Fleetcor Beats Q3 Expectations Again With 29% YOY Revenue Growth

Global commercial fuel card and business payments company Fleetcor Technologies Inc. FLT on Wednesday reported total revenue for the third quarter grew 29% year-over-year to nearly $756 million. Net income increased to $234 million for the quarter, a 24% year-over-year rise.

After record retention and sales in the second quarter, the trend continued in Q3.

Fleetcor's adjusted earnings per share (EPS) reached $3.52 for the third quarter, increasing 26% year-over-year from $2.80. The company's retention rate reached 93.3%, and new sales bookings grew 52% year-over-year — an all-time high.

"Our third-quarter results were again excellent, and beat the expectations we provided in August for both revenue and adjusted EPS," said Charles Freund, chief financial officer at Fleetcor, in a release. "Our expense management discipline, strong credit performance, and effective capital allocation all contributed to the bottom-line beat."

The Atlanta-based company reported fuel transaction revenue of $307 million, a 20% year-over-year increase. Revenue per fuel transaction grew 16% in Q3 compared to 2020, at $2.61 per transaction.

During the second-quarter earnings call, Ron Clarke, CEO at Fleetcor, said the company was embracing electric vehicles as part of its fuel card business. This EV fuel card solution is attracting interest from companies like Hertz, Volkswagen USA, and Union Pacific UP, Clarke said during the Q3 call.

Fourth-Quarter, 2022 Outlook

"Our guidance increase reflects our third-quarter results and the benefit from the ALE acquisition completed on Sept. 1, 2021. With three-quarters of strong results behind us, we currently expect fourth-quarter revenue and adjusted EPS to grow both sequentially and year-over-year, which will contribute to full-year growth rates of 17% and 18% at the midpoint, respectively," Freund said.

Based on the records set in retention and the potential for sales increases to drive incremental revenue, Clarke said, "The early 2022 setup is quite good." He expects sales to grow by 20% in 2022.