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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 March 31, 2024
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
06_431162-1_logo_wex.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)
(207773–8171
(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 April 19, 2024 was 41,900,535.


TABLE OF CONTENTS
PART I—FINANCIAL INFORMATION
Item 1.
Item 2.
Item 3.
Item 4.
PART II—OTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 5.
Item 6.
 

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 refers to 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 on Form 10-Q includes forward-looking statements including, but not limited to, statements about management’s plans 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,” “positions,” “confidence,” 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 impact of fluctuations in demand for fuel and the volatility and prices of fuel, including fuel spreads in the Company’s international markets, and the resulting impact on the Company’s margins, revenues, and net income;
the effects of general economic conditions, including a decline in demand for fuel, corporate payment services, travel related services, or healthcare related products and services;
the failure to comply with the applicable requirements of Mastercard or Visa contracts and rules;
the extent to which unpredictable events in the locations in which the Company or the Company’s customers operate or elsewhere may adversely affect the Company’s employees, ability to conduct business, results of operations and financial condition;
the impact and size of credit losses, including fraud losses, and other adverse effects if the Company fails to adequately assess and monitor credit risk or fraudulent use of our payment cards or systems;
the impact of changes to the Company’s credit standards;
limitations on, or compression of, interchange fees;
the effect of adverse financial conditions affecting the banking system;
the impact of increasing scrutiny with respect to our environmental, social and governance practices;
failure to implement new technologies and products;
the failure to realize or sustain the expected benefits from our cost and organizational operational efficiencies initiatives;
the failure to compete effectively in order to maintain or renew key customer and partner agreements and relationships, or to maintain volumes under such agreements;
the ability to attract and retain employees;
the ability to execute the Company’s business expansion and acquisition efforts and realize the benefits of acquisitions we have completed;
the failure to achieve commercial and financial benefits as a result of our strategic minority equity investments;
the impact of foreign currency exchange rates on the Company’s operations, revenue and income and other risks associated with our operations outside the United States;
the failure to adequately safeguard custodial HSA assets;
the incurrence of impairment charges if the Company’s assessment of the fair value of certain of its reporting units changes;
the uncertainties of investigations and litigation;
the ability of the Company to protect its intellectual property and other proprietary rights;
the impact of regulatory capital requirements and other regulatory requirements on the operations of WEX Bank or its ability to make payments to WEX Inc.;
3

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;
changes in interest rates, including those which we must pay for our deposits, and the rate of inflation;
the ability to refinance certain indebtedness or obtain additional financing;
the actions of regulatory bodies, including tax, banking and securities regulators, or possible changes in tax, banking or financial regulations impacting the Company’s industrial bank, the Company as the corporate parent or other subsidiaries or affiliates;
the failure to comply with the Treasury Regulations applicable to non-bank custodians;
the impact from 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 the Company’s reputation, liabilities or relationships with customers or merchants;
the impact of regulatory developments with respect to privacy and data protection;
the impact of any disruption to the technology and electronic communications networks we rely on;
the ability to incorporate artificial intelligence in our business successfully and ethically;
the ability to maintain effective systems of internal controls;
the impact of provisions in our charter documents, Delaware law and applicable banking laws that may delay or prevent our acquisition by a third party; 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, 2023, filed with the SEC on February 23, 2024 and subsequent filings with the Securities and Exchange Commission.
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. We disclaim 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.
Adjusted free cash flowA non-GAAP measure calculated as cash flows from operating activities, adjusted for net purchases of current investment securities, capital expenditures, the change in net deposits, changes in borrowings under the BTFP and borrowed federal funds and certain other adjustments.
Adjusted net income or ANIA non-GAAP measure that adjusts net income (loss) to exclude all items excluded in segment adjusted operating income except unallocated corporate expenses, further excluding unrealized gains and losses on financial instruments, net foreign currency gains and losses, debt issuance cost amortization, tax related items and certain other non-operating items, as applicable depending on the period presented.
Amended and Restated Credit AgreementAmended and Restated Credit Agreement entered into on April 1, 2021 (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.
Ascensus AcquisitionThe acquisition from Ascensus, LLC of certain entities, which comprised the health and benefits business of Ascensus.
ASUAccounting Standards Update
Average number of SaaS accountsRepresents the average number of active consumer-directed health, COBRA, and billing accounts on our SaaS platforms. SaaS accounts include HSA accounts for which WEX Inc. serves as the non-bank custodian under designation by the U.S. Department of Treasury.
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.
BTFP
The Federal Reserve Bank Term Funding Program, which provides liquidity to U.S. depository institutions.
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, which were repurchased by the Company and canceled by the trustee at the instruction of the Company on August 11, 2023.
Corporate CashCalculated in accordance with the terms of our consolidated leverage ratio in the Company’s Amended and Restated Credit Agreement.
DSUsDeferred Stock Units held by non-employee directors.
FASB
Financial Accounting Standards Board
FDIC
Federal Deposit Insurance Corporation.
Federal Reserve Bank Discount WindowMonetary policy that allows WEX Bank to borrow funds on a short-term basis to meet temporary shortages of liquidity caused by internal or external disruptions.
FSA
Flexible Spending Accounts
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.
5

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.
Operating cash flowNet cash provided by (used for) operating activities
Operating interest
Interest 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.
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.
Processing costsExpenses related to processing transactions, servicing customers and merchants and costs of goods sold related to hardware and other product sales.
Purchase volumePurchase volume in the Corporate Payments segment represents the total dollar value of all WEX-issued transactions that use WEX corporate card products and virtual card products. Purchase volume in the Benefits segment represents the total dollar value of all transactions where interchange is earned by WEX.
Revolving Credit FacilityThe Company’s secured revolving credit facility under the Amended and Restated Credit Agreement
RSUsRestricted stock units
SaaSSoftware-as-a-Service
SECSecurities and Exchange Commission
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.
SOFRSecured Overnight Financing Rate
SPEWholly-owned special purpose entity
Topic 606Accounting Standards Codification Section 606, Revenue from Contracts with Customers
Total 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, other acquisition and divestiture related items, debt restructuring costs, stock-based compensation, other costs and certain non-recurring or non-cash operating charges that are not core to our operations, as applicable depending on the period presented.
Total volumeIncludes purchases on WEX-issued accounts as well as purchases issued by others, but using a WEX platform.
UDFIUtah Department of Financial Institutions
WEXWEX Inc., and all of its subsidiaries that are consolidated under accounting principles generally accepted in the United States, unless otherwise indicated or required by the context.
WEX AustraliaWEX Card Holdings Australia Pty Ltd and its subsidiaries
WEX BankAn industrial bank organized under the laws of the State of Utah, and wholly owned subsidiary of WEX, Inc.
WEX Europe ServicesWEX Europe Service Limited, a European Mobility business
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 millions, except per share data)
(unaudited)
Three Months Ended March 31,
 20242023
Revenues
Payment processing revenue$302.0 $288.1 
Account servicing revenue173.3 160.7 
Finance fee revenue70.3 80.7 
Other revenue107.1 82.5 
Total revenues652.7 612.0 
Cost of services
Processing costs169.1 145.6 
Service fees21.0 18.3 
Provision for credit losses22.4 45.4 
Operating interest23.5 12.8 
Depreciation and amortization31.2 25.2 
Total cost of services267.2 247.3 
General and administrative88.5 88.9 
Sales and marketing85.3 79.9 
Depreciation and amortization47.2 41.6 
Operating income164.5 154.3 
Financing interest expense, net of financial instruments(60.3)(52.9)
Change in fair value of contingent consideration(1.7)(1.8)
Net foreign currency loss(12.5)(1.4)
Income before income taxes90.0 98.2 
Income tax expense24.2 30.2 
Net income$65.8 $68.0 
Net income per share:
Basic$1.57 $1.58 
Diluted$1.55 $1.56 
Weighted average common shares outstanding:
Basic41.8 43.1 
Diluted42.4 43.6 
See notes to the unaudited condensed consolidated financial statements.
7

WEX Inc. Condensed Consolidated Statements of Comprehensive Income
(unaudited)
 Three Months Ended March 31,
 20242023
Net income$65.8 $68.0 
Other comprehensive (loss) income, net of tax:
Unrealized (loss) gain on available-for-sale debt securities(25.7)22.2 
Foreign currency translation(21.6)0.8 
Other comprehensive (loss) income, net of tax(47.3)23.0 
Total comprehensive income$18.5 $91.0 
See notes to the unaudited condensed consolidated financial statements.
8

WEX Inc. Condensed Consolidated Balance Sheets
(in millions, except per share data)
(unaudited) 
March 31,
2024
December 31,
2023
Assets
Cash and cash equivalents$779.6 $975.8 
Restricted cash1,302.1 1,254.2 
Accounts receivable, net3,857.2 3,428.5 
Investment securities3,304.9 3,022.1 
Securitized accounts receivable, restricted143.3 129.4 
Prepaid expenses and other current assets147.4 125.3 
Total current assets9,534.5 8,935.3 
Property, equipment and capitalized software (net of accumulated depreciation of $570.0 in 2024 and $544.2 in 2023)
249.5 242.9 
Goodwill3,003.8 3,015.7 
Other intangible assets (net of accumulated amortization of $1,406.0 in 2024 and $1,359.1 in 2023)
1,406.3 1,458.7 
Investment securities66.1 66.8 
Deferred income taxes, net14.8 13.7 
Other assets146.8 149.0 
Total assets$14,421.8 $13,882.1 
Liabilities and Stockholders’ Equity
Accounts payable$1,824.0 $1,479.1 
Accrued expenses and other current liabilities671.2 802.7 
Restricted cash payable1,301.4 1,253.5 
Short-term deposits4,075.9 3,942.8 
Short-term debt, net1,113.0 1,041.1 
Total current liabilities8,985.5 8,519.2 
Long-term debt, net3,081.5 2,827.5 
Long-term deposits129.7 129.8 
Deferred income taxes, net132.8 129.5 
Other liabilities314.6 455.5 
Total liabilities12,644.1 12,061.5 
Stockholders’ Equity
Common stock $0.01 par value; 175.0 shares authorized; 50.3 shares issued in 2024 and 49.9 in 2023; 41.9 shares outstanding in 2024 and 2023
0.5 0.5 
Additional paid-in capital1,065.2 1,053.0 
Retained earnings1,822.9 1,757.1 
Accumulated other comprehensive loss(276.5)(229.2)
Treasury stock at cost; 8.4 and 8.0 shares in 2024 and 2023, respectively
(834.4)(760.8)
Total stockholders’ equity1,777.7 1,820.6 
Total liabilities and stockholders’ equity$14,421.8 $13,882.1 
See notes to the unaudited condensed consolidated financial statements.
9

WEX Inc. Condensed Consolidated Statements of Stockholders’ Equity
(in millions)
(unaudited)
 Common Stock Issued
Additional
Paid-in
Capital
Retained Earnings
Accumulated
Other
Comprehensive
Loss
Treasury
Stock
Total
Stockholders’
Equity
 SharesAmount
Balance at January 1, 202349.6 $0.5 $928.0 $1,490.5 $(306.3)$(463.2)$1,649.5 
Stock issued under share-based compensation plans0.1 — 6.3 — — — 6.3 
Share repurchases for tax withholdings— — (8.8)— — — (8.8)
Purchase of shares of treasury stock— — — — — (92.8)(92.8)
Stock-based compensation expense— — 25.3 — — — 25.3 
Unrealized gain on available-for-sale debt securities— — — — 22.2 — 22.2 
Foreign currency translation— — — — 0.8 — 0.8 
Net income— $— $— $68.0 $— $— $68.0 
Balance at March 31, 202349.7 $0.5 $950.8 $1,558.5 $(283.3)$(556.0)$1,670.5 
Balance at January 1, 202449.9 $0.5 $1,053.0 $1,757.1 $(229.2)$(760.8)$1,820.6 
Stock issued under share-based compensation plans0.4  12.3    12.3 
Share repurchases for tax withholdings  (28.2)   (28.2)
Purchase of shares of treasury stock     (73.6)(73.6)
Stock-based compensation expense  28.1    28.1 
Unrealized loss on available-for-sale debt securities    (25.7) (25.7)
Foreign currency translation    (21.6) (21.6)
Net income   65.8   65.8 
Balance at March 31, 202450.3 $0.5 $1,065.2 $1,822.9 $(276.5)$(834.4)$1,777.7 
See notes to the unaudited condensed consolidated financial statements.
10

WEX Inc. Condensed Consolidated Statements of Cash Flows
(in millions)
(unaudited)
 Three Months Ended March 31,
 20242023
Cash flows from operating activities
Net income$65.8 $68.0 
Adjustments to reconcile net income to net cash provided by operating activities:
Change in fair value of contingent consideration1.7 1.8 
Stock-based compensation28.1 25.3 
Depreciation and amortization78.4 66.8 
Provision for credit losses22.4 45.4 
Other non-cash adjustments10.1 11.7 
Net change in operating assets and liabilities, net of effects of business acquisitions(359.8)(191.9)
Net cash (used for) provided by operating activities(153.3)27.1 
Cash flows from investing activities
Purchases of property, equipment and capitalized software(34.0)(30.6)
Purchases of available-for-sale debt securities(391.7)(1,107.4)
Sales and maturities of available-for-sale debt securities108.8 80.5 
Acquisition of intangible assets (4.5)
Other investing activities(0.9) 
Net cash used for investing activities(317.8)(1,062.0)
Cash flows from financing activities
Purchase of treasury shares(73.6)(100.9)
Net change in deposits133.6 967.4 
Net change in restricted cash payable69.3 12.5 
Borrowings on revolving credit facility1,041.9 704.4 
Repayments on revolving credit facility(774.1)(582.0)
Repayments on term loans(15.8)(15.8)
Borrowings on BTFP1,570.0  
Repayments on BTFP(1,585.0) 
Net change in borrowed federal funds80.0 100.0 
Net borrowings (repayments) on other debt10.3 (12.1)
Payments of deferred and contingent consideration(86.6)(27.2)
Other financing activities(15.9)(2.5)
Net cash provided by financing activities354.1 1,043.8 
Effect of exchange rates on cash, cash equivalents and restricted cash(31.3)11.7 
Net change in cash, cash equivalents and restricted cash(148.3)20.6 
Cash, cash equivalents and restricted cash, beginning of period(a)
2,230.0 1,859.8 
Cash, cash equivalents and restricted cash, end of period(a)
$2,081.7 $1,880.4 
(a)The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within our condensed consolidated balance sheets to amounts within our condensed consolidated statements of cash flows.
 Three Months Ended March 31,
 20242023
Cash and cash equivalents at beginning of period$975.8 $922.0 
Restricted cash at beginning of period1,254.2 937.8 
Cash, cash equivalents and restricted cash at beginning of period$2,230.0 $1,859.8 
Cash and cash equivalents at end of period$779.6 $921.7 
Restricted cash at end of period1,302.1 958.7 
Cash, cash equivalents and restricted cash at end of period$2,081.7 $1,880.4 
See notes to the unaudited condensed consolidated financial statements.
11

WEX INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
1.Basis of Presentation
The accompanying condensed consolidated financial statements, which include the accounts of WEX Inc. and its subsidiaries, have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10–Q and Rule 10–01 of Regulation S–X. Accordingly, they exclude certain disclosures required by GAAP for a complete set of financial statements. Unless the context suggests otherwise, references in this Quarterly Report on Form 10-Q to “WEX,” the “Company,” “we” or “our” refer to WEX Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
In the opinion of management, all adjustments considered necessary for a fair presentation in accordance with GAAP, which are of a normal recurring nature, have been included. Operating results for the three months ended March 31, 2024 are not necessarily indicative of the results for any future periods or the year ending December 31, 2024. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements that are included in the Company’s Annual Report on Form 10–K for the year ended December 31, 2023, filed with the SEC on February 23, 2024 (“2023 Annual Report”).
We have applied the same accounting policies in preparing these quarterly financial statements as we did in preparing our 2023 annual financial statements. The Company rounds amounts in the condensed consolidated financial statements to millions and calculates all percentages and per-share data from underlying whole-dollar amounts. Thus, certain amounts may not foot, crossfoot or recalculate based on reported numbers due to rounding. We have included certain terms and abbreviations used throughout this Quarterly Report on Form 10-Q within “Acronyms and Abbreviations” in the front of this document.
Change in Reporting Presentation
Previously, realized gains and losses from periodic settlements on our interest rate swap contracts were included within financing interest expense, while the quarterly unrealized gains and losses from the noncash mark-to-market of our swaps were separately presented on the face of the consolidated statement of operations. During the fourth quarter of 2023, the Company made a voluntary change in accounting presentation to reflect the unrealized gains and losses from changes in the value of our swaps within financing interest expense, net of financial instruments. Prior period amounts have been reclassified to conform to the current year presentation.
Certain prior year amounts within cash flows from operating activities in the condensed consolidated statement of cash flows have been aggregated to conform to the current year presentation.
2.Significant Accounting Policies
Significant Accounting Policies
The significant accounting policies used in preparation of these condensed consolidated financial statements as of and for the three months ended March 31, 2024, are consistent with those discussed in “Note 1, Basis of Presentation and Summary of Significant Accounting Policies” to the consolidated financial statements in our 2023 Annual Report.
12

PART I
WEX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

Recent Accounting Pronouncements
The Company evaluates all ASUs recently issued by the FASB for consideration of their applicability. Any recently issued ASUs not listed in the following table were assessed and determined to either not be applicable, or have not had, or are not expected to have, a material impact on our condensed consolidated financial statements. The Company did not adopt any accounting standards during the three months ended March 31, 2024.
StandardDescriptionDate/Method of AdoptionEffect on financial statements or other significant matters
ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures
The amendments in this ASU require enhanced disclosures about significant segment expenses that are regularly provided to the CODM and included within each reported measure of segment profit or loss. In addition, this ASU expands certain annual disclosures about a reportable segment’s profit or loss and assets to interim periods.
The amendments are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 31, 2024. Early adoption is permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements.
The Company is currently evaluating this ASU to determine its impact on the Company’s disclosures. The adoption of this ASU is not expected to have a material effect on the Company’s condensed consolidated financial position, results of operations or cash flows.
ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax DisclosuresUpdates income tax disclosures related to the rate reconciliation and requires disclosure of income taxes paid by jurisdiction.
The amendments are effective for annual periods beginning after December 31, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments should be applied on a prospective basis, however, retrospective application is permitted.
The Company is currently evaluating this ASU to determine its impact on the Company’s disclosures. The adoption of this ASU is not expected to have a material effect on the Company’s condensed consolidated financial position, results of operations or cash flows.
13

PART I
WEX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

3.Revenues
In accordance with Topic 606, revenue is recognized when, or as, performance obligations are satisfied as defined by the terms of the contract, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for goods or services provided.
The following tables disaggregate the Company’s consolidated revenues, substantially all of which relate to services transferred to the customer over time:
Three Months Ended March 31, 2024
(in millions)MobilityCorporate PaymentsBenefitsTotal
Topic 606 revenues
Payment processing revenue$170.7 $103.2 $28.1 $302.0 
Account servicing revenue9.2 10.0 117.0 136.2 
Other revenue23.5  7.7 31.2 
Total Topic 606 revenues$203.4 $113.2 $152.8 $469.4 
Non-Topic 606 revenues135.6 9.4 38.4 183.4 
Total revenues$339.0 $122.5 $191.2 $652.7 
Three Months Ended March 31, 2023
(in millions)MobilityCorporate PaymentsBenefitsTotal
Topic 606 revenues
Payment processing revenue$171.5 $90.1 $26.5 $288.1 
Account servicing revenue4.4 10.6 109.8 124.8 
Other revenue23.3  7.8 31.1 
Total Topic 606 revenues$199.2 $100.7 $144.1 $444.0 
Non-Topic 606 revenues143.1 4.1 20.8 168.0 
Total revenues$342.3 $104.8 $164.9 $612.0 
Contract Balances
The majority of the Company’s receivables, which are excluded from the table below, are either due from cardholders who have not been deemed our customer as it relates to interchange income, or from revenues earned outside of the scope of Topic 606. The Company’s contract assets consist of upfront payments to customers under long-term contracts and are recorded upon the later of when the Company recognizes revenue for the transfer of the related goods or services or when the Company pays or promises to pay the consideration. The resulting asset is amortized against revenue as the Company satisfies its performance obligations under these arrangements. The Company’s contract liabilities consist of customer payments received before the Company has satisfied the associated performance obligations. The following table provides information about these contract balances:
(in millions)
Contract balanceLocation on the condensed consolidated balance sheetsMarch 31, 2024December 31, 2023
ReceivablesAccounts receivable, net$63.3 $59.1 
Contract assetsPrepaid expenses and other current assets17.7 11.5 
Contract assetsOther assets30.6 33.1 
Contract liabilitiesAccrued expenses and other current liabilities14.0 12.4 
Contract liabilitiesOther liabilities79.2 83.0 
During the three months ended March 31, 2024, the Company recognized revenue of $7.6 million related to contract liabilities existing as of December 31, 2023.
14

PART I
WEX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

Remaining Performance Obligations
The Company’s unsatisfied or partially unsatisfied performance obligations as of March 31, 2024 represent the remaining minimum monthly fees on a portion of contracts across the lines of business, deferred revenue associated with stand ready payment processing obligations and contractually obligated professional services yet to be provided by the Company. The total remaining performance obligations below are not indicative of the Company’s future revenue, as they relate to an insignificant portion of the Company’s operations.
The following table includes revenue expected to be recognized related to remaining performance obligations at the end of the indicated reporting period.
(in millions)
Remaining 202420252026202720282029ThereafterTotal
Minimum monthly fees1
$52.5 $28.6 $11.0 $5.4 $3.3 $0.8 $ $101.6 
Other2
10.4 27.5 50.0 22.0 5.9   115.8 
Total remaining performance obligations$62.9 $56.1 $61.0 $27.4 $9.2 $0.8 $ $217.4 
(1)The transaction price allocated to the remaining performance obligations represents the minimum monthly fees on certain service contracts, which contain substantive termination penalties that require the counterparty to pay the Company for the aggregate remaining minimum monthly fees upon an early termination for convenience. These obligations will be recognized within account servicing revenue.
(2)Substantially represents deferred revenue and contractual minimums associated with payment processing service obligations. Consideration associated with certain relationships is variable and the measurement and estimation of contract consideration is contingent upon payment processing volumes and maintaining volume shares, among others.
4.Acquisitions and Other Investments
Business Combinations
2023 Payzer Acquisition
On November 1, 2023, the Company closed on the acquisition of Payzer Holdings, Inc. (“Payzer”), a cloud-based, field service management software provider (the “Payzer Acquisition”). The acquisition is expected to advance WEX’s growth strategy of expanding its product suite and creating additional cross-sell opportunities by providing a new, scalable SaaS solution for its Mobility segment customers that operate field service management companies. Pursuant to the terms of the agreement, total consideration for the acquisition approximated $250.0 million ($5.5 million of which is deferred), with additional contingent consideration of up to $11.0 million based on certain performance metrics, subject to certain working capital and other adjustments.
The table below summarizes the preliminary allocation of fair value to the assets acquired and liabilities assumed on the date of acquisition under the acquisition method of accounting. These fair values may continue to be revised during the measurement period as third-party valuations on the intangible assets are finalized, further information becomes available and additional analyses are performed, and those adjustments could have a material impact on the purchase price allocation.
15

PART I
WEX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

(in millions)
As Reported
December 31, 2023
Measurement
Period
Adjustments
As Reported
March 31, 2024
Cash consideration transferred, net of $4.5 million in cash acquired
$244.0 $ $244.0 
Less:
Accounts receivable2.4  2.4 
Customer relationships(1)(5)
40.4  40.4 
Developed technology(2)(5)
17.2  17.2 
Strategic partner relationships(3)(5)
4.5  4.5 
Trademark(4)(5)
1.4  1.4 
Other current and long-term assets1.4  1.4 
Accrued expenses and other current liabilities(1.8) (1.8)
Deferred tax liability(6.5)(2.0)(8.5)
Contingent/deferred consideration(7.1) (7.1)
Other liabilities(0.9) (0.9)
Recorded goodwill$193.0 $2.0 $195.0 
(1)Weighted average useful life - 4.7 years
(2)Weighted average useful life - 2.4 years
(3)Weighted average useful life - 2.5 years
(4)Weighted average useful life - 2.8 years
(5)The weighted average useful life of all amortizable intangible assets acquired in this business combination is 3.9 years
Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the anticipated synergies of acquiring the business. The goodwill recognized as a result of the Payzer Acquisition is not expected to be deductible for tax purposes. No pro forma information has been included in these financial statements, as the operations of Payzer for the period that it was not part of the Company is not material to the Company’s revenues, net income or earnings per share.
2023 Ascensus Acquisition
On September 1, 2023, WEX Health completed the acquisition from Ascensus, LLC (the “Ascensus Acquisition”) of certain entities (the “Ascensus Acquired Entities”), which comprised the health and benefits business of Ascensus and are technology-enabled providers of employee health benefit accounts including HSAs, FSAs, and other benefit accounts. The Ascensus Acquisition expands WEX’s current footprint in the Benefits segment, while also enhancing and expanding Affordable Care Act compliance and verification capabilities. Pursuant to the terms of the agreement, WEX Health consummated the acquisition for total consideration of approximately $185.5 million, after a $0.9 million working capital adjustment paid by the Company during the first quarter of 2024.
16

PART I
WEX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

The table below summarizes the preliminary allocation of fair value to the assets acquired and liabilities assumed on the date of acquisition under the acquisition method of accounting. These fair values may continue to be revised during the measurement period as third-party valuations on the intangible assets are finalized, further information becomes available and additional analyses are performed, and those adjustments could have a material impact on the purchase price allocation.
(in millions)
As Reported
December 31, 2023
Measurement
Period
Adjustments
As Reported
March 31, 2024
Cash consideration transferred, net of $26.7 million in cash and restricted cash acquired
$158.0 $0.9 $158.9 
Less:
Accounts receivable7.3  7.3 
Customer relationships(1)(5)
52.1  52.1 
Developed technology(2)(5)
6.6  6.6 
Strategic partner relationships(3)(5)
14.0  14.0 
Custodial rights(4)(5)
23.2  23.2 
Other assets3.8  3.8 
Accrued expenses and other current liabilities(6.5) (6.5)
Restricted cash payable(25.7) (25.7)
Other liabilities(2.7) (2.7)
Recorded goodwill$85.9 $0.9 $86.8 
(1)Weighted average life - 5.4 years
(2)Weighted average life - 2.2 years
(3)Weighted average life - 1.2 years
(4)Weighted average life - 4.9 years
(5)The weighted average useful life of all amortizable intangible assets acquired in this business combination is 4.4 years.
Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the anticipated synergies of acquiring the business. The goodwill recognized as a result of the acquisition is expected to be deductible for tax purposes. No pro forma information has been included in these financial statements, as the operations of the Ascensus Acquired Entities for the period that they were not part of the Company are not material to the Company’s revenues, net income or earnings per share.
5.Accounts Receivable, Net
Accounts receivable consists of amounts billed to and due from customers across a wide range of industries and other third parties. The Company often extends short-term credit to cardholders by paying the merchant for the purchase price less the fees it retains and records as revenue, then subsequently collecting the total purchase price from the cardholder. The Company also extends revolving credit to certain small fleets. The Company had approximately $135.5 million and $133.3 million in gross receivables with revolving credit balances as of March 31, 2024 and December 31, 2023, respectively.
The allowance for accounts receivable consists of reserves for both credit and fraud losses, reflecting management’s current estimate of uncollectible balances on its accounts receivable. The following tables present changes in the accounts receivable allowances by portfolio segment:
17

PART I
WEX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

Three Months Ended March 31, 2024
(in millions)
Mobility
Corporate Payments
BenefitsTotal
Balance, beginning of period$72.8 $9.2 $8.1 $90.1 
Provision for credit losses(1)
20.8 1.3 0.3 22.4 
Charges to other accounts(2)
7.1   7.1 
Charge-offs(31.1)(1.2) (32.3)
Recoveries of amounts previously charged-off3.2   3.2 
Currency translation(0.3)(0.1) (0.4)
Balance, end of period$72.5 $9.2 $8.4 90.1 
Three Months Ended March 31, 2023
(in millions)
Mobility
Corporate Payments
BenefitsTotal
Balance, beginning of period$94.6 $14.4 $0.8 $109.8 
Provision for credit losses(1)
44.8 0.4 0.2 45.4 
Charges to other accounts(2)
7.8  0.1 7.9 
Charge-offs(49.4)(0.6) (50.0)
Recoveries of amounts previously charged-off4.5   4.5 
Currency translation 0.2  0.2 
Balance, end of period$102.3 $14.4 $1.1 $117.8 
(1)The provision is comprised of estimated credit losses based on the Company’s loss-rate experience and includes adjustments required for forecasted credit loss information. The provision for credit losses reported within this table also includes the provision for fraud losses.
(2)Consists primarily of charges to other accounts. The Company earns revenue by assessing monthly finance fees on accounts with overdue balances. These fees are recognized as revenue at the time the fees are assessed. The finance fee is calculated using the greater of a minimum charge or a stated late fee rate multiplied by the outstanding balance that is subject to a late fee charge. On occasion, these fees are waived to maintain relationship goodwill. Charges to other accounts substantially represent the offset against the late fee revenue recognized when the Company establishes a reserve for such waived amounts.
Concentration of Credit Risk
The receivables portfolio primarily consists of a large group of homogeneous balances across a wide range of industries, which are collectively evaluated for impairment. No individual customer had a receivable balance representing 10 percent or more of the outstanding receivables balance at March 31, 2024 or December 31, 2023. The following table presents the outstanding balance of trade accounts receivable that are less than 30 and 60 days past due, shown in each case as a percentage of total trade accounts receivable:
Delinquency StatusMarch 31, 2024December 31, 2023
Less than 30 days past due99 %98 %
Less than 60 days past due99 %99 %
6.Repurchases of Common Stock
Under share buyback plans, which may be authorized by our board of directors from time to time, the Company may repurchase up to specified dollar values of shares of its common stock through open market purchases, privately negotiated transactions, block trades or other methods approved by our board of directors.
During the three months ended March 31, 2024, the Company repurchased approximately 0.4 million shares pursuant to a previously approved and announced repurchase program. The total repurchases were recorded as treasury stock of
18

PART I
WEX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

$73.6 million in our condensed consolidated balance sheet. During the three months ended March 31, 2023, the Company repurchased approximately 0.5 million shares pursuant to a previously approved and announced repurchase program, which was collectively recorded as treasury stock of $92.8 million in our condensed consolidated balance sheet. The above costs reflect the applicable one percent excise tax imposed by the Inflation Reduction Act of 2022 on the net value of certain stock repurchases.
7.Earnings per Share
Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock and vested DSUs outstanding during the year. The computation of diluted earnings per share is similar to the computation of basic earnings per share, except that diluted earnings per share includes the impact of convertible securities under the “if-converted” method if the effect of such securities would be dilutive and includes the assumed exercise of dilutive options, the assumed issuance of unvested RSUs, performance-based awards for which the performance condition has been met as of the date of determination and contingently issuable shares that would be issuable if the end of the reporting period was the end of the contingency period, using the treasury stock method unless the effect is anti-dilutive. The treasury stock method assumes that proceeds, including cash received from the exercise of employee stock options and the average unrecognized compensation expense for unvested share-based compensation awards, would be used to purchase the Company’s common stock at the average market price during the period.
The following table presents net income and reconciles basic and diluted shares outstanding used in the earnings per share computations:
 Three Months Ended March 31,
(in millions)
20242023
Net income$65.8 $68.0 
Weighted average common shares outstanding – Basic41.8 43.1 
Dilutive impact of share-based compensation awards(1)
0.6 0.5 
Weighted average common shares outstanding – Diluted(2)
42.4 43.6 
(1)For the three months ended March 31, 2024 and 2023, 0.3 million and 0.4 million, respectively, of outstanding share-based compensation awards were excluded from the computation of diluted earnings per share under the treasury stock method, as the effect of including those shares would be anti-dilutive.
(2)Under the “if-converted” method, approximately 1.6 million shares of the Company’s common stock associated with the assumed conversion of the Convertible Notes were excluded from diluted shares for the three months ended March 31, 2023 as the effect of including such shares would have been anti-dilutive. During August 2023, the Company repurchased all of the Company’s outstanding Convertible Notes. For further information regarding the Convertible Notes and their repurchase and cancellation, see Note 10, Financing and Other Debt.
8.Derivative Instruments
Interest Rate Swap Contracts
From time to time, the Company has entered into interest rate swap contracts to manage the interest rate risk associated with its outstanding variable-interest rate borrowings. Such contracts are intended to economically hedge the reference rate component of future interest payments associated with outstanding borrowings under the Company’s Amended and Restated Credit Agreement.
The following table presents information on interest rate swap gains and losses incurred and recognized within financing interest expense, net of financial instruments on the condensed consolidated statements of operations for the three months ended March 31, 2023. The Company had no interest rate swap contracts outstanding during the three months ended March 31, 2024.
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WEX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

Three Months Ended
(in millions)
March 31, 2023
Unrealized loss on interest rate swaps$14.9 
Realized gain on interest rate swaps(12.2)
Financing interest expense50.2 
Financing interest expense, net of financial instruments$52.9 
Contingent Consideration Derivative Liability
At March 31, 2024 and December 31, 2023, the Company had a contingent consideration derivative liability associated with its asset acquisition from Bell Bank. See Note 13, Financial Instruments − Fair Value and Concentrations of Credit Risk, for further discussion of this derivative and for more information regarding the valuation of the Company’s derivatives.
9.Deposits
WEX Bank’s regulatory status enables it to raise capital to fund the Company’s working capital requirements by issuing deposits, subject to FDIC rules governing minimum financial ratios. See Note 18, Supplementary Regulatory Capital Disclosure, for further information concerning these FDIC requirements.
WEX Bank accepts its deposits through certain customers as required collateral for credit that has been extended (“customer deposits”) and contractual arrangements for brokered and non-brokered certificate of deposit and money market deposit products. Additionally, WEX Bank holds deposits for the benefit of WEX Inc.’s HSA customers subject to the terms of a deposit agreement.
Customer deposits are generally non-interest bearing, certificates of deposit are issued at fixed rates, money market deposits are issued at both fixed and variable interest rates based on the Federal Funds rate and HSA deposits are issued at rates as defined within the consumer account agreements.
The following table presents the composition of deposits, which are classified as short-term or long-term based on their contractual maturities:
(in millions)March 31, 2024December 31, 2023
Customer deposits$181.4 $195.9 
Contractual deposits with maturities within 1 year(1),(2)
345.2 500.8 
Interest-bearing money market deposits1
279.3 226.0 
HSA deposits(3)
3,270.0 3,020.0 
Short-term deposits$4,075.9 $3,942.8 
Contractual deposits with maturities greater than 1 year(1),(2)
129.7 129.8 
Total deposits$4,205.6 $4,072.6 
Weighted average cost of HSA deposits outstanding0.11 %0.11 %
Weighted average cost of funds on contractual deposits outstanding2.84 %3.53 %
Weighted average cost of interest-bearing money market deposits outstanding5.47 %5.47 %
(1)As of March 31, 2024 and December 31, 2023, all certificates of deposit and money market deposits were in denominations of $250,000 or less, corresponding to FDIC deposit insurance limits.
(2)Includes certificates of deposit and certain money market deposits, which have a fixed maturity and substantially fixed interest rates.
(3)HSA deposits are recorded within short-term deposits on the condensed consolidated balance sheets as the funds can be withdrawn by the account holders at any time.
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WEX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

10.Financing and Other Debt
The following tables summarize the Company’s total outstanding debt as of March 31, 2024 and December 31, 2023.
As of March 31, 2024As of December 31, 2023
(in millions)
Balance OutstandingInterest RateBalance OutstandingInterest Rate
Short term debt:
Securitized debt$102.3 5.84 %$101.9 5.85 %
Participation debt45.5 7.74 %39.1 7.62 %
Borrowed federal funds910.0 4.87 %845.0 4.89 %
Current portion of long-term debt(6)
55.2 **55.1 **
Total short term debt, net$1,113.0 $1,041.1 
**    Provided for the total Amended and Restated Credit Agreement borrowings below.
Balance Outstanding at:
(in millions)
March 31, 2024December 31, 2023
Long-term debt:
Amended and Restated Credit Agreement(4):
Term A Loans due April 2026(1)
$831.7 $843.9 
Term B Loans due April 2028(2)
 1,402.3 
Term B-1 Loans due April 2028(3)
1,398.7  
Borrowings on Revolving Credit Facility due April 2026(1)
929.8 662.0 
Total long-term debt(5)
3,160.2 2,908.2 
Less total unamortized debt issuance costs/discounts(23.5)(25.6)
Less current portion of long-term debt(6)
(55.2)(55.1)
Long-term debt, net$3,081.5 $2,827.5 
(1)Bears interest at variable rates, at the Company’s option, plus an applicable margin determined based on the Company’s consolidated leverage ratio. Outstanding borrowings under the Revolving Credit Facility are classified as long-term given they can be rolled forward with interest rate resets through maturity.
(2)Bore interest at variable rates, at the Company’s option, plus an applicable margin, which was fixed at 1.25 percent for base rate borrowings and 2.25 percent with respect to Term SOFR borrowings.
(3)Bears interest at variable rates, at the Company’s option, plus an applicable margin, which is fixed at 1.00 percent for base rate borrowings and 2.00 percent with respect to Term SOFR borrowings.
(4)As of March 31, 2024 and December 31, 2023, amounts outstanding under the Amended and Restated Credit Agreement bore a weighted average effective interest rate of 7.1 percent and 7.3 percent, respectively.
(5)See Note 13, Financial Instruments − Fair Value and Concentrations of Credit Risk for information regarding the fair value of the Company’s debt.
(6)Current portion of long-term debt as of March 31, 2024 and December 31, 2023 is net of $8.2 million and $8.3 million, respectively, in unamortized debt issuance costs/discounts.
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WEX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

(in millions)
March 31, 2024December 31, 2023
Supplemental information under Amended and Restated Credit Agreement:
Letters of credit(1)
$36.8 $36.8 
Remaining borrowing capacity on Revolving Credit Facility(2)
$463.4 $731.2 
(1)Primarily collateralizing Corporate Payments processing activity.
(2)Borrowing capacity is contingent on maintaining compliance with the financial covenants as defined in the Company’s Amended and Restated Credit Agreement. The Company pays a quarterly commitment fee at a rate per annum ranging from 0.25 percent to 0.50 percent of the daily unused portion of the Revolving Credit Facility (which was 0.25 percent at March 31, 2024 and December 31, 2023) determined based on the Company’s consolidated leverage ratio.
Amended and Restated Credit Agreement
As of December 31, 2023, under the Amended and Restated Credit Agreement, we had senior secured tranche A term loans (the “Term A Loans”), senior secured tranche B term loans (the “Term B Loans”) and revolving credit commitments under the Revolving Credit Facility.
On January 22, 2024, the Company and certain of its subsidiaries entered into the Fourth Amendment to the Amended and Restated Credit Agreement (the “Fourth Amendment”), which amended certain terms of the Amended and Restated Credit Agreement, as in effect prior to January 22, 2024, including without limitation to reprice the Term B Loans existing on January 22, 2024 through the issuance of new senior secured tranche B term loans (the “Term B-1 Loans”) in the same amount. The Term B-1 Loans bear interest at variable rates at the Company’s option, plus an applicable margin, which is fixed at 1.00 percent for base rate borrowings and 2.00 percent with respect to Term SOFR borrowings, representing a reduction from the fixed applicable margins of 1.25 percent and 2.25 percent, respectively, for Term B Loans. Additionally, the Fourth Amendment removed the credit spread adjustment applicable to the tranche B term loans. No other substantive changes were made to the Amended and Restated Credit Agreement as part of the Fourth Amendment.
The Company may voluntarily prepay outstanding Term A Loans, Term B-1 Loans and borrowings on the Revolving Credit Facility from time to time (subject to certain conditions), without premium or penalty other than customary “breakage” costs with respect to prepayments of other than base rate borrowings, provided, however, that with respect to Term B-1 Loans, if on or prior to the six month anniversary of the effective date of the Fourth Amendment closing date, the Company prepays any Term B-1 Loans in connection with a repricing transaction, the Company must pay a prepayment premium of 1.00 percent of the aggregate principal amount of the Term B-1 Loans prepaid.
Convertible Notes
The Company previously had issued Convertible Notes in an aggregate principal amount of $310.0 million to an affiliate of Warburg Pincus LLC. Interest on the Convertible Notes was calculated at a fixed rate of 6.5 percent per annum, payable semi-annually in arrears on January 15 and July 15 of each year. On August 11, 2023, the Company repurchased all of the outstanding $310.0 million aggregate principal amount of the Company’s Convertible Notes at 119 percent of par for a total purchase price of $370.4 million, inclusive of accrued and unpaid interest. At the time of repurchase, the net carrying amount of the Convertible Notes was $298.8 million, resulting in a loss on extinguishment of $70.1 million, which was recorded within nonoperating expense on the condensed consolidated statement of operations during the third quarter of 2023. Upon repurchase, the obligations of the Company to Warburg Pincus LLC were satisfied in full and the Convertible Notes were canceled by the trustee at the instruction of the Company.
During the three months ended March 31, 2023, the Company recognized interest expense of $5.7 million.
Securitization Facilities
Under securitized debt agreements, each month on a revolving basis, the Company sells certain of its Australian and European receivables to bankruptcy-remote subsidiaries consolidated by the Company, which in turn use the receivables as collateral to issue securitized debt. Amounts collected on the securitized receivables are restricted to pay the securitized debt and are not available for general corporate purposes. The Company pays interest on the outstanding balance of the securitized debt based on variable interest rates plus an applicable margin.
The Company’s securitized debt agreement for the securitization of its European receivables is with MUFG Bank, Ltd., has a maximum revolving borrowing limit of €55.0 million and expires April 2025, unless otherwise agreed to in writing by the
22

PART I
WEX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

parties. The Company’s securitized debt agreement for the securitization of its Australian receivables is with Australia and New Zealand Banking Group Limited, has a maximum revolving borrowing limit of A$140.0 million and expires October 2024, annually renewable thereafter unless earlier terminated.
Participation Debt
From time to time, WEX Bank enters into participation agreements with third-party banks to fund customers’ balances that exceed WEX Bank’s lending limit to individual customers. Associated unsecured borrowings generally carry a variable interest rate set according to an applicable reference rate plus a margin, which ranged from 2.25 percent to 2.50 percent as of March 31, 2024 and December 31, 2023. As of March 31, 2024, the Company’s participation agreements allow for total borrowings of up to $70.0 million and expire at various points through 2024, unless otherwise agreed to in writing by the parties.
Borrowed Federal Funds
WEX Bank borrows from short-term uncommitted federal funds lines to supplement the financing of the Company’s accounts receivable. WEX Bank had $150.0 million and $70.0 million in outstanding borrowings under these federal funds lines of credit as of March 31, 2024 and December 31, 2023, respectively.
On March 12, 2023, the Federal Reserve Board announced the BTFP, which provided liquidity to U.S. depository institutions through the offering of bank loans for up to one year in length, collateralized by the par value of qualifying assets. The BTFP ceased extending new loans on March 11, 2024. As of March 31, 2024, WEX Bank had $760.0 million in outstanding borrowings under the BTFP due in January of 2025 with an interest rate of 4.76 percent. As of December 31, 2023, WEX Bank had $775.0 million in outstanding borrowings from the BTFP with an interest rate of 4.84 percent. At March 31, 2024, debt securities with a par value of $832.7 million and fair value of $740.3 million were pledged as collateral.
Other
As of March 31, 2024, WEX Bank had pledged $211.3 million of customer receivables held by WEX Bank to the Federal Reserve Bank as collateral for potential borrowings through the Federal Reserve Bank Discount Window. Amounts that can be borrowed are based on the amount of collateral pledged and was $150.6 million as of March 31, 2024. WEX Bank had no borrowings outstanding on this line of credit through the Federal Reserve Bank Discount Window as of March 31, 2024 and December 31, 2023.
11.Off-Balance Sheet Arrangements
WEX Europe Services and WEX Bank Accounts Receivable Factoring
WEX Europe Services and WEX Bank are each party to separate accounts receivable factoring arrangements with unrelated third-party financial institutions to sell certain of their accounts receivable balances. Each subsidiary continues to service these receivables post-transfer with no participating interest. The Company obtained true-sale opinions from independent attorneys, stating that each respective factoring agreement provides legal isolation upon bankruptcy or receivership under local law. As such, transfers under these arrangements are treated as a sale and are accounted for as a reduction in trade accounts receivable because effective control of the receivables is transferred to the buyers. Proceeds received, which are recorded net of applicable costs or negotiated discount rates, are recorded in operating activities in the condensed consolidated statements of cash flows. For the three months ended March 31, 2024, losses on factoring were $3.1 million while losses on factoring were immaterial for the three months ended March 31, 2023. Losses on factoring are recorded within cost of services in the condensed consolidated statements of operations.

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PART I
WEX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

The WEX Europe Services agreement automatically renews each January 1 unless either party gives not less than 90 days written notice of their intention to withdraw. Under this agreement, accounts receivable are sold without recourse to the extent that the customer balances are maintained at or below the credit limit established by the buyer. The Company maintains the risk of default on any customer receivable balances in excess of the buyer’s credit limit, which were immaterial as of March 31, 2024. Under this arrangement, the Company sold $130.6 million and $140.4 million of accounts receivable during the three months ended March 31, 2024 and 2023, respectively.
The WEX Bank agreement extends through August 2024, after which the agreement can be renewed for successive one-year periods assuming WEX Bank provides advance written notice that is accepted by the purchaser. Under this arrangement, the Company sold $4.5 billion and $1.9 billion of accounts receivable during the three months ended March 31, 2024 and 2023, respectively.
Benefits Securitization
In April 2023, WEX Health, through a wholly-owned special purpose entity (“SPE”), entered into a receivable securitization facility with a revolving limit of $35.0 million and an initial term through April 2026, which can be extended for an additional period of up to three years and can be voluntarily terminated by the SPE at any time, subject to 30 days’ notice. During December 2023, the Company signed an amendment to the initial receivable securitization agreement, which suspends activities under the facility until such time as the parties agree in writing to reactivate it (the “Health Facility Amendment”). During this suspension period, the revolving limit of the facility is zero.
Under the facility, and prior to the Health Facility Amendment, WEX Health sold eligible trade accounts receivables to the SPE, which is a bankruptcy-remote subsidiary, and in turn, the SPE sold undivided ownership interests in certain of these receivables to the financial institution in exchange for cash equal to the gross receivables transferred. WEX Health continued to service receivables sold to the financial institution, however, WEX did not retain effective control of transferred receivables, derecognized the assets and accounted for these transfers as sales.
Non-Bank Custodial HSA Cash Assets
As a non-bank custodian, WEX Inc. contracts with depository partners to hold custodial cash assets on behalf of individual account holders. As of March 31, 2024, WEX Inc. was custodian to approximately $4.2 billion in HSA cash assets. Of these custodial balances, approximately $0.9 billion of HSA cash assets at March 31, 2024 were deposited with and managed by certain third-party partners and not recorded on our condensed consolidated balance sheets. Such third-party depository partners are regularly monitored by management for stability. The remaining balance of $3.3 billion in HSA cash assets as of March 31, 2024 is deposited with and managed by WEX Bank and is therefore reflected on our condensed consolidated balance sheets. See Note 9, Deposits, for further information about HSA deposits recorded on our condensed consolidated balance sheets.
12.Investment Securities
The Company’s amortized cost and estimated fair value of investment securities as of March 31, 2024 and December 31, 2023 are presented below. Accrued interest on investment securities of $28.7 million and $24.7 million, respectively, as of March 31, 2024 and December 31, 2023, is excluded from total investment securities and recorded within prepaid expenses and other current assets on the condensed consolidated balance sheets.
24

PART I
WEX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

(in millions)Amortized CostTotal
Unrealized
Gains
Total
Unrealized
Losses
Fair Value(1)
As of March 31, 2024
Current:
Debt securities(2):
U.S. treasury notes
$429.8 $0.5 $35.3 $395.0 
Corporate and sovereign debt securities
1,221.7 9.1 33.4 1,197.4 
Municipal bonds70.9 0.2 5.3 65.8 
Asset-backed securities
652.1 3.8 3.4 652.5 
Mortgage-backed securities
1,035.2 2.8 43.8 994.2 
Total$3,409.7 $16.4 $121.2 $3,304.9 
Non-current:
Debt securities(3)
$28.7 $0.3 $1.2 $27.8 
Mutual fund29.2  3.8 25.4 
Pooled investment fund12.9