Fleetcor Technologies Inc
NYSE:CPAY
| US |
|
Fubotv Inc
NYSE:FUBO
|
Media
|
| US |
|
Bank of America Corp
NYSE:BAC
|
Banking
|
| US |
|
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
| US |
C
|
C3.ai Inc
NYSE:AI
|
Technology
|
| US |
|
Uber Technologies Inc
NYSE:UBER
|
Road & Rail
|
| CN |
|
NIO Inc
NYSE:NIO
|
Automobiles
|
| US |
|
Fluor Corp
NYSE:FLR
|
Construction
|
| US |
|
Jacobs Engineering Group Inc
NYSE:J
|
Professional Services
|
| US |
|
TopBuild Corp
NYSE:BLD
|
Consumer products
|
| US |
|
Abbott Laboratories
NYSE:ABT
|
Health Care
|
| US |
|
Chevron Corp
NYSE:CVX
|
Energy
|
| US |
|
Occidental Petroleum Corp
NYSE:OXY
|
Energy
|
| US |
|
Matrix Service Co
NASDAQ:MTRX
|
Construction
|
| US |
|
Automatic Data Processing Inc
NASDAQ:ADP
|
Technology
|
| US |
|
Qualcomm Inc
NASDAQ:QCOM
|
Semiconductors
|
| US |
|
Ambarella Inc
NASDAQ:AMBA
|
Semiconductors
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
231.66
378.29
|
| Price Target |
|
We'll email you a reminder when the closing price reaches USD.
Choose the stock you wish to monitor with a price alert.
|
|
Fubotv Inc
NYSE:FUBO
|
US |
|
|
Bank of America Corp
NYSE:BAC
|
US |
|
|
Palantir Technologies Inc
NYSE:PLTR
|
US |
|
C
|
C3.ai Inc
NYSE:AI
|
US |
|
|
Uber Technologies Inc
NYSE:UBER
|
US |
|
|
NIO Inc
NYSE:NIO
|
CN |
|
|
Fluor Corp
NYSE:FLR
|
US |
|
|
Jacobs Engineering Group Inc
NYSE:J
|
US |
|
|
TopBuild Corp
NYSE:BLD
|
US |
|
|
Abbott Laboratories
NYSE:ABT
|
US |
|
|
Chevron Corp
NYSE:CVX
|
US |
|
|
Occidental Petroleum Corp
NYSE:OXY
|
US |
|
|
Matrix Service Co
NASDAQ:MTRX
|
US |
|
|
Automatic Data Processing Inc
NASDAQ:ADP
|
US |
|
|
Qualcomm Inc
NASDAQ:QCOM
|
US |
|
|
Ambarella Inc
NASDAQ:AMBA
|
US |
This alert will be permanently deleted.
You don't have any saved screeners yet
Greetings. Welcome to the FLEETCOR Technologies, and Third Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions]. Please note that this conference is being recorded. I will now turn the conference over to your host, Jim Eglseder, Head of Investor Relations. You may begin.
Good afternoon, everyone. And thank you for joining us today for our Third Quarter 2021 earnings call. With me today are Ron Clarke, our Chairman and CEO, and Charles Freund, our CFO. Following the prepared comments, the Operator will announce 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 presenting non-GAAP financial information, including adjusted revenues, adjusted net income, and adjusted net income per diluted share. This information is not calculated in accordance with GAAP, and may be calculated differently than non-GAAP information at other companies.
Reconciliation of historical non-GAAP financial information to the most directly comparable GAAP information appears in today's press release. And on our website as previously described. I do need to remind everyone that part of our discussion today may include forward-looking statements. These statements reflect the best information we have as of today.
All statements about our recovery, outlook, new products and acquisitions, and expectations regarding business development of future acquisitions are based on that information. They are not guarantees of future performance and you should not put undue reliance upon them. We do not undertake any obligation to update any of these statements.
These expected results are subject to numerous uncertainties and risk’s which could cause actual results to differ materially from what we expect. Some of those risks are mentioned in today's press release and on Form 8-K and on our Annual Report and Form 10-K filed with the Securities and Exchange Commission. These documents are available on our website and at sec.gov 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 thanks for joining our Q3 Earnings Call. So upfront here, I'd like to run through 4 subjects. First, give you my take on our Q3 results along with the rest of your outlook. Second, take you into a bit deeper dive into our sales results. Third, give you an update on the 3 acquisitions that we've completed year-to-date. And then lastly, an early preview of 2022 and beyond.
Let me make the turn to our Q3 results. We reported Q3 revenue of $755 million up 29% in cash EPS of 352 up 25%. So both of those all-time record highs for the Company. Also, the Q3 results annualize finally above 3 billion, so past the $3 billion mark in revenue and $14 in cash EPS. Organic revenue for the quarter up 17% and inside of that corporate payments, business grew 22% organically.
The trends in Q3 are quite good, sales finishing at record levels, up over 50% versus Q3 last year, and over 30% against the baseline of Q3 '19. Retention steady as she goes at 93% for the quarter. And again, our global fuel card business inside of that, also come in at 93%. Same-store sales strengthened plus 5% for the quarter, which further adds to the same-store sales rebound we saw in Q2.
Credit loss is low again, at 3 basis points, continuing to run below historic levels. You may notice our tax rate 4 points higher than last year. That did shave about $0.20 off the 352 that we reported for the quarter. So look, overall pretty pleased with the quarter. In terms of rest-of-year, we're raising guidance today.
Revenue guidance at the midpoint now, $2,795,000,000, that's up $30 million from August. Cash EPS at the midpoint to 1305, that's up $0.15 from August. This raise versus last time reflects obviously these Q3 results are beat, the ALE acquisition, which closed September 1 and a bit more favorable fuel prices, all of those offset just a bit by slower than planned COVID recovery.
If you look at the Q4 on its own, it anticipates revenue and profit growth up about 20% versus Q4 last year, and about 10% against Q4 2019. All right. Let me make the transition into a bit deeper dive into our sales results. As I mentioned, new sales or bookings reached record levels in the quarter and are up sequentially, significantly, and up dramatically over the prior periods.
As I'm sure you're aware, sales reflect the market demand for our solutions, but are also really the best leading indicator of our future prospects. And so crazy, record this quarter we signed up almost 50,000 do business clients globally in Q3. So 50,000 new accounts joined the fold. So a record. Over 50% of all of our global fuel card sales now come to us through our digital channels. So great because it's very low cost.
We continue to increase our digital advertising spends and we're enjoying record levels of prospects visiting our websites. Interest in EV Solutions increasing. So a number of large accounts signing on to our EV Solution. That included Hertz, Volkswagen USA, Union Pacific, Lease Plan Europe, and Siemens. Brazil toll sales rocked the quarter.
Our urban sales, or the city dwellers that are lower-frequency toll users, represented 23% of all new sales in the quarter. The programs, whatever, 2 or 3 years old now, almost a quarter. And the active tags for the quarter reached a new milestone, 6 million, so 6 million active paying tags now in Brazil, we are planning to launch our new bank, JV this month with the largest bank in Brazil, who will be helping to promote our products.
We don't talk about it much, but our customer acquisition cost is really quite attractive; runs about 65% of the sales new revenue, so really super important for profitable growth. Let me shift gears and talk a little bit about the 3 acquisitions that we've closed year-to-date and how they're doing.
Roger first up, we've now re-branded Roger to be Corpay One, which is our entry into the corporate payments SMB space. We're under way now adding new SMB bill pay clients through digital channels and accounting channels, and have some early returns on cross-selling bill pay into our fuel card base.
Super early, but it looks like about 10% of our fuel card clients that pay their bills with our new Corpay One platform, are choosing to pay a second non-fleetcor bill with us, so effectively becoming bill pay customers. We're looking at somewhere around 10,000 to 20,000 SMB bill pay clients coming online in 2022.
And also interesting, we plan to launch what we call our 2-in-1 solution before year-end that will combine our smart business cards with our Bill Pay platform into one interface. So an SMB client could potentially pay all of their non-payroll expenses with us on a single platform. Second deal this year, AFEX which is a cross border provider.
Very similar to our Cambridge business. Super performance in '21. Proforma revenue growing mid-teens, EBITDA up almost 50% versus prior year. Well along on integration, we've already combined the management teams into 1 group, and are about halfway through migrating the AFEX customers onto the Cambridge IT platform. Hope to retire most of the AFEX IT system by year-end. Last deal up is ALE.
That's the lodging extension for the insurance vertical. It helps homeowner insurance place policyholders into hotels and temporary housing. We closed that September 1, about 3.5 million incremental annual hotel rooms will be added to our lodging business. Underway with the synergy work and early view is about $0.20 accretive to 2022. So far so good across all 3 transactions this year.
All right. Lastly, let me share our view -- early view of 2022, and speak a little bit to the beyond '22 prospects for the Company. For next year, encouraged by a few things. First, the run rate. We're exiting '21 with about $3 billion of annualized revenue and $14 of cash EPS, so nose of the plane is up. Sales again running at record levels, which will drive incremental revenue into '22.
We also expect sales to grow again next year about 20%. Macros on our side, helping us, obviously, fuel prices are high. FX is generally holding, so setting up well there. And then I mentioned the acquisitions, particularly AFEX and ALE together contributing probably about $0.50 of incremental accretion next year. So look, taken together, the early 2022 setup is quite good.
If we look just a little farther out into the midterm, we're also encouraged there for a couple of reasons. First, we've expanded via our Beyond strategy. The market segments -- or the served market segments in each of our 5 major lines of business. That's laid out on, I think, Page 14 of the earnings supplement. For example, in Corpay, our corporate payments business, we've added cloud-based AP solutions to our original virtual card business.
We did that a couple of years ago in the middle market with Nvoicepay, and then obviously, this year in the SMB market with Roger. So look, much better positioned now to attack the corporate payments term. And then again, if you look, our lodging business initially focused only on workforce or blue collar travelers going to economy hotel. Since we've added two new segments, the airline crew business and now the insurance policyholder business to the fold.
That really triples the opportunity in terms of room nights for the lodging business. A second thing is we're on a path, as I mentioned, to combine our card business with our payables business into a single platform, which we do two things: first, give us differentiation in the marketplace, where we can help clients pay all their non-payroll expenses with us; both walk-around purchases and supplier payables from a single account.
And second, could help us turn our fuel card business into a corporate payments business by cross-selling our Bill Pay services to our hundreds of thousands of fuel card clients. So as I mentioned, underway there. The combination of expanding our served market segments in our existing 5 businesses, along with this idea of joining up our cards and bill pay onto a single platform is encouraging for us.
In closing, a few final wrap up thoughts: again, a really good quarter record revenue and profits for Q3. Good trend, same-store sales up, new sales up, and retention steady. Again, record sales and very attractive cost of acquisition of new accounts. 3 acquisitions on track against our thesis, and our early '22 setup attractive. All-in-all, it feels like we're in a pretty good place. With that, let me turn the call back over to Chuck to provide some additional details on the quarter. Chuck.
Thanks, Ron. I'm delighted to share with you some more color on a very solid, clean quarter. For Q3 of 2021, we reported revenue of $755 million up 29%, GAAP net income of $234 million up 24%, and GAAP net income per diluted share of $2.80 up 28%. Adjusted net income for the quarter or ANI increased 22% to $294 million or roughly $1.2 billion annualized. ANI per diluted share increased 25% to $3.52.
Organic revenue growth was 17%, driven by continued strong sales, solid retention levels, and same-store sales recovery. Looking at organic growth across product categories, corporate payments was up 22% in the third quarter, highlighted by full AP, which grew over 50% again this quarter. Corpay One, our small business-focused full AP offering, grew 78%. So our full AP solutions continue to sell well in the market.
Cross-border revenue was up 19%, which showed some softness from the lockdowns down under in Australia. We do believe much of this softness is recoverable, but the timing is hard to predict. The AFEX integration is progressing quite well. We've converted more than half of its customers onto our existing cross-border payment systems. We expect to convert the remaining customers before year-end.
I'd like to thank our cross-border team as they've worked tirelessly to complete these customer migrations seamlessly while simultaneously operating a growing, thriving business. And within B2B, a lot of attention has been paid to new small entrants. Several of which we enable with our partner program using our best-in-class virtual card. The partners we enable own the customer relationship due to the marketing and take the credit risk.
So they keep most of the economics we’re more of a processor to them. Our take rate is meaningfully lower than when we go direct to customers, which is really where we tend to focus most of our sales and marketing efforts. While these partners drive some volume growth, they still only represent about 13% of our corporate payments revenue.
Fuel was up organically 13% year-over-year, with strong retention trends and record digital sales continuing to drive the performance. We're seeing some softness in same-store sales as Australia, New Zealand, and parts of Continental Europe, are still grappling with COVID -related lock-downs and over-the-road trucking is facing the driver supply shortage that's been all over the news.
But despite these headwinds, our fuel businesses continued to grow in every geography as a result of our sales efforts and strong retention rates. Tolls was up 14% compared with last year and showed impressive performance again this quarter, growing to above 6 million total tag holders, with 5 million consumer tags and 1 million business tags. Now, just for context, the business had approximately 4.5 million total tag holders when we acquired it back in 2016.
Economic and business activity has returned to relatively normal levels in Brazil, which has increased customer mobility and sales traffic through retail and toll locations, helping us to achieve record Q3 sales. Lodging was particularly strong, up 40%, with airline lodging up 61% on the back of the recovery in domestic air travel. We hope to see more recovery in international airline lodging as borders reopen.
Gift organic growth was 25% year-over-year, benefiting from continued retailer embrace of the online sales channel. Looking further down the income statement, operating expenses were up 30% to $417 million and with 55% of revenue stable with last year. The increase was primarily due to higher levels of business activity, the effective currency translation impact on international expenses, and acquisitions.
Interest expense decreased 7% to $29 million primarily due to higher interest income earned on cash balances and lower labor rates, more than offsetting higher debt and securitization balances. As Ron mentioned, our effective tax rate for the third quarter was higher than expected, coming in at 24.1%.
This was due to fewer stock option exercises during the quarter, likely due to the low share price, which resulted in minimal excess tax benefits. We currently expect our tax rate in Q4 to be back within our full-year guidance range. Now, turning to the Balance Sheet. We ended the quarter with $1.3 billion of unrestricted cash. And we also had approximately $650 million of undrawn availability on our revolver.
In total, we had $4.6 billion outstanding on our credit facilities and $1.1 billion borrowed on our securitization facility. As of September 30th, our leverage ratio was 2.76 times, trailing 12-month adjusted EBITDA as calculated in accordance with our credit agreement. We used $406 million to repurchase approximately 1.6 million shares during the quarter at an average price of $260 per share.
We still have $1.18 billion of share buyback capacity in our program. So far this year, we've bought back 3.1 million shares and we've closed 3 deals, putting $1.7 billion of capital to work. On top of that, we still have low leverage and ample liquidity for additional deals and buybacks, clearly demonstrating the earnings power and attractiveness of our high margin, high cash flow business.
Looking ahead, I would note that you can see our full updated guidance and assumptions in both our press release and supplement. But before we open it up for questions, I would like to inform you that at the most recent Board meeting, FLEETCOR adopted the Rooney Rule for all future board positions.
I would also like to mention that we expect to publish our latest ESG reports to our Investor Relations website within the next few weeks. And we'd be happy to take your feedback on our ESG efforts after you've had a chance to review that report. With that said Operator, we'll open it up for questions.
Thank you. At this time, we will be conducting a question-and-answer session. [Operator's instruction]. [Operator Instructions] We ask that you please limit to one question and a short follow-up. One moment, please while we poll for questions. Our first question comes from the line of Darrin Peeler with Wolfe Research. You may proceed with your question.
Thanks guys. It's great to see the macro recovery and you guy’s benefiting there, as well as the initiatives you've made, especially on the Corpay side. And I just want to hone in on that segment for a minute, given all the acquisitions and the re-branding and the efforts on sales focused on software now, so can you just touch on that in terms of what the different assets are going to contribute?
Where you saw the opportunity for growth most profound in the next few quarters? And then, maybe just quickly, I saw in the quarter, we were hoping for a little more acceleration now, but, I think, some of this may be coming over time as the sales force re-navigates its focus. But, can you just touch on the current trends? I think it decelerated on a 2-year stack a little bit, but what it could be going forward. Thanks.
Hey, it's Ron here. We're pretty happy with it. I'd say the sales continue to remain quite good in the corporate pay segment, and of the 3 areas, our direct business where we go to end clients and our FX business cross-border business, super-good growth in Q3. I think one was the -- direct businesses was 30%. I think it's in the earnings supplement and the cross-border I think high teens, 19. All the while, we're digesting that AFEX acquisitions are pretty busy on that.
Right.
So I think those two pieces are basically 90% of the business. And so they're growing good, the sales are good. To your point, if we get any COVID recovery, there's still some fair amount to get back next year. We're -- I think we're bullish. I think our early view again is high teens for that segment for '22.
Okay. That's really helpful. And just Ron, this is -- should we think about it being much more of a software-focused approach going forward in terms of sales versus more pure-play virtual card, I guess, more rolled on -- rolling together all the assets?
Yes, that's a great question. Yes. We started -- I think, a couple of years ago, we bought the full AP software front end and plugged it into our back-end execution stuff. And so we moved the mix, Darrin, dramatically, here in 2021, so we're selling, I think, almost 2 [Indiscernible] what we call full AP when we take 100% of the client's payables versus virtual card. But obviously the great news is, it's still all virtual card.
When we sell that full AP underneath that basically, it's the same engine to your point, the same merchant database, the same ability to earn interchange if you will on that portion so it sells better we think, it has more value to the client. We generally retain more of the economics there, and yet we still have a bunch of virtual cards. You'll see more of that. I think will probably move you in more of the business as you roll forward that way.
Got it. [Indiscernible] Thanks, guys.
Our next question comes from the line of Andrew Jeffrey with Truist. You may proceed with your question.
Hi. Good afternoon. Appreciate you taking the time. Ron, the commentary on the digital go-to-market, I think, is particularly intriguing. Can you talk a little bit about what the LTV to CAC looks like in your fuel business? I think you said 50% of sales are going through digital channels. And how we might expect that to inform your consolidated profitability over time?
Yes, I think the call-out, Andrew, was for our whole global -- our entire sales for Q3, we run around 65% --
Oh, okay.
Okay, so some businesses are better than that, obviously, some are worse. The same with channels. So I was referencing that the digital channel which is growing at 2%, is lower than that 65% line average. So the good news is as the mix of our total sales moves more and more to digital that should improve, basically, our cost of acquisition. And honestly, we're delighted that more and more of the business are moving there.
And then second thing I'd say about that is, things that are less dependent on people, right, hiring, training, and retaining lots of people, slows Company's ability right to staff and grow that way. On the digital side, we're getting pretty good at increasing digital advertising spend now and seeing the payback in terms of visitors and flow-through to conversions.
So those something we think we can step on a bit faster and get returns faster. So I'd say this whole shift basically to digital sets up super - well. As it relates to the corporate pay economics long-term, I think you're right. I think the big, big idea we have is we've got this giant fuel card client base, I don't know, 500,000 I think or more active clients, and they generally are small.
We get a couple of thousand in revenues. We don't get a lot from them. So the idea of being able to go to that group and cross-sell them something else that has the same or more value, obviously, could accelerate revenue growth, but to your point, it's a way lower cost of acquisition than prospecting for new business, right?
Going back to all the UIs and all the ways that we talk to our existing clients. So now when I say it's super early, we just started, but that would have an opportunity, one to make our fuel card business in the synergy. The assets of 20 years of building that payout and then second drive again, the cost of acquisition down, and that cross-sell component becomes big.
Andrew, I'd just like to clarify -- this is Charles. I'd just like to clarify Ron's comment regarding 65% in terms of an acquisition cost. We define that as what we call NSE or net sales expense. It's basically cost of acquisition divided by the annual revenue from that client for prospect. If someone's going to generate $1,000 on revenue for me annually and it cost me $650 to acquire that account, that's the 65% metric that we use internally.
Okay. And how does that compare to the traditional sales channels?
I'm going to say that we've been fairly stable through time. Some of it does shift as you have more field based selling. But in the main, we've been around 50%, 60%, for years.
Yeah, Andrew, I [Indiscernible] laid on it because lots of other people spend lots of money. They generate some sales, but you can't ever make a return, right? So if you sold 100 million and spend 65, your under water the first year, but then you've got, call it 90 million, of the 100 you sold the second year with 80% flow-through, you got 80 billion flowing through for 8 more years with no sales expense.
That's -- the key to profitability in our business is basically, this acquisition costs and the retention rate. We call it out because that's how the business actually makes money.
Right. Okay. Very helpful. I think that's an important metric. Thanks, I'll get back in the queue.
Our next question comes from the line of Pete Christiansen with Citi. You may proceed with your question.
Thank you. Good evening guys. Just wanted to dig a little bit into the lodging business this quarter. I know it was a bunch of natural disasters in the last couple of months. Wildfires, iLab (ph), so on and so forth. Just wondering to what degree that was -- that contribution factor to some out-sized growth the lodging.
How should we think about the ALE business during periods of natural disasters? How does that business from a revenue perspective, how should we think about it ranging in these types of periods? Thank you.
Hey, Pete, thanks for the question, it's Ron. On the first part of the question, how did bad weather and stuff help the lodging business in Q3? Some is the answer. We pick up some decent amount of incremental volume when that happens, almost unexpected volume, but the rate on that's super-duper low. We're signed up with contracts with people like FEMA and stuff.
And so lots of volume and a little bit of revenue contribution. On the ALE side, I'd say, it helps again, a little bit. The diligence that we did on that business is surprisingly over incredibly long cycle, I don't know 90% plus, I guess, over the 5 or 10 years we looked at, is not hurricane or natural disaster related. It's, your pipe breaks, and your house floods. And you let the candle on in the bathroom and the house burned down.
What we think of is way more common, everyday, which is why we went ahead with the business. It's way more ratable. You take all the hundreds of millions of homes or apartments. Stuff goes wrong with them that displace people, and that business, obviously, the insurance, so the statistics on it are pretty good. I'd say for both businesses, it helps really just at the margin.
That's helpful. And then, your comments on the fuel card business, seeing a little bit of incremental softness, which is understandable with what's going on abroad in some areas. But I was wondering if you characterized the competitive market, perhaps for larger fleet type deals, and how that's evolving as we come out of COVID? Are you seeing competition intensify or are there big opportunities ahead, do you think? Wondering if you could put a frame on that? Thank you
I'd say probably, if anything, it's lessened during COVID. I think, we called out for at least a few quarters now, the overall fuel card retention rate, which is up. I think it's up. I don't have it in front of me, but it's certainly up dramatically in the last couple of years versus where it was a couple of years ago, and I think I called out that it remained at 93% for the quarter.
And so I would say the COVID basically, people shifted to other priorities and doing RFP s for fuel cards probably wasn't the top one. The other thing I'd say because I think it's misunderstood is, the real competition for us, we study wind, winds and losses in fuel cards.
So where do we get the 35,000 new accounts that came on board this quarter and where the 10,000 that we lost? And the answer is not our friends WEX, it's basically business cards and other forms of payment, mostly business cards, for example. So that's -- so the real competition for us globally in the fuel card business is really other means of payment.
That's great. Thanks.
You're welcome.
Our next question comes from the line of Ramsey El - Assal with Barclays. You may proceed with your question.
Hi, gentlemen. Thank you for taking my question tonight. I wanted to ask about the new sales bookings growth, which was an impressive number. Was this the result of any changes you've made and your approach in terms of the sales organization? And also, could you help us think through, or even remind us, of the algorithm by which those bookings will eventually convert to revenue and maybe something about timing or how that actually operates?
Yeah Ramsey. We agree. I tried to put a bit of a spotlight on it for the quarter because it's in record territory. There weren't 50,000 accounts till I started with the platform 20 years ago. To sign up 50,000 new businesses in a quarter is good. And then second, against the '19 baseline, I think I called out, our bookings dollars were up 30%. So forget the weak comp against the normal quarter a couple of years ago.
It's way up, so they headline is our Company's sales are way up. That's headline one. And partly is why they are way up? I think, it's the rotation we made into digital. Start, I don't know, 4 or 5 years ago, we did a bunch of things to get way better at digital marketing and selling, obviously.
Not the least of which is the whole tech stack that we build to be able to follow businesses and everywhere they crawl around and then what they do to advertising, figuring out where to spend and who to the target money against to get them to visit our sites to optimizing our sites, to get conversional rates and sales out the bottom end to applications going end-to-end where someone could go on our site and literally order the program and get cards in a couple of days and not have to talk to people.
The re-engineering I'd say of the whole digital machinery has been -- first of all it was an asset, but we're getting the returns of it now. It's obviously ramped way the heck up, and I think it's another huge step up in our early plans for '22. So I would say that's the main, main driver. And we're doing that everywhere.
We're just way smarter in how we target and how we study where prospects go, what they're looking at instead of trying to make up who we think might be interested in our products. On your second question on bookings, the answer to it is, let's say we said we've sold, picking up $100 million of new business in this quarter. To Chuck 's point, what that means is, as you roll forward and that all gets implemented, it's obviously an annualized amount of 100.
It wouldn't be 100 in this year like we saw it throughout the year, it'd be 50, for example, in that case. And so we have very different timings in our Brazil business. We sell and it's almost instamatic. In our fuel card business we sell and we get it pretty soon. In our corporate payments businesses, which are bigger accounts, it takes longer. We, basically, know our sales, if you will. Our new business for '22 because it's all sitting in our pipeline to be implemented.
The bookings number turns into an annualized revenue number, which is how we build our plan. And then, the timing, or what we call the in-year amount, varies across the various businesses we have. But the main thing I want to make sure people are clear, is it's working. I don't want to get lost in the details here, that the Company -- our Company is selling more of everything than it's ever sold before. Ever.
Great. Sounds like it's not a fluke, but by design. So that's encouraging. Ron, I wanted to ask you about your new compensation contract, which is structured in more of a pay-for-performance style. Can you talk about why you pivoted in that direction in terms of structuring your confidence? What gives you confidence about hitting those sort of future hurdle rates?
Yeah, that's an interesting question. I'd say, basically, that the first 10 years of the Company's life was in a PE form, where the alignment between investors and managers were super-clear. The value gets created, the proceeds get split versus this, kind of, hey, I just give you money for showing up and so -- it's in the DNA. I like it.
I like if the people that put capital in alongside of me get returns and I get returns, and if we don't, we don't. And obviously, there's more leverage in that. I've got off, as you know, a lot of money, and so getting some money with our current tax structure is not super interesting. So it's a motivating way to keep me at the grindstone for a couple of years here to try to get the thing to the -- to a place.
And how do I feel about the confidence other than the way people trade our stock? I feel good. We have models that come off of this sales and retention math that we run all the time through your models. And I see what the revenue and cash EPS looks like running through our machine. And if it's valued fairly, reasonably, it gets to those targets that are there. So I look at it and go if it is somewhere priced our earnings reasonably, I think we can make the targets and then I can get paid.
That's very helpful, Ron. Thanks so much.
Our next question comes from the line of Mihir Mehta, with Bank of America. You may proceed with your question.
Good afternoon, and thank you for taking my question. To start, I wanted to ask about the gift card business. Given all we're hearing about supply chain issues, could that be a tailwind? You're in 4Q, maybe a little bit of a unique opportunity there. Anything you're hearing? If you could talk about that?
Yeah, Mihir, it's Ron's again. Yeah, there are a bit on the card side and the retailers ordering cycle. I would say it looks like it's going to come in on our plan, but I was talking to our gift heads not long ago. But I'd say, the upside for us is probably, not so much that the card orders would go up, it is really we're finally the guy running it and we finally found a way to grow the business and how along you've followed our Company.
But I've been trying to sell the business since I bought it, and all of a sudden, the guys turned it into a business now that we think can compound a double digit. So the way they've done it is instead it just being an administrator or an account for the Macy's gift card and count $100 down, they help our clients now sell online. So they've moved over to helping sell online digital gift cards because they know a lot about it.
They've -- they're getting paid extra for wallet provisioning. Half the gift cards, there's breakage where people can't find them anymore. They're in a drawer. And so super technically hard to move private label cards in the wallet. But our guys came up with a way to do it. So we're getting paid money from a number of the brands to basically provision those electronically.
And then the guy came up with the idea of selling the content we have 300 or 400 pretty good brands were so we're taking a back to businesses because we're the B2B business, so they built a bit of a revenue and sales stream now, taking them for rewards to like companies like ours, for example, for employees.
So these two or three new ideas on top of the old chugging along low single-digit business has propped that thing up now to be north of 10%. I went through the guys plan a couple of weeks ago, so I think we finally have a set of ideas that are more sustainable to keep rolling that business now.
All right. Great. And then -- if I could ask about the -- just about Brazil. You mentioned things are getting back to normal there. You've obviously had very good momentum in selling more tags. Is there argument there that you might see a little bit of exponential step function growth in the revenues per tag? Because those are still meaningfully below where you were in 2019. You've obviously added a lot of capability, as where you can use those tags too.
Yeah, that must be -- you're looking at that the FX so we're way to heck up. The sales there in constant currency, and [Indiscernible] are way, way up. I don't have it in front of me versus '19, Chuck's going to pull it up, but vis -a - vis record levels, whatever we sold in Q3 would've been an all-time record number of sales. And what I said about the recovery is, Brazil was in a complete ditch COVID-wise in the spring and into the summer. And somehow has come out the other side. They're in a better place than we are here.
So what's that's done is, it's opened the stores there where we sell a lot, we have kiosks, and hundreds and hundreds of stores. Stores are open, people are walking, mobility is back, and so more people are running through the tolls where we also sell. So the places basically where we conducted just to try to make sales are kind of reactivated again, which is helping drive it.
And then second, I think we 've said before, we've come up with a number of super-new partner or channel ideas there. The newest one is we've got a couple of the big car manufacturers to put the tags now on the vehicles. So when you go in and get your new Volkswagen and drive it out of the dealership there, you look up and there's a sticker already there with a little POS thing that says call this number or go to this website.
We're getting 50% or some conversion on adoption of these new vehicles rolling out of the dealerships. So it's really -- I can't even tell you how good of a sales story that team has put together. But as you said, the big, big idea for us, and we poured a lot of capital into it, this year in '21, is to double or triple the fueling locations.
And the fueling transactions were up huge over a year ago now, as we take the 6 million vehicles that we had tags and give more places to use the tags. So that's the one that you said to me, where could the free money and real acceleration come? It could come from this massive group of people, basically just having more places to use the tag and the account that's already on their vehicle.
Right. And you get paid per transaction right? I thank you.
We get pay the MDR -- pretty attractive MDR on the fueling in that example, yes.
Perfect. Thank you.
Our next question comes from the line of Sanjay Sakhrani with KBW. You may proceed with your question.
Thanks. I wanted to talk about the partner-channel, corporate payments, Mr. Charles touched on. When we think about that 13%, 14%, is this a higher profitability contribution? Because your partners is sort of bearing the expense. And then as we think about how that percentage is going to migrate over time, do you expect that to go up or down, or are there -- how long are those partners committed to? Thanks.
Yes. It's Ron. Let me start with the second part. We probably have, I don't know, 15 significant kinds of partners in that corporate payments group, our top 3 or 4 most important, another 8 or 10. And the contracts, generally, would run anywhere from, probably, 3-5 years.
We just renewed, actually, a couple of them with some of our most important partners this year. In terms of what do I think, I'd say down, would be my answer. If you look at, I think, we put [Indiscernible] in the earnings supplement, I think it's Page 15.
Yeah.
Sanjay, [Indiscernible]
Yeah, you're right.
Take the 3 pieces of our corporate payments business: the partner thing that we're talking about, and then the direct business where we go to the end client, and then the cross-border business where we mostly go to the end client. You can see that those two are growing revenue much faster, and so the mix itself, if these ran the clock forward, would make the partner piece smaller, I think, going forward.
So obviously, there's lots of spend there and spend grows fast. But to your point, they do more of the work, so obviously, our rates are much, much lower there than in the direct business. So we like the business, but obviously 90% of our corporate payments business is in the directed cross-border.
I guess obviously the chatter out there is you have a lot of these Fintechs that are competing against you, and with you. I'm just curious, as we think about FLEETCOR 's competitive edge. I know, Ron, you talked about how you're putting the acquisitions together to deliver a powerful punch. But do you feel like there's -- the competitive intensity has increased in that market and you're -- or that you've widened your moat in that market? I'm just curious to just get a little more color on that because that's obviously been a hot topic of discussion.
I think it's a super good question. I think, obviously, there are more people trying to get into card processing, whether it's virtual or just traditional physical cards. I think, first off, that a lot of the players are getting into it, are more issue for issuing kinds of companies that are in that business. For FIs and for us, but yes, some of them are coming into our area. What I'd say back is, the fallacy is somehow that the game is tech and product.
That, oh, the XYZ's Fintech has some great thing, knock old fashioned FLEETCOR out of it. And so what I say is, what they're missing is, it's the merchant network. You can't monetize virtual cards if you don't have a virtual card merchant network that can process and capture those transactions you can process till the day goes on, but you have to have the network.
So we've had a 10-year head-start on everybody and cleansing, building, growing that network. And then the second one is the whole service dimension of a huge pay-for-you group, a massive group that helps the partners clean up the data and get the stock processed. So I think those would be the couple of components that people miss that this isn't just making a new processing engine in the garage and given it to AWS and it's all going to be great.
There are actual real assets that we have. The cars are partners to stay with us. I mean, there was a big thing, so I won't give it my outgoing here. Two of your clients, Bill.com and Avid abroad, another providers. We're doing great with them. We've renewed the contract for a number of years with one of them. We're getting more business than ever from another. We're obviously have a great relationship.
Some of those are targeted, like, the Marquette thing, as an example of targeted FI's, which we're not even and we're not in the processing business to help FI's. We thought they won't use their own processors and stuff. I think like everything else, it's someone searches for some narrative that isn't there.
We've got a good business, it's growing, it's funds grow like crazy, but because we make so much more money on the direct businesses, and they're growing fast, that mix will cause the partner thing to be a bit smaller.
But I think we're still -- I tell you, go call the partners. Don't ask me the supplier. Go ask our partners if they like the job we're doing. I look at the performance reports, I sit in performance reviews with the partners myself, personally, so from my vantage point, we're doing quite well.
Thank you.
Our next question comes from the line of Ken Suchoski with Autonomous. You may proceed with your question.
Hi, good evening everyone. Thanks for taking the question. I just wanted to dig into the fuel card business a little bit more. It looks like transactions came in weaker than we were expecting. And I think, you called out international and the driver shortage. But can you provide some detail there on where you're seeing that weakness on the transaction side and what's your expectation around the recovery?
Ken, hey, it's Ron. Yes, I'd say that there's good news and bad news. The good news is -- the bad news is that the transactions are a little weaker than we thought, the good news is they're not worth much. The two areas of weakness are in trucking again, and particularly large trucking both here and in Europe.
And you guys have read the press on this, that the large trucking firms just don't have drivers, and not only are there not drivers, they're quitting and forming and going into smaller firms now. So our big accounts are effectively just soft in terms of trucks and transactions, but they're happy because they're just raising their rates. And then, the second one, I would say is really Europe. There's a big corporate sales of white collar.
Book of business where people haven't gone back to work in Europe. I don't know if you guys know this, but in Europe, lots of people have Company cars. People like us have a car, we're used to drive around and get reimbursed. Those are the 2 areas that are weak. The good news is we don't get paid anything for those things.
We don't get paid very much. That's why our revenue growth is still pretty good. The local business for example, our partner business are super healthy and even a big part of our U.K. business, which I'm looking at, had strong same-store sales recovery. The areas where we get paid and we get revenue are actually pretty healthy.
Got it. That's really helpful. And maybe for my follow-up, I think on last quarter's call, you provided some preliminary thoughts on '22. I think, you talked about $14 in annualized EPS in the second half of this year. Yeah, some interest rate hedges rolling off, and then, the contribution from AFEX and ALE. Lots of moving parts, but maybe you can frame for us how you're thinking about 2022?
Yeah, that's -- it's a good question. The way -- I say this all the time, if you like businesses, you can plan. You should like our business, it's the nature of the model. And so what we do is, we -- which we're about halfway through, we build things off of run rates. So we're staring here at October volumes and revenues in all of our businesses.
And I think what I said is, hey, when you post 352 or 350, we multiply it and we go, okay, that sounds like 14, and we guide it to a number -- I don't have it in front of me to check this, 350 something for Q4, which is track stuff. So there's another one.
So hey, we start with, the Company is running earnings 14 box on an annualized basis now, then we sit there and say, okay, we had sales record level this year of which, call it 2/3 of that will be realized in 2022 so we can see what that number is. Then we have a bigger sales plan for 2022, probably 20% higher, and we look at what's in year there, I'm like, okay, that looks good.
And then we look at the deals that I mentioned that are on top of that, which I think I called out together, I called $0.50 would be my commitment on the stuff that we use capital for us. That's how we build the math. We take the run rate, we take this year and next year sales, we take added things like the accretion of [Indiscernible], and that helps us, basically target a number that we can get to. And we haven't planned a heck of a lot of COVID recovery.
Obviously, it's been the weirdest, obviously, 12 months this year. and so we've been pretty conservative so far and getting some of that back, we still have probably $100, $150 million that could literally come back a different day, potentially. And those are the components. And what I was trying to say -- and the other one is the macro, obviously, fuel prices are higher here in November than they were in January, and seem to be holding.
And so when you roll all that up, my messages are, it looks super early, but it looks like a really good number. And the reason I go through all that math is to get people, other than us who run the Company, some insight into how they ought to think about it. That things could happen, but that the Company is pretty well-positioned to put up an attractive growth number for next year.
Great. Thanks a lot, Ron. Appreciate it. Thank you.
Our next question comes from the line of David Togut with Evercore ISI. You may proceed with your question.
Thank you. In the corporate payments business, WEX reported a pretty substantial compression in revenue yields in the third quarter year-over-year. Can you comment on the revenue yield you're seeing in that business? And A. Is there any significant change and are there any call outs and verticals, i.e. travel versus non-travel?
Okay. David, it's Ron. Honestly, it's a good question, so I go back to the slide that [Indiscernible] would in our earnings supplement. I think it's page 15. So again, sitting inside our corporate payments business, I think we reported 22% organic growth and 50% of some trends for the quarter? The [Indiscernible]. Obviously that's the overall number, David.
But the pieces of that again, are the director or end client business, the cross border business, and then this channel partner business. For us, the good news is the 2 big pieces which are about 90% of looking at the thing are effectively flat.
Because we price it, there's really no rate erosion in that part of our business, and so all of the rate erosion is really just in the mix of partners, where we have tax cable rates and we have some partners that are growing like crazy. So, as their volumes go up they enjoy a bit better rates right in the base, than the base rates.
So, because we don't have the same kind of reliance, if you will, on the channel business I think we're a bit more insulated, if you will, from rate compression there. And I mentioned it earlier, I'd say the super-positive thing is our mix of that business is going to more full AP. And don't forget, we bought up SMB Company that has higher rates.
So as we roll in, the full AP, the Nvoicepay mix and this Corpay One mix, those have a way higher rate than the existing businesses. So my guess is just kicking out the channel business, I see actually rate expansion over the next couple of years, and that business mostly held for mix.
Understood. That's very clear. Just as a quick follow-up. You commented earlier about the difficulty of finding drivers in this environment. Could you quantify for us what this means for your fuel card business in terms of revenue growth in 2022?
Yeah. Again, I think the driver thing is a total trucking vertical issue, David. I don't think it's -- we don't see it -- obviously, it's significantly in the trades businesses, right? [Indiscernible], those people have to be trained and whatever they ask. We don't see the same kind of sides, if you will, of our existing customers and those kinds of businesses.
And so -- and again, we see it mostly in the large account trucking business, would be the other thing which we don't make any money in either. So I'd say that who knows? My guess is it's not a super - easy fix for suddenly large trucking people to get the people, although you see the pictures of the -- at the ports of the need for more trucking.
So my guess is there will be more incentives and pressure to try to get more people into the space over the next 6 to 12 months. But I'd say it doesn't do much to us. 1. Its limited only to that trucking vertical, 2. It's limited to the big firms which don't pay us much, and 3. Honestly, it's been our run rate, the softness has really been there for the last couple of quarters.
And so I don't see it getting any worse, mostly because of what I said, that I think there's going to be such a push to try to add people, I think the rates are going to keep going up to attract people. I'd say it's probably not a super duper impact on our forward thinking for the fuel card business.
Understood. Thank you very much.
Always good to talk to you.
Our next question comes from the line of George Mihalos with Cowen. You may proceed with your question.
Hey, guys, thanks for taking my questions and for squeezing me in here. Ron, you talked a lot about some of the, I guess, hiring and wage pressures that are impacting the fuel side of the business. I'm curious, as it relates to the corporate payments business, do you feel that's been impacted at all by any supply chain issues at your customers, or has that come up at all in your conversations with them?
Yeah. For sure. Again, George, I'd say it's pocketed. When we go look, we have bigger customers there. And some have come through this thing unscathed, and then others have had big problems. Yes, we have a select group of clients that are down and have stayed down. And, I think, the supply chain is a big part of it.
Okay. That's helpful. I'm just curious to the extent are you able to quantify that in any sort of capacity? Will give any sort of color around that? And then maybe separately for a follow-up, the minimal credit losses that you're continuing to see, is that just a harbinger of just cleaner credit now or, do you feel that there is an opportunity to loosen credit standards even from here? Just curious how you're thinking about that?
I'll take the first part. Yes, we are. One of the easiest things to quantify for us is to look at clients we have. Let's say clients 1 through 100, and look at their volumes in revenue at [Indiscernible] period. Let's say 2019 or Q3 of 2019. And then let's say we still have those 100 clients to go look at their volume and revenue with us in Q3 of this year. That's the stat we call same-store sales or the core client - base.
So, yes, we -- per corporate payments for every business, we turn that into a revenue number and say, okay, we're [Indiscernible], whatever $20 million with clients that used to give us $20 million more 2 quarters ago than they do now. And hey, we watch them to see whether some of that $20 million is coming back. We have super-clear visibility on the amount of it and the rate of recovery of it. Is that one clear?
Yes. Curious if you could ballpark what that impact would be, or if you're willing to ballpark what that impact would have been? How much faster the growth would've been in the segment?
Do you want to say, Chuck, anything about that?
Yeah, I think you -- we look at those pocketed groups. So in corporate payments, the top 75 and we have to look at it last month, that 75 most affected clients, their volume is still down about half of where it was back in January 2020. And so we looked at it just last month, so we continue to track it. But as Ron mentioned, it's highly pocketed and in certain categories that just haven't quite reopened yet.
It's about us just to give you a percentage it's about I'd say 3% this quarter versus our plans that we guesstimated those a 100 people would come back a certain way in Q3 from 2 years ago and they came part of the way back. They come back to where we thought they had 3 points more of growth in their thing. It's still a significant thing and we'd be hopeful maybe we get it back and be ready to get back a different day.
On your second question, the credit question, I'd say yes, yes, and yes. It's a super-good question. It's record lifetime lows of credit losses. First of all, because we didn't sell much new business obviously in 2020, so there wasn't a lot of new business coming on. And then between the stimulus and relief and everything else, people repaid us and stuff.
And so for sure, we've opened it up. I think Chuck said in the last call last time that we expect those losses to tick up, you see it a bit in the roll rates, as we've on boarded a lot more business this year. Our [Indiscernible] loses will be a bit higher, and we're actually, doing that juggling question now for 2022. Okay, how much do we -- how open do we want to be in credit, both with existing accounts in terms of credit lines.
Think of this, I've got 500,000 fuel card clients that have some credit line. And the credit line's enough to pay their fuel card bills. What if they tell me they want to pay all my bills -- all their bills with me? I say, okay, I let you pay some with our credit. Our opportunity to increase credit to credit worthy people for our new products is super high.
And I'd say, we for sure will re-balance next year, towards taking more risk, certainly, than this year and try to make that trade-off right between the incremental sales and revenue growth and incremental losses. But we'll be careful. I want to make sure everyone on the call is clear. We're not crazy. We'll step our way in, we'll study our way in, but we will do more of it.
Very helpful. Thank you.
Our next question comes from the line of Bob Napoli, with William Blair. You may proceed with your question.
Thank you. Good afternoon, Ron and Jim and Chuck. So Ron, I mean, there's been a lot of questions asked and -- but just what business or what are you most excited about over the next few years? Which part of -- parts of your business do you see the most opportunity to maybe outperform, drive upside, drive growth?
Hey Bob, it's a great question. I'd say the most -- to me, the most exciting thing, which is coming mostly from the world out there is this synergy, this, this platform concept of bringing walk around plastic, which is the business we've mostly been in, with Payables together. And so it's a way of creating, in our case of massive synergy of these businesses we built over 20 years of getting just way more out of them.
I gave the example earlier, we're launching late this month or at the beginning of December, this thing we call the two-in-one, where a client that has a business card of ours, or our fuel card, can also pay bills with us and literally would be in one place. He could use our card and our credit to pay some of his bills. Obviously, we'd have access [Indiscernible] his bank account to fund the bills.
His report, which show all his walk-around purchases, like it does now, and it would show all his payables to vendors the way it is now, and it would all be in one place. And so that has the opportunity of joining up businesses that we have.
That's what’s creates profit acceleration, where you don't have to go fish one at a time through each new client, you can go back to this pretty gigantic customer base that we built and basically start to join it up and cross-sell stuff that's useful to them. And the tech that we have now makes it look -- when you look at it, it's just stitched together now. So I'd say that that's the -- again, I tried to say in the thing, I'm also excited.
I know people will doubt me -- doubt us, but we've got a lot of legs in the businesses. We have on that page we 've been just beyond thing and we've added segments everywhere in all the businesses which are adding growth. So I'm obviously super-happy about that, but this integration and joining up in synergy, where the new guys that have some nice new shiny product, they don't have a 20-year customer base and spend, and they don't get 50,000.
Certainly the most of all your guys had sign up 50,000 clients in the quarter. So that's the super exciting thing, is, can we monetize this bigger business profitably, would be what I'd say is the super new opportunity for us.
Great. Thank you. And Charles, just how are you feeling looking at margins, the ability to expand margins from here over the next few years?
Yeah, Bob, I'd say that our model tends to be one where we try to grow top-line, 10% plus and get a little bit of expansion. I think that is a mindset we've had for a long time and we'll continue on that path. I'd say we'll increment our way as we go.
With that said, when do make a little room for select investments, whether it's the digital sales that Ron mentioned, when we find opportunities to invest, we will make those investments but always with a mindset, that we will continue to grow the bottom line a little bit faster than the top.
Right. Thanks. Appreciate it.
[Indiscernible], Bob.
Yeah.
At this time, we have reached the end of our allotted time for the call. Thank you, everybody for joining today's conference. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation and have a great day.