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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, 2021
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-20210930_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)
(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 October 28, 2021 was 44,818,545.


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” 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 demand for worldwide travel as a result of COVID-19 and the length of time it may take for the travel industry to rebound to and grow beyond pre-pandemic levels;
the extent to which the coronavirus (COVID-19) pandemic and measures taken in response thereto impact the Company’s business, results of operations and financial condition in excess of current expectations;
the impact of fluctuations in fuel prices and fuel spreads in the Company’s international markets, including the resulting impact on the Company’s revenues and net income;
the effects of general economic conditions, including those caused by the effects of COVID-19, on overall employment, travel and fueling patterns as well as payment and transaction processing activity;
failure to expand the Company’s technological capabilities and service offerings as rapidly as the Company’s competitors;
limitations on interchange fees;
the failure to comply with the applicable requirements of MasterCard or Visa contracts and rules;
the failure to maintain or renew key commercial agreements or to maintain volumes under such agreements;
breaches of 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, 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;
the Company’s ability to successfully finalize the recently announced Executive Leadership Team transition plan and to appoint additional officers;
the success of the Company’s recently announced Executive Leadership Team and strategic reorganization;
the effects of the Company’s business expansion and acquisition efforts;
the failure of corporate investments to result in anticipated strategic value;
the failure to comply with the Treasury Regulations applicable to non-bank custodians;
potential adverse changes to business or employee relationships, including those resulting from the completion of an acquisition;
competitive responses to any acquisitions;
uncertainty of the expected financial performance of the combined operations following completion of an acquisition;
the failure to complete or successfully integrate the Company’s acquisitions or to realize anticipated synergies and cost savings from such acquisitions;
unexpected costs, charges, or expenses resulting from an acquisition;
the failure to successfully acquire, integrate, operate and expand commercial fuel card programs;
the impact and size of credit losses;
the impact of changes to the Company’s credit standards;
the failure to successfully implement the Company’s information technology strategies and capabilities in connection with its technology outsourcing and insourcing arrangements and any resulting cost associated with that failure;
legal, regulatory, political and economic uncertainty surrounding the United Kingdom’s departure from the European Union and the resulting trade agreement;
the impact of foreign currency exchange rates on the Company’s operations, revenue and income;
changes in interest rates;
the impact of the future transition from LIBOR as a global benchmark to a replacement rate;
the impact of the Company’s debt instruments on the Company’s operations;
the impact of increased 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 incurrence of impairment charges if the Company’s assessment of the fair value of certain of its reporting units changes;
the uncertainties of litigation; as well as
3

other risks and uncertainties identified in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission on March 1, 2021 and WEX’s quarterly report on Form 10-Q for the quarter ended June 30, 2021, filed with the Securities and Exchange Commission on August 4, 2021.
Our forward-looking statements and these factors 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, WEX Card Holding Australia Pty Ltd., as designated borrower, 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 attributable to shareholders to exclude unrealized gains and losses on financial instruments, net foreign currency remeasurement gains and losses, change in fair value of contingent consideration, acquisition-related intangible amortization, other acquisition and divestiture related items, loss on sale of subsidiary, stock-based compensation, other costs, 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
ASU 2020-06Accounting Standards Update 2020-06-Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)
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 as part of the benefitexpress Acquisition as defined in Note 4, Acquisitions to Item 1 - Financial Statements
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 million with a 6.5 percent interest rate, issued July 1, 2020
COVID-19 (or “coronavirus”)
An infectious disease caused by the SARS-CoV-2 virus. The World Health Organization declared the coronavirus outbreak a global pandemic on March 11, 2020
Discovery BenefitsDiscovery Benefits, LLC, an employee benefits administrator that was acquired by the Company in March 2019 and was merged with and into WEX Health, Inc. effective March 31, 2021, with WEX Health being the sole surviving entity
DSUsDeferred stock units
EBITDAA non-GAAP measure that adjusts income before income taxes to exclude interest, depreciation and amortization
eNetteNett International (Jersey) Limited
European Fleet businessWEX Fleet Europe (Go Fuel Card) and WEX Europe Services, collectively
European Securitization SubsidiaryGorham Trade Finance B.V., a special purpose entity consolidated by the Company
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
Legal settlementThe settlement of legal proceedings and appeals related to the acquisition of eNett and Optal.
NAVNet asset value
Net payment processing rateThe percentage of the dollar value of each payment processing transaction that the Company records as revenue from merchants less certain discounts given to customers and network fees
Notes$400 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
NYSENew York Stock Exchange
OptalOptal Limited
Over-the-roadTypically, heavy trucks traveling long distances
Payment processing fuel spendTotal dollar value of the fuel purchased by fleets that have a payment processing relationship with the Company
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
Payment solutions purchase volumeTotal dollar value of all WEX-issued transactions that use WEX corporate card products and virtual card products
Purchase volumeTotal U.S. dollar value of all transactions in the Travel and Corporate Solutions and Health and Employee Benefit Solutions segments where interchange is earned by the Company
Redeemable non-controlling interestThe portion of the U.S. Health business’ net assets owned by a non-controlling interest holder, SBI, subject to redemption rights held by the non-controlling interest holder
SaaSSoftware-as-a-service
5

SBISBI Investments, Inc., which is owned by State Bankshares, Inc, and is a minority interest holder in PO Holding, Inc., 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 and divestiture related items (including acquisition-related intangible amortization), loss on sale of subsidiary, debt restructuring costs, stock-based compensation, and other costs.
Topic 606Accounting Standards Codification Section 606, Revenue from Contracts with Customers
TSRTotal shareholder return
U.S. Health business(i) from June 1, 2021, WEX Health, Inc. and benefitexpress, collectively, and (ii) prior to March 31, 2021, WEX Health, Inc. and Discovery Benefits, LLC., collectively
WEX
WEX Inc., unless otherwise indicated or required by the context
WEX Europe ServicesA fleet business in Europe initially acquired by the Company from ExxonMobil
WEX Fleet Europe (Go Fuel Card)A fleet business in Europe acquired from EG Group
WEX HealthWEX Health, Inc. the Company’s healthcare technology and administration solutions provider/business.
WEX Latin AmericaUNIK S.A., the Company’s Brazilian subsidiary, which is branded WEX Latin America. This subsidiary was sold on September 30, 2020.


6

PART I
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,
 2021202020212020
Revenues
Payment processing revenue$226,126 $171,077 $627,941 $522,575 
Account servicing revenue137,724 112,417 389,344 335,736 
Finance fee revenue67,769 46,307 179,421 144,945 
Other revenue51,145 52,315 156,298 157,623 
Total revenues482,764 382,116 1,353,004 1,160,879 
Cost of services
Processing costs121,207 102,244 347,177 307,152 
Service fees14,246 10,881 39,151 34,335 
Provision for credit losses14,127 12,283 32,148 66,851 
Operating interest2,124 5,262 7,019 20,151 
Depreciation and amortization28,226 26,202 83,871 76,115 
Total cost of services179,930 156,872 509,366 504,604 
General and administrative79,486 73,131 245,460 197,432 
Sales and marketing82,225 64,592 246,177 188,118 
Loss on sale of subsidiary 46,362  46,362 
Depreciation and amortization40,301 39,314 118,360 118,907 
Operating income100,822 1,845 233,641 105,456 
Financing interest expense(32,493)(40,950)(98,250)(101,813)
Change in fair value of contingent consideration2,800  (44,900) 
Other income3,617  3,617  
Net foreign currency loss(9,962)(784)(11,375)(31,973)
Net unrealized gain (loss) on financial instruments6,424 3,774 19,470 (32,115)
Income (loss) before income taxes71,208 (36,115)102,203 (60,445)
Income tax expense (benefit)19,340 21,602 16,924 (3,852)
Net income (loss)51,868 (57,717)85,279 (56,593)
Less: Net income from non-controlling interests134 1,244 1,099 3,282 
Net income (loss) attributable to WEX Inc.51,734 (58,961)84,180 (59,875)
Change in value of redeemable non-controlling interest(3,416)(6,879)(72,283)50,437 
Net income (loss) attributable to shareholders$48,318 $(65,840)$11,897 $(9,438)
Net income (loss) attributable to shareholders per share:
Basic$1.08 $(1.49)$0.27 $(0.22)
Diluted$1.07 $(1.49)$0.26 $(0.22)
Weighted average common shares outstanding:
Basic44,861 44,166 44,664 43,720 
Diluted45,279 44,166 45,334 43,720 
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,
 2021202020212020
Net income (loss)$51,868 $(57,717)$85,279 $(56,593)
Foreign currency translation(20,368)15,147 (29,927)(2,913)
Comprehensive income (loss)31,500 (42,570)55,352 (59,506)
Less: Comprehensive income attributable to non-controlling interests134 1,676 781 3,466 
Comprehensive income (loss) attributable to WEX Inc.$31,366 $(44,246)$54,571 $(62,972)
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,
2021
December 31,
2020
Assets
Cash and cash equivalents$533,830 $852,033 
Restricted cash628,436 477,620 
Accounts receivable (net of allowances of $65,692 in 2021 and $59,147 in 2020)
3,053,565 1,993,329 
Securitized accounts receivable, restricted126,648 93,236 
Prepaid expenses and other current assets93,275 86,629 
Total current assets4,435,754 3,502,847 
Property, equipment and capitalized software (net of accumulated depreciation of $465,264 in 2021 and $402,406 in 2020)
178,797 188,340 
Goodwill2,905,520 2,688,138 
Other intangible assets (net of accumulated amortization of $963,071 in 2021 and $835,163 in 2020)
1,690,916 1,552,012 
Investment securities36,855 37,273 
Deferred income taxes, net36,431 17,524 
Other assets229,858 197,227 
Total assets$9,514,131 $8,183,361 
Liabilities and Stockholders’ Equity
Accounts payable$1,289,591 $778,207 
Accrued expenses432,879 362,472 
Restricted cash payable627,217 477,620 
Short-term deposits1,016,327 911,395 
Short-term debt, net183,244 152,730 
Other current liabilities55,377 58,429 
Total current liabilities3,604,635 2,740,853 
Long-term debt, net2,802,317 2,874,113 
Long-term deposits600,496 148,591 
Deferred income taxes, net204,730 220,122 
Other liabilities266,221 164,546 
Total liabilities7,478,399 6,148,225 
Commitments and contingencies (Note 15)
Redeemable non-controlling interest191,487 117,219 
Stockholders’ Equity
Common stock $0.01 par value; 175,000 shares authorized; 49,245 shares issued in 2021 and 48,616 in 2020; 44,817 shares outstanding in 2021 and 44,188 in 2020
491 485 
Additional paid-in capital830,074 872,711 
Retained earnings1,300,849 1,286,976 
Accumulated other comprehensive loss(114,827)(82,935)
Treasury stock at cost; 4,428 shares in 2021 and 2020
(172,342)(172,342)
Total WEX Inc. stockholders’ equity1,844,245 1,904,895 
Non-controlling interest 13,022 
Total stockholders’ equity1,844,245 1,917,917 
Total liabilities and stockholders’ equity$9,514,131 $8,183,361 
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 December 31, 202048,616 $485 $872,711 $(82,935)$(172,342)$1,286,976 $13,022 $1,917,917 
Cumulative effect adjustment1
  (41,982)  1,976  (40,006)
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 

1 Reflects the impact of the Company’s modified retrospective adoption of ASU 2020-06 (See Note 1, Basis of Presentation).
See notes to the unaudited condensed consolidated financial statements.

10

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, 202047,749 $477 $675,060 $(115,449)$(172,342)$1,530,614 $9,385 $1,927,745 
Stock issued under share-based compensation plans189 2 1,950 — — — — 1,952 
Share repurchases for tax withholdings— — (8,817)— — — — (8,817)
Stock-based compensation expense— — 12,533 — — — — 12,533 
Change in value of redeemable non-controlling interest— — — — — (2,624)— (2,624)
Foreign currency translation— — — (40,935)— — (469)(41,404)
Net (loss) income— — — — — (13,632)1,221 (12,411)
Balance at March 31, 202047,938 479 680,726 (156,384)(172,342)1,514,358 10,137 1,876,974 
Stock issued under share-based compensation plans5 — 184 — — — — 184 
Share repurchases for tax withholdings— — (76)— — — — (76)
Stock-based compensation expense— — 14,219 — — — — 14,219 
Change in value of redeemable non-controlling interest— — — — — 59,940 — 59,940 
Foreign currency translation— — — 23,123 — — 221 23,344 
Net income— — — — — 12,718 576 13,294 
Balance at June 30, 202047,943 479 695,053 (133,261)(172,342)1,587,016 10,934 1,987,879 
Stock issued under share-based compensation plans30 — 2,091 — — — — 2,091 
Fair value of stock issued through private placement, net of issuance costs of $968
577 6 92,970 — — — — 92,976 
Share repurchases for tax withholdings— — (378)— — — — (378)
Equity component of the Convertible Notes, net of allocated issuance costs of $570 and taxes of $13,623
— — 41,066 — — — — 41,066 
Stock-based compensation expense— — 17,882 — — — — 17,882 
Change in value of redeemable non-controlling interest— — — — — (6,879)— (6,879)
Transfer of cumulative translation adjustment on the sale of subsidiary— — — 5,473 — — — 5,473 
Foreign currency translation— — — 14,715 — — 432 15,147 
Net (loss) income— — — — — (58,961)707 (58,254)
Balance at September 30, 202048,550 $485 $848,684 $(113,073)$(172,342)$1,521,176 $12,073 $2,097,003 

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,
 20212020
Cash flows from operating activities
Net income (loss)$85,279 $(56,593)
Adjustments to reconcile net income (loss) to net cash (used for) provided by operating activities:
Net unrealized (gain) loss(7,499)54,661 
Change in fair value of contingent consideration44,900  
Stock-based compensation60,250 44,634 
Depreciation and amortization202,231 195,022 
Loss on sale of subsidiary 46,362 
Gain on sale of equity investment(3,617) 
Debt restructuring and debt issuance cost amortization13,315 9,464 
Deferred tax benefit(8,829)(16,514)
Provision for credit losses32,148 66,851 
Changes in operating assets and liabilities, net of effects of acquisitions:
Accounts receivable and securitized accounts receivable(1,138,233)406,095 
Prepaid expenses and other current and other long-term assets13,212 (892)
Accounts payable517,455 (48,528)
Accrued expenses and restricted cash payable211,855 46,367 
Income taxes(12,363)23,697 
Other current and other long-term liabilities(20,459)3,830 
Net cash (used for) provided by operating activities(10,355)