Greetings, and welcome to the Corpay Fourth Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jim Eglseder, Investor Relations. Thank you, Jim. You may begin.

Good afternoon, and thank you for joining us today for our earnings call to discuss 2024 results, both fourth quarter and full year. With me today are Ron Clarke, our Chairman and CEO; and Tom Panther, our CFO. Following the prepared comments, the operator will announce the queue will open for the Q&A session. Today’s documents, including our earnings release and supplement, can be found under the Investor Relations section of our website at corpay.com. Throughout this call, we will be covering several non-GAAP financial metrics, including revenues, net income, and net income per diluted share, all on an adjusted basis. We will also be covering organic revenue growth. This metric neutralizes the impact of year-over-year changes in FX rates, fuel prices, and fuel spreads. It also includes pro forma results for acquisitions and divestitures or scope changes closed during the two years being compared. None of these measures are calculated in accordance with GAAP, so they may be different from 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. It's important to understand 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, expected macro environment, 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 also 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 in our Annual Report on Form 10-K. These documents are also available on our website and at sec.gov. So now, I'll turn the call over to Ron Clarke, our Chairman and CEO. Ron?

Okay, Jim. Thanks. Good afternoon, everyone, and thanks for joining our Q4 2024 earnings call. Up front here, I plan to cover four subjects. First, I'll provide my take on Q4 results. Second, I'll hit the highlights for full year 2024. Third, I'll share our 2025 guidance along with the major priorities for the year. And then lastly, I'll provide a bit of an M&A update. Let me begin with our Q4 results. We reported Q4 revenue of $1,034 million, that's up 10%, and cash EPS of $5.36, that's up 21%. Overall, the results were really in line with our expectations. Each of our core businesses pretty much came in as planned with accelerating revenue. The macro turned unfavorable during Q4, compressing our print revenue by about $20 million. But fortunately, a favorable tax rate effectively offset the unfavorable FX, really landing us back at our expected Q4 EPS. On the revenue front, we did pick up some unplanned GPS acquisition revenue in the quarter, but that was offset by some delayed gift card shipments. Organic revenue growth accelerated quite nicely in Q4, coming in at 12% overall. Inside of that, our corporate payments line of business finished at 26% organic revenue growth. Quite importantly, the trends improved significantly in the quarter. Same-store sales finished positively up 1%, which compares to minus 3% in Q4 last year. Sales growth accelerated to 36%, really impressive. That did include some elephant sales in the quarter. And retention remained steady at 92%. So to wrap on the quarter, the underlying businesses really performed in line with our expectations. The environment both helped and hindered, zeroing out in the quarter, and importantly, our revenue, same-store sales, and sales or new bookings trends improved significantly in the quarter. Now, let me turn and highlight a few points for full year 2024. Overall, I characterize it as quite successful. Cash EPS of $19 was up over $2 on a print basis and up 16% versus last year excluding Russia. We did rebrand and simplify the company, now operating as Corpay, the Corporate Payments Company. We scaled our Corporate Payments line of business by adding two acquisitions. Sales growth for the full year was over 20%. We managed credit losses to extremely low levels, lower than 2023. We progressed our Vehicle Payments add-on idea, noting real success with that in Brazil. We have hired a world-class USA sales leadership team to drive our performance and we have begun the slow turn of our two problem child businesses back into positive territory. So all in all, this performance was pretty good. Let me transition to our 2025 guidance along with our major priorities for the year. Today, we are providing full year 2025 guidance at the mid-point of $4.4 billion in revenue and $21 of cash EPS, so both of those numbers up 11%. The guidance reflects strong underlying business fundamentals. Within the guide, we anticipate organic revenue growth at the mid-point of 11%. That's up a bit from our view 90 days ago. We're planning full year overall sales or new bookings growth of 20% for 2025 and we're planning macro-neutral cash EPS growth of 17%, consistent with our mid-term earnings target. Unfortunately, we are facing a very unfavorable macro environment, a combination of weak international currencies along with a much higher tax rate. Taken together, we expect our print revenue to be compressed by over $100 million and our cash EPS to be compressed by about $1.20. Obviously, FX and SOFR forward curves can change, but we're using the January forecasts that are out there. Tom will provide some additional details on the guidance math along with specific Q1 guidance when we reach his prepared remarks. As for our priorities, we have four major focuses in 2025, emphasizing the expansion of our Corporate Payments business. First priority is our portfolio; we'll continue to simplify our portfolio by going deeper rather than wider. We will look to shed some additional non-core assets and acquire more Corporate Payment assets, so we are already quite active in this front. Second, USA sales; we plan a significant improvement in USA sales production this year. We intend to invest more in the Corpay brand, scale our field and zoom sales teams, and progress our dedicated cross-sell team. Third, on the Payables front, we will take our Payables business upmarket to the Enterprise segment, in addition to our core middle-market focus. We have secured our first major enterprise win, which is quite exciting. Additionally, we plan to expand our Payables business into Europe this year and launch our Corpay complete Payables product in the UK, where we have many UK assets to assist our efforts. Finally, regarding Cross-Border, we will expand our MCA or Multi-Currency Account Product that holds multiple currencies for our clients as deposits, making it easier for them to expand the countries in which they participate. This could be a game changer, helping us compete with banks on the Cross-Border front. Overall, we have an exciting set of initiatives planned this year. Lastly, let me provide a brief M&A update. Our two Corporate Payment acquisitions, Paymerang and GPS, are well underway integrating into our tech environment and executing our synergy plans. We are still on track to deliver $0.50 of cash EPS accretion from these two deals in 2025. The acquisition of Gringo, our second Brazil mobile payments acquisition, was announced on Monday. This acquisition, alongside last year's ZaPay acquisition, gives us entry into a significant Brazil payments TAM, which is about 3x larger than our toll TAM and is still early in terms of digital penetration. Together, these two deals will add 5 million active monthly digital users, all of whom become potential buyers for our Vehicle Payments Solutions, including toll, parking, insurance, and fueling. Additionally, we have a robust pipeline of Corporate Payment acquisition opportunities, aiming to increase our Corporate Payment mix, which could lead to revenue acceleration. So in conclusion, Q4 again finished in line with expectations, although revenue and profit growth are accelerating. We think 2024 was quite successful; we grew profits while simplifying and better positioning the company for the mid-term. Our macro-neutral guidance calls for 11% organic revenue growth, 17% cash EPS growth, both consistent with our mid-term targets, although we expect our print results to be negatively impacted by macro headwinds. Lastly, we anticipate some upside in 2025 from our capital allocation and corporate development activities as we progress through the year. With that, I’ll turn the call back over to Tom, who will provide additional details on the quarter and on our 2025 guidance.

Thanks, Ron, and good afternoon, everyone. Here are some additional details related to the quarter and the full year. It was a very good quarter with all of our businesses exhibiting strong organic revenue growth. For the quarter, organic revenue grew 12%, slightly under our guide due to gift card shipments falling a bit short of expectations. From a housekeeping perspective, the net benefit from our December acquisition and divestiture activity was offset by a slight shortfall in gift. Our print revenue of $1,034 million was impacted by approximately $20 million of negative macro compared to our November guide, primarily due to FX shifts from the stronger dollar post the U.S. presidential election. Normalizing for macro revenue would have been $1,055 million, which is in line with our guide. Delving deeper into our revenue results during the quarter, we were encouraged to see our same-store sales turn 1% positive compared to a 3% drag in Q4 2023. Looking down the P&L, we overcame the macro headwind through strong expense management and a lower tax rate contributing to $5.36 per share in cash EPS that we are reporting, reflecting a 21% increase versus last year. Regarding the full year, organic revenue grew 8%, while cash EPS grew 12%. Excluding our Russia business, which we sold in 2023, cash EPS increased 16%, despite $65 million of negative revenue macro performance in 2024. These strong year-over-year results are further reinforced by consistent sequential quarterly growth in revenue, EBITDA, adjusted EBITDA margin, and cash EPS throughout 2024, positioning us well entering 2025. Continuing with our performance highlights, new sales during the quarter and full year were exceptional, increasing 36% in Q4 and 22% for the year. For the quarter, Corporate Payments and Vehicle Payments sales grew almost 40%, with over 20% growth for those segments for the year. There is no better testament to the quality and value of our products than the ability to consistently generate sales to new customers. To sum it up, 2024 was a great year as we generated strong top and bottom line growth, increased margins, and significantly grew sales. Turning to our segment performance and drivers of our revenue growth, Corporate Payments revenue was up 26% during the quarter, increasing 20% for the year. As expected, one-time deal-related synergies contributed 4 points of growth for the quarter. During this time, our direct business grew 28% excluding the one-time synergy, led by growth in full AP. Our comprehensive suite of high-quality payment solutions continues to sell extremely well with sales up 29% in this quarter. Additionally, we won the full AP business of a large global enterprise client that was already using our Vehicle Payments Solutions. This is a great example of leveraging overlaps in our customer base. Furthermore, while our focus has primarily been selling full AP solutions to middle-market customers, the addition of this enterprise customer has the potential to unlock additional TAM for us in the Enterprise segment. Lastly, the business' KPI fundamentals remain strong with spend volumes increasing 22% in the quarter and card penetration remaining stable. Cross-Border revenue increased 20% for the quarter and the year, led by a 43% growth in sales for the quarter and 33% for the year. We closed the GPS transaction in December, and we are moving full steam ahead with integration plans. The Cross-Border space continues to attract more investor attention, and we occupy a great position in this vast global marketplace. Competing primarily with banks, which control over 90% of international payment flows, we focus on the global middle market where we leverage superior technology, sales, customer service, and a proprietary network that allows us to have a high win rate. We continue to develop new products for our clients and explore new geographies to capture more of the large addressable market. Turning to Vehicle Payments, organic revenue increased 8% during the quarter, a 4-point improvement from Q3, and for the year, revenue grew 5%. In Brazil, toll tax increased 9% year-over-year, with over one-third of our customer revenue from extended networks. Insurance revenue climbed over 130%, with nearly 300,000 insurance policies sold in Q4 alone. We also announced the signing of definitive agreements to acquire Gringo, our second deal in the car debt segment. Gringo's super app and extensive network help consumers and business drivers manage vehicle taxes, registration, and tickets. The car debt market is three times the size of the toll market and significantly less penetrated, providing us with substantial growth potential. This acquisition, expected to close in early Q2, will allow us to optimize cash use in Brazil in a leverage-neutral manner. Our strategies and execution are yielding results, with organic revenue growing 20% for the quarter and 18% for the year. Our brand, sales coverage, and value-added products will serve as meaningful drivers of total Vehicle Payments growth moving forward. In International Vehicle Payments, revenue grew 12% for the quarter and 11% for the year. This division has performed consistently despite recent economic softness in Europe. Our strong sales, diverse product offerings, and channel variety contribute to these consistent results. In the U.S., our digital and field sales efforts are improving, as seen by growth in applications, approvals, and starts. During the quarter, sales increased over 60%, which includes a significant expansion of our service offering with a large corporate customer; we've now lapped the drag from lower late fees allowing new sales to translate into revenue. Lodging organic revenue for the quarter improved to 1% compared to a down 5% in Q3. This quarter benefitted from an uptick in same-store sales within our workforce business, a trend we anticipate will continue throughout 2025. During the quarter, room nights increased 23%, led by the workforce business, which was particularly active in response to Hurricanes Helene and Milton. Certainly, a significant topic of interest is the impact of the California wildfires that began in early January. We support FEMA activation in our workforce business and the needs of displaced policyholders through our insurance business. In January alone, we provided approximately 42,000 rooms to emergency workers and displaced homeowners. It’s too early to estimate the impact this catastrophe may have on the results for 2025. However, we are focused on ensuring our network can support recovery efforts and extend assistance to all impacted by this tragic event. In summary, we're very pleased with our business performance in 2024. Earlier in the year, we identified issues in our Lodging and Vehicle Payments segments, which are improving. Meanwhile, our Corporate Payments, Cross-Border, Brazil, and International Vehicle Payments businesses performed exceptionally well, illustrating our durable earnings growth and cash flow generation. Looking further down the income statement, fourth quarter operating expenses of $546 million increased 6% year-over-year. There were a few unusual items recognized in the quarter that essentially net out against each other that I'll quickly run through. First, during the quarter, we recognized a $120 million pre-tax gain on the sale of our Merchant Solutions business. Secondly, in connection with our annual goodwill impairment analysis, we recorded a $90 million non-cash impairment charge related to the Paycard business, which is part of the Other segment. Thirdly, we recognized $11 million in deal termination fees, and finally, we recorded a $10 million one-time stock comp charge. Notably, the after-tax impacts of these unusual items are excluded from cash EPS. Additionally, this year’s acquisitions and divestitures added approximately $30 million of net new operating expense in the quarter. Excluding these unusual items and M&A activity and after normalizing for lower FX rates, operating expenses increased roughly 5% versus Q4 last year. This increase was driven by higher transaction and sales activities aimed at driving future growth. Bad debt expense remained flat versus last year at $22 million, or 4 basis points of spend. Adjusted EBITDA margin in the quarter was 55.2%, up 100 basis points compared to Q4 2023. On a full year basis, adjusted EBITDA margin increased 120 basis points, excluding our Russia business. Despite the adverse macro environment, we generated significant positive operating leverage due to solid revenue growth, disciplined expense management, and synergies realized from acquisitions. Our interest expense this quarter rose 3% year-over-year due to higher balances related to capital deployed during the year, partially offset by lower interest rates. Our reported effective tax rate for the quarter was 36.4%. This effective tax rate is approximately 15% higher due to the aforementioned goodwill impairment and sale of our Merchant Solutions business, as well as a non-cash discrete tax provision related to a previous tax planning strategy. Normalizing for these items, our effective tax rate for the quarter was 21%, compared to 23% in Q4 of last year, with the decline primarily driven by stock option exercises and tax planning strategies. Now, turning to our balance sheet. We ended 2024 with an excellent balance sheet, with a leverage ratio at 2.75x, flat sequentially despite the acquisition of GPS in December. In January, we expanded our securitization facility to $1.8 billion and extended the maturity by three years, with slightly better pricing. We are also in the process of raising another $500 million of Term Loan B debt, which we are structuring to be interest expense and leverage neutral by using the proceeds to pay down the revolver. Our capital allocation in 2024 was balanced, as we deployed $2.6 billion during the year, which included $1.3 billion for the repurchase of 4.2 million shares and $1.3 billion related to acquisitions to enhance our positions in Payables, Cross-Border, and Brazil. Looking ahead to 2025, our first priority remains M&A, and our pipeline is robust. We will seek to acquire businesses that strengthen our positions in our three core operating segments, focusing particularly on Corporate Payments. We have nearly $1.3 billion authorized for share repurchases, providing ample capacity for stock buybacks. Now, let me share additional information on our 2025 full year and Q1 outlook. We established our fuel, FX, and interest rate macro assumptions based on the respective forward curves when previewing our 2025 earnings on our November earnings call. The January forward curves have significantly worsened since that call. Specifically, fuel prices are approximately 8% lower, interest rates are approximately 25% higher, and the U.S. dollar is significantly stronger, as evidenced by the Brazil FX rate being 10% lower. To gauge the magnitude of these recent shifts, if the macro aligns with the October forward curves, annual revenue would increase by $136 million, and cash EPS would rise by $1.19 per share. While current lower macro assumptions may be transient as markets adjust to the policies of incoming government administrations globally, we have maintained our process for estimating the macro using the January forward curves. Consequently, our 2025 outlook projects both print and organic revenue growth of 10% to 12%. We estimate cash EPS growth to also be between 10% and 12%, which would be approximately $21 per share at the mid-point. Normalizing both revenue and cash EPS for the macro headwinds I described before, we see alignment with our November preview. To sum up, the only change since our last call is that the macro has worsened considerably. On a positive note, our confidence regarding core business performance has increased, which is why we are maintaining our initial financial estimates, excluding the macro. Below EBITDA, we expect net interest expense to fall between $350 million and $380 million, the tax rate to be between 25.5% and 26.5%, and weighted average shares to remain flat year-over-year. Regarding capital allocation, we forecast approximately $1.5 billion of free cash flow to be directed to debt repayment, which presents opportunities for earnings upside if we deploy capital for M&A or share buybacks. From a segment perspective, we anticipate the following revenue growth rates: Corporate Payments high-20s print and high-teens organic, Vehicle Payments low-single-digits print and high-single-digits organic, Lodging low-single-digits print and organic. For the first quarter, we expect print revenue to grow 7% to 9%, organic revenue to increase 8% to 10%, and cash EPS to rise 9% to 11%. On a constant year-over-year macro basis, revenue is growing 13%, and cash EPS is increasing 17% at the mid-point compared to the first quarter of last year. We project revenue growth to increase in subsequent quarters as we execute our business plans and lap the higher FX rates from the first half of the previous year. Additionally, first quarter revenue growth is impacted by a tough comp related to last year's Gift revenue. I will note that volatility in FX rates so far this year contributes uncertainty regarding the ultimate macro for the quarter. We provided additional details regarding our full year and first quarter outlook in our press release and earnings supplement. So now, operator, we’d like to open the lines for questions. Thank you.

Thank you. We will now be conducting a question-and-answer session. Our first question comes to the line of Tien-Tsin Huang with JPMorgan. Please proceed.

Hey, thanks a lot, good to hear, and I'll say up front, Tom, all the best on the transition to your next role here. On my questions, it sounds like not a lot of surprise organically, really just gift, a little bit of a push-out if I heard that correctly. But across the segments in 2025, it looks like you're looking for a nice acceleration in Vehicle Payments to the high-single-digits from the mid-single-digits in 2024. So what's driving that? How much visibility do you have? I know sales have been good, but just hoping you could break that down for us a little bit. Thanks.

Hey, Tien-Tsin Huang, great to hear from you. Yes, you’ve got it right. The guide assumes high-single-digits growth, primarily driven by two factors: one, Brazil is still performing strongly, and two, we have seen some improvement in the U.S. Vehicle Payments segment, which has begun to turn the corner, inching up over last year.

Okay. Good. Good to know. And then, really quickly on Gringo, interesting deal that triples your TAM, as you said. What more can you tell us about the financial profile of this business? I think you talked about a 30% grower on the release, but any other details you can share?

Yes, it's a decent size. If you combine it with our previous acquisition, you will see that together they will generate a little over 10% of Brazil's total revenue and are obviously growing much faster. The exciting parts are both the growth rate and the early innings market penetration, which is currently around 5% to 7%. This presents a significant runway for growth. With 5 million active users per month, we have a vast opportunity to introduce them to our suite of offerings, which is quite exciting.

No. Sounds like a good fit. No. Thanks for taking my questions.

Thank you. Our next question comes to the line of Sanjay Sakhrani with KBW. Please proceed.

Thank you. Maybe just to follow-up on Tien-Tsin's line of questioning. Appreciate that the macro is weighing against the results, but perhaps we could discuss what could drive the upside from here. I know you mentioned buybacks and M&A, but is Gringo included in the guidance now for 2025, and are there considerations from some of these priorities or initiatives that you mentioned, Ron?

Yes, Sanjay, to clarify, Gringo is not included in our guidance since the deal has not closed yet. The potential upside would stem from macro conditions improving, as they have done in the last 60 days, or us utilizing our capital for M&A or buying back stock.

I would also like to add that we have been conservative in our same-store sales assumptions, and I generally expect that even small fluctuations could lead to positive surprises.

Great, and just a follow-up on Corporate Payments. I know Ron spoke about some work remaining regarding pruning. Can you talk about where that might occur and how that could impact the business? These initiatives sound exciting, especially the Multi-Currency Account product. I am curious when it might fully scale to a run rate that's material. Thank you.

Yes, regarding pruning, this would focus mainly on small or non-core assets that don't fit into our Corporate Payments strategy. I wouldn’t want to specify them yet, but there are two or three assets we are currently reviewing for potential disposals. On the priorities front, the MCA Multi-Currency Account product is noteworthy; we've seen great results with it across several currencies, and we anticipate scaling it throughout this year. I believe that it could significantly enhance our revenue and attract institutional clients managing large funds internationally, which is quite exciting.

Great. Thank you.

Thank you. Our next question comes from the line of Andrew Schmidt with Citi Global Markets. Please proceed.

Hey, Ron. Hey, Tom. Thanks for having me on the call here. Great to see the sales momentum. I was wondering if you're seeing any benefit from some of the sales changes you've made, the reorg, the rebranding, and the hiring of a CRO. Those changes are relatively recent, but is there any benefit yet from that effort? Or is it primarily existing business momentum that is propelling these numbers? I know you mentioned doubling down in the U.S., which seems additive. I'm just curious about the sales initiatives. Thanks so much.

Yes. That's a good question. While I'd like to take credit, the benefit has been minimal so far since it’s still early days for these initiatives. The contribution from our new leadership has been primarily in strengthening our team. We've added a few experienced professionals to enhance our zoom sales and revenue operations. The substantial acceleration, seen with the 36% growth, was unexpected; we usually target around 20%. The significant sales accompanied by some 'elephant' sales in Q4 play a large role. Notably, we signed our first enterprise payables account, which is a considerable deal compared to our entire Paymerang business from years past.

That's great to hear. Maybe I could delve deeper on that Payables Enterprise win. As you pursue that enterprise TAM, are there product adjustments or go-to-market strategies that need to be enhanced? What steps would be necessary to access that TAM since capabilities can differ between client sizes?

Excellent question. On the product or platform side, we are in good shape, as our capabilities are well-suited for enterprise needs. For our go-to-market strategy, we're planning to partner with some significant consulting firms to facilitate introductions into senior management at these larger enterprise accounts. This is how we landed our initial contract.

Got it. Thanks so much, Ron.

Thank you. Our next question comes from the line of Andrew Jeffrey with William Blair. Please proceed.

Hi, good afternoon, guys. Thank you for taking the questions. Ron, I have a couple of questions on Corporate Payments. First, can you discuss your view on Corpay's competitive position among enterprise customers? I understand the deal you signed this quarter was with a pre-existing client. Can you frame what this success means, alongside any investments needed for future wins, particularly in the context of Corporate Payments?

Great question. The TAM is massive in this sector. The enterprise account signed this quarter has a spend profile comparable to a business that took us 20 years to build, while having around 1,500 customers. Securing a handful of these large enterprise accounts could be transformative for our growth. We have a technological advantage we’ve built over time, notably our virtual card network that optimizes spend monetization. Knowing we have dedicated sales personnel focusing on lending and treasury life-cycle aspects adds a significant advantage.

Thanks. Additionally, could you provide an update on the percentage of the full stack AP business that is card-attached today? Moreover, how do you plan to monetize ACH? Are there any new plans as you move into the enterprise space?

Andrew, to clarify, the penetration level of card usage within our full AP offering is fairly consistent, averaging around 10% to 11%. There are variabilities among different customers, some exceeding this average significantly. As for monetization, we are currently testing methods to improve monetization around non-card transactions, like ACH, to ensure our offerings are as valuable as possible.

The good news is we have a clear model to get compensated for ACH and ACH+ transactions, as we share more data or execute quicker money transfers. Regarding subscriptions, our product, Corpay Complete, is highly effective. Our approach has been to automate processes such as getting approvals and digitalizing invoicing workflows to prevent loss. While we excel in customer penetration, we do anticipate growing our revenue from these avenues.

Thank you. I appreciate it.

Thank you. Our next question comes from Darrin Peller with Wolfe Research. Please proceed.

Hey guys, thanks. I want to follow up on the Corporate Payments segment since it's a big contributor. Are you satisfied with the asset mix now? Additionally, could you provide more granularity on your expected growth drivers within Corporate Payments for the year, such as AP businesses or Cross-Border initiatives?

Yes. On the asset mix, we are in a good position. The focus remains on building our Multi-Currency Account product within the Cross-Border space, which has traditionally been a disbursement model. This is now shifting towards allowing clients to hold and deposit in their native currencies. We expect to grow that significantly alongside Corporate Payments, targeting high-teens organic growth in 2025.

Just to clarify, there’s no current plans for pruning or divestitures within our Corporate Payments segment. Ron's comments were aimed at a broader context.

That makes sense. One last follow-up regarding margins. Considering the U.S. sales effort and investments, is there potential for limiting margin expansion? Could you provide some insight into your expected EBITDA margins over the next couple of years as you build this initiative?

Currently, we're planning EBITDA margins to be relatively flat in 2025. This is largely a result of macro compression due to currency impacts and lower-than-average acquisitions. We also decided to invest more in sales and marketing to secure the growth we expect this year, aiming for a 20% increase in sales.

Additionally, we anticipate accelerating margins in 2025 as we lap negative macro effects and begin to realize synergies from our recent acquisitions and as we witness further growth in our Lodging and Vehicle Payments segments.

Fair enough. Thanks for the insights, guys.

Thank you. Our next question comes from David Koning with Baird. Please proceed.

Yes. Hey, guys. I have a question about the Lodging business. Yields have been in the $13 to $15 range per room night for the past several quarters, but I noticed it dropped in this quarter to $11.40. I assume this is due to mix; could you explain that further and how you see this yield evolving into 2025?

You're correct, David. The decreased yield is attributed primarily to the impact of support provided during Hurricane Helene and Milton, which provided a lot of business but at a lower spread for us. We also anticipate yield compression due to our ongoing support of the California wildfires. However, as the hurricane support decreases, we should return to average yields we saw in the earlier quarters of 2024.

Understood. Thanks. Just a quick follow-up: you mentioned some one-off benefits in Corporate that helped to drive the 26%, but could you bridge the gap from that 26% in Q4 down to the high-teens over the next few quarters?

Sure, David. The transition from the 26% growth in Q4 to a high-teens normalized level can be attributed to the one-time synergies we experienced and improvements in channel business performance compared to the prior year, which acted as a detractor. We managed to improve the channel business significantly, leading to the noticeable growth in Q4.

Got it. Thanks, guys.

Thank you. Our next question comes from Ramsey El-Assal with Barclays. Please proceed.

Hi guys, thanks for taking my question. I wanted to ask about your Lodging segment, which is recovering. However, the 2025 expectations are still below the historical growth rates. Should we expect this segment to revert to previous growth rates, or has the business model or growth algorithm changed?

That’s an excellent question, Ramsey. The decline in our Lodging business was a result of negative same-store sales from clients using our services significantly less. This trend has relatively normalized, and we are optimistic that sales personnel focused on acquiring new clients will help drive growth. The services we offer are highly valuable, and I anticipate we'll gain new business in 2025, ultimately leading to improved performance.

Very helpful, thanks. A follow-up regarding your Payables expansion into Europe. What do you need to do to be successful? Are additional hires needed or enhancements to the technology? Can you leverage existing clients to gain traction? Any additional details would be appreciated.

Another good question. Expanding our Payables business into Europe is very exciting. We already have existing assets in the UK and the cloud tech we’ve developed works well. The main focus is integrating with our Cross-Border product, allowing us to offer superior disbursement services to clients with both domestic and international needs. Our strategy will leverage existing client relationships, and we will establish a specialized sales team to drive product adoption. By summer, we expect to have data on the viability of our Payables offering in the UK.

Thanks, and best of luck to you, Tom. It has been a pleasure working with you.

Thanks, Ramsey.

Thank you. Our next question comes from Nate Svensson with Deutsche Bank. Please proceed.

Hey guys, thanks for fitting me in. A few questions regarding Lodging. I'd like to link it back to the other problem child, North American fleet. Last quarter, we discussed this segment potentially returning to positive growth this year. As you mentioned earlier, the U.S. Vehicle Payments have started to perform. Could you provide an update on your visibility into these areas as we commence February?

Sure, Nate. The good news is we’ve moved past the challenges that previously impacted our business, which are now firmly behind us. The primary goal is straightforward: attract sales. Our products are robust, client satisfaction is high, and we have controlled credit losses. Our guiding expectation anticipates sequential growth in this segment, exiting at approximately 5% or 6% in Q4 of this year. It’s simple; if we can add more sales successfully, we expect to see improvements.

That is very helpful. I know Gringo was discussed earlier, but could you provide a broader update on the consumer vehicle opportunity? We have a lot happening within the business, but I still believe this area holds significant promise. How's the pay-by-phone technology progressing in the UK, and what does the roadmap look like for the future?

Great follow-up. Brazil continues to perform exceptionally well, driving substantial revenue growth outside of toll collections. In our 2025 budget, a significant portion of revenue growth in Brazil will stem from non-toll sectors. With the Gringo acquisition, we expect to enhance our customer base significantly. Regarding the UK, progress has been slower than anticipated. Developing the pay-by-phone technology required more time, as we needed to ensure integration with multiple networks such as fuel, EV services, and maintenance. We’ve been focused on creating a robust product, and I hope to provide updates by this summer.

Additionally, I would like to comment that the Gringo acquisition price was approximately US$140 million, which is just under 4x forward revenue. This acquisition largely leverages Brazilian currency, providing us with an efficient way to utilize cash in that market without going through adverse currency fluctuation processes.

Thanks for that clarity, guys. Wishing you best of luck, Tom.

Thank you. Our next question comes from Andrew Bauch with Wells Fargo. Please proceed.

Hey guys, thanks for taking my question. I know you discussed how macro conditions impact the EPS number. Can you help delineate the influence of fuel and FX rates from your business activity? Are you sensing any increase in customer confidence and how might those indicators translate into your outlook?

Sure, Andrew. To identify these issues, our Q4 results showcased excellent sequential improvement, particularly in organic revenue growth at 12%. Same-store sales turned positive, and customer retention rates improved. These trends are solid indicators of growth and allow us to maintain our organic growth outlook for 2025 at 11%. It’s crucial to remember these achievements are despite current macro challenges, such as fluctuations in currency that directly influence our EPS conversion but don't directly impact the core business.

Yes. When we discuss macro phenomena, we are applying a narrow definition that largely pertains to FX conditions. We’re noticing high transaction volumes and card activity indicating strong business health, unimpeded by broader economic dynamics.

Absolutely clear. One housekeeping note: Regarding the M&A contributions proposed in 2025, you stated a bridge of $131 million. However, if we look back at your M&A presentation in the summer, the estimate then was around $200 million for GPS and Paymerang. I suspect that Paymerang’s revenue for 2024 may be closer to $25 million; I want to align around the expected revenue from those assets.

Yes. You're spot on. The $200 million projection comprises gross numbers from both acquisitions formerly, however, the $131 million reflects the net outcome considering the divested business. Therefore, it’s a net of $200 million minus the gains on our current disbursement business.

Great. Best of luck, Tom. Thank you.

Thank you, Andrew.

Thank you. That concludes the allocated time for questions. I would like to turn the floor back over to Jim for closing remarks.

Thank you very much for your interest. There are still some questions we didn't get to due to timing, but please feel free to reach out to us. I'll be available tonight. Thanks, everyone.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.