Corpay Raises Revenue Outlook While FTC Charge Cuts Profit
Corpay's adjusted per-share profit climbed 36% to $7.00 even as a new $100 million FTC settlement charge pulled GAAP net income down 13%.
Corpay (CPAY) reported second-quarter revenue of $1,338.8 million, up 21% from a year earlier, and raised its full-year revenue guidance even as a newly disclosed $100 million regulatory settlement charge dragged GAAP profit lower.
The quarter marks a turning point in Corpay's growth trajectory. Organic revenue growth slowed to 10%, ending a four-quarter run at 11% and stepping down for the first time since the streak began, though it still extended the company's run of double-digit organic growth to a fifth straight quarter. Adjusted earnings per share rose 36% to $7.00, the fastest growth rate of the past three quarters and an acceleration from 29% in the first quarter and 13% in the fourth quarter of 2024. GAAP net income attributable to Corpay, by contrast, fell 13% to $248.3 million, reversing a 44% increase in the first quarter, largely because that comparison had been inflated by a $122.5 million gain on the sale of the PayByPhone parking business that added roughly $1.19 to first-quarter earnings per share and did not recur. The bigger driver of the year-over-year decline was a new $100 million preliminary charge tied to a Federal Trade Commission Bureau of Consumer Protection settlement, still pending regulatory approval, that appeared in Corpay's disclosures for the first time this quarter.
Profitability improved even as growth slowed. Adjusted EBITDA margin expanded to 57.3% from roughly 54.6% in the first quarter, a gain of about 270 basis points, while adjusted EBITDA itself rose 24% year over year to $767.2 million, matching the prior quarter's growth rate and outpacing the 18% increase recorded in the fourth quarter of 2024.
Segment results diverged sharply. Corporate Payments held organic growth at 16% for a third consecutive quarter and posted a 27% increase in operating income on 42% revenue growth, the strongest combination in the portfolio. Lodging Payments revenue rose just 3% to $123.2 million as room nights fell 13% to 7.5 million, offset by an 18% jump in revenue per room night to $16.34; the segment showed sequential organic improvement despite the weak headline growth. Vehicle Payments presented the starkest contrast: revenue rose 13% to $580.2 million, but operating income fell 21% to $190.1 million, as transactions dropped 29% to 147.6 million following the March 2024 divestiture of the PayByPhone parking business, which had contributed 67.8 million transactions a year earlier. Revenue per transaction jumped 59% to $3.93 as the mix shifted away from high-volume, lower-revenue parking activity. Corporate Payments also flagged a pricing headwind, with revenue per spend dollar compressing to 0.58% from 0.70% a year earlier, which the company attributed to growth among new payables and cross-border enterprise clients.
Corpay raised full-year revenue guidance to a range of $5.290 billion to $5.330 billion, implying 17% growth, up from the $5.250 billion to $5.330 billion range given with first-quarter results. Profit guidance moved in the opposite direction. Full-year net income guidance was cut to $1.285 billion to $1.325 billion from $1.352 billion to $1.432 billion, and net income per diluted share guidance dropped to $19.50–$19.90 from $20.39–$21.19, reflecting the FTC charge and other one-time items. Adjusted earnings-per-share guidance was narrowed to $27.15–$27.55, with the low end effectively reduced from the $26.30–$27.10 range issued in the first quarter even as the midpoint held roughly steady. For the third quarter, Corpay guided to revenue of about $1.355 billion, or 16% growth, a deceleration from the 18% growth rate implied by the $1.295 billion guide it had issued for the second quarter.
Corpay pulled back on buybacks and leaned into balance-sheet flexibility. Share repurchases fell to 1 million shares for $321 million, down from 2.4 million shares for $786 million in the first quarter, while the leverage ratio improved to 2.55 times from 2.7 times. In May, between the two reporting periods, Corpay refinanced its credit facilities, increasing its revolver by $925 million to $3.7 billion and its Term Loan A by $420 million to $3.3 billion, cutting dollar-denominated rates by 10 basis points and extending maturities to 2031 and 2032.