Good day, and thank you for standing by. Welcome to the FLEETCOR First Quarter 2022 Earnings Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the call over to your speaker today, Mr. Ron Clarke. Please go ahead.

Okay, Jim. Thanks. Good afternoon, everyone, and thanks for joining our Q1 2022 earnings call. Upfront here, I'll plan to cover four subjects: first, give you my take on Q1; second, lay out our updated rest of year 2022 guidance; third, I will give you a brief update on our Russia business; and then lastly, I'll share some new things, some good things happening in the company. Let me make the turn to our Q1 results. Terrific. Really great performance. We reported revenue of $789 million, up 30%, and cash EPS of $365 million, up 29%. Revenue came in very strong, about $40 million above our Q1 midpoint guide, with only $12 million of that beat related to macro factors. So a lot of very good fundamental overperformance in the quarter. Organic growth overall was 15% for Q1, and each of our four major lines of business all grew organically in double digits. Trends in Q1 were excellent. Sales were up 39% versus last year. We added about 50,000 new clients to the fold, sold in Q1, and over 50% of all our new global fuel card clients came to us digitally. A steady revenue retention of 93% and healthy same-store sales for the quarter at plus 7%. So Q1, really one of the best quarterly performances that I can recall. Now with that, we're revising our 2022 full year guidance today up as follows. So revenue to $3.360 billion at the midpoint. That's up $140 million. Assuming we achieve today's guidance, it would imply full year 2022 revenue growth of 19% and full year 2022 cash EPS growth of 18%. I do want to remind everyone, we are still expecting a meaningful sequential improvement in the guide as we run through the year, with our Q4 revenue expected to be up about $90 million versus our Q1 print. Let me shift gears and give you just a brief update on our Russia business. Russia represents a very small part of the company, about 3% of revenue. We're certainly being super cautious to take care of the wellbeing of our employees. I would like to run through some good things that are happening in the company. So first, some new wins. We have had a fair number of notable new wins and client renewals in the quarter. Just a couple of examples are Speedway, one of our largest North America retail partners, who recently extended their relationship with us, and Amazon awarding us their middle-mile trucking fleet. Lastly, we had our off-site growth meeting last month and set the internal goal of selling $1 billion of new business annually. Overall, we're in a good place.

Yes. Thanks, Ron. Before digging into the financial results, I would like to make sure that you are all aware of the new investor deck we posted on our website a few weeks ago. At its core, FLEETCOR provides a set of corporate payment solutions to help businesses reduce spend. We posted an impressive 30% growth quarter, including 15% organic growth. Speaking of macro, fuel prices were $3.88 per gallon for the quarter, higher than our $3.40 guidance assumption based on January levels. Now moving to organic growth, our corporate payables were up 23%, driven by full AP outsourcing, which was up over 50%, while our expense management solutions for fuel increased 14% organically due to new sales growth of 25%. The EBITDA margin in the quarter was 50%. We still expect our full-year EBITDA margin to be in line with our original expectations of 52% as margins expand throughout the year. Turning to the balance sheet, we ended the quarter with over $1.3 billion in unrestricted cash and $969 million available on our revolver. Our effective tax rate for the quarter was 26% versus 22% last year. Moving away from the results and outlook, I want to thank our circa 10,000 employees around the world for helping us deliver a fantastic start to 2022.

Hey, Tien-Tsin, good to hear your voice, too. So simplistically, the $140 million would be $40 million in Q1 and $100 million rest of the year, called out: one-third real performance; two-thirds macro health. So yes, really good question. On the fuel and fleet side, the higher fuel prices help us from a revenue perspective, but they also help in sales. In Q1, we had record new sales, and we are optimistic about our sales productivity. You were talking about higher bad debt levels, and yes, new sales tend to default at a much higher rate. Hey, Jeff, it's Ron. So I don't want to give too much away, but I would say there was an 'aha' moment where we were taking stock of the assets we're building, particularly the ability to capture EV data and the public network acceptance. Our whole focus has been serving our fleet card customers, yet we've identified non-fleet customer segments that need help in EV. So we believe the assets we built for one purpose are easily transferable to serve a broader customer base. Hey, Sanjay, it's Ron. I would say it is really uncertain at this point how that ball is going to bounce. We're doing lots of things, exploring different options regarding our Russia business. To the extent that we have to shutter it, we're carrying circa around $300 million on our books, which would be the loss we could incur. So we'll continue to explore options there. Yes, Ramsey, it's Ron. Everything in the Corporate Payments segment worked well this quarter. We are seeing recovery in the base, particularly in the construction vertical, which is much healthier now. The full AP outsourcing is obviously growing at over 50%, representing half of our sales.

Yes, this is Charles. We are taking a look at policies for bad debt management. Higher fuel prices equate to higher customer balances. Record sales are also contributing to increased bad debt levels, but we believe bad debt will normalize as fuel prices stabilize throughout the year.

It's Ron. Let me just add on one other trick that works in the fuel card business, which is we change the payment cycle to minimize losses. By adjusting payment terms, we can still acquire customers while effectively managing risk.

Yes, this is Charles. We are observing higher transaction growth and revenue per tag growth in the tolls business. It is still evolving, with a small portion of revenue coming from non-toll-related purchases. However, we expect that to grow as we build out our fuel network.

Yes, and as I mentioned, our ability to process and create economics provides us with a competitive advantage in the corporate payments sector, despite the growing number of new entrants. Thanks for joining us today. Let us know if you need anything else. Have a nice evening.

This concludes today's conference call, and thank you for participating. You may now disconnect.