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Introduction & Market Context
Corpay Inc (NYSE:CPAY) released its Q1 2025 earnings presentation on May 6, 2025, reporting revenue of $1.006 billion, up 8% year-over-year, with adjusted earnings per share of $4.51, meeting analyst expectations. The payment solutions provider’s stock responded positively to the results, rising 1.37% in aftermarket trading to $330.75, according to market data.
The company’s Q1 performance demonstrated resilience amid various macroeconomic headwinds, with CEO Ron Clark emphasizing the company’s strategic expansion initiatives during the earnings call. "We’re expanding our Corporate Payments segments with additional acquisition targets still in front of us," Clark noted, highlighting the company’s growth-oriented approach.
Quarterly Performance Highlights
Corpay delivered solid financial results for the first quarter of 2025, with adjusted EPS growing 10% year-over-year to $4.51, or 18% on a constant macro basis. The company generated $555 million in adjusted EBITDA (up 8% YoY) and maintained strong adjusted EBITDA margins of 55.2%.
As shown in the following performance highlights from the company’s presentation:
The company’s organic revenue growth reached 9% in Q1, driven primarily by its Corporate Payments segment. Same store sales improved to 1% year-over-year, compared to -2% in the first quarter of 2024, indicating strengthening business fundamentals. Sales growth was particularly strong at 35%, while revenue retention remained stable at approximately 92%.
The following bridge analysis illustrates the factors contributing to Corpay’s revenue and EPS growth compared to the prior year:
Despite negative impacts from macroeconomic factors, including fuel prices and foreign exchange rates totaling $51 million in revenue and $0.34 in adjusted EPS, Corpay’s core business performance and strategic acquisitions drove overall growth. The company’s free cash flow generation remained robust at $323 million for the quarter.
Segment Performance Analysis
Corpay’s segment performance showed varied results, with Corporate Payments emerging as the standout performer with 19% organic revenue growth. Vehicle Payments delivered solid 8% growth, while Lodging Payments experienced a slight 1% decline, showing improvement from larger declines in previous quarters.
The following chart details organic revenue growth by segment:
The Corporate Payments segment has consistently delivered double-digit growth over the past five quarters, while Vehicle Payments has maintained steady growth in the high single digits. The Lodging segment shows signs of stabilization after previous declines.
Customer retention remained strong across the business, as illustrated in the following chart:
The company has maintained retention rates above 91.5% over the past five quarters, demonstrating the stickiness of its payment solutions and customer relationships despite competitive pressures in the payments industry.
Strategic Initiatives and Acquisitions
Corpay announced several significant strategic initiatives during the quarter that position the company for future growth. Most notably, the company formed a strategic partnership with Mastercard (NYSE:MA), which will invest $300 million for approximately a 3% equity stake in Corpay’s cross-border payments business.
The following slide details this strategic partnership:
This partnership validates the standalone valuation of Corpay’s cross-border business at over $10 billion and is expected to add 2-3% revenue growth to the Cross Border unit in 2026 by expanding into the financial institution segment.
Additionally, Corpay announced an agreement with TPG to acquire AvidXchange, a leader in real estate and HOA AP automation, for $2.2 billion:
The initial investment of approximately $500 million for a 33% ownership stake, with an option to acquire the entire company in three years, represents a strategic expansion into complementary verticals with high growth potential. AvidXchange has demonstrated impressive growth with a 24% revenue CAGR from 2020-2024.
The company also completed the acquisition of Gringo in March 2025 for approximately $164 million, further expanding its portfolio of payment solutions.
Forward Guidance and Outlook
Corpay maintained its full-year 2025 guidance, with only minor adjustments to account for recent acquisitions. The company expects GAAP revenues of $4.42 billion (midpoint), representing 11% year-over-year growth, and adjusted EPS of $21.00 (midpoint), also up 11% year-over-year.
The following slide presents the company’s detailed guidance for FY25 and Q2 2025:
For Q2 2025, Corpay expects revenues of $1.10 billion (midpoint) and adjusted EPS of $5.10 (midpoint), representing year-over-year growth of 13% and 12%, respectively. On a constant macro basis, the company anticipates even stronger growth of 12% in revenues and 18% in adjusted EPS.
The company also addressed potential tariff impacts on its business, noting limited direct exposure:
Corpay estimates that potential tariff policies would have a relatively modest impact on its business, with a potential second-half revenue impact of approximately $10-15 million. The company’s cross-border business has the highest sensitivity to tariffs, while other segments would primarily experience indirect effects through impacts on clients.
With a strong balance sheet featuring $1.6 billion in unrestricted cash and $1.2 billion in borrowing capacity, Corpay remains well-positioned to pursue additional strategic acquisitions while maintaining its leverage ratio of 2.69x within the target range. The company’s focus on expanding its Corporate Payments segment and cross-border capabilities through strategic partnerships and acquisitions suggests continued growth momentum through 2025 and beyond.
Full presentation:
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