Good afternoon, and welcome to the FLEETCOR Technologies, Inc. Fourth Quarter 2022 Earnings Conference Call. Please note that this event is being recorded. I would now like to turn the conference over to Jim Eglseder, Senior Vice President of Investor Relations. Please go ahead.

Good afternoon, everyone, and thank you for joining us today for our fourth quarter and full year 2022 earnings call. With me today are Ron Clarke, our Chairman and CEO; and Alissa Vickery, our Interim CFO. Following the prepared comments, the operator will announce that the 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 covering organic revenue growth. And as a reminder, this metric neutralizes the impact of year-over-year changes in foreign exchange rates, fuel prices and fuel spreads. It also includes pro forma results for acquisitions closed during the 2 years being compared. We will also be covering non-GAAP financial metrics, including revenues, net income and net income per diluted share, all on an adjusted basis. These measures are not calculated in accordance with GAAP and may be calculated differently than that at other companies. Reconciliations of the historical non-GAAP to the most directly comparable GAAP information can be found in today's press release and on our website. 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 outlook, new products 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 undertake no 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, on Form 8-K and on our annual report on Form 10-K, both filed with the Securities and Exchange Commission. These documents are available on our website and at sec.gov. So now with that out of the way, I will turn the call over to Ron Clarke, our Chairman and CEO. Ron?

Okay, Jim. Thanks. Good afternoon, everyone, and I appreciate you joining our Q4 2022 earnings call. At the top here, I'll plan to cover four subjects. So first, I'll provide my take on our Q4 results. Second, I'll recap our full year 2022 performance. Third, I'll share our initial 2023 guidance, and then lastly, I'll update you on a few of the key priorities that we're working on. Okay. Let me make the turn to our Q4 results, which exceeded the top end of our guidance range, so better than we expected. We reported revenue of $884 million, that's up 10%; and cash EPS of $4.04, that's up 9%. Our cash EPS was helped in the quarter by a Brazil tax benefit, which did lower our Q4 overall tax rate. Organic revenue growth came in at 7% overall. Inside of that, our corporate payments business, super strong, growing 20% in the quarter. Against the prior year, our Q4 organic revenue growth was negatively impacted by about $20 million to $25 million of one-time revenues sitting in Q4 of '21, so that reduced organic revenue growth by about 2% to 3% in Q4. We do expect Q1 2023 organic growth to return to the 9% to 10% range. Cash EPS in the quarter was pressured by both higher bad debt and significantly higher interest expense. As a result of the rising delinquencies we're seeing in our U.S. fuel business, we did make the decision in Q4 to slow what we call our new micro-digital sales, so our very smallest accounts. We also began tightening the terms of our existing SMB accounts. Both of those moves were cautionary efforts to try to control bad debt expense here in 2023. Fortunately, our credit risk is narrowly concentrated in what we call these very small micro-accounts and also in our newest vintages, think 12 to 24 months, so it really impacts a pretty small portion of our overall business. Turning to the trends, fundamentals in the quarter are quite good. Same-stores finished plus 2% for the quarter, and retention remains steady at 92%, while sales grew 19% in the quarter despite our decision to slow the micro sales in fuel. So look, all in all, we had a better finish than we expected with continuing strong trends helping us here as we roll into 2023. Okay, let me turn to our full year 2022 performance along with the progress that we made to better position the company for the midterm. For the full year 2022, we reported revenue of $3.4 billion, which is up 21% and nearly $600 million over 2021. Cash EPS was $16.10, which is up 22% versus the prior year and a full $0.85 ahead of our initial 2022 guidance. Our full year organic revenue growth was 13%. Full year sales or new bookings growth was 21%, and we closed five capability acquisitions, including the GRG deal on January 1. So really good, outstanding performance against the primary objectives we set. In addition to our financial goals, we advanced our Beyond strategy meaningfully in '22, extending either or both the product set of the business or the customer segments that we serve. This is helpful as it grows the total addressable market and better positions the business for long-term growth. Just a few of our Beyond highlights for 2022. In global fleet, we made significant progress on our EV capabilities. We acquired a European public charging network and developed mapping and payment applications, along with at-home charging software, integrating all of these with our existing fueling solution, and that was great progress. In corporate payments, we added an AP automation software front end to our whole AP payment execution business, which has been the fastest-growing area for us, so we are super excited about that. In lodging, we expanded beyond our core workforce business into two new verticals: the airline and insurance verticals, both reaching nearly $100 million in revenue in 2022. Finally, in Brazil, we are continuing to expand our tag fueling solution, and we reached about 10 million annualized transactions by the end of Q4. So look, overall, we had a combination of really strong financial performance and significant strategic progress in 2022, and we're quite pleased. Now let me shift gears and make the turn to our 2023 outlook. We've worked hard to build a plan to meet our most important objectives in what is a challenging environment. Here is our 2023 guidance at the midpoint: revenue of $3.825 billion, which would be up 12% or approximately $400 million. EBITDA of $2.025 billion reflects an increase of 15% or about $260 million. Cash EPS at the midpoint is projected to be $17, up by 6%. We are certainly outlooking a pretty unfavorable macro environment this year with slightly lower fuel prices and significantly higher interest rates. These two factors are expected to reduce our 2023 cash EPS by about $1.75, implying we would be providing an $18.75 cash EPS guide in an apples-to-apples environment. Our 2023 plan sets forth a series of important objectives: to deliver organic growth of over 10%, to grow new sales by over 15%, and to manage our operating expenses with a plan to expand margins by approximately 150 basis points for the full year and 200 basis points exiting 2023. The major assumptions underpinning our 2023 guidance are, first, that our 2022 acquisitions will add about 2% to 3% to our 2023 print revenue growth. This 2023 guidance does include Russia and will until we have certainty of the divestiture. Guidance assumes that we can manage bad debt equal to the levels seen in 2022, although we expect it to be more elevated in the first half than in the second half. Finally, we have not planned for a U.S. or global recession but rather built our 2023 plan and volumes based on what we can see and projected from there. Our confidence in this 2023 plan or outlook is bolstered by several factors. First, we've seen our 2022 finish which was better than expected. We closed the Global Reach cross-border deal, so that's included in our numbers. We've implemented expense cuts already, so those are behind us. We are observing slight improvements in both fuel and currency trends. Recently, we executed two interest rate swaps that will lower our 2023 interest expense and fix rates. Lastly, we qualified for a Brazil tax benefit that will slightly reduce our 2023 consolidated tax rate, better than our earlier expectations. Let me transition to my last subject, which is an update on some of our important priorities. Starting with Russia, we are making good progress on the sale of our Russian business. We have had numerous interested parties and a select group of potential buyers has moved into the diligence phase. Timing is probably around late Q2, and at this point, our plan is to use the proceeds from the Russian sale to buy back FLT stock. If we achieve a mid-year close, we expect about $0.30 to $0.35 of in-year cash EPS dilution. Next, regarding the FTC matter, it appears to be nearing resolution. We expect the court to issue an order likely in Q1, detailing incremental processes and disclosures that we will need to implement. Once we have clarity, we will move quickly to implement those changes, although we expect it will take some time. It's worth noting that the disclosure enhancements and process changes that we have voluntarily made over the last few years have not had a material impact on our financial performance, nor do we believe that this court order will materially affect our future financial performance. Lastly, on EV, we've made great progress. In the U.K., we're now in the market with our three-in-one EV solution for commercial fleet clients. This includes a U.K. public EV charging network, at-home charging software, and traditional fueling, all integrated into one solution, and about 1,000 of our U.K. commercial fleet clients are using it successfully. Additionally, we are entering the market in Continental Europe with an EV solution targeting new customer segments, including EV car manufacturers, charge point operators, and even EV drivers. We are seeing adoption across all three of these customer segments, which is incremental to our fleet payment business. The goal is to be a major player in this EV transition. I am happy to report that we are officially out of the blocks. In closing, we finished 2022 strongly; positive sales and retention trends support our setup for this year. Our full year financial performance was solid, with 21% and 22% growth on the top and bottom lines, significantly ahead of our initial guidance. Additionally, we advanced numerous important Beyond strategies that support the future growth of the company. Our outlook for 2023 remains positive with projections of double-digit revenue growth, improved operating margins, and EBITDA, although we acknowledge that absolute profits will be burdened by rising interest rates. We expect to clear our Russia and FTC overhang in the first half, and we will continue to solidify our position in the emerging EV market, which represents a significant opportunity for us. Finally, our midterm objectives remain intact, and we aim to grow cash EPS in the 15% to 20% range once we navigate past the 2023 interest expense headwinds. With that, let me turn the call back over to Alissa to provide more detail on the quarter. Alissa?

Thanks, Ron. First, the financial details. As mentioned, we posted 10% growth in revenue in the quarter, driven by 7% organic growth or $57 million, which I will delve into shortly. The remaining percentages came from $20 million of macro tailwinds and $4 million from acquisitions made over the past year. Organic revenue growth was negatively affected by one-off items not expected to repeat from the fourth quarter of 2021, including breakage, backlogged card orders, accounting true-ups in the normal course, and acquisition accruals. We expect 2023 organic revenue growth to meet our double-digit targets. Corporate payments average revenue growth was 20%, driven by continued strong new sales across both direct and cross-border. Specifically, our direct corporate payments business grew 27% and continues to demonstrate robust growth. Cross-border was up 24%, another great quarter as new sales remained strong, with robust activity levels across nearly all geographies, and we completed the full tech integration of AFEX into our cross-border platforms. Lodging continued to perform well, up 14%. While we have largely lapped the airline COVID recovery benefit, the airline business was still up 38% in the quarter. The suite of services we have integrated into this business has substantially enlarged the total addressable market and durability of our lodging growth profile over the medium term. Fuel was up organically 2%, with growth in international fuel largely offset by softness in our U.S. micro SMB customer segment. By micro, we mean companies with fewer than five vehicles, so the smallest of the small. The economic cost of higher fuel prices, inflation, and, in the case of micro SMB trucking, lower spot rates has negatively affected their ability to manage expenses, including fuel bills, resulting in higher bad debt. We have also experienced some negative mix shift within that micro trucking segment, as higher-margin independent trucking volume has moved to lower-margin volume as those drivers transition to larger contract carriers. This micro segment generated over 75% of our U.S. fuel bad debt losses in the fourth quarter and for the full year 2022, fully feeling the effects of these economic headwinds. Given the higher loss rates in that micro client segment, we have significantly tightened credit approval standards and have purposefully targeted a narrower focus to proactively manage our bad debt exposure. Consequently, we saw a drag on organic fuel growth in the quarter. We are taking a balanced approach to new customer demand generation activities, prioritizing customer segments and industries that are healthier to drive fuel growth in 2023 while limiting our bad debt exposure. We will continue to feel the residual effects of tighter credit and higher losses in that micro segment in the first half of 2023 but expect to clear this overhang and return to normalized fuel growth rates in the latter half of the year. This will likely cause 2023 fuel organic growth to remain at the low end of our normal range. Tolls were up 6% year-over-year, as the impact of strong new sales was partially masked by nearly $5 million of nonrecurring revenue in the fourth quarter of last year. Toll sales were strong in the current quarter, recovering from softer sales midyear, which helped offset some of the prior year’s one-time benefit impact. We expect tolls to return to their low to mid-teens growth rate in 2023. We have made significant progress building out the Beyond Toll network and now have over 5,400 Beyond Toll locations, which include 2,200 fueling stations, 2,300 parking lots, 750 drive-throughs, and 150 car washes that accept our tag. Additionally, we serve as a reseller of insurance from other companies to our more than 6 million tag holders in Brazil, for whom we have negotiated preferential pricing. This insurance offering is growing quite rapidly. In the quarter, we sold over 58,000 insurance policies. We also signed up Santander as a toll distribution partner, which is the fifth largest bank in the country. All in all, we are very optimistic about the outlook for our Brazilian business. Gift organic growth in Q4 was down 11% compared to prior year Q4, as the card orders that had been anticipated from the last two quarters and in the previous year's Q4 did not materialize. Due to the lumpiness of card orders between quarters, it is best to evaluate the full-year gift organic growth, which was 11%, as the newer online card sales programs and the B2B program have significantly improved the growth of that business. Looking further down the income statement, operating expenses of $514 million represented an increase over the previous Q4, primarily due to recent acquisitions, higher bad debt, and volume-related increases. We recognized $5 million in expenses associated with reductions to staffing levels and termination of office space leases as we adjusted our expense base for the current challenging environment. We will continue to manage our expenses with a very close eye on our outlook. Bad debt expense totaled $41 million or 9 basis points, consistent with the third quarter 2022 level. I've already discussed our approaches to managing this, but we remain very focused on it. Moving below the line, interest expense for the quarter was $74 million, a 168% increase over the previous Q4, totaling $165 million for the full year, which is up 45%. These increases were driven by higher reference rates on our floating rate debt as well as incremental borrowings for stock repurchases and acquisitions. Our effective tax rate for the quarter was 24.2% versus 25.6% last year, which is lower than our guidance, with the primary driver being the impact of a pandemic-related tax benefit election in Brazil realized for 2022 in the quarter. Now, turning to the balance sheet, we ended the quarter with over $1.4 billion in unrestricted cash and approximately $600 million available on our revolver. There was $5.7 billion outstanding on our credit facilities, with $1.3 billion borrowed on our securitization facility. As a reminder, earlier in the year, we upsized and extended our credit facility by about $500 million and extended the maturity through June 2027 at attractive rates. As of December 30, our leverage ratio was 2.8x trailing 12-month adjusted EBITDA, as calculated under our credit agreement. Our capital allocation remained balanced in 2022. During the quarter, we repurchased roughly 600,000 shares at an average price of $188 per share. In total, we repurchased about 6.2 million shares during 2022 for $1.4 billion. Our guidance for share count in 2023 is 5 million shares lower than what we guided to a year ago. In total, we have bought back 11.7 million shares over the past two years and still have over $1.2 billion authorized for future repurchases. In 2022, we spent $217 million on acquisitions and minority investments, excluding Global Reach on January 1, 2023, solidifying our positions in EV, corporate payments, and lodging. Let me share some thoughts on our Q1 outlook and full-year assumptions. For Q1 2023, we expect revenue to be between $875 million and $890 million, and adjusted net income per share to be between $3.55 and $3.75. This is largely due to revenue seasonality for specific businesses, such as fuel, lodging, and tolls, which typically experience lighter first quarters due to weather and holidays. As such, the first quarter is generally the lowest in terms of both revenue and profit for our company. We have some insights for the first few weeks of the year, and we are tracking in line with the guidance we are providing. Notably, for the full year 2023, we anticipate managing bad debt to be roughly flat compared to 2022 levels, expecting it will be higher in the first half of the year and improving in the second half. We project 2023 net interest expense to be between $312 million and $332 million, based on the forward curve as of February 1, 2023, which implies that reference rates will peak sometime during the third quarter of 2023. As we disclosed in the earnings release and you can see on Slides 21 and 22 of our supplement, we entered into a series of interest rate swap agreements to fix rates on approximately $1.5 billion of our floating rate debt. These swaps will provide some relief on our 2023 rates and help limit the downside risk from further rising interest rates. The inverted forward rate curve has enabled us to reduce 2023 interest expense by locking in lower future rates over a three-year period. With these new swaps, alongside our previous outstanding swaps, we now have fixed interest rates on a total of $2 billion of our variable rate debt for most of 2023. Last week, we also entered into a euro cross-currency swap to benefit from the lower euro interest rates, yielding an implied interest savings of 1.96% on $500 million of notional debt. With these various swaps, we have now managed interest rate and FX risk on $2.5 billion, or 47% of our debt, excluding the securitization. We anticipate that these actions will help mitigate risks associated with continued increasing interest rates in 2023. Our expected tax rate in 2023 is projected to be slightly higher, between 26% and 27%, as the continued benefit from the Brazil tax holiday is more than offset by higher tax rates in the U.K., where the statutory tax rate is set to increase from 19% to 25% in April 2023. Further assumptions can be found in our press release and supplement. As I complete my prepared remarks, I would like to extend our gratitude to our more than 10,000 employees around the world who helped us deliver such a strong finish to a great year and who will be the driving force to even greater heights throughout 2023. Thank you for your interest in our company. And now operator, we'd like to open the line for questions.

Our first question today will come from Sanjay Sakhrani with KBW.

Ron, you talked a little about these rising delinquencies among the micro SMEs. I'm just curious, was that fairly contained inside of fuel or the fleet business? Or was there any other weakness among the SMEs? And I'm curious if you think this might be a leading indicator of more things to come if you go upmarket. I know you haven't assumed any additional macro pressures and such.

Yes, it's a good question, Sanjay. Yes is the short answer. The fuel business, and really the U.S. fuel business — because the terms and the way we collect money and bill internationally is fundamentally different — is the area where we've seen the micro segment's impact. We’re talking about super small accounts, mostly one- and two-card accounts that are relatively new on the books. This portion of our overall sales accounts for around 75% of our credit losses. Although the credit losses from that group were sizeable, the amount of business from that group is not particularly large. So yes, that is the only place we're seeing significant issues. When we studied the cohorts that are larger or more mature — those that have been on the books longer, say 12 to 24 months — the metrics appear to be stable. So it seems quite contained.

You don't think it's a leading indicator or anything like historically?

Look, you guys have as good a guess as I do. We've been discussing the potential for a macro recession for six months now, and our analysis hasn’t indicated any signs of one. We haven’t observed it in volumes or sales. This is just one area where it became evident. We noticed a rise in delinquencies about six months ago, around September or October. I think these micro businesses will face more pressure as their savings diminishes. When we witnessed that, we decided to allocate resources differently by moving sales efforts toward corporate payments.

Just one quick follow-up for Alissa on some of these impacts that happened to the growth rate in the fourth quarter. As I look across the different segments, there's been a lot of variability in the growth rate. I'm curious, did those one-off items affect multiple lines?

It did. We noticed a significant impact in our toll business and a bit in our fuel business.

I want to highlight that we view this more as a temporary bump rather than a trend. We're confident that our current quarter could return to a growth rate of about 9% or 10%. So really, we perceive it as a comp issue and not a fundamental run rate issue.

Our next question will come from Bob Napoli with William Blair.

Ron, the corporate payments business is performing exceptionally well. Can you provide a bit more color on what the stronger areas were in the quarter? Did you notice any significant deceleration in any areas? I'm particularly interested in the SMB market.

Bob, it’s always great to hear from you! In the corporate payments category, we posted 20% organic growth for the quarter, which we believe will be our growth rate for 2023. While the direct business is growing quite well, we did see some decline in the channel partner area, likely due to some partners that have been with us for years reducing volumes to different rates. That being said, our direct businesses are growing at about 25%, and the AP area, with every modality, is seeing even faster growth at around 40% to 50%. On cross-border sales, we've observed very strong sales, with a 60% increase in Q4, which has deepened our presence in various geographies. Overall, our business is performing exceptionally well.

Regarding your investments in EV, can you provide any additional insights, particularly from your experiences in Europe? What can you tell us about the economics? How do they compare against gas?

Certainly, Bob. The best insights we have are from our operations in the U.K., where we have a robust commercial fleet business that has adopted EVs earlier. Currently, I believe we have about 1,200 active clients using a combination of traditional fueling and EVs, with EVs accounting for about 15% of those accounts. For larger accounts, the economics of EV adoption are quite favorable for us. These bigger accounts generally generate fewer fees, but they require new EV-related services, which will create opportunities for additional revenue streams. Early indications suggest that revenues among enterprise clients are up around 50%. However, it’s essential to note that while new EV sales are growing, the overall uptake on the market remains a challenge, particularly concerning trucks. Our strategy is to position ourselves as a major player in this EV transformation. It's certainly correct that EV growth is not happening rapidly across the board, especially for heavier vehicles. However, we see an opportunity in the consumer segment, particularly with EV carmakers and charge point operators, which we are actively pursuing. Our aim is to create acceptance networks for EVs, providing data about charger availability and characteristics to ease the transition for consumers. We are seeing early engagement from several prominent EV car manufacturers utilizing our software, which would reduce anxiety for potential buyers. The opportunity here is considerable, but the timeline for realizing it remains uncertain.

Our next question will come from Darrin Peller with Wolfe Research.

Ron, can we return to the corporate payments segment? Given the numerous data points regarding challenges in SMBs and B2B activity slowing down, we're curious about the conditions you’re observing in the marketplace.

Indeed, Darrin, it's a significant insight. The good news for us is that our corporate payments business primarily focuses on middle-market clients, typically around $200 million to $300 million in revenue. Consequently, a vast majority, about 95%, of our corporate payment business caters to middle-market clients. Given the recent challenges some SMBs face, we may have been fortunate in not having progressed as much in that area. Our volumes and spending have remained positive, as reflected in our numbers, with revenue up by 25% when excluding our partner-related decline. We're optimistic for 2023, anticipating a similar growth rate as last year.

Regarding the convergence of assets within corporate payments, can you provide an update on this process and its progression?

Yes, Darrin. We're combining various elements of our offerings. We are close to finalizing many components to create a cohesive package for our middle-market clients. We've successfully integrated numerous elements: smart cards, AP automation software, and international payment capabilities among them. As we have these tools in our hands, we are seeing increased sales in both our smart card and AP services, targeting the CFO offices where these solutions are needed.

Understood. I have a follow-up for Alissa on the revenue growth rate. Given the various onetime items affecting the growth rate last year, do you anticipate any impediments to growth this year outside of the macro environment?

Barring normal macro adjustments to our organic growth, I do not expect anything significant that would hinder growth, aside from the impacts we’ve already discussed regarding the micro SMB customer segment in our fuel business.

The guidance is 10% to 12%, with a focus on achieving around 10% organic growth at the midpoint and accounting for acquisitions to aim for 12%. That's our target for this year.

Our next question will come from Tien-Tsin Huang with JPMorgan.

Regarding the margin outlook, you indicated a target of a 150 basis point increase while previously mentioning 200-300 basis points. I’m interested in what changed in the last 90 days.

That's a good question, Tien-Tsin. The adjustment in our plan now targets a 150 basis point increase across the full year and 200 basis points in Q4. The reason for this shift is our decision to invest more in our newly acquired businesses. If you exclude all acquisitions, our core operating expenses are under 5% growth, around 3% or 4%. However, acquisitions from last year will necessitate an additional investment of $70 million to $80 million year-over-year. Therefore, it was more strategic to adjust our outlook to facilitate better returns on these new assets.

Understood. As a quick follow-up on your appetite for deals, can you discuss the pipeline and how it may influence your short-term plans?

We continue to evaluate deals as a priority. The positive aspect is that we see a resetting on valuation, although the cost of capital has risen. This leads us to consider how we can generate the right returns before committing. While the valuation outlook looks better, the increased capital cost creates tension. We are always focused on strategic deals where we believe we can add value and generate returns. Therefore, we are not currently prioritizing buybacks given these conditions, while we favor deleveraging instead.

Our next question will come from Ramsey El-Assal with Barclays.

Are you well-positioned organizationally and technologically for cross-selling across your segments? Do you have any initiatives ongoing to further enhance this synergy?

This is a great question. We are ahead on synergy efforts in corporate payments, particularly since it targets middle-market customers who generally have greater needs. These businesses tend to utilize multiple services, which gives us the opportunity to sell fleet cards, for instance, to our corporate payment clients. However, in SMBs, our organization needs to adapt better to leverage the technology we have. We're aiming to consolidate related purchases for vehicle payments more effectively going forward.

Could you please provide your expectations for lodging and gift growth for 2023 for modeling purposes?

At the midpoint, we're projecting about 10% overall growth. For fleet, we anticipate lower single-digit growth for the first half and a stronger growth rate in the second half. Lodging is expected to grow in the low to mid-teens, potentially between 15% and 20%. As for corporate payments, there’s a guidance of over 20% growth, especially if we exclude the channel contribution.

Our next question will come from Sheriq Sumar with Evercore ISI.

Concerning the 2023 share count guidance of 75 million, does that assume any buybacks, and if not, how does that impact EPS if you decide to accelerate buybacks?

Sheriq, that’s a good question. For share count guidance, we do not include the impact of potential buybacks, treating these decisions similarly to capital allocation decisions such as acquisitions or divestitures. We believe it's prudent to hold off on these decisions until they make sense for the company. So the current share count assumptions align with what we expect for the rest of the year.

Our default approach is to aim for deleveraging. We anticipate generating $1.3 billion in free cash flow and use this primarily for debt reduction. If we choose to use funds for buybacks in Q2, we will update guidance accordingly to reflect that decision.

Our next question will come from Jeff Cantwell with Wells Fargo.

Congratulations on the results. Ron, in your prepared remarks, you mentioned adding an AP automation software front end to your AP execution business. Can you clarify how this impacts your partnerships with others you've worked with?

Yes, I see your point. Historically, standalone AP automation software companies would sell AP software solutions, and banks would offer execution capabilities. Our approach is to take both sides of that equation and connect them. By offering process improvement and payment execution as a single solution, we believe this gives us a competitive advantage and generates additional leads, benefiting both parties.

Understood, just wanted a quick follow-up regarding your EV strategy. Can you size that revenue opportunity for the next few years, especially considering the substitution effect and how it impacts revenue dynamics?

Yes, that's another significant question. Looking far ahead, we envision that the commercial fleet side could represent the size of our current business, potentially forecasting a $1.5 billion revenue stream if we effectively transition 50% of that business to EVs. The more immediate opportunity lies in consumer segments through collaboration with EV carmakers and charge point operators, which we believe to be significant. Our strategic intent is to establish acceptance networks and gather data to enhance trust among users regarding charger availability. We have already started brainstorming with several key EV car manufacturers regarding their uses of our software solutions. While the opportunity is considerable, the timing and realization remain aspects to navigate.

And we’ve reached the allotted time for questions today, so we would like to thank you for attending today's presentation. This will conclude the question-and-answer session. You may now disconnect your lines at this time.