Good afternoon, everyone, and thank you for joining us today for our third quarter 2021 earnings call. With me today are Ron Clarke, our Chairman and CEO; and Charles Freund, our CFO. Following the prepared comments, the operator will announce that queue will open for the Q&A session. It is only then that you can get in line for questions. Please note, our earnings release and supplement can be found under the Investor Relations section of our website at fleetcor.com. Now throughout this call, we will be presenting non-GAAP financial information, including adjusted revenues, adjusted net income and adjusted net income per diluted share. This information is not calculated in accordance with GAAP and may be calculated differently than non-GAAP information at other companies. Reconciliation of historical non-GAAP financial information to the most directly comparable GAAP information appears in today's press release and on our website as previously described. I do need to remind everyone 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 recovery, outlook, new products and acquisitions 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 do not undertake any obligation to update any of these statements. These expected results are 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 and on Form 8-K and in our annual report on Form 10-K filed with the Securities and Exchange Commission. These documents are available on our website and at sec.gov.

Okay, Jim, thanks. Good afternoon, everyone, and thanks for joining our Q3 earnings call. So up-front here, I'd like to run through four subjects: first, I'll give you my take on our Q3 results along with the rest of your outlook; second, take you into a bit deeper dive into our sales results; third, give you an update on the three acquisitions that we've completed year-to-date; and then lastly, an early preview of 2022 and beyond. All right. So let me make the turn to our Q3 results. We reported Q3 revenue of $755 million, up 29% and cash EPS of $3.52, up 25%, so both of those all-time record highs for the company. Also, the Q3 results annualized, finally above $3 billion, so past the $3 billion mark in revenue and $14 in cash EPS. Organic revenue for the quarter, up 17%. And inside of that, Corporate Payments business grew 22% organically. The trends in Q3 are quite good. Sales finishing at record levels, up over 50% versus Q3 last year and over 30% against the baseline of Q3 '19. Retention, steady as she goes at 93% for the quarter. And again, our global fuel card business inside of that also coming at 93%. Same-store sales strengthened plus 5% for the quarter, which further adds to the same-store sales rebound we saw in Q2. Credit losses low again at 3 basis points, continuing to run below historic levels. You may notice our tax rate kind of 4 points higher than last year. That did shave about $0.20 off the $3.52 that we reported for the quarter. So look, overall, I'm pretty pleased with the quarter. So in terms of the rest of the year, we're raising guidance today. So revenue guidance at the midpoint now, $2.795 billion, that's up $30 million from August. Cash EPS at the midpoint to $13.05, that's up $0.15 from August. This raise versus last time reflects, obviously, these Q3 results that beat the ALE acquisition, which closed September 1, and a bit more favorable fuel prices, all of those offset just a bit by slower-than-planned COVID recovery. If you look at the Q4 on its own, it anticipates revenue and profit growth up about 20% versus Q4 last year and about 10% against Q4 2019. All right. Let me make the transition into a bit deeper dive into our sales results. So as I mentioned, new sales or bookings reached record levels in the quarter and are up sequentially, significantly and up dramatically over the prior periods. So as I'm sure you're aware, sales reflect the market demand for our solutions but are also really the best leading indicator of future prospects. And so crazy record this quarter. We signed up almost 50,000 new business clients globally in Q3. So 50,000 new accounts joined the fold, so a record. Over 50% of all of our global fuel card sales now come to us through our digital channels. So great because it's very low cost. We continue to increase our digital advertising spend, and we're enjoying record levels of prospects visiting our websites. Interest in EV solutions is increasing, so a number of large accounts signing on to our EV solution. So that included Hertz, Volkswagen USA, Union Pacific, LeasePlan Europe and Siemens. Brazil toll sales rocked in the quarter. Our urban sales or city dwellers that are lower frequency toll users represented 23% of all new sales in the quarter. So programs, whatever, 2 or 3 years old now, almost a quarter. And the active tags for the quarter reached a new milestone, 6 million, so 6 million active paying tags now in Brazil. We are planning to launch our new bank joint venture this month with the largest bank in Brazil, who will be helping to promote our products. We don't talk about it much, but our customer acquisition cost is really quite attractive, runs about 65% of the sales new revenue, so really super important for profitable growth. So let me shift gears and talk a little bit about the three acquisitions that we've closed year-to-date and how they're doing. So Roger, first up. We've now rebranded Roger to be Corpay One, which is our entry into the Corporate Payments SMB space. So we're underway now adding new SMB bill pay clients through digital channels and accounting channels, and have some early returns on cross-selling bill pay into our fuel card base. So super early, but it looks like about 10% of our fuel card clients that pay their bills with our new Corpay One platform are choosing to pay a second non-fleet corporate bill with us, so effectively becoming bill pay customers. We're looking at somewhere around 10,000 to 20,000 SMB bill pay clients coming online in 2022. And also interesting, we plan to launch what we call our 2-in-1 solution before year-end that will combine our smart business cards with our bill pay platform into one interface. So an SMB client could potentially pay all of their nonpayroll expenses with us on a single platform. Second deal this year, AFEX, which is a cross-border provider, very similar to our Cambridge business. Super performance in '21. Pro forma revenue growing mid-teens. EBITDA up almost 50% versus prior year. Well along on integration, we've already combined the management teams into one group, and are about halfway through migrating the AFEX customers onto the Cambridge IT platform. So I hope to retire most of the AFEX IT system by year-end. Last deal up is ALE. That's the lodging extension for the insurance vertical. It helps homeowner insurance place policyholders into hotels and temporary housing. So we closed at September 1 about 3.5 million incremental annual hotel rooms will be added to our lodging business. Underway with the synergy work. And early view is about $0.20 accretive to 2022. So far, so good really across all three transactions this year. All right. So lastly, let me share our view, early view of 2022, and speak a little bit to the beyond '22 prospects for the company. So for next year, encouraged by a few things. First, the run rate, we're exiting '21 with about $3 billion of annualized revenue and $14 of cash EPS. So the nose of the plane is up. Sales again, running at record levels, which will drive incremental revenue into '22. We also expect sales to grow again next year about 20%. Macro is on our side, helping us. Obviously, fuel prices are high. FX is generally holding, so setting up well there. And then I mentioned the acquisitions, particularly AFEX and ALE, together contributing probably about $0.50 of incremental accretion next year. So look, taken together, the early 2022 setup is quite good. If we look just a little farther out into the midterm, we're kind of also encouraged there for a couple of reasons. So first, we've expanded, via our Beyond strategy, the market segments or the served market segments in each of our five major lines of business. So that's laid out on Page 14 of the earnings supplement. So for example, in Corpay, our Corporate Payments business, we've added cloud-based AP solutions to our original virtual card business. So we did that a couple of years ago in the middle market with Nvoicepay, and then obviously, this year, in the SMB market with Roger. So look, much, much better positioned now to attack the Corporate Payments TAM. And then again, if you look at our lodging business initially focused only on workforce or blue-collar travelers going to economy hotels. Since we've added two new segments, the airline crew business and now the insurance policyholder business of the fold, that really triples the opportunity in terms of room nights for the lodging business. A second thing is we're on a path, as I mentioned, to combine our card business with our payables business into a single platform, which would do two things: first, give us differentiation in the marketplace, where we can help clients pay all their nonpayroll expenses with us, both walk-around purchases and supplier payables from a single account; and second, could help us turn our fuel card business into a Corporate Payments business by cross-selling our bill pay services to our hundreds of thousands of fuel card clients. So as I mentioned, underway there. So look, the combination of expanding our served market segments in our existing five businesses along with this idea of joining up our cards and bill pay onto a single platform is encouraging for us. In closing, I have a few final thoughts. We had a really strong quarter with record revenue and profits for Q3, positive trends, increased same-store sales, rising new sales, and steady retention. Additionally, we achieved record sales with a very appealing cost of acquiring new accounts. Our three acquisitions are progressing according to our strategy, and our early setup for 2022 looks promising. Overall, it feels like we're in a pretty good position.

Thanks, Ron. I'm delighted to share with you some more color on a very solid clean quarter. For Q3 of 2021, we reported revenue of $755 million, up 29%; GAAP net income of $234 million, up 24%; and GAAP net income per diluted share of $2.80, up 28%. Adjusted net income for the quarter, or ANI, increased 22% to $294 million or roughly $1.2 billion annualized. ANI per diluted share increased 25% to $3.52. Organic revenue growth was 17%, driven by continued strong sales, solid retention levels, and same-store sales recovery. Looking at organic growth across product categories. Corporate Payments was up 22% in the third quarter, highlighted by full AP, which grew over 50% again this quarter. Corpay One, our small business-focused full AP offering, grew 78%. So our full AP solutions continue to sell well in the market. Cross-border revenue was up 19%, which showed some softness from the lockdowns down under in Australia. We do believe much of this softness is recoverable, but the timing is hard to predict. The AFEX integration is progressing quite well, and we've converted more than half of its customers onto our existing cross-border payment systems. We expect to convert the remaining customers before year-end. I'd like to thank our cross-border team as they've worked tirelessly to complete these customer migrations seamlessly while simultaneously operating a growing, thriving business. And within B2B, a lot of attention has been paid to new small entrants, several of which we enable with our partner program using our best-in-class virtual card. The partners we enable own the customer relationship, do the marketing and take the credit risk, so they keep most of the economics. We're more of a processor to them. So our take rate is meaningfully lower than when we go direct to customers, which is really where we tend to focus most of our sales and marketing efforts. So while these partners drive some volume growth, they still only represent about 13% of our Corporate Payments revenue. Fuel was up organically 13% year-over-year, with strong retention trends and record digital sales continuing to drive the performance. We're seeing some softness in same-store sales as Australia, New Zealand and parts of Continental Europe are still grappling with COVID-related lockdowns, and over-the-road trucking is facing the driver supply shortage that's been all over the news. But despite these headwinds, our fuel businesses continued to grow in every geography as a result of our sales efforts and strong retention rates. Tolls were up 14% compared with last year and showed impressive performance again this quarter, growing to above 6 million total tag holders, with 5 million consumer tags and 1 million business tags. Now just for context, the business had approximately 4.5 million total tag holders when we acquired it back in 2016. Economic and business activity has returned to relatively normal levels in Brazil, which has increased customer mobility and sales traffic through retail and toll locations, helping us to achieve record Q3 sales. Lodging was particularly strong, up 40%, with airline lodging up 61% on the back of the recovery in domestic air travel. We hope to see more recovery in international airline lodging as borders reopen. Gift organic growth was 25% year-over-year, benefiting from continued retailer embrace of the online sales channel. Now looking further down the income statement. Operating expenses were up 30% to $417 million and were 55% of revenue, stable with last year. The increase was primarily due to higher levels of business activity, the effect of currency translation impact on international expenses and acquisitions. Interest expense decreased 7% to $29 million, primarily due to higher interest income earned on cash balances and lower LIBOR rates more than offsetting higher debt and securitization balances. As Ron mentioned, our effective tax rate for the third quarter was higher than expected, coming in at 24.1%. This was due to fewer stock option exercises during the quarter likely due to the low share price, which resulted in minimal excess tax benefits. We currently expect our tax rate in Q4 to be back within our full year guidance range. Now turning to the balance sheet. We ended the quarter with $1.3 billion of unrestricted cash, and we also had approximately $650 million of undrawn availability on our revolver. In total, we had $4.6 billion outstanding on our credit facilities and $1.1 billion borrowed on our securitization facility. As of September 30, our leverage ratio was 2.76x trailing 12-month adjusted EBITDA, as calculated in accordance with our credit agreement. We used $406 million to repurchase approximately 1.6 million shares during the quarter at an average price of $260 per share. We still have $1.18 billion of share buyback capacity in our program. So far this year, we've bought back 3.1 million shares and we've closed 3 deals, putting $1.7 billion of capital to work. On top of that, we still have low leverage and ample liquidity for additional deals and/or buybacks, clearly demonstrating the earnings power and attractiveness of our high-margin, high-cash flow business. Looking ahead, I would note that you can see our full updated guidance and assumptions in both our press release and supplement. But before we open it up for questions, I would like to inform you that at the most recent Board meeting, FLEETCOR adopted the Rooney Rule for all future Board positions. I would also like to mention that we expect to publish our latest ESG report to our Investor Relations website within the next few weeks, and we'd be happy to take your feedback on our ESG efforts after you've had a chance to review that report.

Look, it's great to see the macro recovery and you guys benefiting there as well as the initiatives you've made, especially on the Corpay side. And I just want to hone in on that segment, primarily, given all the acquisitions and the rebranding and the efforts on sales focused on really software now. So can you just touch on that in terms of what the different assets are going to contribute where you saw the opportunity for growth most profound in the next few quarters? And then maybe just quickly, I saw in the quarter, we're hoping for a little more acceleration now, but I think some of this may just be coming over time as the sales free navigates its focus. But can you just touch on the current trends? I think it decelerated on a 2-year stack a little bit, but what it could be going forward?

Darrin, it's Ron here. We're quite pleased with the results. Sales in the corporate pay segment have remained strong. Among the three segments, our direct business with end clients and our FX cross-border business have shown excellent growth in Q3. The direct business grew by 30%, as noted in the earnings supplement, while the cross-border segment saw growth in the high teens, all while we integrate the AFEX acquisition. These two areas of our business are performing well. Sales are strong, and if there’s any recovery from COVID, we expect to regain a significant amount next year. Overall, we’re optimistic and our preliminary outlook for that segment in 2022 is high teens growth. Yes. So that's a great question. Yes, we started that. I think a couple of years ago, we bought kind of the full AP software front-end and plug it into our back-end execution stuff. And so we've moved the mix, Darrin, dramatically here in 2021. So we're selling, I don't know, I think almost what we call full AP where we take 100% of the clients' payables versus virtual card. But obviously, the great news is it's still all virtual card, right? When we sell that, full AP, underneath that, basically is the same engine to your point, the same merchant database, the same ability to earn interchange, if you will, on that portion. So it sells better. We think it has more value to the client. We generally retain more of the economics there, and yet we still have a bunch of virtual cards. So you'll see more of that. I think we'll probably move even more of the business as you roll forward that way.

Ron, the commentary on the digital go-to-market, I think, is particularly intriguing. Can you talk a little bit about what the LTV to CAC looks like in your fuel business? I think you said 50% of the sales are going through digital channels. And how we might expect that to inform your consolidated profitability over time?

Yes. In Q3, our total global sales run around 65%. Some businesses perform better and some worse, including across different channels. The digital channel, which is growing as a percentage, is currently below that 65% average. The positive aspect is that as our total sales increasingly shift to digital, it should enhance our cost of acquisition. We're pleased that a larger portion of the business is evolving in that direction. Additionally, aspects that rely less on human resources—such as hiring, training, and retaining staff—can hinder a company's ability to grow. On the digital front, we're becoming more effective at increasing our digital advertising spend and are seeing good returns in terms of site visitors and conversions. This shift to digital positions us very well for the future.

Andrew, I can provide some clarification on Ron's comment about the 65% acquisition cost. We refer to this as net sales expense. Essentially, it's the cost of acquisition divided by the annual revenue generated by that client. For example, if a client is expected to generate $1,000 in revenue for me each year and it costs $650 to acquire that account, that is the 65% figure we use internally.

Okay. And how does that compare to the traditional sales channels?

I'd say that we've been fairly stable through time. Some of it does shift as you have more field-based selling. But in the main, we've been around 50%, 60% for years.

And, Andrew, I love the spotlight on it because lots of other people spend lots of money. They generate some sales, but you can't ever make a return, right? So if you sell $100 million and spend $65 million, you're underwater on the first year. But then you've got, call it, $90 million of the $100 million you sold the second year with 80% flow-through, you've got $80 million flowing through for eight more years with no sales expense. So that's the key to profitability in our kind of business is basically this acquisition cost and the retention rate. So we call it out because that's how the business actually makes money.

Nice results. Just wanted to dig a little bit into the lodging business this quarter. I know there was a bunch of natural disasters in the last couple of months, wildfires, Ida, so on and so forth. Just wondering, to what degree that was a contribution factor to some of the outsized growth in lodging? How should we think about the ALE business during periods of natural disasters? How does that business, I guess, from a revenue perspective, how should we think about it ranging in these types of periods?

Pete, thanks for the question. It's Ron. So in the first part of the question, hey, how did bad weather and stuff help the lodging business some is Q3? Some is the answer. So we picked up some decent amount of incremental volume when that happens kind of almost unexpected volume, but the rate on that is like super-duper low. We sign up with contracts with people like FEMA and stuff. And so lots of volume and a little bit of revenue contribution. On the ALE side, I'd say, it helps again a little bit. The diligence that we did in that business is surprisingly over an incredibly long cycle. I don't know, 90% plus, I guess, over the 5 or 10 years we looked at is not hurricane or natural disaster-related. It's your pipe ranks and your house floods, and you left the candle on of the bathroom and the house burned down. And so it's what we think of as just way more common kind of every day, which is why we went ahead with the business. It's just way more ratably, you take all the hundreds of millions of homes or apartments. Stuff goes wrong, with them that displaces people. And so that business, obviously, it's insurance, so the statistics on it are pretty good. So I'd say for both businesses, it helps really just at the margin.

That's helpful. I also wanted to discuss your observations regarding the fuel card business showing some slight softness, which makes sense given the international situation in certain regions. Could you describe the competitive landscape for larger fleet contracts and how it has evolved as we move past COVID? Are you noticing increased competition, or do you see significant opportunities ahead? I would appreciate any insights you can share on that.

Yes, I would say that the situation has probably eased somewhat during COVID. We've mentioned the fuel card retention rate, which has improved significantly over the past few years. It remained at 93% for the quarter. I believe that during COVID, people shifted their focus to other priorities, and pursuing fuel cards was likely not at the forefront. Additionally, it's important to note that our actual competition involves business cards and other forms of payment. The 35,000 new accounts gained this quarter and the 10,000 lost were not primarily impacted by competitors like WEX. Instead, the main competition for us in the fuel card sector comes from various alternative payment methods.

I wanted to ask about the significant growth in new sales bookings. Was this due to any changes you've made in your sales organization? Also, could you clarify how these bookings will eventually convert to revenue, including any information on timing or the process involved?

Yes, Ramsey. So we agree. I tried to put a bit of a spotlight on it for the quarter because it's in record territory, right? There weren't 50,000 accounts when I started with the platform 20 years ago. So to sign up 50,000 new businesses in a quarter is good. And then second, against the '19 baseline, I think I called out our bookings dollars were up 30%. So forget the weak comp against the normal quarter. A couple of years ago, it's way up. So the headline is our company sales were way up, that's headline 1. And Part B is so why they weigh up? I think it's the location we made into digital, So start, I don't know, 4 or 5 years ago, we did a bunch of things to get way better at digital marketing and selling, obviously, not the least of which is the whole tech stack that we build to be able to follow businesses and everywhere they crawl around and then what they do to advertising, figuring out where to spend and who to target money against to get them to visit our sites to optimizing our sites to get conversion rates and sales at the bottom end to applications going end-to-end where someone could go on our site and literally order the program and get cards in a couple of days and not have to talk to people. So the reengineering, I'd say, of the whole digital machinery has been, first of all, it was massive, but we're getting the returns of it now. It's obviously ramped way the heck up. And I think it's another huge step-up in our early plans for '22. So I would say that's the main, main driver, and we're doing that everywhere. We're just way smarter in how we target and how we study where prospects go and what they're looking at instead of trying to make up who we think might be interested in our products.

Great. It sounds like it's not a fluke but by design, so encouraging. Ron, I wanted to ask you about your new compensation contract, which is structured in more of pay-for-performance kind of style. Can you talk about why you pivoted in that direction in terms of structuring your comp, and sort of what gives you confidence about hitting those sort of future hurdle rates?

That's an interesting question. I would say that the first decade of the company's existence was structured like a private equity model, where the interests of investors and managers were very clear. If value is created, the profits are shared, rather than just receiving money for participation. This approach is ingrained in our culture. I appreciate that the investors who put money in alongside me receive returns, and I am committed to delivering those returns. If we don't achieve that, then we don't. Of course, there are additional factors at play. As you know, I have significant financial resources, so the current tax situation makes acquiring additional funds less appealing. This serves as a strong motivation for me to work hard over the next few years to drive the company forward. Regarding my confidence, apart from the way our stock is valued, I feel good. Our sales and retention data inform our projections constantly, and I see what our revenue and cash earnings per share look like as they progress through our systems. If our earnings are valued appropriately, we will meet our targets. Therefore, if the market prices our earnings sensibly, I believe we can achieve those goals, and I could receive compensation accordingly.

Maybe just to start, I just wanted to ask about the gift card business. Given all we're hearing about supply chain issues, could that be a tailwind in 4Q? Maybe a little bit of a unique opportunity there. Anything you're hearing if you could just talk about that?

Yes, Mihir, it’s Ron again. There are a few developments on the card side related to the retailers' ordering cycle. It seems that our plans are on track based on a recent conversation I had with our gift head. However, the real opportunity for us isn’t necessarily an increase in card orders, but rather the new direction we’ve taken with the business. After years of being an administrator for Macy's gift card, we've found ways to grow it. We've transitioned to helping clients sell digital gift cards online, tapping into our expertise. We're also earning additional revenue through wallet provisioning since many gift cards get misplaced. Although it's challenging to integrate private label cards into digital wallets, we've successfully developed a solution for that. Additionally, we've leveraged our connections with around 300 or 400 good brands and are focusing on B2B sales, especially for employee rewards. These new strategies, combined with our existing stable business, have allowed us to surpass 10% growth. I reviewed our plans a few weeks ago, and I believe we now have more sustainable strategies to continue growing this business.

All right. Great. And then If I could ask about Brazil. You mentioned things are getting back to normal there. You've obviously had very good momentum in selling more tags. So is there an argument there that you might see a little bit of an exponential step-function growth in the revenues per tag? Because those are still meaningfully below like where you were in 2019, and you've obviously added a lot of capabilities where you can use those tags too.

Yes, you're looking at the foreign exchange impact. Our sales in constant currency are significantly up. Although I don't have the exact figures in front of me compared to 2019, Chuck will provide those details, but we are seeing record levels of sales. What we achieved in Q3 would represent an all-time high. Additionally, Brazil, which faced severe COVID challenges in the spring and summer, has managed to recover. They are currently in a better position than we are here. This improvement has led to the reopening of many stores where we sell our products, including kiosks across hundreds of locations. Increased mobility is allowing more people to access these stores, which contributes positively to our sales. Moreover, we have developed several new partnerships and channel initiatives. One of the latest involves major car manufacturers placing our tags on their vehicles, so when customers purchase a new Volkswagen, they find a sticker with a POS system that encourages them to engage with us. We're seeing around a 50% conversion rate from these new vehicles being sold. The sales effort from our team has been outstanding. The major focus for us this year has been to significantly increase the number of fueling locations, and we've invested heavily in this initiative. The fueling transactions have surged compared to last year as we now have 6 million vehicles that can use the tags. With more locations available for these tags, we see a great opportunity for significant growth. This presents a potential for substantial gains as a large number of people gain access to more places to use the tag linked to their vehicles.

I wanted to discuss the partner channel mix for Corporate Payments that Charles mentioned. Regarding the 13% and 14%, will this lead to a higher profitability contribution since your partners are covering the expenses? Additionally, as we consider how this percentage might change over time, do you anticipate it will increase or decrease, and for how long are those partners committed?

Yes, it's Ron. Let me begin with the second part. We have around 15 significant partners in our Corporate Payments group, with about 3 or 4 being the most important and around 8 or 10 others. Generally, the contracts last between 3 to 5 years. We renewed a few with some key partners this year. Regarding your question, I think the answer lies in the slide we included in the earnings supplement, which I believe is on Page 15. It shows the three segments of our Corporate Payments business: the partner channel we discussed, the direct business where we engage with the end client, and the cross-border business primarily directed at the end client. The data indicates that revenue from the direct and cross-border segments is growing much faster, which suggests that the partner segment may decrease in proportion going forward. While there's significant spending in this area and it grows rapidly, it's worth noting that our margin rates are considerably lower in the partner segment compared to the direct business. We appreciate this business, but it's important to highlight that 90% of our Corporate Payments revenue comes from direct and cross-border transactions.

Okay. The discussion out there is that many fintech companies are competing both against and with you. I'm curious, as we consider FLEETCOR's competitive advantage, Ron mentioned that you are integrating acquisitions to create a strong impact. Do you feel that competition has intensified in that market, or have you managed to strengthen your position? I would like to hear more about this as it has been a key topic of discussion.

Yes, I think it's a super good question. I think obviously, there's more people trying to get into the entire processing, whether it's virtual or just traditional physical cards. So I think, first off, that a lot of the players that get into are issuing companies that are in that business, right, for FIs and for us, but yes, some of them are coming into our area. What I'd say back is the fallacy is somehow that the game is tech and product to the X, Y, Z fintech has some great thing not old fashion FLEETCOR out of it. And what I'd say to you is what they're missing is it's the merchant network. You can't monetize virtual cards if you don't have a virtual card merchant network that can process and capture those transactions. You can profit until the day goes on, but you have to have the network. So we've had a, call it, I don't know, a 10-year head start on everybody in cleansing, building, growing that network. And then the second one is the whole service dimension of a huge pay for you group, a massive group that helps the partners clean up the data and get the stuff processed. So I'd say those would be the couple of components that people missed that this isn't just making a new processing engine in the garage and giving it to AWS, and that's all going to be great. There's actual real assets that we have that cause our partners to stay with us. I mean, there was a big thing. Some came into my office a year, two of your clients, Build.com and AVIDA brought on other providers. We're doing great with them. We've renewed the contract for a number of years with one of them. We're getting more business than ever from another. We're obviously we have a great relationship.

I just wanted to dig into the fuel card business a little bit more. I mean, it looks like transactions came weaker than we were expecting, and I think you called out international and the driver shortage. But can you provide some detail there on where you're seeing that weakness on the transaction side? And what's your expectation around the recovery?

Yes, Ken, it's Ron. I would say there's good news and bad news. The bad news is that the transactions are a little weaker than we anticipated. The good news is they are not particularly valuable. The two areas where we see weakness are in trucking, especially since the large trucking companies, both here and in Europe, are facing a driver shortage. Not only are there not enough drivers, but many are leaving to join smaller firms. As a result, our major accounts are quite soft regarding trucks and transactions, but they are content because they are just increasing their rates. The second area of concern is in Europe with large corporates; the white-collar segment hasn't fully returned to work. Many employees in Europe are used to having company cars, which means they would drive around and get reimbursed. So those are the two weak areas. The good news is that we don't earn much from those activities, which is why our revenue growth remains strong. For example, our local partner business is thriving, and a significant portion of our U.K. business is seeing a strong recovery in same-store sales. Therefore, the areas where we truly earn revenue are quite healthy.

Got it. That's really helpful. For my follow-up, I remember that on last quarter's call, you shared some initial insights on 2022. You mentioned an annualized EPS of $14 in the latter half of this year, along with some interest rate hedges rolling off and contributions from AFEX and ALE. There are many components at play, so could you explain how you're approaching 2022?

Yes, that's a good question. I often say that if you appreciate businesses with a clear plan, you should appreciate ours due to the nature of our model. We're currently halfway through our process, building on our current run rate. We're looking at our October volumes and revenues across all our operations. I mentioned that when we see earnings around $3.52 or $3.50, we project that to an annualized earning of about $14. We've guided towards a number for Q4, which is around $3.50-something. So, we start with the company running at an annualized earnings of $14. This year, we've achieved record sales levels, and we estimate that about two-thirds of that will be realized by 2022, allowing us to better understand that figure. We have an ambitious sales plan for next year, likely 20% higher than this year, and it looks promising. Additionally, we have potential deals that could contribute around $0.50, reflecting our capital utilization. This is how we approach the calculations, taking into account the run rate, this year’s and next year’s sales, as well as the impact of new deals, which helps us set ambitious targets. We haven't heavily factored in COVID recovery yet; we've been cautious about that. However, there's still around $100 million to $150 million that could return unexpectedly. Those are the elements at play. Another factor is the macro environment; fuel prices are currently higher than at the beginning of the year and appear to be stable. Overall, while it's still early, the outlook seems promising. I share this calculation process to give stakeholders insight into how to consider these numbers. Although things can change, the company is well-positioned for attractive growth next year.

In the Corporate Payments business, WEX reported a pretty substantial compression in revenue yield in the third quarter year-over-year. Can you comment on the revenue yield you're seeing in that business? And, a, is there any significant change? And are there any call-outs in verticals, i.e., kind of travel versus nontravel?

David, it's Ron. It's a good question. So I'd go back to the slide that Jim put in our earnings supplement. I think it's Page 15. So again, sitting inside our Corporate Payments business, I think we report, what, 22% organic growth and, what, 50% or something for the quarter? Charles Freund: 68%, I think. Ronald F. Clarke: 68%. So obviously, that's the overall number, David. But the pieces of that, again, are the direct or end-client business, the cross-border business, and then this channel partner business. And so for us, the good news is the two big pieces, which are about 90% I'm looking at the thing are effectively flat. So because we price it, there's really no rate erosion in that out of our business. And so all of the rate erosion is really just in the mix of partners where we have tax table rates, and we have some partners that are growing like crazy. So as their volumes go up, they enjoy a bit better rates, right, in the base than the base rates. And so because we don't have the same kind of reliance, if you will, on the channel business, I think we're a bit more insulated, if you will, from rate compression there. And I mentioned it earlier, I'd say the super positive thing is our mix of that business is going to more full AP. And don't forget, we bought an SMB company that has higher rates. So as we roll in the full AP, the Nvoicepay mix and this Corpay One mix, those have a way higher rate than the existing businesses. So my guess is just kicking out the channel business, I see actually rate expansion over the next couple of years in that business mostly help from mix.

Understood. That's very clear. Just as a quick follow-up. You commented earlier about the difficulty of finding drivers in this environment. Could you quantify for us what this means for your fuel card business in terms of revenue growth in 2022?

Yes. The issue with drivers is primarily related to the trucking sector. We don't observe significant impacts in the trade businesses, as those roles require specific training. Consequently, we don't see the same level of decline among our existing customers in those sectors. The major effects are evident mostly within large account trucking businesses, which, by the way, aren't particularly profitable for us. It seems that it might not be an easy process for large trucking companies to onboard more drivers, despite the visible demand at ports for increased trucking capacity. I anticipate there will be more incentives and pressure to bring more people into this field over the next 6 to 12 months, but this situation won't significantly affect us. Firstly, it is mainly confined to the trucking sector. Secondly, it specifically impacts larger firms that typically offer lower pay. Lastly, this kind of softness has been part of our experience for the last couple of quarters, and I don't expect it to worsen because there will likely be efforts to recruit more workers, which should lead to rising rates to attract them. Overall, I believe this will not have a major effect on our future outlook for business growth.

Ron, you talked a lot about some of the, I guess, hiring and wage pressures that are impacting the fuel side of the business. I'm just curious, as it relates to the Corporate Payments business, do you feel like that's been impacted at all by any supply chain issues at your customers, or has that come up at all your conversations with them?

Yes, for sure. I mean, again, George, I'd say it's pocketed. When we go look, we have bigger customers there. And so some have come through this thing kind of unscathed and then others have had a big problem. So yes, we have a select group of clients that are kind of down and have stayed down. And I think the supply chain is a big part of it.

Okay. That's helpful. I'm just curious to the extent, are you able to quantify that in any sort of capacity or give any sort of color around that? And then maybe separately for a follow-up, the minimal credit losses that you're continuing to see, is that just a harbinger of just cleaner credit now, or do you feel that there is an opportunity to loosen credit standards even from here? Just curious how you're thinking about that.

Yes. Let me address the first part. One of the simplest ways for us to assess is by examining clients one through 100 and comparing their volumes and revenue from a previous period, such as 2019 or Q3 of 2019. Then, we can look at the same 100 clients to evaluate their volume and revenue with us in Q3 of this year. This metric is what we refer to as same-store sales or core client base. For Corporate Payments and every business, we convert that into a revenue figure, for example, if we earned $20 million from clients who previously contributed $20 million more two quarters ago, we monitor to see if any of that $20 million is returning. We have clear visibility on the amount and the rate of recovery. Is that clear?

Yes, I think we look at those pocketed groups. So in Corporate Payments, the top 75 we last looked at it last month, the 75 most affected clients, their volume was still down about half of where it was back in January 2020. And so we looked at it just last month. So we continue to track it. But as Ron mentioned, it's highly pocketed in certain categories that just haven't quite reopened yet.

Yes. Just to give you a percentage, it's about 3% this quarter compared to our plan. We estimated that 100 people would return in a certain way in Q3 compared to two years ago, and they came back part of the way. They returned to a level we expected. That's 3 points more growth in our metrics. It's still significant, and we are hopeful that we can fully recover in the future. In response to your second question about credit, I would say yes, yes and yes. It's a very relevant question. We're experiencing record low credit losses primarily because we didn't generate much new business in 2020. Consequently, there was not a significant influx of new business. Additionally, due to various stimulus and relief measures, people have been repaying us. As a result, we've certainly loosened our credit policies. Chuck mentioned in the last call that we expect these losses to gradually increase. You can observe this in the roll rates as we've taken on more business this year. We anticipate that our losses in Q4 will be somewhat higher. Currently, we're evaluating how much risk we want to take in credit for 2022, particularly concerning credit lines for existing accounts. For instance, I have fuel cards that come with a credit line sufficient for paying their fuel bills. They've indicated a desire to settle their bills using this payment method. I see an opportunity to increase credit for creditworthy customers with our new products, which is quite promising. Therefore, I can confidently say that we will adjust our approach next year to take on more risk compared to this year, balancing that against incremental sales, revenue growth, and potential losses. However, we will proceed cautiously. I want to ensure that everyone on the call understands that we are not acting recklessly. We will approach this incrementally and carefully analyze our decisions, but we will increase our credit activities.

So Ron, there have been many questions, but what are you most excited about over the next few years? Which areas of your business do you believe have the most potential to outperform and drive growth?

Bob, that's an excellent question. The most exciting development for me is the synergy created by combining our existing payables business with our walk-around plastic services. This integration allows us to enhance the value of our offerings, which we've been building for 20 years. For example, we're set to launch a new 2-in-1 product by late this month or early December. This will allow clients with our business or fuel cards to also pay bills using the same platform. They will be able to use our card and credit to manage their payments, all centralized in one place. The reporting will also provide a comprehensive view of their purchases alongside their payables, making it much more streamlined. This integration opens the door to profit acceleration, as we can tap into our extensive customer base without having to individually seek out new clients. Our existing tech infrastructure allows us to present a seamless experience. I'm genuinely excited about the potential here, even though I know some may be skeptical. We have a strong foundation with our client base and continued growth across all our segments. The challenge now is to effectively monetize this larger business profitably, which represents a significant new opportunity for us.

Great. And looking at margins, the ability to expand margins from here over the next few years? Yes, Bob, I'd say that our model tends to be one where we try to grow top line 10-plus percent and get a little bit of expansion. I think that is a mindset we've had for a long time, and we'll continue on that path. So I'd say we'll increment our way kind of as we go. With that said, we do make a little room for select investments, whether it's the digital sales that Ron mentioned. When we have opportunities to invest, we will make those investments. But always with a mindset that we'll continue to grow the bottom line a little bit faster than the top.

At this time, we have reached the end of our allotted time for the call. Thank you, everybody, for joining today's conference. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation and have a great day.