Our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to provide information that will assist the reader with understanding our financial statements, the changes in key items in those financial statements from year to year, and the primary factors that accounted for those changes, as well as how certain accounting estimates affect our financial statements. The discussion also provides information about the financial results of the three segments of our business to provide a better understanding of how those segments and their results affect our financial condition and results of operations as a whole. Additionally, certain corporate costs not allocated to our operating segments are discussed herein.
Our MD&A is presented in the following sections:
•Executive Overview
•Company Highlights
•Results of Operations
•Liquidity and Capital Resources
•Critical Accounting Policies and Estimates
•Recently Adopted Accounting Standards
This discussion should be read in conjunction with our audited consolidated financial statements as of December 31, 2025, the notes accompanying those financial statements and MD&A as contained in our Annual Report on Form 10–K for the year ended December 31, 2025, filed with the Securities and Exchange Commission on February 13, 2026, and in conjunction with the condensed consolidated financial statements and notes in Part I – Item 1 of this report.
Executive Overview
WEX is the global commerce platform that simplifies the business of running a business. WEX has created a powerful ecosystem that offers seamlessly embedded, personalized solutions for its customers around the world. Across multiple enterprise payments categories, including the following three business segments, WEX transforms data into intelligence to deliver value to our customers through tailored spending controls, stronger cash flow visibility, reduced fraud exposure, and data-enriched insights into their business:
•Within our Mobility segment, we are a leading provider of payments and fleet management solutions. We serve diverse fleet needs globally, addressing the marketplace through North American Mobility and Over-the-Road, which are central to the operation of the service and freight economies, respectively, in North America and International Mobility, which is central to the operation of the service economy outside of North America, inclusive of our fleet portfolios in Europe and Asia-Pacific.
•Within our Benefits segment, we provide a broad benefits platform with integrated payments spanning HSAs, FSAs, HRAs, COBRA and benefits enrollment and administration, delivered directly to businesses or through our partner network. WEX Inc. also serves as an IRS-designated non-bank custodian, while WEX Bank provides HSA depository services.
•Our Corporate Payments segment provides comprehensive and secure B2B payments solutions powering mid-sized businesses and global enterprises through our scalable technology. Our capabilities and solutions broadly fall into the categories of Embedded Payments, which seamlessly integrates virtual payment capabilities into existing workflows, empowering a broad range of industries, including online travel, and Direct to Corporate, which automates accounts payable by integrating with enterprise resource planning software systems and accounting workflows to maximize virtual payment usage, addressing corporations of all sizes through direct to customer sales and white-label partnership offerings with financial institutions who license our technology.
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Company Highlights
The following table presents a summarized view of selected results for the three and six months ended June 30, 2026, shown comparative to the prior year periods. The “Other Key Metric” included below is considered by management to be of particular importance to our overall performance as it provides enhanced information and data underlying our financial results. A more extensive list of the key performance indicators regularly used by management to evaluate our performance is included by segment within the Results of Operations section later in this MD&A.
(in millions, except per share data) Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
GAAP Measures:
Total revenues $ 753.5 $ 659.6 $ 1,427.4 $ 1,296.1
Net income attributable to shareholders $ 108.5 $ 68.1 $ 186.2 $ 139.6
Net income attributable to shareholders per diluted share $ 3.11 $ 1.98 $ 5.33 $ 3.78
Net cash used for operating activities $ (408.4) $ (217.0)
Non-GAAP Measures(1)
Adjusted net income attributable to shareholders $ 186.5 $ 136.2 $ 331.9 $ 274.6
Adjusted net income attributable to shareholders per diluted share $ 5.35 $ 3.95 $ 9.49 $ 7.44
Adjusted free cash flow $ 268.5 $ 210.5
Other Key Metric:
Total volume across the Company(2) $ 68,862 $ 59,501 $ 126,981 $ 113,557
(1)Adjusted net income attributable to shareholders, adjusted net income attributable to shareholders per diluted share, and adjusted free cash flow are supplemental non-GAAP financial measures of operating performance. Refer to the sections titled Non–GAAP Financial Measures That Supplement GAAP Measures and Liquidity and Capital Resources later in this MD&A for more information and a reconciliation of the non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with GAAP.
(2)Total volume across the Company includes purchases on WEX-issued accounts as well as purchases on third party-issued accounts using a WEX platform.
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Results of Operations
The following includes information that our management believes is material to an understanding of our results of operations. Any significant changes, unusual or infrequent events, or significant economic changes that materially affect our results of operations are discussed below.
Mobility
Revenues
The following table reflects comparative revenue and key operating statistics within Mobility:
Three Months Ended June 30, Increase (Decrease) Six Months Ended June 30, Increase (Decrease)
(in millions, except per gallon data) 2026 2025 Amount % 2026 2025 Amount %
Revenues(1)
Payment processing revenue $ 210.8 $ 160.4 $ 50.4 31 % $ 367.6 $ 316.7 $ 50.9 16 %
Account servicing revenue 53.8 52.0 1.9 4 % 107.1 101.8 5.2 5 %
Finance fee revenue 101.6 80.0 21.5 27 % 181.4 155.2 26.2 17 %
Other revenue 56.2 53.9 2.4 4 % 111.0 106.2 4.8 5 %
Total revenues $ 422.4 $ 346.2 $ 76.2 22 % $ 767.0 $ 680.0 $ 87.0 13 %
Key operating statistics
Total volume(2) $ 26,700.1 $ 18,832.9 $ 7,867.2 42 % $ 46,590.7 $ 37,583.8 $ 9,006.9 24 %
Payment processing transactions 139.3 139.2 0.1 — % 269.7 273.6 (4.0) (1) %
Payment processing $ of fuel(2) $ 17,190.9 $ 12,216.2 $ 4,974.7 41 % $ 29,897.7 $ 24,234.0 $ 5,663.6 23 %
Payment processing gallons 3,595.9 3,625.4 (29.5) (1) % 7,024.2 7,153.2 (129.0) (2) %
Average U.S. fuel price ($USD/gal) $ 4.70 $ 3.28 $ 1.42 43 % $ 4.16 $ 3.30 $ 0.86 26 %
Net payment processing rate(3) 1.23 % 1.31 % (0.09) % (7) % 1.23 % 1.31 % (0.08) % (6) %
Net late fee rate 0.48 % 0.54 % (0.06) % (11) % 0.49 % 0.53 % (0.04) % (8) %
Credit losses, in basis points(4) 16.1 13.5 2.6 19 % 17.4 12.5 4.9 39 %
(1)Higher domestic fuel prices increased revenues by $63.8 million and $61.7 million for the three and six months ended June 30, 2026, respectively, as compared to the same periods of 2025. The high volatility and rapid increase in the price of fuel as a result of the war in the Middle East, resulted in unfavorable European fuel price spreads and reduced revenue from fuel prices during the first quarter of 2026. During the second quarter of 2026, the impacts from European market fuel spreads reverted to more normal trends. Foreign currency exchange rate fluctuations had a $1.8 million and $4.6 million favorable impact on revenue for the three and six months ended June 30, 2026, respectively, as compared to the same periods of 2025.
(2)Total volume and payment processing $ of fuel increased for the three and six months ended June 30, 2026, as compared to the same periods in the prior year, due primarily to higher domestic fuel prices.
(3)Our net payment processing rate decreased for the three and six months ended June 30, 2026, as compared to the same periods in the prior year, due primarily to higher average domestic fuel prices, partly offset by the net impact of pricing initiatives.
(4)We generally measure our loss performance by calculating fuel-related losses as a percentage of total fuel expenditures on payment processing transactions. Refer to provision for credit losses discussion later in this section for more information.
Total Mobility revenues increased for the three and six months ended June 30, 2026, as compared to the same periods of the prior year, driven substantially by higher payment processing and finance fee revenues. Payment processing revenues increased primarily as a result of higher average U.S. fuel prices. Finance fee revenue, which is comprised of the following components, is discussed below.
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Three Months Ended June 30, Increase (Decrease) Six Months Ended June 30, Increase (Decrease)
(in millions) 2026 2025 Amount % 2026 2025 Amount %
Late fee revenue $ 82.6 $ 65.9 $ 16.7 25 % $ 146.8 $ 129.6 $ 17.2 13 %
Factoring fee revenue 18.9 14.1 4.8 34 % 34.6 25.6 9.0 35 %
Finance fee revenue $ 101.6 $ 80.0 $ 21.5 27 % $ 181.4 $ 155.2 $ 26.2 17 %
Late fee revenue primarily consists of late fees charged for receivables not paid within the terms of the customer agreement based upon the outstanding customer receivable balance and, to a lesser degree, by finance charges earned on revolving portfolio balances. This revenue is earned when a customer’s receivable balance becomes delinquent and 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. Changes in the absolute amount of such outstanding balances can generally be attributed to: (i) changes in fuel prices; (ii) customer specific transaction volume; (iii) customer specific delinquencies; and (iv) changes in late fee rates.
Factoring fee revenue is comprised primarily of fees calculated at a negotiated percentage of the receivable balance that we purchase.
Late fee revenue increased for the three and six months ended June 30, 2026, as compared to the same periods of the prior year, due primarily to an increase in outstanding balances subject to a late fee charge as a result of higher average domestic fuel prices. This growth was offset in part by lower late fee instances. Factoring fee revenue increased for the three and six months ended June 30, 2026, as compared to the same periods of the prior year, due to higher average invoice sizes resulting from increased spot rates due to a decrease in available carriers and driver supply, combined with rising fuel costs.
Concessions to certain customers experiencing financial difficulties may be granted and are limited to extending the time to pay, placing a customer on a payment plan or granting waivers of late fees. There were no material concessions granted to customers experiencing financial difficulties during the three and six months ended June 30, 2026 and 2025.
Operating Expenses
The following table compares line items within operating income and presents segment adjusted operating income and segment adjusted operating income margin for Mobility:
Three Months Ended June 30, Increase (Decrease) Six Months Ended June 30, Increase (Decrease)
(in millions) 2026 2025 Amount % 2026 2025 Amount %
Cost of services
Processing costs $ 74.4 $ 76.0 $ (1.6) (2) % $ 151.3 $ 153.0 $ (1.7) (1) %
Service fees $ 1.8 $ 2.2 $ (0.4) (17) % $ 3.6 $ 4.1 $ (0.4) (11) %
Provision for credit losses $ 32.3 $ 15.4 $ 17.0 111 % $ 57.9 $ 29.3 $ 28.6 98 %
Operating interest $ 25.3 $ 22.2 $ 3.1 14 % $ 43.9 $ 40.8 $ 3.1 8 %
Depreciation and amortization $ 16.9 $ 16.4 $ 0.5 3 % $ 32.9 $ 32.0 $ 0.9 3 %
Other operating expenses
General and administrative $ 34.0 $ 30.9 $ 3.1 10 % $ 64.8 $ 60.3 $ 4.5 7 %
Sales and marketing $ 72.2 $ 63.6 $ 8.7 14 % $ 139.3 $ 124.2 $ 15.1 12 %
Depreciation and amortization $ 18.1 $ 18.6 $ (0.5) (3) % $ 36.1 $ 35.8 $ 0.3 1 %
Operating income $ 147.5 $ 101.1 $ 46.4 46 % $ 237.2 $ 200.6 $ 36.7 18 %
Segment adjusted operating income(1) $ 182.7 $ 134.0 $ 48.7 36 % $ 307.1 $ 265.5 $ 41.6 16 %
Segment adjusted operating income margin(2) 43.2 % 38.7 % 4.5 % 12 % 40.0 % 39.0 % 1.0 % 3 %
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(1)See “Non-GAAP Financial Measures That Supplement GAAP Measures” later in this Item 2 for a reconciliation of operating income to total segment adjusted operating income. See also Part I – Item 1 – Note 17, Segment Information, to our condensed consolidated financial statements for more information regarding our segment determination.
(2)Segment adjusted operating income margin is calculated by dividing segment adjusted operating income by segment revenue. Such margin increased during the three months ended June 30, 2026 as compared to the same period in the prior year, due primarily to higher domestic fuel prices, which are accretive to earnings since most costs are not impacted by fuel prices, offset in part by the increased provision for credit losses coupled with the impact of sales and product development investments, as further discussed below.
Cost of services
Provision for credit losses, which includes estimates for both credit and fraud losses, increased during the three and six months ended June 30, 2026, as compared to the same periods in the prior year. The increase was substantially driven by higher accounts receivable balances primarily as a result of increased spend from higher average fuel prices and to a smaller extent, the impact from higher loss rates during the first half of 2026 compared to the first half of 2025.
Operating interest increased during the three and six months ended June 30, 2026, as compared to the same periods in the prior year, primarily due to higher relative average funding needs of the Mobility segment as a result of higher average domestic fuel prices, offset in part by a reduction in average interest rates.
Other operating expenses
Sales and marketing expenses increased for the three and six months ended June 30, 2026, as compared to the same periods in the prior year, primarily resulting from the sustained investments tied to sales initiatives made throughout 2025, a growth in partner commissions, and higher stock-based compensation primarily due to an increase in estimated attainments.
Benefits
Revenues
The following table reflects comparative revenue and key operating statistics within Benefits:
Three Months Ended June 30, Increase (Decrease) Six Months Ended June 30, Increase (Decrease)
(in millions) 2026 2025 Amount % 2026 2025 Amount %
Revenues
Payment processing revenue $ 29.5 $ 27.2 $ 2.3 8 % $ 62.5 $ 56.9 $ 5.5 10 %
Account servicing revenue 107.4 110.4 (3.1) (3) % 221.9 226.4 (4.5) (2) %
Finance fee revenue 0.1 — — NM 0.1 0.1 — NM
Other revenue 69.0 57.4 11.6 20 % 137.7 111.0 26.7 24 %
Total revenues $ 206.0 $ 195.1 $ 10.9 6 % $ 422.1 $ 394.4 $ 27.8 7 %
Key operating statistics
Purchase volume $ 2,187.5 $ 2,002.6 $ 184.9 9 % $ 4,684.2 $ 4,332.5 $ 351.7 8 %
Total volume $ 3,578.1 $ 3,729.3 $ (151.2) (4) % $ 7,566.9 $ 7,925.7 $ (358.8) (5) %
Average number of SaaS accounts 21.7 21.2 0.5 2 % 22.0 21.4 0.6 3 %
HSA Yield 4.93 % 4.92 % — % — % 4.94 % 4.88 % 0.1 % 1 %
Average HSA custodial cash assets $ 5,227.2 $ 4,705.4 $ 521.8 11 % $ 5,190.7 $ 4,657.1 $ 533.6 11 %
NM - Not meaningful
Total Benefits revenue increased for the three and six months ended June 30, 2026, as compared to the same periods in the prior year, substantially due to higher other revenue from an increase in average HSA deposit balances held by WEX Bank and higher payment processing revenues on increased purchase volumes. The decrease in account servicing revenue was driven by a reduction in program fees earned on custodial services from lower HSA deposits held by third-
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party depository banks as a result of deposits being transferred to WEX Bank. Such decrease was offset in part by higher account servicing revenues earned as a result of an increase in average number of SaaS accounts.
Operating Expenses
The following table compares line items within operating income and presents segment adjusted operating income and segment adjusted operating income margin for Benefits:
Three Months Ended June 30, Increase (Decrease) Six Months Ended June 30, Increase (Decrease)
(in millions) 2026 2025 Amount % 2026 2025 Amount %
Cost of services
Processing costs $ 68.1 $ 65.9 $ 2.2 3 % $ 136.0 $ 135.6 $ 0.3 — %
Service fees $ 20.5 $ 18.9 $ 1.6 9 % $ 40.3 $ 39.7 $ 0.6 1 %
Provision for credit losses $ 0.8 $ (0.2) $ 1.0 NM $ 0.2 $ (1.3) $ 1.5 NM
Operating interest $ 1.4 $ 1.3 $ 0.1 11 % $ 2.8 $ 2.5 $ 0.3 12 %
Depreciation and amortization $ 13.2 $ 12.2 $ 1.0 8 % $ 26.0 $ 24.3 $ 1.7 7 %
Other operating expenses
General and administrative $ 9.7 $ 7.2 $ 2.5 35 % $ 18.1 $ 13.3 $ 4.7 35 %
Sales and marketing $ 17.5 $ 15.7 $ 1.8 11 % $ 32.5 $ 28.9 $ 3.6 13 %
Depreciation and amortization $ 19.0 $ 20.6 $ (1.6) (8) % $ 38.1 $ 41.2 $ (3.1) (8) %
Operating income $ 55.8 $ 53.5 $ 2.2 4 % $ 128.2 $ 110.0 $ 18.1 16 %
Segment adjusted operating income(1) $ 83.5 $ 84.9 $ (1.4) (2) % $ 183.7 $ 171.8 $ 11.9 7 %
Segment adjusted operating income margin(2) 40.5 % 43.5 % (3.0) % (7) % 43.5 % 43.6 % (0.1) % — %
NM - Not meaningful
(1)See “Non-GAAP Financial Measures That Supplement GAAP Measures” later in this Item 2 for a reconciliation of operating income to total segment adjusted operating income. See also Part I – Item 1 – Note 17, Segment Information, to our condensed consolidated financial statements for more information regarding our segment determination.
(2)Segment adjusted operating income margin is calculated by dividing segment adjusted operating income by segment revenue. Revenue earned on HSA assets is highly accretive to earnings, however, higher HSA-related revenues during the three and six months ended June 30, 2026 were offset primarily by increased nonrecurring operating costs incurred during the second quarter of 2026, as compared to the same period of the prior year.
Other operating expenses
General and administrative expense increased for the three and six months ended June 30, 2026, as compared to the same periods in the prior year, due primarily to higher stock-based compensation as a result of an increase in estimated attainments and increased costs incurred toward technology licenses and professional service fees.
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Corporate Payments
Revenues
The following table reflects comparative revenue and key operating statistics within Corporate Payments:
Three Months Ended June 30, Increase (Decrease) Six Months Ended June 30, Increase (Decrease)
(in millions) 2026 2025 Amount % 2026 2025 Amount %
Revenues
Payment processing revenue $ 104.1 $ 97.7 $ 6.5 7 % $ 198.5 $ 183.4 $ 15.2 8 %
Account servicing revenue 16.6 15.4 1.1 7 % 31.4 28.7 2.6 9 %
Finance fee revenue 0.3 0.4 (0.1) NM 0.5 0.8 (0.2) NM
Other revenue 4.1 4.8 (0.7) (15) % 7.7 8.9 (1.1) (13) %
Total revenues $ 125.1 $ 118.3 $ 6.8 6 % $ 238.2 $ 221.8 $ 16.4 7 %
Key operating statistics
Total volume $ 38,584.1 $ 36,938.6 $ 1,645.5 4 % $ 72,823.7 $ 68,047.9 $ 4,775.8 7 %
Purchase volume $ 19,761.7 $ 20,496.8 $ (735.1) (4) % $ 37,670.2 $ 37,782.0 $ (111.8) — %
Net interchange rate(1) 0.53 % 0.48 % 0.05 % 11 % 0.53 % 0.49 % 0.04 % 9 %
NM - Not meaningful
(1)Our net interchange rate has increased during the three and six months ended June 30, 2026, compared to the same periods of the prior year, substantially due to an increase in network incentives.
Total Corporate Payments revenue increased for the three and six months ended June 30, 2026, as compared to the same periods in the prior year, primarily due to an increase in network incentives, offset in part by a decrease in purchase volumes primarily driven by travel volumes timing between the first half and second half of the year. For the six months ended June 30, 2006, our revenue increase includes a $2.6 million favorable impact from foreign exchange rates, as compared to the same period of the prior year.
Concessions to certain customers experiencing financial difficulties may be granted and are limited to extending the time to pay, placing a customer on a payment plan or granting waivers of late fees. There were no material concessions granted to customers during the three and six months ended June 30, 2026 and 2025.
Operating Expenses
The following table compares line items within operating income and presents segment adjusted operating income and segment adjusted operating income margin for Corporate Payments:
Three Months Ended June 30, Increase (Decrease) Six Months Ended June 30, Increase (Decrease)
(in millions) 2026 2025 Amount % 2026 2025 Amount %
Cost of services
Processing costs $ 18.6 $ 19.6 $ (1.1) (5) % $ 38.5 $ 40.3 $ (1.9) (5) %
Service fees $ 1.5 $ 2.2 $ (0.7) (32) % $ 4.0 $ 5.1 $ (1.1) (21) %
Provision for credit losses $ (0.1) $ 6.4 $ (6.5) (102) % $ 4.2 $ 9.4 $ (5.2) (55) %
Operating interest $ 5.9 $ 5.2 $ 0.7 13 % $ 9.6 $ 9.5 $ 0.1 1 %
Depreciation and amortization $ 9.3 $ 9.3 $ — — % $ 18.3 $ 18.4 $ (0.1) — %
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Three Months Ended June 30, Increase (Decrease) Six Months Ended June 30, Increase (Decrease)
(in millions) 2026 2025 Amount % 2026 2025 Amount %
Other operating expenses
General and administrative $ 14.0 $ 12.4 $ 1.6 13 % $ 26.9 $ 25.0 $ 1.9 8 %
Sales and marketing $ 22.8 $ 18.7 $ 4.1 22 % $ 45.2 $ 35.8 $ 9.4 26 %
Depreciation and amortization $ 6.2 $ 6.5 $ (0.2) (4) % $ 12.5 $ 13.0 $ (0.5) (4) %
Operating income $ 47.0 $ 38.0 $ 9.0 24 % $ 79.0 $ 65.2 $ 13.8 21 %
Segment adjusted operating income(1) $ 58.5 $ 49.5 $ 8.9 18 % $ 102.5 $ 90.0 $ 12.5 14 %
Segment adjusted operating income margin(2) 46.7 % 41.9 % 4.9 % 12 % 43.1 % 40.6 % 2.5 % 6 %
(1)See “Non-GAAP Financial Measures That Supplement GAAP Measures” later in this Item 2 for a reconciliation of operating income to total segment adjusted operating income. See also Part I – Item 1 – Note 17, Segment Information, to our condensed consolidated financial statements for more information regarding our segment determination.
(2)Segment adjusted operating income margin is calculated by dividing segment adjusted operating income by segment revenue. See below for an explanation of changes to our year over year segment adjusted operating margin.
As a result of owning all of our technology and issuing capabilities, our Corporate Payments segment has a highly scalable and relatively fixed cost base resulting in largely comparable expenses year to year. As a result, changes in revenue generally have a similar impact on operating income, segment adjusted operating income and segment adjusted operating income margin. During the three and six months ended June 30, 2026, however, segment adjusted operating income margin increased significantly from the comparable 2025 periods. These increases were driven by higher second quarter margins due substantially to a reduction in the provision for credit losses as a result of lower collection risk in the receivables portfolio, offset in part by increased sales and marketing expense, resulting primarily from the sustained investments tied to sales initiatives made throughout 2025.
Unallocated corporate expenses
Unallocated corporate expenses represent the portion of expenses relating to general corporate functions, including acquisition and divestiture expenses, certain finance, legal, information technology, human resources, administrative and executive expenses, and other expenses not directly attributable to a reportable segment.
The following table compares line items within operating income for unallocated corporate expenses:
Three Months Ended June 30, Increase (Decrease) Six Months Ended June 30, Increase (Decrease)
(in millions) 2026 2025 Amount % 2026 2025 Amount %
Other operating expenses
General and administrative $ 46.6 $ 35.8 $ 10.8 30 % $ 81.9 $ 61.3 $ 20.6 34 %
Depreciation and amortization $ 0.4 $ 0.4 $ — NM $ 0.7 $ 0.8 $ (0.1) NM
NM - Not meaningful
During the three and six months ended June 30, 2026, general and administrative expenses increased as compared to the same periods of the prior year, primarily due to an increase in professional services and other expenses incurred in connection with the proxy contest that concluded during the second quarter of 2026 and increased stock-based compensation expense as a result of higher estimated performance-based attainments.
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Non-operating income and expense
The following table reflects comparative results for certain amounts excluded from operating income:
Three Months Ended June 30, Absolute Dollar Change Effect of Change on Net Income Six Months Ended June 30, Absolute Dollar Change Effect of Change on Net Income
(in millions) 2026 2025 2026 2025
Financing interest expense, net of financial instruments $ (52.2) $ (65.0) $ 12.8 Increase $ (105.8) $ (118.0) $ 12.2 Increase
Change in fair value of contingent consideration $ — $ (0.8) $ 0.8 Increase $ (0.7) $ (1.6) $ 0.9 Increase
Net foreign currency gain (loss) $ (0.5) $ 2.4 $ 2.9 Reduction $ 4.1 $ (0.7) $ 4.8 Increase
Income tax expense $ 41.9 $ 25.2 $ 16.7 Reduction $ 72.7 $ 54.1 $ 18.6 Reduction
Financing interest expense, net of financial instruments decreased during the three months ended June 30, 2026, as compared to the same periods of the prior year, primarily due to lower interest rates and a reduction in borrowings on the Revolving Credit facility. Partially offsetting these factors during the six months ended June 30, 2026, was higher comparative interest year over year as a result of the issuance of the Senior Notes on March 6, 2025.
Our foreign currency exchange exposure is primarily related to the remeasurement of our cash, receivable and payable balances, including intercompany transactions that are denominated in both U.S. dollar and foreign currencies. The net gain incurred during the six months ended June 30, 2026 was due primarily to the net impacts on intercompany balance revaluation of a strengthening of the U.S. dollar, particularly against the British pound sterling and Canadian dollar and a strengthening of the British pound sterling against the Euro. The net gain incurred during the three months ended June 30, 2025 was due to a second quarter strengthening of many foreign currencies relative to the U.S dollar, including the euro, Canadian and Australian dollars and British pound sterling.
Income tax expense increased for the three and six months ended June 30, 2026, as compared to the same periods of the prior year due primarily to an increase in the Company’s pre-tax book income. See Part I – Item 1 – Note 14, Income Taxes, to our condensed consolidated financial statements for information regarding our effective tax rates.
Non–GAAP Financial Measures That Supplement GAAP Measures
Total Segment Adjusted Operating Income and Adjusted Net Income
In addition to evaluating the Company’s performance on a GAAP basis, Company management uses particular non-GAAP financial measures, which exclude the impact of certain costs, expenses, gains and losses, to evaluate our overall operating performance, including comparison across periods and with competitors. Our management team believes these non-GAAP measures are integral to our reporting and planning processes and uses them to assess operating performance because they generally exclude financial results that are outside the normal course of our business operations or management’s control. These measures are also used to allocate capital and resources among our operating segments.
Total segment adjusted operating income excludes 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.
Adjusted net income, which similarly excludes the impact of all items excluded in total segment adjusted operating income except unallocated corporate expenses, further excludes 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.
The following items are generally excluded in determining one or more non-GAAP measures for the following reasons:
•Exclusion of the non-cash, mark-to-market adjustments on financial instruments, including interest rate swap agreements and investment securities, helps management identify and assess trends in the Company’s underlying business that might otherwise be obscured due to quarterly non-cash earnings fluctuations associated with these financial instruments. Additionally, the non-cash, mark-to-market adjustments on financial instruments are difficult to forecast accurately, making comparisons across historical and future periods difficult to evaluate;
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•Net foreign currency gains and losses primarily result from the remeasurement to functional currency of cash, accounts receivable and accounts payable balances, certain intercompany transactions denominated in foreign currencies and any gain or loss on foreign currency economic hedges relating to these items. The exclusion of these items helps management compare changes in operating results between periods that might otherwise be obscured due to currency fluctuations;
•The change in fair value of contingent consideration, which is related to the acquisition of certain contractual rights to serve as custodian or sub-custodian to HSAs, is dependent upon changes in future interest rate assumptions and has no significant impact on the ongoing operations of the Company. Additionally, the non-cash, mark-to-market adjustments on financial instruments are difficult to forecast accurately, making comparisons across historical and future periods difficult to evaluate;
•The Company considers certain acquisition-related costs, including certain financing costs, investment banking fees, warranty and indemnity insurance, certain integration-related expenses and amortization of acquired intangibles, as well as gains and losses from divestitures to be unpredictable, dependent on factors that may be outside of our control and unrelated to the continuing operations of the acquired or divested business or the Company. In addition, the size and complexity of an acquisition, which often drives the magnitude of acquisition-related costs, may not be indicative of such future costs. The Company believes that excluding acquisition-related costs and gains or losses on divestitures facilitates the comparison of our financial results to the Company’s historical operating results and to other companies in our industry;
•Stock-based compensation is different from other forms of compensation as it is a non-cash expense. For example, a cash salary generally has a fixed and unvarying cash cost. In contrast, the expense associated with an equity-based award is generally unrelated to the amount of cash ultimately received by the employee, and the cost to the Company is based on a stock-based compensation valuation methodology and underlying assumptions that may vary over time;
•Other costs are not consistently occurring and do not reflect expected future operating expense, nor do they provide insight into the fundamentals of current or past operations of our business. This also includes non-recurring professional service costs including amounts incurred as part of the 2026 proxy contest, and costs related to certain identified initiatives, including restructuring and technology initiatives, to further streamline the business, improve the Company’s efficiency, create synergies and globalize the Company’s operations, all with an objective to improve scale and efficiency and increase profitability going forward.
•Impairment charges represent non-cash asset write-offs, which do not reflect recurring costs that would be relevant to the Company’s continuing operations. The Company believes that excluding these nonrecurring expenses facilitates the comparison of our financial results to the Company’s historical operating results and to other companies in its industry;
•Debt restructuring and debt issuance cost amortization are unrelated to the continuing operations of the Company. Debt restructuring costs are not consistently occurring and do not reflect expected future operating expense, nor do they provide insight into the fundamentals of current or past operations of our business. In addition, since debt issuance cost amortization is dependent upon the financing method, which can vary widely company to company, we believe that excluding these costs helps to facilitate comparison to historical results as well as to other companies within our industry;
•The tax related items are the difference between the Company’s GAAP tax provision and a non-GAAP tax provision. The Company utilizes a fixed annual projected long-term non-GAAP tax rate in order to provide better consistency across reporting periods. To determine this long-term projected tax rate, the Company performs a pro forma tax provision based upon the Company’s projected adjusted net income before taxes. The fixed annual projected long-term non-GAAP tax rate could be subject to change in future periods for a variety of reasons, including the rapidly evolving global tax environment, significant changes in our geographic earnings mix including due to acquisition activity, or other changes to our strategy or business operations; and
•The Company does not allocate certain corporate expenses to our operating segments, as these items are centrally controlled and are not directly attributable to any reportable segment.
Total segment adjusted operating income and adjusted net income may be useful to investors as a means of evaluating our performance. However, because total segment adjusted operating income and adjusted net income are non-GAAP measures, they should not be considered as a substitute for, or superior to, operating income or net income as determined in accordance with GAAP. Total segment adjusted operating income and adjusted net income as used by WEX may not be comparable to similarly titled measures employed by other companies.
The following tables reconcile net income to adjusted net income and related per share data:
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Three Months Ended June 30,
(in millions except per diluted share data) 2026 2025
Net income $ 108.5 $ 3.11 $ 68.1 $ 1.98
Unrealized loss (gain) on financial instruments 0.1 — (0.1) —
Net foreign currency loss (gain) 0.5 0.01 (2.4) (0.07)
Change in fair value of contingent consideration — — 0.8 0.02
Acquisition-related intangible amortization 45.7 1.31 49.3 1.43
Other acquisition and divestiture related items 1.8 0.05 1.9 0.06
Stock-based compensation 37.4 1.07 32.4 0.94
Other costs 10.6 0.30 4.5 0.13
Debt restructuring and debt issuance cost amortization 2.2 0.06 1.8 0.05
Tax related items (20.2) (0.58) (20.2) (0.59)
Adjusted net income $ 186.5 $ 5.35 $ 136.2 $ 3.95
Six Months Ended June 30,
2026 2025
Net income $ 186.2 $ 5.33 $ 139.6 $ 3.78
Unrealized loss (gain) on financial instruments 0.3 0.01 (0.5) (0.01)
Net foreign currency (gain) loss (4.1) (0.12) 0.7 0.02
Change in fair value of contingent consideration 0.7 0.02 1.6 0.04
Acquisition-related intangible amortization 91.6 2.62 97.2 2.63
Other acquisition and divestiture related items 2.6 0.08 4.4 0.12
Stock-based compensation 67.1 1.92 45.7 1.24
Other costs 20.8 0.59 19.3 0.52
Debt restructuring and debt issuance cost amortization 4.7 0.13 4.0 0.11
Tax related items (37.9) (1.08) (37.4) (1.01)
Adjusted net income $ 331.9 $ 9.49 $ 274.6 $ 7.44
The following table reconciles operating income to total segment adjusted operating income and adjusted operating income:
Three Months Ended June 30, Six Months Ended June 30,
(in millions) 2026 2025 2026 2025
Operating income $ 203.2 $ 156.8 $ 361.3 $ 314.0
Unallocated corporate expenses 26.0 25.4 50.7 50.4
Acquisition-related intangible amortization 45.7 49.3 91.6 97.2
Other acquisition and divestiture related items 1.8 0.7 1.8 1.2
Stock-based compensation 37.4 32.4 67.1 45.7
Other costs 10.6 3.9 21.0 18.8
Total segment adjusted operating income $ 324.6 $ 268.5 $ 593.4 $ 527.2
Unallocated corporate expenses (26.0) (25.4) (50.7) (50.4)
Adjusted operating income $ 298.6 $ 243.0 $ 542.7 $ 476.8
Adjusted Free Cash Flow
Adjusted free cash flow is calculated as cash flows from operating activities adjusted for net sales and maturities or purchases of current investment securities, capital expenditures, net Funding Activity, changes in WEX Bank cash balances and certain other adjustments.
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Although non-GAAP adjusted free cash flow is not calculated in accordance with GAAP, WEX believes that adjusted free cash flow is a useful measure to further evaluate our results of operations because (i) adjusted free cash flow indicates the level of cash generated by the operations of the business, which excludes consideration paid on acquisitions, after appropriate reinvestment for recurring investments in property, equipment and capitalized software that are required to operate the business; (ii) net Funding Activity includes fluctuations in deposits and other borrowings primarily used as part of our accounts receivable funding strategy; (iii) purchases, sales or maturities of current investment securities are made as a result of deposits gathered operationally; and (iv) WEX Bank cash balances may be increased or decreased for reasons other than matching operating activity. However, because adjusted free cash flow is a non-GAAP measure, it should not be considered as a substitute for, or superior to, operating cash flow as determined in accordance with GAAP. In addition, adjusted free cash flow as used by WEX may not be comparable to similarly titled measures employed by other companies.
The following table reconciles GAAP operating cash flow to adjusted free cash flow:
(in millions) Six Months Ended June 30,
2026 2025
Operating cash flow, as reported $ (408.4) $ (217.0)
Change in WEX Bank cash balances (254.5) (114.8)
Other adjustments1 31.1 60.4
Net Funding Activity 1,638.8 871.1
Net sales and maturities (purchases) of current investment securities (657.6) (322.0)
Capital expenditures (81.0) (67.2)
Adjusted free cash flow $ 268.5 $ 210.5
1 For the six months ended June 30, 2026 and 2025, other adjustments are predominantly comprised of contingent consideration paid to sellers in excess of acquisition-date fair value.
Liquidity and Capital Resources
We fund our business operations primarily via cash on hand, cash generated from operations, the issuance of deposits and other borrowings primarily used as part of our accounts receivable funding strategy, and borrowings under our Revolving Credit Facility. As of June 30, 2026, we had cash and cash equivalents of $1.2 billion, including Corporate Cash of $123.3 million, and we had a remaining borrowing availability of $1.1 billion under the Revolving Credit Facility, along with access to various sources of funds, including uncommitted federal funds lines of credit from other banks.
Our short-term cash requirements consist primarily of funding the working capital needs of our business, current principal and interest payments on the credit facilities under our Credit Agreement, and payments on maturities of deposits and other borrowings used as part of our accounts receivable funding strategy. We fund a customer’s entire receivable in the majority of our Mobility and Corporate Payments processing transactions. In these transactions, we extend short-term credit to cardholders, paying the merchant or payment network, as applicable, for the purchase price less the fees we retain, generally within 10 days. We subsequently collect the total purchase price from the cardholders, typically within 30 days from the billing date.
Our long-term cash requirements consist primarily of amounts owed under our Credit Agreement and any other long-term debt outstanding and various facilities lease agreements.
We believe that our current cash and cash equivalents, cash generating capabilities, financial condition and operations, and access to available funding sources will be adequate to fund our cash needs for the next 12 months and the foreseeable future. The table below includes a more comprehensive list of frequent sources and uses of cash:
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Sources of cash Uses of cash
•Cash generated from operations•Borrowings and availability on our Credit Agreement and other long-term borrowings1•Deposits2•Accounts receivable securitization and factoring arrangements3•Participation debt4•Borrowed federal funds and other short-term borrowings5 •Payments on our Credit Agreement•Payments on maturities of deposits•Payments on borrowed federal funds and other short-term borrowings•Working capital needs of the business•Operating lease obligations•Capital expenditures•Repurchases of common stock6•Merger and acquisition activity
(1)As of June 30, 2026, the Company had outstanding term loan principal borrowings of $2.6 billion, borrowings of $446.8 million on the Revolving Credit Facility, letters of credit of $44.6 million drawn against the Revolving Credit Facility and $550.0 million of outstanding Senior Notes. See Part I – Item 1 – Note 10, Financing and Other Debt, to our condensed consolidated financial statements for more information regarding our Credit Agreement and Senior Notes.
(2)WEX Bank’s regulatory status enables it to raise capital to fund the Company’s working capital requirements by issuing deposits, subject to various regulatory capital requirements administered by the FDIC and the UDFI. Additionally, WEX Bank holds deposits for the benefit of WEX Inc.’s HSA customers subject to the terms of a deposit agreement. As of June 30, 2026, we had $6.6 billion in total deposits. See Part I – Item 1 – Note 9, Deposits, to our condensed consolidated financial statements for more information regarding our deposits.
(3)The Company utilizes securitized debt agreements to finance a portion of our receivables, lower our cost of borrowing and more efficiently utilize capital. The Company had $97.8 million of securitized debt under these facilities as of June 30, 2026. We also utilize off-balance sheet factoring and securitization arrangements to sell certain of our accounts receivable to unrelated third-party financial institutions in order to accelerate the collection of the Company’s cash and reduce internal costs. Available capacity is generally dependent on the level of our trade accounts receivable eligible to be sold and the financial institutions’ willingness to purchase such receivables. However, the Company is not dependent on them to maintain its liquidity and capital resources. See Part I – Item 1 – Notes 10, Financing and Other Debt and 11, Off-Balance Sheet Arrangements, to our condensed consolidated financial statements for further information about the Company’s securitized debt and off-balance sheet arrangements.
(4)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. There was $49.6 million borrowed against these participation agreements as of June 30, 2026.
(5)WEX Bank borrows from short-term uncommitted federal funds lines of credit from time to time to supplement the financing of the Company’s accounts receivable. There were $100.0 million outstanding borrowings under these lines of credit as of June 30, 2026. The Bank is also a member of the FHLB of Des Moines, which provides collateralized short-term funding. As of June 30, 2026, WEX Bank had $1.5 billion of advances outstanding and had $118.3 million of remaining borrowing capacity. See Part I – Item 1 – Note 10, Financing and Other Debt, to our condensed consolidated financial statements for more information regarding these facilities.
(6)Under share repurchase programs, 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 a variety of methods as approved by our board of directors from time to time. For additional information regarding our current authorized share repurchase program, see Financing Activities later in this Liquidity and Capital Resources section and Part I - Item 1 - Note 6, Repurchases of Common Stock, to our condensed consolidated financial statements.
Additional Sources of Cash Available
WEX Bank has the ability to borrow funds from the Federal Reserve Bank Discount Window. Borrowing limits fluctuate based on pledged assets, and as of June 30, 2026, the Company could borrow up to a maximum amount of $221.9 million. WEX Bank had no borrowings outstanding on this line of credit as of June 30, 2026. Also, under an uncommitted borrowing facility, WEX Australia can be advanced up to A$21.3 million from Bank of America in short-term funds. The Company had no borrowings outstanding on this facility as of June 30, 2026. See Part I – Item 1 – Note 10, Financing and Other Debt, to our condensed consolidated financial statements for more information regarding these borrowing arrangements.
Credit Agreement
Financial Covenants
The Credit Agreement contains various affirmative and negative covenants that, subject to certain customary exceptions, limit the Company and its subsidiaries’ (including, in certain limited circumstances, WEX Bank and the Company’s other regulated subsidiaries) ability to, among other things (i) incur additional debt, (ii) pay dividends or make other distributions on, redeem or repurchase capital stock, or make investments or other restricted payments, (iii) enter into transactions with affiliates, (iv) dispose of assets or issue stock of restricted subsidiaries or regulated subsidiaries, (v) create liens on
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assets, or (vi) effect a consolidation or merger or sell all, or substantially all, of the Company’s assets. The Credit Agreement also contains customary financial maintenance covenants, including that the Company maintain at the end of each fiscal quarter the following financial ratios:
•a consolidated interest coverage ratio (as defined in the Credit Agreement) of no less than 3.00 to 1.00; and
•a consolidated leverage ratio (as defined in the Credit Agreement) of no more than 4.75 to 1.00.
We were in compliance with these covenants and restrictions as of June 30, 2026.
Senior Notes
Financial Covenants
The Indenture contains covenants that, among other things, limit the Company’s and certain of its subsidiaries’ (other than the Bank Regulated Subsidiaries (as defined in the Indenture)) ability to (i) create or permit to exist certain liens on any of their property or assets securing any indebtedness, without securing the Senior Notes equally and ratably with (or prior to) such secured indebtedness and (ii) enter into sale leaseback transactions. The Company and the Guarantors (as defined in the Indenture) are also limited in their ability to consolidate with or into, or convey, lease or otherwise transfer all or substantially all of their assets on a consolidated basis to any person, subject to certain exceptions.
We were in compliance with these covenants and restrictions as of June 30, 2026.
Redemption provisions
Prior to March 15, 2028, the Company may, at its option, (i) redeem all or a portion of the Senior Notes at the applicable make-whole price set forth in the Indenture, or (ii) redeem up to 40 percent in aggregate principal amount of the Senior Notes in an amount not greater than the net proceeds of certain equity offerings at a redemption price equal to 106.500 percent of the principal amount of Senior Notes to be redeemed, so long as at least 50 percent of the aggregate principal amount of the Senior Notes (originally issued) remains outstanding immediately afterwards. The Company has the option to redeem all or a portion of the Senior Notes at any time on or after March 15, 2028, at specified redemption prices ranging from 100.000 percent to 103.250 percent depending on the date of redemption. Upon the occurrence of a Change of Control Triggering Event (as defined in the Indenture), the Company is required to offer to repurchase the Senior Notes at 101 percent of the principal amount of such Senior Notes, plus accrued and unpaid interest, if any, to, but not including, the date of repurchase.
Cash Flows
The table below summarizes our cash activities and adjusted free cash flow:
Six Months Ended June 30,
(in millions) 2026 2025
Net cash provided by (used for)
Operating activities $ (408.4) $ (217.0)
Investing activities $ (780.0) $ (415.8)
Financing activities $ 1,296.1 $ 660.4
Non-GAAP financial measure:
Adjusted free cash flow1 $ 268.5 $ 210.5
(1)Adjusted free cash flow is calculated as cash flows from operating activities adjusted for net sales and maturities or purchases of current investment securities, capital expenditures, net Funding Activity, changes in WEX Bank cash balances and certain other adjustments. Although non-GAAP adjusted free cash flow is not calculated in accordance with GAAP, WEX believes that adjusted free cash flow is a useful measure to further evaluate our results of operations. Please refer to the section titled Non-GAAP Financial Measures That Supplement GAAP Measures included in Part I, Item 2 of this Form 10–Q for the reasons why we believe this is an important financial measure, and for a reconciliation to net cash provided by operating activities, the most closely comparable GAAP measure.
Operating Activities
We fund a customer’s entire receivable in the majority of our Mobility and Corporate Payments processing transactions, while the revenue generated by these transactions is only a small percentage of that amount. Consequently, cash flows from operations are impacted significantly by increases or decreases in fuel prices and purchase volumes, driving changes in accounts receivable and accounts payable balances, which directly impact our capital resource requirements.
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Cash used for operating activities for the six months ended June 30, 2026, increased $191.4 million as compared to the same period in the prior year primarily due to the impact of higher domestic fuel prices on receivable balances.
Investing Activities
Investing cash flows generally consist of capital expenditures, cash used for acquisitions and the investment of eligible custodial cash assets.
Cash used for investing activities for the six months ended June 30, 2026, increased $364.2 million as compared to the same period in the prior year primarily due to higher transfers of HSA deposits to WEX Bank in the current year, that are invested in available-for-sale debt securities.
Financing Activities
Financing cash flows generally consist of the issuance and repayment of debt and deposits, changes in restricted cash payable and during certain periods, may include repurchases of our common stock based on management’s evaluation of market and economic conditions and other factors.
Net cash provided by financing activities during 2026 increased $635.7 million as compared to the same period in the prior year, primarily due to an increase in Net Funding Activity driven substantially by higher relative deposit balances and net borrowings from the FHLB. While we completed the Tender Offer during the six months ended June 30, 2025, we funded the majority of such share repurchases with $450.0 million of gross borrowings from a new Term Loan B-3 facility under our Credit Agreement and through gross proceeds of $550.0 million from a new offering of Senior Notes. The excess of proceeds received through these borrowings over the amounts paid to repurchase shares under the Tender Offer were used to repay borrowings on the Revolving Credit Facility. As a result, these transactions collectively had little net impact on net cash flows from financing activities during 2025.
During the second quarter of 2026, the Company’s board of directors authorized a share repurchase program under which up to $1.0 billion of the Company’s common stock may be repurchased, with no expiration date. As of June 30, 2026, there was $940.0 million worth of WEX common stock available to be purchased pursuant to the repurchase program authorization.
Other Commitments, Contingencies and Contractual Obligations
As of June 30, 2026, there were generally no material changes to our contractual obligations from the information previously provided in Item 7 of our Annual Report on Form 10–K for the year ended December 31, 2025.
Regulatory Matters
WEX Bank is subject to a consent order issued by the FDIC on September 20, 2023 (the “2023 Order”), which requires WEX Bank to make certain improvements, which include corrections of certain issues identified in the 2023 Order and general enhancements to WEX Bank’s compliance management program. Customer impact and any resulting harm from the violations detailed in the 2023 Order have been identified and steps have been taken to remediate any such impact and harm. On December 17, 2024, the FDIC assessed a civil money penalty of $650 thousand to WEX Bank, which has been paid in full, in relation to the 2023 Order. The terms of the 2023 Order will remain in effect and be enforceable until they are modified, terminated, suspended or set aside by the FDIC. The civil money penalty and the matters identified in the 2023 Order have not had, nor are they expected to have, a material effect on WEX Bank’s operations or the Company’s results of operations, financial condition or cash flows.
Critical Accounting Estimates
We have no material changes to our critical accounting estimates discussed in our Annual Report on Form 10–K for the year ended December 31, 2025.
Recently Adopted Accounting Standards
See Note 2, Significant Accounting Policies, to the condensed consolidated financial statements included in Part I, Item 1 of this Form 10–Q.
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