Good day, everyone, and welcome to the Corpay Third Quarter 2025 Earnings Conference Call. Please note that this call is being recorded, and I will be available to assist if needed. It is now my pleasure to turn the conference over to Jim Eglseder, Investor Relations. Please go ahead.

Good afternoon, and thank you for joining us today for our earnings call to discuss third quarter 2025 results. With me today are Ron Clarke, our Chairman and CEO; and Peter Walker, our CFO. Our earnings release and supplemental materials for the quarter are available on the Investor Relations section of corpay.com. Please refer to these materials for an explanation of the non-GAAP financial measures discussed on this call, along with a reconciliation of those measures to the nearest applicable GAAP measures. Our remarks today will include forward-looking statements about expected operating and financial results, strategic initiatives, acquisitions and synergies and potential divestitures, among other matters. Forward-looking statements may differ materially from actual results and are subject to a number of risks and uncertainties. Some of those risks are mentioned in today's press release on Form 8-K and can also be found in our annual report on Form 10-K. These documents are available on our website and at sec.gov. Now I'll turn the call over to Ron Clarke, our Chairman and CEO. Ron?

Good afternoon, everyone, and thank you for joining our Q3 2025 earnings call. Today, I’ll discuss three topics: my perspective on Q3 results, our Q4 outlook, and a glimpse into 2026. I will also highlight our Corporate Payments business and the significant opportunity it presents, followed by an update on our recent mergers and acquisitions and stablecoin initiatives. To start with our Q3 results, they were quite strong overall. We reported a 14% increase in both revenue and cash EPS for the quarter, with organic revenue growth at 11%. I’m particularly pleased that increased volume and spending are contributing to this organic growth. Within that growth, our Vehicle Payments segment saw a 10% increase, while our U.S. Vehicle Payment segment grew at 5%, which is encouraging. Our Corporate Payments segment grew 17% this quarter, despite experiencing a slight point of flow compression. Q3 trends continue to be strong, with retention slightly improved at 92.4%. Our new bookings grew by 24%, which is a positive indicator. However, our lodging business faced challenges this quarter due to a decline in emergency revenues. Fortunately, attrition decreased from 8% last year to 5% this quarter, and client base softness improved from a decline of 2% to a growth of 2%. This suggests that the business is stabilizing, but we need to focus on increasing sales. In summary, I am very pleased with the quarter’s performance. All business segments met or exceeded our expectations, with our two largest segments, Vehicle and Corporate Payments, each growing organically in double digits and accounting for 80% of the company. Now, looking ahead to our Q4 outlook, we are raising our guidance. We anticipate Q4 revenue to be $1.235 billion and cash EPS of $5.90 at the midpoint, benefiting from the Alpha acquisition that closed on October 31 and our strong Q3 performance. We expect Q4 organic revenue growth to be around 10%, maintaining our Vehicle segment growth at 10% and projecting mid-teens growth for our Corporate Payments segment, which includes a 3% headwind from float revenue. Early insights from October's revenue have been factored into our Q4 guidance. If we achieve this outlook, our total revenue for 2025 will exceed $4.5 billion, which is a 14% increase, and cash EPS will exceed $21, surpassing our initial profit guidance from February. This would mean four out of the last five years with organic revenue growth of 10% or more. Now, moving to our 2026 fiscal year setup, we are optimistic. The current macroeconomic conditions are favorable, including better foreign exchange rates and lower interest rates. We expect organic revenue growth to be in the range of 9% to 11% and anticipate at least $0.75 in incremental accretion from the Alpha and Avid deals, along with margin expansion from improvements in AI productivity and vendor rationalization. We expect strong earnings growth next year. Turning to our Corporate Payments business, which consists of four key solutions, we are projecting over $2 billion in revenue next year, making up about 40% of the company. We aim to highlight the significant opportunities in this sector and our competitive advantages. Our first solution, Corpay One Spend Management, is about a $250 million business providing modern commercial cards that compete with companies like Amex and Brex. Our strength lies in our ability to monetize more client spending via our developed B2B virtual card network. Next, we have a $400 million mid-market AP automation and payment business that helps clients manage their invoices, and we’re leaders in this space with exclusive ERP partnerships. Our third solution focuses on cross-border risk management and mass payments, projecting around $1.2 billion in revenue next year, making us the largest non-bank provider in this field. Lastly, our global bank account solution, anticipated to generate about $200 million next year, assists corporate clients in setting up foreign bank accounts swiftly. We have established strong positions across these four areas, each representing significant global opportunities. Our goal is to grow this business substantially, aiming for $10 billion in revenue. Regarding M&A progress, we completed the Avid investment on October 15 and are collaborating with TPG and Avid management to enhance profitability and sales productivity. Alpha, a European cross-border business, was acquired on October 31, and our global bank account product is rapidly growing. We are finalizing plans for 2026’s synergies, expecting them to positively impact our business. We anticipate closing the Mastercard investment in our cross-border operations around December 1, allowing us to offer our solutions to Mastercard's bank clients. We are also planning divestitures that we hope to finalize soon, with targets up to $1.5 billion. Additionally, we continue to explore further corporate payment acquisition opportunities. Lastly, I’ll address our progress with stablecoins. We have partnered with companies like Circle to create a stablecoin payment system. We are targeting three main areas: enabling large domestic and cross-border clients to receive payments in stablecoin, adding digital wallets to existing clients for easier fund transfers, and serving new large crypto clients. In conclusion, we had a solid Q3 performance, have raised our Q4 and full-year 2025 guidance, anticipate a favorable setup for 2026, and are enthusiastic about the long-term growth potential within our Corporate Payments business. We have made significant acquisitions this year that position us well for the future, and we are advancing our entry into the stablecoin market. Now I will turn the call over to Peter for more details on the quarter.

Thanks, Ron, and good afternoon, everyone. Let's start with highlights of the quarter. Q3 revenue was $1.172 billion, overperforming the midpoint of our guidance range. Print revenue grew 14% year-over-year, driven by 11% organic revenue growth. Q3 adjusted EPS of $5.70 per share overperformed the midpoint of our range and grew 14% year-over-year due to strong top line performance and solid expense management. Adjusted EPS grew 17% year-over-year on a constant macro basis. The headline for the quarter is mid-teens top and bottom line growth, excellent organic growth with 10% vehicle payments organic growth driven by our U.S. vehicle payments business returning to mid-single-digit organic growth, continued strong retention, all while maintaining strong margins. We've also produced significant sales growth this year that will fuel our business over the balance of 2025 and into 2026. Now turning to our segment performance and the underlying drivers of our organic revenue growth. Corporate Payments delivered 17% organic growth for the quarter despite a 100 basis points drag from float revenue compression due to lower interest rates. Overall, the performance was driven by growth in spend volumes, which increased 57% on a reported basis and up 38% organically. Spend volume was just over $68 billion in Q3, which puts us on pace to be north of $250 billion annually on a run rate basis. Corporate Payments revenue per spend volume decreased year-over-year due to new payables and cross-border enterprise clients. The payables business continues to perform, driven by strong execution on Paymerang synergies and solid progress implementing and ramping new full AP customers. We continue to be optimistic about the future of the business and are laser-focused on customer acquisition. Cross-border continued to deliver strong sales in Q3. Both new client acquisition and recurring client transaction activity was robust as our scale, technology, and talent advantages continue to power share gains from legacy financial players. Vehicle Payments organic revenue increased to 10% this quarter. You can see in the financial supplement, there is a good trend line of improving organic revenue growth in this segment, now returning to our target run rate of 10% organic revenue growth. Also, it's important to point out that our Vehicle Payments segment is made up of three approximately equal-sized revenue businesses in different geographies. These geographies are the U.S., Brazil, and Europe. U.S. Vehicle Payments organic revenue growth improved 500 basis points sequentially to 5%, reflecting the return to sustainable mid-single-digit organic growth we've been expecting. This was driven by improved sales production, higher approval rates, and strong retention. Brazil and European vehicle payments continue to perform well. In Brazil, the combination of 6% tag growth, growth in our extended network, including our new card debt offering is driving the strong results. International Vehicle Payments continued to deliver consistent results, driven by strong sales and performance across the U.K., Europe, and ANZ. As expected, lodging organic revenue was down 5% for the quarter, inclusive of a 400 basis point drag from lower emergency revenue year-over-year in our FEMA business. We feel good about the progress we've made to position this business for the future, but the recovery has not yet shown through in a meaningful way. The business has now stabilized, and we are hyper-focused on improving sales in the lodging business. The other segment was up 23% as the gift business generated significant year-over-year growth from pent-up demand due to new regulations to upgrade gift card packaging to reduce fraud. In summary, we delivered 11% organic growth in Q3 at the high end of our target range, driven by continued strong corporate payments organic growth and double-digit vehicle payments organic growth. These two segments make up over 80% of our revenues. Now looking further down the income statement. Operating expenses of $649 million represent a 16% increase versus Q3 of last year, driven primarily by acquisitions and divestitures and related add-backs, FX and a true-up of a 2024 disposition. Excluding these impacts, operating expenses increased 8%. Bad debt expense declined 1% from last year to $28 million or 4 basis points of spend, so credit remains well controlled. Our adjusted EBITDA margin was 57.7%, essentially flat with the prior year. Our adjusted effective tax rate for the quarter was 26.6%. The increase in the rate was driven by Pillar 2 and a change in the mix of earnings. On to the balance sheet. We ended the quarter in excellent shape with liquidity of $3.5 billion and a leverage ratio of 2.4x. Today, we closed upsized debt facilities that enhance our capital structure, increasing our revolving credit facility by $1 billion, resulting in a total facility of $2.775 billion and a new $900 million 7-year Term Loan B. Our Term Loan B and revolving credit facility continue to price at some of the tightest credit spreads amongst BB+ corporates, which reflects our strong balance sheet and significant cash flow generation. We used proceeds from these facilities to close our Alpha acquisition and our investment in AvidXchange. We have a plan to delever and expect to end 2025 at approximately 2.8x leverage. We purchased approximately 600,000 shares in the quarter for $192 million, leaving us with approximately $1 billion authorized for share repurchases. We will continue to pursue near-term M&A opportunities and we'll also buy back shares when it makes sense while maintaining leverage within our target range. So now some updates and details on our Q4 and full year outlooks. We're increasing our full year 2025 revenue guidance to $4.515 billion at the midpoint, representing growth of 14%, driven by our third quarter beat, the continued benefit of improved foreign currency exchange rates and the inclusion of our recently closed acquisition. We are also increasing our adjusted EPS guidance to $21.24 per share at the midpoint, representing growth of 12% as a result of our Q3 beat, continued expense discipline and recently closed acquisition and investment. For the fourth quarter, we expect print revenue of $1.235 billion at the midpoint, representing growth of 19% and adjusted EPS of $5.90 per share at the midpoint, representing growth of 10%. We provided additional details regarding our rest of year and Q4 outlook in our press release and earnings supplement. This concludes our prepared remarks, operator. Please open the line for questions.

We'll take our first question from John Davis with Raymond James.

Peter, maybe just first on Corporate Payments organic growth. I think you guys said mid-teens despite an incremental float headwind. Obviously, you have a very tough comp from the year ago quarter. So maybe just talk about the drivers that give you confidence in that organic growth outlook for the fourth quarter, specifically in Corporate Payments.

John, I appreciate the question. So maybe we'll just break it down into the components because what Ron shared in his script was obviously with the Alpha acquisition. So if we look at the core Corporate Payments business, we're expecting that to be, call it, 16-ish percent with a drag of 100 basis points from float. So about a 17% growth rate there in the core business. That does compare to last year, which was 26%, which was obviously kind of had a double impact. We had a one-timer in there of about 400 basis points, and we are growing off of a really weak Q4 '23. So hopefully, that gives some context in terms of kind of the core business. When we think about Alpha, Alpha's organic growth is coming in at 13%, but ex float, that would be 31%. So obviously, the business is very dependent on float from the bank account business. And then on a consolidated basis, that gets us to the mid-teens that Ron spoke about with a 3% float headwind. So call that without the headwind, 18%-ish.

John, it's Ron. Remember, we've also seen October.

Fair enough. Fair enough. All right. So I'll continue on the guidance here. Ron, as you think about next year, you guys have consistently said 10% organic. You're guiding to that next year. There's a little bit of a choppy macro backdrop. You saw some nice acceleration in North America fleet in the quarter. Obviously, Corporate Payments is strong. Maybe just talk about what gives you confidence? And what, if any, of that organic growth outlook next year comes from synergies from Paymerang and some other of the prior corporate payments deal that now will flow through to organic growth.

Yes, I think it's just about the run rate. We have the trends, we're observing the new business we're adding, and we see the current losses. Therefore, we're confident that the vehicle business will be in the high single digits to 10%, and the Corporate Payments business will be in the mid-teens, accounting for the flow headwinds. We feel very comfortable with this outlook. Even for the other category, which has been a bit challenging in the past, we're expecting it to exceed 10%. The wildcard appears to be lodging, which we anticipate will move into positive territory. Overall, if you look at the recent quarter and what we're projecting for Q4, we believe we're on track and not expecting significant changes from our current trajectory. So we're quite confident.

We will move next with Sanjay Sakhrani with KBW.

Maybe just to follow on some of the questions asked before. Obviously, next year is setting up pretty strong. You've got this Mastercard investment and then some of the pipeline that's building associated with that partnership, the synergies from Alpha. Could you just talk, Ron, a little bit of how you're figuring for that in that preliminary outlook?

What do you mean, Sanjay? How we're figuring it.

Like how much of that is driving sort of the preliminary view on revenue growth for next year?

Yes. I'd say not a lot. I think I said before that we were hoping that Mastercard thing could add 1 point or 2 that FI channel to our cross-border business, which is already kind of a mid-high teens number. The synergies, again, the Alpha business is, call it, circa $300 million-ish in U.S. and it's got a bit of a flow headwind. So I'd say, again, 0.5 point maybe from that. So the majority really of the outlook is around just the core set of businesses. I do think we're going to get profit leverage, though, separate from revenue from Alpha from the macro, right, that we're seeing and from some of this cost efficiency, some of the AI work that we've done. So I do see us getting some incremental profit leverage next year kind of above normal levels.

Got it. Okay. And then, Peter, could you just drill down just a little bit more on that breakdown that you had? So if I think about the fourth quarter revenue outlook, how much does Alpha specifically add to that? And then on that $0.75 of upside for next year, like how much of it is Alpha versus Avid?

Yes. So on the revenue outlook for Q4 '25, Alpha is adding about $55 million of revenue in the fourth quarter. And in terms of the $0.75, we've not given that breakout, but we obviously previously shared that Alpha would be $0.50. So you can kind of take those two and give that some thought in terms of your split there.

Our next question comes from Tien-Tsin Huang with JPMorgan.

Just wanted to ask on '26 again. Just thinking about the segments and the growth and how growth might be different than what we saw in '25 at a high level, any interesting call-outs there? You've got the new sales performance up 20-plus percent. Retention is a little bit better. I know the deals are getting layered in. But just at a high level, how is '26 going to be different than '25?

Tien-Tsin, it's Ron. It's good to hear your voice. I'd say it's really more of the same, right, than different. I think what's different is a little bit happier on the vehicle, right, that thing accelerated second half or will we think to 10% from whatever it was 8%, 9% in the first half. So we think that's going to kind of carry through. So we think that will do a little bit better. Lodging, again, a wildcard call that thing a push. The other category, maybe a tad lighter, but still positive kind of double digits. So really, the question is where in the teens will the corporate payment business, inclusive of the float land. So that would be, I'd say, what could cause the thing to be a little bit better. But more of the same really, Tien-Tsin, to the '25 numbers, I'd say, next year.

I have a quick follow-up. Considering all that you have going on with acquisitions and divestitures, along with other potential deals, how does it feel to regenerate some of the sales performance you've seen? I'm curious about your perspective on the opportunities and risks as we approach the end of the year and look ahead to next year.

Yes. I mean I think the sales performance, Tien-Tsin, is quite good. The preliminary plan that we're building is way increasing. We hired someone new to start to build up some new channels like the Zoom channel has been super small. We're building that channel for kind of midsize is working. So I see us pouring a bunch more money some of it from the expense savings that we're getting, and sales will be up well over 20% this year in 2025. We got a bunch of elephants, right, that help this year. So I think bullish on it. I think the way upside for us is really in capital allocation. If people keep trading our stock at this level, and we sell these companies, we are going to be buying stock back, which obviously at this kind of a price would be pretty incremental. We have this Mastercard money coming in. So we have some sources of incremental capital, again, above kind of normal levels that could help us next year. So I'm pretty bullish on the profit side really for next year.

Our next question comes from Andrew Jeffrey with William Blair.

Appreciate taking the question. Pretty exciting times in corporate payments, obviously. Ron, I'm intrigued by the stablecoin commentary because I know there's been a lot of discussion in the market, both sort of pro and con. I wonder if you could just sort of frame up for me what you think the long-term opportunity is in that business? It sounds like initially, it's going to be infrastructure, so on-ramp, off-ramp. Over time, does the Circle agreement sort of create the opportunity for cross-border stablecoin movement? It sounds like maybe you're doing that a little bit today in the FX business, but I'm thinking like cross-border B2B payments. And what do you think the time frame on something like that is, assuming that's a business in which you have your eye at this point?

Yes. In the supplement, we laid out some information. The stablecoin situation can be broken down into two parts. One part involves new players with significant crypto balances, like Circle and Ripple, as well as a bank I mentioned, Frick, where we can assist them. They provide capabilities for us but could also be our clients needing to route dollars back to investors. This presents an opportunity for us to support those with large balances. The more intriguing aspect for me is our extensive business where we pay hundreds of billions to U.S. merchants, both domestically and internationally, who benefit greatly from our payouts. The compelling question is what the take rate will be. If we approach these major beneficiaries and offer a stablecoin wallet, will they want us to facilitate funds entering that wallet, whether off-cycle or not? They could alternate between this and their traditional bank accounts, for which we manage a significant amount with around 7,000 bank accounts totaling $3 billion in deposits. When we present the stablecoin wallet to our institutional clients, will they adopt it? We expect to gain valuable insights because we have flows and deposits that differ from those entering this business. Therefore, we are preparing these offerings and monitoring whether our clients and beneficiaries decide to utilize them.

Okay. So it sounds like you'll sort of build the infrastructure and wait to see how the market evolves. Would that be the right way to think about it?

Yes, absolutely. If you consider the current situation, much of the activity is coming from third-tier markets, while there's limited movement in the G20 countries where we primarily operate. We are expanding our capabilities, particularly with wallets. We've developed these services and will inform our clients about them to gauge their usage rates. We're optimistic about their potential. I believe the ability to process transactions when banks are closed is particularly interesting, though we’ll have to see how it plays out. I want to reassure everyone that we’re not apprehensive. Contrary to what some might think, we find this new avenue quite intriguing. We plan to offer it and hope our clients will find value in it.

Yes, I suspect they will. I suspect you're right. And if I could ask one more, maybe, Peter, the yield on these big enterprise clients, I guess, I mean, if investors ask, can you kind of frame up how you're thinking about that business? I imagine it's high incremental margin and you like the volume. Is there anything you'd add to that when we think about sort of the yield on those big customers versus the core business?

Andrew, it's Ron. I'll take that one. I think it's quite wide, right? As we said in our cross-border business, historically, we'd be in the, call it, average of 50 to 60 basis points kind of keep on conversion work. We have some of these gigantic super large transactions that could be single-digit basis points, so 16, 17 of the line average and stuff. And we often do it in concert with the normal business with those big accounts. So we might have a big account where we're doing some set of ongoing kind of mass payments at a decent kind of rate and then, hey, they call us for some kind of significant one-off kind of transaction. So it's oftentimes done that way where the account calls us for some other kind of use. And your point, although it's a way different rate, it's a gigantic trade, and we're happy to kind of take it to your point, from a profit perspective, it's quite high, the absolute dollars of the profit because it's one big transaction, there's not a lot of work. We're really calling out mostly so people don't think that the core or normalized rate in that business is moving at all. It's really going nowhere if you look at it without this handful of accounts.

Our next question comes from Darrin Peller with Wolfe Research.

Ron, can you provide a quick update on the progress and share any details about the interest level and some of the divestitures you are planning to make in the coming quarters?

Yes. Darrin, I'd say mostly it's early days. Kind of the books are out, the fireside chats have started. We've obviously had some call-ins on the businesses. So I'd say it'd be premature to say we know a lot. The one thing I would say is these are decent businesses. These are a couple of businesses that are in our International vehicle segment that are growing, both of them grow kind of 10%-ish. So they're decent businesses and they're profitable. So they will sell. The question is, are we going to like the price? So unlike the gift thing that I know you weathered through with us, however many times we try that. These will transact. The question is whether we're going to like the price enough. But we will know. We've got a process set up where first bids are due in the next few weeks here. So by the time we talk again, we'll have a clear answer for you.

All right. That's good to hear and helpful. I guess my quick follow-up would be on U.S. fleet growth. I think we saw 5% you mentioned. And just touch a little bit more on the sustainability of that just because it obviously is good to see. I'm curious what's driving it and then your conviction around it going forward.

Yes. That's a super good question. I think the main thing is the structure of that business has changed a lot kind of since the pivot. So call our Vehicle segment there a $2 billion business annually, kind of 1/3 in the U.S., 1/3 in Europe and 1/3 in Brazil, ballpark. So let's just use $700 million as a ballpark number. The retention in that business now has gotten to the company's line average. So historically, when it was a micro business, losses were super high. So think now if you were modeling this with me, hey, I got a $700 million business printing in 2025 and our line average is, call it, 92%, 93%, so the loss rate is 7. So you lose 7 on $700 million, you lose $50 million. We actually are planning the same-store sales that are improving. They're going to go positive in that business next year. So you're into a way lower risk profile now. We don't need to sell very much or add too many initiatives to get the thing to work. Whereas before, we had the bottom of the bucket, the loss rates were almost double that at some point and the same-store sales were 2 and 3 points negative. So that's the main headline for everybody is the assignment to grow it now is just infinitely easier than it was a couple of years ago.

Way easier to get a number.

Our next question comes from Nate Svensson with Deutsche Bank.

Nice results. I did want to ask on Avid now that that's closed and nice to hear that it's contributing at least some portion of the $0.75 accretion next year. I guess, first, just any update on the work being done at Avid to help improve their margin profile and growth and kind of the role that Corpay is playing there? And then I guess more specifically, since the deal closed, any way to quantify the impact from Avid volumes maybe coming on? I think a competitor may have called out a loss, but wondering if you can size the impact there maybe in terms of volumes.

Thank you, Nate, for the good opener and nice results. We appreciate that. Regarding your first question, I feel the relationship is very strong. I've known Mike, who heads the company, for quite some time, as well as several members of his management team, which is part of why we proceeded with the deal alongside TPG. So, firstly, I want to emphasize that our three groups - us, the Avid team, and the TPG team - are working closely together. Secondly, it is evident what we need to do to significantly enhance profit performance. Mike has already initiated some cost reductions by the time of this call. Therefore, I can say we are aligned on this. We expect profits to rise significantly, which is why we are optimistic about some profit growth next year. The critical question remains the growth rate. Can Mike steer that business to a level comparable to ours, achieving mid-teens or higher growth? Currently, our primary focus is on what they can achieve in sales and monetization to boost revenue. If they succeed, we plan to acquire the remainder of the business and consolidate it.

I appreciate the detail you've provided. I want to ask about the gift card business and the impact of some lumpiness and regulatory changes that may have affected demand throughout the year. It would be helpful to go through the changes in that business and understand the extent of the pull forward. You mentioned a return to double-digit growth, so I would like to ensure your confidence in achieving that goal in a historically lumpy business.

That's a great question. A few years ago, this was considered one of the worst businesses, but now it's growing well both this year and next. There are mainly three factors at play, Nate. First, we've addressed issues with fraudulent gift card packaging. Several states were facing problems with people stealing gift cards and discovering they had no value. To tackle this, we're introducing new packaging that prevents these issues, and we've already started using it with some clients, resulting in a lift of about 3 to 5 points in card fulfillment this year. Second, we've been gaining a significant number of new accounts. I'm not sure if other companies in this space have become complacent, but we've secured around 5 or 6 new accounts this year, with at least 4 or 5 more expected to come online next year. This has led to a substantial increase in our new business over the past couple of years. Lastly, we've developed additional services for our clients, such as assisting them in selling gift cards and managing their websites. We earn money not only by handling their gift cards but also by aiding in the sales process. Additionally, we've created a system to integrate these proprietary gift cards into digital wallets, making them more visible to consumers. As a result, we're generating more revenue from our clients by offering these extra services. Combining all these factors, it's clear that our business is thriving, and I'm quite confident that we'll see double-digit growth again by 2026.

I guess just to clarify, that 3- to 5-point uplift you mentioned above normal card fulfillment, is that a pull forward from '26? Or is there a change in inventories? Or am I thinking about that the wrong way?

No, I would say it's the incremental 2025 growth. Like if they hadn't had this thing, I'd say the full year '25 gift card might be 2, 3 points lower than what we'll print. I don't think it will have much different impact. We know everything about the legislation and stuff. So we built that into the guide already for '26. It's mostly these two new things that are creating the lift to get the thing in the double digits.

We will move next with Mihir Bhatia with Bank of America.

Let me highlight the positive results here. I want to revisit the discussion about the monetization rate in the Corporate Payments segment. I'm trying to understand if there was anything unusual in the third quarter regarding large transactions or onboarding enterprise accounts. Specifically, should we anticipate the monetization rate to recover in the fourth quarter? Or have you achieved something that allows you to handle more volume since you've signed some significant enterprise accounts, making it more about volume rather than monetization?

Yes. I would say don't read that as abnormal. We probably will do a bit more of this. The reason we want to break it out is to make sure people are clear that when you take away these super large accounts and these super large transactions that the normal book of business is still pricing basically in the same kind of range. And I'd say the same thing on the domestic payables business. If anything, that thing may inch up again next year as we offer some incremental ways. We've increased kind of pay for ACH via an acquisition, and we're introducing a debit card as a way to get paid versus just a virtual card. So I would say that, if anything, the monetization rates and these big one-time things will probably inch up a bit in '26.

Got it. That is helpful. And then maybe just thinking about '26 broadly, you've laid out some pretty interesting upside or optionality in corporate payments, whether it's from the Mastercard or just selling more. And then similarly on U.S. vehicle payments, you were talking about the turnaround being there and being the sales increasing. Lodging, it sounds like it's stabilized and likely heading better. So I guess I'm asking, where is the risk? And could that 9% to 11% growth actually look closer to 11% to 13% or something like that?

I think that's a super great follow-up. I guess the headline, the first comment is we just have a better business today. Like I just don't want people on the call to miss that sitting here in whatever November, like the business is just better. The two biggest businesses are growing and working and stuff. And so that would be the #1 thing. Across the areas, I'd say, again, the thing that probably has a chance to be better that would cause our number to get better if we got there would be in the corporate payment space. A bunch of these things that you called out like the Mastercard thing are new. We haven't actually booked a single sale yet, although we have a good pipeline. So I'd say the goal of this call, since we're still early days is to not get over our skis to kind of give you guys a number of what we're seeing, what the business is running at and provide some assurance we think we can get that number and then come back in 90 days when we finish our work and be a bit more precise. But I think the main thing is we've gotten to the second half acceleration that we said we would despite the skeptics, and we like that. And we just don't want people to miss that the step-off, when we give you 570 and 590, you're good at math, that's higher than 21. So I say it all the time in recurring businesses, if your exit rate is a lot better than your entry rate, you already have part of the next year baked. It's really in your exit rate. So yes, I'd say our confidence of the business performance is pretty good.

Our next question comes from Rayna Kumar with Oppenheimer.

This is Abigail on for Rayna. So just a quick question about corporate payments kind of going off of the team for tonight. So the accounts payables represent a major TAM for corporate payments, particularly with the investment in Avid. Could you talk a little bit more about the progress you're making in convincing companies to switch from older accounts payable methods like such as paper checks, et cetera? And then what are some of your biggest roadblocks that the sales force is facing to unlock more of this TAM? And then how do you guys like convince the companies to make that switch?

Abigail, it's Ron. That's a pretty good question. I guess this offering of going to a midsized company that's got a lot of ADP, it's literally a proposal that's too good to be true. You show up, knock, knock, meet the CFO, the head of ADP, and you tell them, hey, look, I can digitize and derisk paying your AP and give you money back. So when you finish saying that, I think people look at you and like, what do you mean? Well, like, what do we mean? We can take over all the invoicing you have. We've got way more scale to do it. We've got ways to derisk the electronic transfer of things, and because we can monetize some of them, we can actually give you money back. So the pitch is super compelling. It's the inertia, I'd say, of getting in. So the close rate, the win rate is super high. If you can meet the CFO and the Head of ADP and tell them that we've got thousands of clients that we do this for, and it's pretty easy and you get money back and you transfer risk to us, it's a really super compelling pitch. The question is, can you get the meetings? Can you get people to make time to listen to it? That would be the question mark. And I think the more common, I worked at ADP before starting this company and everybody knows about payroll outsourcing, and I think less people know about AP automation and workflow and payment AP outsourcing. So I think as the category and the referenceability keeps getting wider that it will get easier. The world will be clear that this is a logical thing to do with non-payroll expense, right, which is almost half of a business' expense, right, payroll half and then this. So that's the bet that we have that as the clock keeps turning, more and more companies will become aware of the service.

We will move next with James Faucette with Morgan Stanley.

Ron, I want to follow up on questions around the stablecoins. I really appreciate all the work you guys are doing to build an infrastructure there. You made interesting comments about where you may see some utility. Just wondering if you can give more specific examples. I think you mentioned you thought maybe there'd be some interest in things like after hours or weekend type transfers, et cetera. But have you seen any specific cases where, hey, that makes a lot of sense or at least you could imagine the kinds of transactions that you may be looking at?

Yes, James, it's a good question. I'd say it's pretty quiet. I'd say that most of the activity is with the crypto digital assets guys themselves, right, that people like us going to Circle and Ripple to get some capabilities and then them suggesting that they could be clients of ours. I'd say that's what's real today. We're actually getting paid doing work here in November. So on the other ones, I'd say, in terms of our flows and our deposits, I think there's not a lot of people standing up and shouting. I think as we make them more aware of what this after-hours utility case is, then we'll see would be my comment back. But I wouldn't say, again, among the major countries and major markets, which is where our flows are that we are hearing tons of people jumping up and down on it yet. But we're not waiting. We're just going to put the stuff in place and tell people about it and see if they find utility there.

Got it. Following up on that one point, you mentioned the G20 and the lack of activity there. Can you discuss why that might be or what could change that situation? I have heard from others that this may become more significant for emerging market currencies. I would like to know your perspective on whether this is a permanent issue or if it requires time and development to evolve.

Yes, I believe that the current business environment is driving our growth, particularly in emerging markets where there's significant volume potential. Besides that, much of the volume is also related to cryptocurrencies like Bitcoin and our role in helping users convert these into USD for investors. The use of stablecoins among major businesses is still in its early stages as they explore beneficial use cases. The traditional financial system isn't failing; it continues to facilitate the movement of hundreds of billions of dollars effectively. In my conversations, people often don't fully grasp the concept of stablecoins. There seems to be more discussion around it than actual usage. I suggest giving it some time, and we will inform our clients and deposit holders about it, then evaluate their interest. The key takeaway is that we are preparing to engage our clients and stakeholders and will follow up on whether they are inclined to transact or not.

Our next question comes from Trevor Williams with Jefferies.

I wanted to ask another on '26. So within the 9% to 11% organic growth, Ron, it sounded like not much different than what we're seeing this year or at least in the second half. For Corporate Payments, can you be more specific on what you're assuming for the fully loaded growth rate there? And within that, how you're thinking about the puts and takes between float and then the revenue synergies from Alpha, if we can think about those two potentially netting each other out in fiscal '26?

Yes, Trevor, I think it's still early in the process, which is why we're providing a broad range since we are possibly halfway through the Alpha 2026 plan. I'll be going with our team next week to continue developing this and determining how aggressively we will pursue the synergies. We did talk about the Mastercard initiative, right? In about 90 days, as those appointments take shape and the pipeline develops, we should get a clearer view on the conversion. So, I would say we're intentionally keeping our expectations somewhat broad. We want to see how the interest rate trends play out and what happens with employment numbers in the next 90 days. We are confident that this segment will grow, and it will depend on our investments. If we generate more revenue from some of our AI initiatives, we might increase our sales and marketing spending. So, I just ask for your patience, and we'll provide more details on those key areas when we speak next time.

Okay. It seems there was some conservatism in the initial $0.50 projection when the deal was announced. Regarding the total $0.75 with Avid, could you provide more specifics on the clear early synergies from Alpha? Additionally, what do you feel confident about realizing in the future that might not be reflected in the initial numbers? That would be helpful.

Yes. I would say we've provided an early estimate, and we are very confident that we can achieve at least that figure. There are a couple of key points to consider. First, in the case of Alpha, we have both revenue and cost synergies. In other businesses, we've seen more on the cost side. Second, I believe that half or more of the synergies will be relatively easy to achieve. For instance, we have contracts that allow us to secure better rates on holding deposits compared to them, and they have accounts using their products in regions where they lack licensing but we do. Additionally, their public company cost structure will be eliminated. So, I would say that half or more of the initial synergies are readily available for us, which supports our ability to pay the price. The next 90 days will be focused on maximizing the other half of those synergies, and by the time we speak again, we should have further clarity on that. Overall, it will be quite beneficial.

Our next question comes from Dave Koning with Baird.

Good job. Capital return question, really getting back to the last question. Is the $0.75, is that fully self-funding, meaning the profits are fully covering the interest expense of what you're borrowing and you can use all your cash flow to do capital return over the next year. Just want to make sure I understand how the accretion was looked at.

Yes. Dave, the answer is yes.

Good. And then just a quick follow-up, please go ahead.

I think it's a fair way to think about it.

And we will move next with Ken Suchoski with Autonomous Research.

Maybe just on U.S. Vehicle, the acceleration there. I think you called out higher approval rates as one of the drivers. Can you just comment on what you're seeing in terms of new acquisition and where that's coming from? It sounds like you're comfortable with the credit trends that you're seeing if you're approving more customers there.

Yes, Ken, it's Ron. The growth of that business really begins with a complete transformation in our retention and same-store sales strategies, which makes it significantly easier to expand. On the sales front, we have secured a number of large deals that contributed to the acceleration in the second half, and there are more opportunities in the pipeline. The shift we made from the micro digital sector has led to improved credit quality. As we've adjusted our models and analyzed our losses and receivables, we've been able to approve larger amounts. Consequently, what we're selling is contributing more to our revenue. Additionally, we have initiatives aimed at enhancing merchant rates, including our big proprietary networks like cardlock. Our technology now allows us to redirect some volume from lower interchange rails to higher ones, resulting in better merchant rate enhancements. Overall, we have many factors working in our favor. The foundation is stronger, we've made significant sales, the credit approval rate for new accounts is better, and we're shifting volume to higher interchange options. There are several elements contributing to our success, and we believe this momentum is sustainable into next year.

And then maybe just sorry, go ahead.

You're breaking up a little.

Sorry about that. Just on the margins for next year, I mean, lots of moving parts with acquisitions and efficiencies. Just how are you thinking about margins? I think I saw the comment on expecting incremental margin expansion from some initiatives.

Yes. As we mentioned, we've got some AI initiatives that are paying off well, some vendor rationalization initiatives, et cetera. So we do think there'll be incremental margin improvement next year, and we'll give more details on that when we get together in 90 days.

Ken, it's Ron. I believe this relates to our decisions on spending, particularly in sales and marketing. A significant aspect of our growth planning involves how much we choose to invest in these areas. To echo Peter's point, one of the crucial decisions we need to make is regarding the level of profitability we aim for in 2026. We also need to consider whether we can strategically invest a bit more in some businesses to drive growth in the following year. This is another decision we will be evaluating. I just want to be cautious about overextending ourselves. We may opt to invest some of that if we believe it will yield a strong return.

This does conclude our Q&A session as well as the Corpay Third Quarter 2025 Earnings Conference Call. Thank you for your participation, and you may disconnect at any time.