kind of a two-part answer on the product or platform side, though, we're kind of okay. The product and capability we have a work side for enterprise. On the go-to-market, the market motion, yes, we're going to rely on some kind of big partners think like SI, some big consultant firms, to walk us into kind of the senior management in some of those enterprise accounts, which is how we basically got this initial one contracted. So yes, we've got a couple of relationships that are making introductions now into these super-duper big accounts that us coming in saying that we've got a solution ready to go.

Got it. Thanks so much, Ron.

Thank you. Our next question comes from the line of Andrew Jeffrey with William Blair. Please proceed.

Hi, good afternoon, guys. Appreciate taking the questions. Ron, a couple of questions actually on Corporate Payments. First of all, can you talk a little bit about sort of your view of Corpay's right to win among enterprise customers? I understand the deal you signed this quarter was with an existing customer. And sort of just from a go-to-market competitive, you mentioned banks and economic standpoint. Can you frame up for us what further wins and/or investments in that business might mean for the long-term growth trajectory of Corporate Payments top and bottom line?

Yes, it's also a good question. I mean, the TAM is crazy to size, right? When I quoted to you that this single new enterprise contract has a spend profile equal to a business that took 20 years to build and has, I think, 1,500 customers. So a handful of these super giant enterprise accounts would be crazy. The one thing really comes from, I think a couple of things that we're advantaged one again is the tech, right, that we built really an advantaged way to pay all these different modalities. And then, second is really, again, the virtual card network that, that monetizes it creates money, right, for both sides here. So we're just way ahead because we've been at it a long time in terms of the size and the quality of that network and we can basically promise, if you will, these prospects that we can monetize more of their spend than other people can. And so when you've got tech that works and you've got an economic advantage. And then, last year, remember, we have dedicated people just selling this. I think to focus, as you know, on lending and treasury and stuff. And so having grown up senior people that can go in and articulate why as I'd say, would be the third plant. So a big advantage, yes.

Okay. Look forward to learning more about that. And then, could you give us an update, and I apologize if I missed it, Tom, has said it. As to what portion of the full stack AP business is card attached today? And maybe talk about plans to monetize ACH and maybe those plans are even more pronounced now as you move up market in enterprise customers. Just thinking about longer-term, how that business monetizes even better than it is today.

Andrew, if we caught the question right, we've got a little bit -- you skipped out a little bit. I think you're asking about what the penetration level within the full car penetration level within full IP?

Yes, exactly.

So it is stay consistent right around that 10%, 11%.

Okay.

The average is a high degree of variability. Averages sometimes be dangerous when there's a fair amount of variability. There's some customers that is 2 to 3x that and then there's other customers that are smaller than that just depends on the nature of their AP and how it aligns with our merchant network. But on average, it's right around that 10%, 11% range and has stayed steady.

And just from a monetization standpoint and we could talk about off-line, too, if it's more appropriate just trying to understand how you monetize better going forward around non-card in particular?

Yes. I mean the good news on that one is there's a model, right, of getting paid right or ACH or ACH+, where we share more data or actually moved -- move money more quickly and same on the subscription side, our product is pretty good now as we've had for a couple of years ago, Corpay Complete. And so having software that actually is helpful, particularly in the front end, right, of automating the process like getting approvals and digitizing invoice. They don't get lost. A lot of that workflow value basically, we don't get paid for it. So we're testing our way into getting paid more for both of those things. Both of those things obviously have value to clients and we've historically done very well at penetrating. So we've got plenty of money. But I think you'll see us do more of that.

Thank you. Appreciate it.

Thank you. Our next question comes from the line of Darrin Peller with Wolfe Research. Please proceed.

Hey guys, thanks. Maybe just on the -- I want to follow-up on another question on the corporate gaming side for a minute, just because this is a big contributor. Number one, I mean, I know it was asked about divestitures before, but in terms of having the right mix of assets, Ron, number one, are you where you want to be? And then, number two, maybe just give us a little more granularity on what you expect the building blocks to this strong growth rate to be for the year. When you think of whether it's the AP businesses or the Cross-Border businesses or the T&E, et cetera. Help us understand a little more of a sort of sub segment level expectation and where you see yourself winning most in that segment if we could start there?

Yes. Hey Darrin, so kind of on the two-part question, are they the mix of assets, I think I said to you that we're kind of there. I'd say the one thing that we called out today is this MCA, this Multi-Currency Account product in Cross-Border. I mean, simplistically, that business has been a disbursement business, right? We moved client funds right to benefit share. So this idea effectively depositing and holding in the native currencies, deposits is an advantage based on the better product right for clients, you don't have to go to Germany and open up some local bank account, we can just hold the currency for you, right, in the market that you're in. So I think that, that would be kind of the only significant product at that, that, that we're looking to. On the outlook of the business, again, we had obviously crazy good Q4. We're guiding that thing again to high-teens, approaching 20% again here in 2025. I'd say both businesses are in that neighborhood. It's not like, one of them is carrying. Others, I'd say they're the pretty similar in terms of the growth rate. And the great news in the thing is it's not hard to model for us is, we sold a lot of the business already back in 2024 it's going to get implemented in 2025. And so the visibility that we have in the forward roadmap business is pretty good. And then b) the retention rate, as you know, in that business are a bit above our 92% line average or probably in the 95% kind of retention rate. So look, it's a pretty predictable business. And thinking -- I think I said this to you privately, like, there's just so many prospects like we've got a $600 million U.S. Payables business with 5,000 mid-market clients. There's 250,000 in our sales prospect database. So like the opportunity to make the business 2x, 3x, 4x bigger, that's what we're chasing.

And Darrin, just to add, there's nothing in the pruning or divestiture category that's in the Corporate Payment space. I think maybe Andrew also had similar questions. So we just want to make sure there's no confusion there. The comments Ron made, were very good, [indiscernible].

Makes sense. All right. And just my quick follow-up would just be on margins for a minute. When considering just the U.S. sales effort and the build-out on the investments, I mean, is there any implication about limiting margin expansion? Maybe just give us a little color on what you're expecting for EBITDA margins over the next year or two to then as you build that in.

Let me start and then Tom can jump on. So we're kind of planning relatively flat in 2025 on a print basis. And a little bit of that is the macro compression, right, the currency taking $100 million of revenue low kind of processing. Two, is we're absorbing two pretty big acquisitions that have lower, certainly lower than our line average, which means our core business outside of those is actually coming a little bit better. And then, third, we -- I -- we just decided to spend a bit more money on sales and marketing to try to make sure we can get the growth, we can get the sales, which we're planning to be up another 20% this year. So we just felt that it was the best balance. I mean if you were me dare to go to a macro neutral where the world is the same at 2025 and 2024. The print that we're sharing is 13 to 17 -- 13 and 17. So it does get lost a little bit with this wave of crummy macro but kind of underneath is the headline is the business is just performing and outlooking to perform pretty well.

I think the only thing I would add to that is what we see is the quarterly acceleration of the margin. Some of that is as we lap some of the negative macro that Ron referred to, it's also as we start to harvest some of the synergies from the two acquisitions, particularly GPS in late 2024. And as we also see some acceleration as Lodging and Vehicle Payments start to get further into the black. So all of those things kind of give us accelerating margins to 2025 based on our projection.

Fair enough, Tom. Thanks, guys. Appreciate it.

Thank you. Our next question comes from David Koning with Baird. Please proceed.

Yes. Hey, guys. First of all, just a question on the Lodging business. I was just looking at yields. The last seven quarters, the yields have kind of been in the $13 to $15 per room night. In this quarter, it was $11.40. And I'm sure it has to do with the mix, but maybe describe that a little bit and then how you kind of see the mix in the yield into 2025.

Dave, you hit it. I mentioned in my prepared remarks in terms of the impact of Hurricane Helene and Milton that draws a fair amount of what we call FEMA activation business, which is at a very low spread for us. And so that's what drove the overall yield down. We'll see a little bit of yield compression as we now support the California wildfires. The hurricane support has actually declined quite a bit here in January. But that's being replaced and then some by the California wildfire support. But within the FEMA activation as well as within the insurance business, the interest business has a bit higher take rate and so the overall impact may not be as high. It wasn’t as much insurance business associated with the hurricanes. It's more of the payment piece. But it's mix is, as you said, I can going forward with that normalizes out, I think you see a back to the line average of what you saw in the first three quarters of 2024.

Yes. Okay. Thanks. And just a quick follow-up. I know you mentioned some kind of one-off benefits in Corporate that helped to drive the 26%, but maybe bridge kind of from 26% in Q4 down to high-teens in the next few quarters.

Yes, Dave, hey, it's Ron. So it's really two things. I think of that as kind of a normalized high-teens, 20% business. The two happies in the 2026 was a big kind of one-time synergy, piece of revenue that we negotiated and the second was the channel the comp in the prior year in the infamous channel business that was always detractor turn quite positive. We -- I think we said that we are going to turn the channel business and in fact, we did. So those two things accounted for the vast majority of the list above 20%.

Got you. Thanks, guys.

Thank you. Our next question comes from Ramsey El-Assal with Barclays. Please proceed.

Hi guys, thanks for taking my question this evening. I wanted to also ask about Lodging and the -- which is recovering nicely. The 2025 expectations are still below the longer-term segment kind of growth profile and trend. I'm just wondering if we should expect that Lodging business to revert over time back up to the normalized historical growth rate. Or has there anything changed in that business in terms of mix or growth algorithm, which might cause it to grow slower than historical precedent?

Yes. Hey Ramsey, that is a good question. So the first thing is just how the Lodging business kind of get bad. So let me just start here at bad basically via same-store sales. We had a swath of clients basically kind of use us a lot less. And so it took that volume and revenue out and stuff. And second, what it did is it drew a bunch of our sales people effectively to run over and try to resell and help those clients and stuff. And so that's the problem to say. The recovery in both Q4 and our guide is the same-store sales has basically flat. It was kind of minus 10% in Q4 of 2023, and it's gotten basically back to flat in Q4 of 2024. So as we thought, as I had hoped, it was transient with a swath declines. And so now we're back into, okay, let's zoom bar right, let's get the salespeople back getting new clients and building volume at the top of the funnel. So that's the assignment. So assuming we don't have another fire drill for same-store sales and the salespeople could take this very useful valuable offer we have out, we would expect acceleration as we run through at 2025. And I said it before, it may be the single best offer we have in the company like four of these workforce people. It's just a killer offer of stay anywhere in the hotels that want to stay at 25% off the lowest available price, don't worry about how your people pay for it will handle the employee, the traveler paying and give it back to you, we'll pour on it, reconcile it all like it's an incredible service, you need service that's less than free to companies. And so I continue to believe if we go tell new businesses that they'll take the service.

Super helpful. Thanks, Ron. And a follow-up for me on the expanding payables business into Europe. Similar question as one before about moving into enterprise with Corporate Payments. What do you need to do there? I know you've got assets in Europe do you have to hire? Do you have to build that technology? Can you cross-sell to existing customers? Just a little more color on the build-out to get that product overseas. Thanks.

Well, another good question. This is super exciting, right? We're trying to take one of our go-forward businesses and get it beyond the USA. And so logically for us, the UK and Europe is a place to go because we have assets there. So the good news is the new cloud tech, front-end tech that we've created for payables works already. It works. We actually have some clients already on the platform in the UK. So the major piece of product work we're doing is we're connecting that to our Cross-Border product because we want -- I want to make sure we could offer disbursements that are -- they're obviously Cross-Border as well as in-country because way higher percent of business is there, right, move money across borders. And so that's kind of the product is take a product we have that works and attach really our Cross-Border to it. So the real-time is the go-to-market. So we're going to use the combination of our clients and some of our people there and stand up a team of specialists to go take this product just like we hear in the U.S. to the clients there. So I'd say by the turn, Ramsey, this summer, we'll have some feedback on whether we can make a business go -- a Payables business go in the UK, like we had here in the U.S.

Thanks so much, and best of luck to you, Tom. Nice working with you.

Thanks, Ramsey.

Thank you. Our next question comes from Nate Svensson with Deutsche Bank. Please proceed.

Hey guys, thanks for squeezing me in here. A few questions on Lodging. So I figured I'd ask about the other problem trials for North American fleet. I know the last quarter; we talked about that business returning to positive growth this year. And Ron, I think earlier on the call; you mentioned that U.S. Vehicle Payments has started the corner or started to turn the corner. I guess the other thing that set out with that U.S. sales number in Vehicle Payments, which I think was 60% in 4Q. But I guess, just taking that all together, hoping for an update on your thoughts and visibility on that business as we sit here in February for the rest of the year.

Yes. Hey Nate, thanks for bringing up the second problem child. Yes. Look, the good news is we're kind of done with the drama that we took you guys through from two years ago, and there will always be. So that's fortunately all behind us. And so the assign that at this point is simple. It's just make sales. The products work well. The clients are happy with improving retention in the business, the credit is in control. So it's as simple as, okay, we're at the baseline. And so the guide that we have, if you look at it quarterly, sequentially has that business ticking up, I think on in front of me, it's exiting at 5% or 6% in Q4 of this year in 2025. And so the single question to ask is just, okay, Ron, how are you adding sales and starts as you run through the quarters? And the answer is, if we do, which is why I hired a guy that knows how to make sales to oversee this, if we do, that business will recover because we'll have dramatically more sales and losses. And so the good news is the assignment is like simple, straightforward, clear, now we need to just go execute it.

Got it. That's very helpful. I know there was a question earlier about Gringo. I think that's an interesting acquisition. So I don't want to ask about that again. But maybe I can use that topic to segue maybe a broader update on the consumer vehicle opportunity that we've talked about. Obviously, you've got a ton of things going on in the business these days, but I still think that consumer would be of an opportunity is an exciting one. So maybe update on how things are going in the UK with pay-by-phone and maybe with the road map for that sort of new business opportunity looks like from here for expansion in the UK and the U.S.

That's a good follow-up. So I think it's probably pretty consistent with what we reported 90 days ago, which is Brazil is just doing crazy, great. Like if you look at our budget for 2025, in Brazil, half of the revenue growth. So if you took the growth from 2024 to 2025 in Brazil in revenue is from non-toll growth. So even though we're planning 9% tag or toll volume growth, the driver of that thing being high-teens half now of that Gringo growth is non-kind of core product toll. It's the other product. So then we add these assets that effectively double the number of users, customers that can use the full suite of stuff. I'd say my report would be is better dramatically better than we thought it could go. Counter that the UK, I'd say, is still slow and super early days. The tech build took us longer. And simplistically, if you think about it, what we needed to do there is take the pay-by-phone, 2 million digital users and get that app connected to the various networks. So like the fuel network, the EV network, et cetera, the maintenance network, the registration network. So we spent an awful lot of time in the kitchen, making the product work so that when we went out to the pay-by-phone users, we actually had a product that, that actually did a bunch of stuff. And so that’s not a ton to report on the market side. So I'd say same thing, give us, call it, till the term this summer, and we'll have a better fix on whether there's a take. Again, we have great results in one place. It makes us believe we could get them in the second place, but we don't have them yet.

And maybe want to add on Gringo that I thought after Ron to answer that initial question. Question about price was an ask, but we're going to disclose that in our 10-K, so mine will just kind of comment on it here. We paid around US$140 million, which is a little less than 4x forward revenue, which we think is pretty attractive. But it was all in Brazilian -- essentially almost all in Brazilian currency, which we had in market as a really efficient way, particularly with the currency depressed for us to use that cash down there rather than bring it back and it gets evaporated on it just because of the decline in overall FX rates. From that standpoint, it was something that we thought was pretty attractive. I want just the business purpose and strategy that, that Ron described, but also the price of the transaction and the efficient use of our free cash flow down there.

Thanks for the color, guys. Best of luck, Tom. We’ll miss you.

Thank you. Our next question comes from Andrew Bauch with Wells Fargo. Please proceed.

Hey guys, thanks for taking the question. I know that you've called out and you made very clear the macro impacts to the EPS number. But maybe if we can kind of just separate fuel and FX rates, things like business activity confidence amongst your client base bookings, how would you characterize what you're seeing today, what you saw in the fourth quarter because there's various data points that suggest optimism is picking up. And I'm just wondering how that could kind of translate to your outlook?

Yes. Hey Andrew, so we get at that and think about that through the trends that we call out. So I don't want you or others to miss that. The best news in Q4 was really the improving trend sequentially, right, that, that organic revenue got backed up right to 12% in same-store sales and health of our clients turned positive, right, at plus 1% sales growth was -- in sales production was record. We've never sold as much in the quarter as we sold in Q4 and retention stage. So that's the math of the business. Like this isn't a very complicated business. If you sell a lot and you keep a lot and your clients stay healthy, you grow. And so the headline to you guys is that's what's spilling into running here into 2025, which allows us -- we took our organic growth consolidated to 11% at the at the mid-point because we think we've got decent visibility into those trends. And effectively, the macro, like how real or the pound converts it's kind of, in some ways, for us, it's just an after we look at what the numbers are and we were on the conversion. So you put that together with just the amount of sales that we have in 2024 of which we get more than half of the benefit from those in 2025, you've got half of your growth effectively already there, kind of already happening, exiting and filling into 2025. So look, things could happen, but I'd say our confidence in the basic businesses is pretty high.

Yes. One of the things, Andrew, just to be careful of, when we talk about macro and negative macro, it's a very narrow definition of macro. We're not talking about the broader economy in terms of what we're seeing in terms of spend volume and card activity and things like that. It's really our definition of the macro that we normalize for. And if you dig into it even further, it's FX. And if you double-click into that, it's the Brazilian currency is down 9% year-over-year. So it's not a spillover in terms of business activity that we're seeing out there. It's really just a function of some very kind of unique and isolated things in terms of how we're defining the macro.

Yes. Of course meaning kind of separate the two, just one housekeeping note. The M&A contributions you're calling out in 2025, $131 million in the bridge. If we look back at the deck when we did our M&A call in the summer, I know that you're pointing to $200 million of revenues for GPS and Paymerang. Obviously, I think Paymerang had roughly $25 million, I think; we were calling out for 2024. Just trying to make sure if that $200 million kind of pie in the sky goal is still the right number for those two assets?

It is. And I wouldn't say it would be pie in the sky. I'd say it's a number we're going to get. So that is the -- Andrew, is the gross numbers. So if you look at the print this year for those two businesses, they will print over $200 million in revenue. The net against that is we dispose of the business; merchant digit business and we got the benefit of six months of Paymerang in 2024. So really, it's a net number, right, call it, $200 million minus the two things I just named basically takes the thing out of where you said $130 million.

All right. Great. Good luck, Tom. Thank you.

Thank you, Andrew.

Thank you. That concludes the allotted time for questions. I would like to turn the floor back over to Jim for closing remarks.

Yes. Hey guys, thanks for your interest. There's still some questions we didn't get to, given the timing, but you know where to find us, let me know, I'll be around tonight. Thanks, guys.