FLEETCOR Technologies, Inc.

Fleetcor Technologies’ Q4 results were stronger than anticipated, surpassing Wall Street expectations in terms of revenues as well as earnings and also surpassing the upper limit of the management’s guidance in terms of revenues. The company’s organic revenue increase was 7%. Its total sales increased by 19%, retention remained constant at 92%, and same-store results were up 2% for the quarter. In short, the company performed slightly better than anticipated. Gift organic growth was 11% lower than the previous year. In corporate payments, the company added an AP automation software front end to its entire AP payment execution business. Furthermore, in lodging, they have expanded beyond their core labor business to two new verticals, the airline vertical and the insurance vertical. Fleetcor has further made significant strides in expanding the Beyond Toll network. Santander was recently added to their list of toll distribution partners. The company also entered into a euro cross-currency swap to take advantage of the lower euro interest rates, saving an indicated 1.96% on $500 million in notional debt. By 2023, these swaps are anticipated to save $35 million in interest costs. We give Fleetcor Technologies a ‘Hold’ rating with a revised target price.