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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, 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-20220331_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 April 27, 2022 was 44,990,271.


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 extent to which the coronavirus (COVID-19) pandemic 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 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 failure to maintain or renew key customer and partner agreements and relationships, or to maintain volumes under such agreements;
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, 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 failure to comply with the applicable requirements of Mastercard or Visa contracts and rules;
the effects of general economic conditions, including a decline in demand for fuel, travel related services, or healthcare services, and payment and transaction processing activity;
failure to expand the Company’s technological capabilities and service offerings as rapidly as the Company’s competitors;
changes in interest rates and the rate of inflation;
the ability to attract and retain employees;
limitations on or compression of interchange fees;
the impact and size of credit losses;
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 acquired company or business;
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 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 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;
3

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
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 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, 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, 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)
Australian Securitization SubsidiarySouthern Cross WEX 2015-1 Trust, a special purpose entity consolidated by the Company
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, Inc.
DSUsDeferred stock units
eNetteNett International (Jersey) Limited
European Fleet businessWEX Fleet Europe 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
Fuel transactions processedFuel transactions processed represents the total number of fuel transactions (funded and unfunded) made by fleet customers
GAAPGenerally Accepted Accounting Principles in the United States
HSAHealth Savings Account
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 $ 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
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 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, and other costs.
Topic 606Accounting Standards Codification Section 606, Revenue from Contracts with Customers
TSRTotal shareholder return
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. and (iii) from June 1, 2021, WEX Health, Inc. and benefitexpress, collectively
WEX
WEX Inc., unless otherwise indicated or required by the context
WEX Europe ServicesWEX Europe Service Limited, a European Fleet business
WEX Fleet EuropeA fleet business in Europe acquired from EG Group
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 March 31,
 20222021
Revenues
Payment processing revenue$239,478 $188,389 
Account servicing revenue139,941 118,623 
Finance fee revenue78,582 52,153 
Other revenue59,534 51,592 
Total revenues517,535 410,757 
Cost of services
Processing costs132,507 109,762 
Service fees15,750 11,146 
Provision for credit losses25,640 5,059 
Operating interest2,300 2,624 
Depreciation and amortization26,002 29,194 
Total cost of services202,199 157,785 
General and administrative78,663 86,431 
Sales and marketing73,945 78,347 
Depreciation and amortization40,454 37,653 
Operating income122,274 50,541 
Financing interest expense(29,689)(33,284)
Change in fair value of contingent consideration(16,600) 
Net foreign currency gain (loss)5,006 (2,755)
Net unrealized gain on financial instruments49,827 7,033 
Income before income taxes130,818 21,535 
Income tax expense (benefit)42,032 (1,670)
Net income88,786 23,205 
Less: Net income from non-controlling interests268 726 
Net income attributable to WEX Inc.88,518 22,479 
Change in value of redeemable non-controlling interest34,245 (25,044)
Net income (loss) attributable to shareholders$122,763 $(2,565)
Net income (loss) attributable to shareholders per share:
Basic$2.73 $(0.06)
Diluted$2.71 $(0.06)
Weighted average common shares outstanding:
Basic44,912 44,343 
Diluted45,344 44,343 
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 March 31,
 20222021
Net income$88,786 $23,205 
Other comprehensive loss, net of tax:
  Unrealized losses on available-for-sale debt securities(51,668) 
  Foreign currency translation4,306 (6,877)
Other comprehensive loss, net of tax(47,362)(6,877)
Comprehensive income41,424 16,328 
Less: Comprehensive income attributable to non-controlling interests268 407 
Comprehensive income attributable to WEX Inc.$41,156 $15,921 
See notes to the unaudited condensed consolidated financial statements.
8

WEX INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(unaudited) 
March 31,
2022
December 31,
2021
Assets
Cash and cash equivalents$577,536 $588,923 
Restricted cash671,808 667,915 
Accounts receivable (net of allowances of $76,253 in 2022 and $66,306 in 2021)
3,863,159 2,891,242 
Investment securities977,757 948,677 
Securitized accounts receivable, restricted160,180 125,186 
Prepaid expenses and other current assets87,299 77,569 
Total current assets6,337,739 5,299,512 
Property, equipment and capitalized software (net of accumulated depreciation of $478,193 in 2022 and $458,093 in 2021)
177,768 179,531 
Goodwill2,915,909 2,908,057 
Other intangible assets (net of accumulated amortization of $1,053,542 in 2022 and $1,009,601 in 2021)
1,600,058 1,643,296 
Investment securities38,209 39,650 
Deferred income taxes, net6,598 5,635 
Other assets257,111 231,147 
Total assets$11,333,392 $10,306,828 
Liabilities and Stockholders’ Equity
Accounts payable$1,713,744 $1,021,911 
Accrued expenses434,416 476,971 
Restricted cash payable671,808 668,014 
Short-term deposits2,225,438 2,026,420 
Short-term debt, net157,622 155,769 
Other current liabilities50,417 50,614 
Total current liabilities5,253,445 4,399,699 
Long-term debt, net2,773,630 2,695,365 
Long-term deposits650,257 652,214 
Deferred income taxes, net212,517 192,965 
Other liabilities517,093 273,706 
Total liabilities9,406,942 8,213,949 
Commitments and contingencies (Note 15)
Redeemable non-controlling interest 254,106 
Stockholders’ Equity
Common stock $0.01 par value; 175,000 shares authorized; 49,409 shares issued in 2022 and 49,255 in 2021; 44,981 shares outstanding in 2022 and 44,827 in 2021
494 492 
Additional paid-in capital856,325 844,051 
Retained earnings1,411,852 1,289,089 
Accumulated other comprehensive loss(169,879)(122,517)
Treasury stock at cost; 4,428 shares in 2022 and 2021
(172,342)(172,342)
Total stockholders’ equity1,926,450 1,838,773 
Total liabilities and stockholders’ equity$11,333,392 $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, 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 
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 

See notes to the unaudited condensed consolidated financial statements.

10

WEX INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
 Three Months Ended March 31,
 20222021
Cash flows from operating activities
Net income$88,786 $23,205 
Adjustments to reconcile net income to net cash (used for) provided by operating activities:
Net unrealized gains(54,732)(4,505)
Change in fair value of contingent consideration16,600  
Stock-based compensation23,682 17,886 
Depreciation and amortization66,456 66,847 
Amortization of premiums on investment securities1,844  
Debt restructuring and debt issuance cost amortization3,263 4,455 
Deferred tax expense (benefit)14,200 (2,235)
Provision for credit losses25,640 5,059 
Changes in operating assets and liabilities, net of effects of acquisitions:
Accounts receivable and securitized accounts receivable(1,030,533)(565,374)
Prepaid expenses and other current and other long-term assets26,152 (11,065)
Accounts payable695,918 350,563 
Accrued expenses and restricted cash payable(39,267)(100,744)
Income taxes24,777 (3,877)
Other current and other long-term liabilities(23,816)2,490 
Net cash used for operating activities(161,030)(217,295)
Cash flows from investing activities
Purchases of property, equipment and capitalized software(24,163)(18,280)
Purchases of equity securities(72)(96)
Maturities of equity securities 61 
Purchases of available-for-sale debt securities(97,612) 
Sales and maturities of available-for-sale debt securities15,284  
Acquisitions, net of cash and restricted cash acquired 1,909 
Net cash used for investing activities(106,563)(16,406)
Cash flows from financing activities
Repurchase of share-based awards to satisfy tax withholdings(12,178)(21,062)
Proceeds from stock option exercises772 22,559 
Net change in deposits197,460 102,958 
Net activity on other debt29,582 194,798 
Borrowings on revolving credit facility585,000  
Repayments on revolving credit facility(524,500) 
Repayments on term loans(15,835)(16,152)
Redemption of Notes (400,000)
Net change in securitized debt2,216 2,320 
Net cash provided by (used for) financing activities262,517 (114,579)
Effect of exchange rates on cash, cash equivalents and restricted cash(2,418)(7,723)
Net change in cash, cash equivalents and restricted cash(7,494)(356,003)
Cash, cash equivalents and restricted cash, beginning of period(a)
1,256,838 1,329,653 
Cash, cash equivalents and restricted cash, end of period(a)
$1,249,344 $973,650 







11

The following tables provides supplemental disclosure of non-cash investing and financing activities:
Three Months Ended March 31,
20222021
Capital expenditures incurred but not paid$3,043 $2,213 
Deferred liability from acquisition of remaining interest in PO Holding$216,594 $ 


(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,
 20222021
Cash and cash equivalents at beginning of period$588,923 $852,033 
Restricted cash at beginning of period667,915 477,620 
Cash, cash equivalents and restricted cash at beginning of period$1,256,838 $1,329,653 
Cash and cash equivalents at end of period$577,536 $561,199 
Restricted cash at end of period671,808 412,451 
Cash, cash equivalents and restricted cash at end of period$1,249,344 $973,650 

See notes to the unaudited condensed consolidated financial statements.

12



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



1.Basis of Presentation
Basis of Presentation
    The accompanying condensed consolidated financial statements 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 do not include all information and notes required by GAAP for complete financial statements. These condensed consolidated financial statements should be read in conjunction with the financial statements that are included in the Company’s Annual Report on Form 10–K for the year ended December 31, 2021, filed with the SEC on March 1, 2022. In the opinion of management, all adjustments considered necessary for a fair presentation, which are of a normal recurring nature, have been included. Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results for any future periods or the year ending December 31, 2022.
We have applied the same accounting policies in preparing these quarterly financial statements as we did in preparing our 2021 annual financial statements. The Company rounds amounts in the condensed consolidated financial statements to thousands and calculates all per-share data from underlying whole-dollar amounts. Thus, certain amounts may not foot, crossfoot or recalculate based on reported numbers due to rounding.

2.Recent Accounting Pronouncements
The following table provides a brief description of recent accounting pronouncements adopted during the three months ended March 31, 2022 and those not yet adopted that could have a material effect on our financial statements.

StandardDescriptionDate of AdoptionMethod of adoptions and effect on financial statements or other significant matters
Adopted During the Three Months Ended March 31, 2022
ASU 2021-08, Business CombinationsThis standard requires acquirers within the scope of Subtopic 805-10, Business Combinations to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. This will generally result in an acquirer recognizing and measuring acquired contract assets and liabilities consistent with how they were recognized and measured in an acquiree’s financial statements if such financial statements were prepared in accordance with GAAP. Previously, contract assets and contract liabilities acquired were recognized at their fair value on the acquisition date.Effective for fiscal years beginning after December 15, 2022.The Company early adopted this ASU effective January 1, 2022. Adoption had no material effect on the Company’s condensed consolidated financial statements for the three months ended March 31, 2022. The guidelines of this ASU will be applied prospectively for business combinations in the scope of ASC 805.
Not Adopted as of March 31, 2022
ASU 2020–04, Reference Rate Reform

and

ASU 2021–01, Reference Rate Reform: Scope
These standards provide optional guidance for a limited period of time to ease the potential financial reporting burden in accounting for (or recognizing the effects of) the discontinuation of LIBOR resulting from reference rate reform. The amendments provide optional expedients and exceptions for applying GAAP to contracts and other transactions impacted by reference rate reform. If certain criteria are met, an entity will not be required to remeasure or reassess contracts impacted by reference rate reform. Election is available through December 31, 2022.The Company is currently evaluating the implications of these amendments to its current efforts for reference rate reform implementation and any impact the adoption of these ASUs would have on its financial condition and results of operations. While the Company has not yet determined if and when it will adopt these standards, the adoption of such standards is not expected to have a material effect on the Company’s condensed consolidated financial statements.

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.
13

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

The following tables disaggregate the Company’s consolidated revenues:
Three Months Ended March 31, 2022
(In thousands)Fleet SolutionsTravel and Corporate SolutionsHealth and Employee Benefit SolutionsTotal
Topic 606 revenues
Payment processing revenue$151,906 $65,075 $22,497 $239,478 
Account servicing revenue4,343 10,758 86,740 101,841 
Other revenue19,925 313 8,063 28,301 
Total Topic 606 revenues$176,174 $76,146 $117,300 $369,620 
Non-Topic 606 revenues142,965 1,105 3,845 147,915 
Total revenues$319,139 $77,251 $121,145 $517,535 
Three Months Ended March 31, 2021
(In thousands)Fleet SolutionsTravel and Corporate SolutionsHealth and Employee Benefit SolutionsTotal
Topic 606 revenues
Payment processing revenue$110,576 $57,248 $20,565 $188,389 
Account servicing revenue4,369 10,687 67,945 83,001 
Other revenue20,246 1,800 7,745 29,791 
Total Topic 606 revenues$135,191 $69,735 $96,255 $301,181 
Non-Topic 606 revenues108,646 907 23 109,576 
Total revenues$243,837 $70,642 $96,278 $410,757 
Substantially all revenues relate to services transferred to the customer over time.
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 thousands)
Contract balanceLocation on the condensed consolidated balance sheetsMarch 31, 2022December 31, 2021
Receivables
Accounts receivable, net$49,300 $49,303 
Contract assets
Prepaid expenses and other current assets7,319 8,975 
Contract assets
Other assets39,917 40,718 
Contract liabilities
Other current liabilities7,274 9,123 
Contract liabilities
Other liabilities68,588 58,900 
During the three months ended March 31, 2022, the Company recognized revenue of $5.0 million related to contract liabilities existing as of December 31, 2021.
14

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, 2022 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 reporting period.
(In thousands)Remaining 202220232024202520262027ThereafterTotal
Minimum monthly fees1
$54,972 $39,749 $17,372 $6,018 $915 $ $ $119,026 
Professional services2
3,970 80      4,050 
Other3
2,524 8,689 13,858 19,104 22,985 27,185 5,929 100,274 
Total remaining performance obligations$61,466 $48,518 $31,230 $25,122 $23,900 $27,185 $5,929 $223,350 
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.
2 Includes software development projects and other services sold subsequent to the core offerings, to which the customer is contractually obligated.
3 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
2022 Transactions
Acquisition of Remaining Interest in PO Holding
On March 7, 2022, WEX Inc. and SBI entered into a share purchase agreement (the “Share Purchase Agreement”) whereby SBI sold, and WEX Inc. purchased, SBI’s remaining 4.53 percent interest in PO Holding for a purchase price of $234.0 million plus any interest accruing pursuant to the terms of the Share Purchase Agreement. The purchase price is payable in three installments of $76.7 million in each of March of 2024, 2025 and 2026, with a final payment of $4.0 million also payable in March 2026. Pursuant to the Share Purchase Agreement, WEX Inc. owes SBI interest on the outstanding purchase price balance from March 2024 to March 2025 at the 12-month Secured Overnight Financing Rate (“SOFR”) (as determined on March 1, 2024) plus 1.25 percent and on the outstanding balance from March 2025 to March 2026 at the 12-month SOFR rate (as determined on March 3, 2025) plus 2.25 percent, except that no interest accrues on the $4.0 million payment due in March 2026.
Using a discount rate of 3.4 percent, the Company recorded the deferred liability under this Share Purchase Agreement at its net present value of $216.6 million within other liabilities on the condensed consolidated balance sheet. The associated discount relative to the purchase price will be amortized as interest expense using the effective interest method over the repayment term.
This transaction makes PO Holding, the direct parent of WEX Health, a wholly owned subsidiary of WEX Inc. to which the Company is solely entitled to the economic benefits. See Note 13, Redeemable Non-Controlling Interest for more information.


15

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

2021 Transactions
Asset Acquisition
On April 1, 2021, WEX Inc. completed the acquisition of certain contractual rights to serve as custodian or sub-custodian to over $3 billion of HSAs from the HealthcareBank division of Bell Bank, which is owned by State Bankshares, Inc. This acquisition increased the Company’s role in its customer-directed healthcare ecosystem and aligns with its growth strategy. On the closing of the acquisition, WEX Inc. paid Bell Bank initial cash consideration of $200.0 million. Pursuant to the purchase agreement, WEX Inc. agreed to make an additional deferred cash payment of $25.0 million in July 2023 and a second additional deferred cash payment of $25.0 million in January 2024. As of June 1, 2021, in connection with the acquisition by WEX Health of Cirrus Holdings, LLC further discussed below in this Note 4 and in Note 13, Redeemable Non-Controlling Interest, the second deferred payment of $25.0 million was reduced by the amount of $12.5 million (the “Payment Offset”). As a result of the Payment Offset, WEX Inc. continues to owe Bell Bank $12.5 million for the second additional deferred cash payment, which is due and payable in January 2024.
The purchase agreement also includes potential additional consideration payable to Bell Bank annually that is calculated on a quarterly basis and is contingent, and based, upon any future increases in the Federal Funds rate. The contingent payment period began on July 1, 2021 and shall extend until the earlier of (i) the year ending December 31, 2030, or (ii) the date when the cumulative amount paid as contingent consideration equals $225.0 million.
Given the acquisition does not meet the definition of a business, the Company accounted for this transaction as an asset acquisition, recognizing $263.4 million as a definite-lived intangible rights asset as of the acquisition date, with a weighted average life of 5.6 years. As more fully described in Note 13, Redeemable Non-Controlling Interest, as part of this acquisition WEX Inc. allocated $11.2 million of the initial cash consideration to the repurchase of SBI’s non-controlling interest in the U.S. Health business, reducing SBI’s ownership percentage to 4.53 percent at that time. Additionally, the Company recorded an initial deferred liability of $47.4 million equal to the present value of the deferred cash payments and a derivative liability of $27.2 million related to the additional consideration contingent upon future increases in the Federal Funds rate. Refer to Note 12, Fair Value, for further information on the valuation of the derivative liability. Transaction costs related to the acquisition were immaterial and expensed as incurred.
Acquisition of Remaining Interest in WEX Europe Services
On April 13, 2021, the Company both entered into a share purchase agreement for, and consummated the acquisition of, the remaining interest in WEX Europe Services it did not own previously, which consisted of 25 percent of the issued ordinary share capital, for a purchase price of $97.0 million. As a result of the transaction, the Company now owns 100 percent of the issued ordinary share capital of WEX Europe Services, which operates part of our European Fleet business. This transaction further streamlines the European Fleet business in order to create revenue synergies and increases our ability to manage the associated cost structure. Given the Company had a controlling interest in WEX Europe Services prior to the transaction, the acquisition has been accounted for as an equity transaction.
(In thousands)
Purchase price$96,992 
Reduction in:
Non-controlling interest1
(13,077)
Accumulated other comprehensive income(2,284)
Additional paid-in capital2
(81,631)
1 Reduces non-controlling interest to zero as of the acquisition date.
2 In conjunction with the acquisition, the Company incurred $0.5 million in acquisition costs, which further reduced additional paid-in capital.


16

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

benefitexpress Acquisition

On June 1, 2021, WEX Inc.’s subsidiary, WEX Health, completed the acquisition of Cirrus Holdings, LLC, the indirect owner of Benefit Express Services, LLC, which is a provider of highly configurable, cloud-based benefits administration technologies and services doing business under the name benefitexpress (the “benefitexpress Acquisition”). The transaction expanded the Company’s role in the healthcare ecosystem, bringing benefit administration, compliance services, and consumer-directed health and lifestyle spending accounts together to form a full-service benefits marketplace. Pursuant to the terms of the definitive purchase agreement, WEX Health consummated the benefitexpress Acquisition for total consideration of approximately $275 million, subject to certain working capital and other adjustments.
To facilitate the benefitexpress Acquisition, WEX Inc., PO Holding, Bell Bank and SBI, which is owned by State Bankshares, Inc., the owner of Bell Bank, entered into a subscription agreement with respect to PO Holding (the “Subscription Agreement”). Pursuant to the Subscription Agreement, on June 1, 2021, WEX Inc. purchased approximately $262.5 million in value of shares in PO Holding and SBI (which, at the time of the transaction, held a non-controlling interest in PO Holding) acquired approximately $12.5 million in value of shares in PO Holding in exchange for SBI granting the Payment Offset to WEX Inc. with respect to the asset acquisition from Bell Bank. For a description of WEX Inc.’s subsequent acquisition of all of SBI’s shares in PO Holding, see “Acquisition of Remaining Interest in PO Holding” above.
The benefitexpress Acquisition has been accounted for using the acquisition method of accounting, which requires that assets acquired and liabilities assumed be recognized at their respective fair values on the acquisition date. The table below summarizes the preliminary allocation of fair value to the assets acquired and liabilities assumed on the acquisition date. 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 these adjustments could have a material impact on the purchase price allocation. During the three months ended March 31, 2022, no such measurement period adjustments were recorded. The following is a summary of the preliminary allocation of the purchase price to the assets and liabilities acquired, based on the estimated fair value at the date of acquisition:
(In thousands)As of
March 31, 2022
Cash consideration transferred, net of $15.0 million in cash and restricted cash acquired
$259,061 
Less:
Accounts receivable3,103 
Customer relationships(a)(d)
84,400 
Developed technologies(b)(d)
19,600 
Non-compete(c)(d)
2,150 
Other assets4,387 
Accrued expenses(3,498)
Restricted cash payable(14,328)
Other liabilities(5,177)
Recorded goodwill$168,424 
(a) Weighted average life - 9.3 years.
(b) Weighted average life - 3.6 years.
(c) Weighted average life - 2.5 years
(d) The weighted average life of the $106.2 million of amortizable intangible assets acquired in this business combination is 8.1 years
Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the anticipated synergies of acquiring the businesses. 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 benefitexpress for the period that they were not part of the Company are not material to the Company’s revenues, net income and earnings per share.

17

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

5.Accounts Receivable, net of Allowances
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 $114.2 million and $93.7 million in receivables with revolving credit balances as of March 31, 2022 and December 31, 2021, 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:
Three Months Ended March 31, 2022
  (In thousands)Fleet SolutionsTravel and Corporate SolutionsHealth and Employee Benefit SolutionsTotal
Balance, beginning of period$55,758 $9,931 $617 $66,306 
Provision for credit losses1
23,224 2,147 269 25,640 
Charges to other accounts2
8,400  (70)8,330 
Charge-offs(25,795)(261)(147)(26,203)
Recoveries of amounts previously charged-off2,421  10 2,431 
Currency translation(70)(181) (251)
Balance, end of period$63,938 $11,636 $679 $76,253 
Three Months Ended March 31, 2021