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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2022
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission file number: 001-32426
wex-20220930_g1.jpg 
WEX Inc.
(Exact name of registrant as specified in its charter)
Delaware 01-0526993
(State or other jurisdiction of
incorporation or organization)		 (I.R.S. Employer
Identification No.)
1 Hancock St.,Portland,ME 04101
(Address of principal executive offices) (Zip Code)
(207) 773–8171
(Registrant’s telephone number, including area code) 
N/A
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par valueWEXNew York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes   ☐ No

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S–T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes   ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b–2 of the Exchange Act.
Large Accelerated Filer☒  Accelerated Filer☐
Non-accelerated Filer☐  Smaller Reporting Company☐
Emerging Growth Company☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b–2 of the Exchange Act).    
☐ Yes  ☒  No

Number of shares of common stock outstanding as of October 20, 2022 was 43,593,058.

TABLE OF CONTENTS



2
Unless otherwise indicated or required by the context, the terms “we,” “us,” “our,” “WEX,” or the “Company,” in this Quarterly Report on Form 10–Q mean WEX Inc. and all of its subsidiaries that are consolidated under Generally Accepted Accounting Principles in the United States.
FORWARD–LOOKING STATEMENTS
The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for statements that are forward-looking and are not statements of historical facts. This Quarterly Report includes forward-looking statements including, but not limited to, statements about management’s plan and goals. Any statements in this Quarterly Report that are not statements of historical facts are forward-looking statements. When used in this Quarterly Report, the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “will” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such words. Forward-looking statements relate to our future plans, objectives, expectations and intentions and are not historical facts and accordingly involve known and unknown risks and uncertainties and other factors that may cause the actual results or performance to be materially different from future results or performance expressed or implied by these forward-looking statements. The following factors, among others, could cause actual results to differ materially from those contained in forward-looking statements made in this Quarterly Report and in oral statements made by our authorized officers:

•the effects of general economic conditions, including a decline in demand for fuel, travel related services, or healthcare related services, and payment and transaction processing activity;
•the impact of the level of, and fluctuations in, fuel prices and fuel spreads, including the resulting impact on the Company’s revenues and net income;
•the impact and size of credit losses, including losses attributable to fraud;
•breaches of, or other issues with, the Company’s technology systems or those of its third-party service providers and any resulting negative impact on its reputation, liabilities or relationships with customers or merchants;
•the actions of regulatory bodies, including banking and securities regulators, and the Company’s and its industrial bank’s responses thereto, or possible changes in banking or financial regulations impacting the Company’s industrial bank, the Company as the corporate parent or other subsidiaries or affiliates;
•failure to expand the Company’s technological capabilities and service offerings as rapidly as the Company’s competitors;
•the failure to maintain or renew key customer and partner agreements and relationships, or to maintain volumes under such agreements;
•the failure to comply with the applicable requirements of MasterCard or Visa contracts and rules;
•changes in interest rates and the rate of inflation;
•the failure to comply with the Treasury Regulations applicable to non-bank custodians;
•the extent to which the COVID-19 pandemic, including emergence of new variants, and measures taken in response thereto impact the Company’s employees, business, results of operations and financial condition in excess of current expectations, particularly with respect to demand for worldwide travel;
•the ability to attract and retain employees;
•limitations on or compression of interchange fees;
•the effects of the Company’s business expansion and acquisition efforts;
•the failure of corporate investments to result in anticipated strategic value;
•potential adverse changes to business or employee relationships, including those resulting from the completion of an acquisition;
•uncertainty of the expected financial performance of the combined operations following completion of an acquisition;
•the failure to realize anticipated synergies and cost savings from the Company’s acquisitions;
•the impact of changes to the Company’s credit standards;
•the impact of foreign currency exchange rates on the Company’s operations, revenue and income;
•the impact of the Company’s debt instruments on the Company’s operations;
•the impact of leverage on the Company’s operations, results or borrowing capacity generally, and as a result of acquisitions specifically;
•the impact of sales or dispositions of significant amounts of the Company’s outstanding common stock into the public market, or the perception that such sales or dispositions could occur;
•the possible dilution to the Company’s stockholders caused by the issuance of additional shares of common stock or equity-linked securities, whether as result of the Company’s convertible notes or otherwise;
•the impact of the transition from LIBOR as a global benchmark to a replacement rate;
•the incurrence of impairment charges if the Company’s assessment of the fair value of certain of its reporting units changes;
3
•the uncertainties of litigation; as well as
•other risks and uncertainties identified in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission on March 1, 2022.
The Company’s forward-looking statements do not reflect the potential future impact of any alliance, merger, acquisition, disposition or stock repurchases. The forward-looking statements speak only as of the date of the initial filing of this Quarterly Report and undue reliance should not be placed on these statements. The Company disclaims any obligation to update any forward-looking statements as a result of new information, future events or otherwise.
4
ACRONYMS AND ABBREVIATIONS
The acronyms and abbreviations identified below are used in this Quarterly Report, including the condensed consolidated financial statements and the notes thereto. The following is provided to aid the reader and provide a reference point when reviewing this Quarterly Report.
2016 Credit AgreementCredit agreement entered into on July 1, 2016, as amended from time to time, by and among the Company and certain of its subsidiaries, as borrowers, and Bank of America, N.A., as administrative agent on behalf of the lenders.
Adjusted net income or ANI
A non-GAAP measure that adjusts net income (loss) attributable to shareholders to exclude unrealized gains and losses on financial instruments, net foreign currency gains and losses, change in fair value of contingent consideration, acquisition-related intangible amortization, other acquisition and divestiture related items, stock-based compensation, other costs, impairment charges, debt restructuring and debt issuance cost amortization, similar adjustments attributable to our non-controlling interests and certain tax related items.
Amended and Restated Credit AgreementThe 2016 Credit Agreement, as amended and restated on April 1, 2021.
ASCAccounting Standards Codification
ASUAccounting Standards Update
Average number of SaaS accountsRepresents the number of active consumer-directed health, COBRA, and billing accounts on our SaaS platforms in the U.S.
B2BBusiness-to-Business
benefitexpress
Benefit Express Services, LLC, a provider of highly configurable, cloud-based benefits administration technologies and services, and its indirect and direct parents, which were acquired on June 1, 2021 and merged into WEX Health, Inc. on April 30, 2022.
CODMChief Operating Decision Maker
CompanyWEX Inc. and all entities included in the consolidated financial statements.
Convertible NotesConvertible senior unsecured notes due on July 15, 2027 in an aggregate principal amount of $310.0 million with a 6.5 percent interest rate, issued July 1, 2020.
COVID-19
An infectious disease caused by the SARS-CoV-2 coronavirus. The World Health Organization declared the coronavirus outbreak a global pandemic on March 11, 2020.
Discovery BenefitsDiscovery Benefits, Inc.
DSUsDeferred Stock Units held by non-employee directors.
eNetteNett International (Jersey) Limited
European Fleet business(i) prior to January 1, 2022, WEX Fleet Europe and WEX Europe Services, collectively; and (ii) from January 1, 2022, WEX Europe Services.
EVsElectric Vehicles
FDICFederal Deposit Insurance Corporation
Federal Reserve Bank Discount WindowMonetary policy that allows WEX to borrow funds on a short-term basis to meet temporary shortages of liquidity caused by internal or external disruptions.
GAAPGenerally Accepted Accounting Principles in the United States
HSAHealth Savings Account
NAVNet Asset Value
Net interchange rateRepresents the percentage of the dollar value of each payment processing transaction that WEX records as revenue from merchants, less certain discounts given to customers and network fees.
Net late fee rateNet late fee rate represents late fee revenue as a percentage of fuel purchased by fleets that have a payment processing relationship with WEX
Net payment processing rateThe percentage of each payment processing $ of fuel that the Company records as revenue from merchants less certain discounts given to customers and network fees.
Notes$400.0 million senior notes with a 4.75 percent fixed rate, issued on January 30, 2013, which were redeemed in full by the Company on March 15, 2021.
Operating interestInterest expense incurred on the operating debt obtained to provide liquidity for the Company’s short-term receivables or used for investing purposes in fixed income debt securities.
OptalOptal Limited
Over-the-roadTypically, heavy trucks traveling long distances.
Payment processing $ of fuelTotal dollar value of the fuel purchased by fleets that have a payment processing relationship with WEX.
Payment processing transactionsTotal number of purchases made by fleets that have a payment processing relationship with the Company where the Company maintains the receivable for the total purchase.
PO HoldingPO Holding, LLC, a wholly-owned subsidiary of WEX Inc. and the direct parent of WEX Health.
PPGPrice Per Gallon of fuel
Processing costsExpenses related to processing transactions, servicing customers and merchants and costs of goods sold related to hardware and other product sales.
Redeemable non-controlling interestThe portion of the U.S. Health business’ net assets owned by a non-controlling interest holder, SBI, prior to the March 7, 2022 acquisition of SBI’s remaining interest in PO Holding.
5
SaaSSoftware-as-a-Service
SBISBI Investments, Inc., which is owned by State Bankshares, Inc., and was a minority interest holder in PO Holding, LLC., a subsidiary of WEX Inc. and the direct parent of WEX Health.
SECSecurities and Exchange Commission
Segment adjusted operating incomeA non-GAAP measure that adjusts operating income to exclude specified items that the Company’s management excludes in evaluating segment performance, including unallocated corporate expenses, acquisition-related intangible amortization and other acquisition and divestiture related items, debt restructuring costs, stock-based compensation, impairment charges and other costs.
Service feesCosts incurred from third-party networks utilized to deliver payment solutions and other third-parties utilized in performing services directly related to generating revenue.
Topic 606ASC Section 606, Revenue from Contracts with Customers
Total volume
Includes purchases on WEX-issued accounts as well as purchases issued by others, but using a WEX platform.
UDFIUtah Department of Financial Institutions
U.S. Health business(i) prior to March 31, 2021, WEX Health, Inc. and Discovery Benefits, LLC., collectively, (ii) from March 31, 2021 to June 1, 2021, WEX Health, Inc., (iii) from June 1, 2021 to April 30, 2022, WEX Health, Inc. and benefitexpress, collectively, and (iv) from April 30, 2022, WEX Health, Inc.
WEX
WEX Inc., unless otherwise indicated or required by the context
WEX AustraliaWEX Card Holdings Australia Pty Ltd and its subsidiaries
WEX Europe ServicesWEX Europe Service Limited, a European Fleet business
WEX Fleet EuropeA fleet business in Europe acquired from EG Group and merged into WEX Europe Services on January 1, 2022.
WEX HealthWEX Health, Inc., the Company’s healthcare technology and administration solutions provider/business.


6
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
WEX INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
 
Three Months Ended September 30,Nine Months Ended September 30,
 2022202120222021
Revenues
Payment processing revenue$309,032 $226,126 $860,815 $627,941 
Account servicing revenue138,324 137,724 415,903 389,344 
Finance fee revenue96,698 67,769 260,590 179,421 
Other revenue72,075 51,145 194,593 156,298 
Total revenues616,129 482,764 1,731,901 1,353,004 
Cost of services
Processing costs146,316 121,207 416,258 347,177 
Service fees16,614 14,246 47,220 39,151 
Provision for credit losses54,030 14,127 121,856 32,148 
Operating interest7,887 2,124 13,384 7,019 
Depreciation and amortization27,265 28,226 79,900 83,871 
Total cost of services252,112 179,930 678,618 509,366 
General and administrative86,506 79,486 248,651 245,460 
Sales and marketing80,882 82,225 235,267 246,177 
Depreciation and amortization38,855 40,301 118,186 118,360 
Impairment charges136,486 — 136,486 — 
Operating income21,288 100,822 314,693 233,641 
Financing interest expense(34,419)(32,493)(95,928)(98,250)
Change in fair value of contingent consideration(30,300)2,800 (135,100)(44,900)
Other income— 3,617 — 3,617 
Net foreign currency loss(23,445)(9,962)(37,847)(11,375)
Net unrealized gain on financial instruments23,540 6,424 90,261 19,470 
(Loss) income before income taxes(43,336)71,208 136,079 102,203 
Income tax expense809 19,340 57,309 16,924 
Net (loss) income(44,145)51,868 78,770 85,279 
Less: Net income from non-controlling interests— 134 268 1,099 
Net (loss) income attributable to WEX Inc.(44,145)51,734 78,502 84,180 
Change in value of redeemable non-controlling interest— (3,416)34,245 (72,283)
Net (loss) income attributable to shareholders$(44,145)$48,318 $112,747 $11,897 
Net (loss) income attributable to shareholders per share:
Basic$(1.00)$1.08 $2.53 $0.27 
Diluted$(1.00)$1.07 $2.51 $0.26 
Weighted average common shares outstanding:
Basic44,229 44,861 44,644 44,664 
Diluted44,229 45,279 44,972 45,334 
See notes to the unaudited condensed consolidated financial statements.

7
WEX INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in thousands)
(unaudited)
 
 Three Months Ended September 30,Nine Months Ended September 30,
 2022202120222021
Net (loss) income$(44,145)$51,868 $78,770 $85,279 
Other comprehensive loss, net of tax:
  Unrealized losses on available-for-sale debt securities(56,764)— (150,495)— 
  Foreign currency translation(42,331)(20,368)(83,769)(29,927)
Other comprehensive loss, net of tax(99,095)(20,368)(234,264)(29,927)
Comprehensive (loss) income(143,240)31,500 (155,494)55,352 
Less: Comprehensive income attributable to non-controlling interests— 134 268 781 
Comprehensive (loss) income attributable to WEX Inc.$(143,240)$31,366 $(155,762)$54,571 
See notes to the unaudited condensed consolidated financial statements.
8
WEX INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(unaudited) 
September 30,
2022		December 31,
2021
Assets
Cash and cash equivalents$759,375 $588,923 
Restricted cash942,132 667,915 
Accounts receivable (net of allowances of $102,260 in 2022 and $66,306 in 2021)
3,830,178 2,891,242 
Investment securities1,379,411 948,677 
Securitized accounts receivable, restricted143,252 125,186 
Prepaid expenses and other current assets144,379 77,569 
Total current assets7,198,727 5,299,512 
Property, equipment and capitalized software (net of accumulated depreciation of $514,607 in 2022 and $458,093 in 2021)
186,819 179,531 
Goodwill2,702,998 2,908,057 
Other intangible assets (net of accumulated amortization of $1,123,052 in 2022 and $1,009,601 in 2021)
1,513,689 1,643,296 
Investment securities36,005 39,650 
Deferred income taxes, net20,667 5,635 
Other assets250,243 231,147 
Total assets$11,909,148 $10,306,828 
Liabilities and Stockholders’ Equity
Accounts payable$1,561,033 $1,021,911 
Accrued expenses567,036 476,971 
Restricted cash payable942,153 668,014 
Short-term deposits3,145,770 2,026,420 
Short-term debt, net156,483 155,769 
Other current liabilities41,782 50,614 
Total current liabilities6,414,257 4,399,699 
Long-term debt, net2,644,478 2,695,365 
Long-term deposits489,942 652,214 
Deferred income taxes, net155,536 192,965 
Other liabilities573,849 273,706 
Total liabilities10,278,062 8,213,949 
Commitments and contingencies (Note 16)
Redeemable non-controlling interest— 254,106 
Stockholders’ Equity
Common stock $0.01 par value; 175,000 shares authorized; 49,512 shares issued in 2022 and 49,255 in 2021; 44,130 shares outstanding in 2022 and 44,827 in 2021
495 492 
Additional paid-in capital907,486 844,051 
Retained earnings1,401,836 1,289,089 
Accumulated other comprehensive loss(356,781)(122,517)
Treasury stock at cost; 5,382 and 4,428 shares in 2022 and 2021, respectively
(321,950)(172,342)
Total stockholders’ equity1,631,086 1,838,773 
Total liabilities and stockholders’ equity$11,909,148 $10,306,828 
See notes to the unaudited condensed consolidated financial statements.
9
WEX INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands)
(unaudited)


 Common Stock Issued Additional
Paid-in 
Capital		Accumulated Other Comprehensive LossTreasury Stock Retained
Earnings		 Non-Controlling InterestTotal Stockholders’
Equity
 SharesAmount
Balance at January 1, 202249,255 $492 $844,051 $(122,517)$(172,342)$1,289,089 $— $1,838,773 
Stock issued under share-based compensation plans154 2 770 — — — — 772 
Share repurchases for tax withholdings— — (12,178)— — — — (12,178)
Stock-based compensation expense— — 23,682 — — — — 23,682 
Unrealized loss on available-for-sale debt securities— — — (51,668)— — — (51,668)
Change in value of redeemable non-controlling interest, net of $3.5 million of tax expense
— — — — — 34,245 — 34,245 
Foreign currency translation— — — 4,306 — — — 4,306 
Net income— — — — — 88,518 — 88,518 
Balance at March 31, 202249,409 $494 $856,325 $(169,879)$(172,342)$1,411,852 $— $1,926,450 
Stock issued under share-based compensation plans73 1 2,324 — — — — 2,325 
Share repurchases for tax withholdings— — (3,053)— — — — (3,053)
Purchase of shares of treasury stock— — — (80,599)— — (80,599)
Stock-based compensation expense— — 24,922 — — — — 24,922 
Unrealized loss on available-for-sale debt securities— — — (42,063)— — — (42,063)
Foreign currency translation— — — (45,744)— — — (45,744)
Net income— — — — — 34,129 — 34,129 
Balance at June 30, 202249,482 $495 $880,518 $(257,686)$(252,941)$1,445,981 $— $1,816,367 
Stock issued under share-based compensation plans30 — 682 — — — — 682 
Share repurchases for tax withholdings— — (1,870)— — — — (1,870)
Purchase of shares of treasury stock— — — — (69,009)— — (69,009)
Stock-based compensation expense— — 28,156 — — — — 28,156 
Unrealized loss on available-for-sale debt securities— — — (56,764)— — — (56,764)
Foreign currency translation— — — (42,331)— — — (42,331)
Net loss— — — — — (44,145)— (44,145)
Balance at September 30, 202249,512 $495 $907,486 $(356,781)$(321,950)$1,401,836 $— $1,631,086 
See notes to the unaudited condensed consolidated financial statements.










10
WEX INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands)
(unaudited)
Common Stock IssuedAdditional
Paid-in 
Capital		Accumulated Other Comprehensive LossTreasury StockRetained
Earnings		Non-Controlling InterestTotal Stockholders’
Equity
SharesAmount
Balance at January 1, 202148,616 $485 $830,729 $(82,935)$(172,342)$1,288,952 $13,022 $1,877,911 
Stock issued under share-based compensation plans394 4 22,555 — — — — 22,559 
Share repurchases for tax withholdings— — (21,062)— — — — (21,062)
Stock-based compensation expense— — 17,886 — — — — 17,886 
Change in value of redeemable non-controlling interest— — — — — (25,044)— (25,044)
Foreign currency translation— — — (6,558)— — (319)(6,877)
Net income— — — — — 22,479 374 22,853 
Balance at March 31, 202149,010 $489 $850,108 $(89,493)$(172,342)$1,286,387 $13,077 $1,888,226 
Stock issued under share-based compensation plans214 2 20,479 — — — — 20,481 
Share repurchases for tax withholdings— — (884)— — — — (884)
Stock-based compensation expense— — 20,629 — — — — 20,629 
Acquisition of non-controlling interest— — (81,631)(2,284)— — (13,077)(96,992)
Change in value of redeemable non-controlling interest— — — — — (43,823)— (43,823)
Foreign currency translation— — — (2,682)— — — (2,682)
Net income— — — — — 9,967 — 9,967 
Balance at June 30, 202149,224 $491 $808,701 $(94,459)$(172,342)$1,252,531 $— $1,794,922 
Stock issued under share-based compensation plans21 — 704 — — — — 704 
Share repurchases for tax withholdings— — (1,066)— — — — (1,066)
Stock-based compensation expense— — 21,735 — — — — 21,735 
Change in value of redeemable non-controlling interest— — — — (3,416)(3,416)
Foreign currency translation— — — (20,368)— — — (20,368)
Net income— — — — — 51,734 — 51,734 
Balance at September 30, 202149,245 $491 $830,074 $(114,827)$(172,342)$1,300,849 $— $1,844,245 
See notes to the unaudited condensed consolidated financial statements.

11
WEX INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
 Nine Months Ended September 30,
 20222021
Cash flows from operating activities
Net income$78,770 $85,279 
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Change in fair value of contingent consideration135,100 44,900 
Stock-based compensation76,760 60,250 
Depreciation and amortization198,086 202,231 
Gain on sale of equity investment— (3,617)
Amortization of premiums on investment securities3,958 — 
Debt issuance cost amortization and accretion expense12,595 13,315 
Deferred tax benefit(54,085)(8,829)
Provision for credit losses121,856 32,148 
Impairment charges136,486 — 
Other non-cash gains(58,159)(7,499)
Changes in operating assets and liabilities, net of effects of business acquisitions:
Accounts receivable and securitized accounts receivable(1,147,791)(1,138,233)
Prepaid expenses and other current and other long-term assets(11,233)13,212 
Accounts payable568,438 517,455 
Accrued expenses and restricted cash payable389,896 211,855 
Income taxes10,838 (12,363)
Other current and other long-term liabilities(4,871)(20,459)
Net cash provided by (used for) operating activities456,644 (10,355)
Cash flows from investing activities
Purchases of property, equipment and capitalized software(75,476)(55,484)
Cash proceeds from sale of equity investment— 3,117 
Purchases of equity securities(267)(250)
Maturities of equity securities— 130 
Purchases of available-for-sale debt securities(632,782)— 
Sales and maturities of available-for-sale debt securities47,972