Corpay delivered 18% revenue growth and a 32% increase in adjusted diluted earnings per share in the third quarter, prompting a higher full-year outlook. The company is also using substantial cash resources for share buybacks and debt reduction.
- Revenue rose 18% to US$1.382 billion
- Adjusted diluted EPS increased 32% to US$7.54
- Full-year adjusted EPS guidance lifted to US$28.00 at the midpoint
- US$1.85 billion spent on share repurchases through September
- Corporate Payments organic revenue growth reached 18%
Strong quarter lifts Corpay’s full-year targets
Corpay, Inc. (NYSE:CPAY) has raised its 2026 earnings outlook after reporting a third quarter that exceeded management’s expectations, with revenue up 18% to US$1.382 billion and adjusted diluted earnings per share up 32% to US$7.54. Organic revenue growth was 11%, a pace the company says it has achieved in five of the past six quarters.
GAAP net income attributable to Corpay rose 36% to US$378.4 million, while diluted GAAP earnings per share increased 45% to US$5.66. Adjusted EBITDA, a non-GAAP measure, climbed 17% to US$793.8 million, producing a 57.4% adjusted EBITDA margin.
Corporate Payments drives the fastest growth
Corporate Payments was the standout segment. Reported revenue increased 41% to US$571.3 million, while pro forma and macro-adjusted revenue growth was 18%. Management attributed the performance to strength in both spend management and cross-border payments, with adjusted EBITDA margins in the segment reaching 57.4%.
Vehicle Payments revenue rose 8% to US$579.8 million, although transaction volumes were affected by the disposal of PayByPhone and other portfolio changes. Lodging Payments revenue increased 3% to US$131.1 million, while the smaller Other category declined 2% to US$99.7 million.
Higher guidance comes alongside aggressive capital allocation
Corpay now expects full-year revenue of US$5.340 billion to US$5.360 billion, with adjusted net income per diluted share of US$27.90 to US$28.10. At the midpoint, that implies 18% revenue growth and 31% adjusted EPS growth. Fourth-quarter guidance calls for revenue of about US$1.37 billion and adjusted diluted EPS of US$7.65 at the midpoint.
The company had repurchased 5.25 million shares for US$1.85 billion by the end of September, including US$747 million of buybacks during the quarter. Management also says free cash flow will be directed towards debt repayment, alongside proceeds from the sale of the maintenance business. That combination may support per-share results, but the filing’s assumptions include interest expense of US$435 million to US$455 million for the year and remain exposed to fuel prices, foreign exchange, credit conditions and borrowing costs.
The immediate question is whether Corporate Payments can sustain its unusually strong organic growth while the company balances buybacks with deleveraging. Corpay’s updated targets are based on assumptions including US$4.90-per-gallon fuel prices for the rest of the year, broadly flat fuel spreads and no material undisclosed acquisitions or divestitures, leaving those variables as important tests for the final quarter.
Bottom Line?
The raised targets strengthen Corpay’s growth case, but the next test is whether organic momentum can hold while cash is split between buybacks and debt reduction.
Questions in the middle?
- Can Corporate Payments maintain 18% organic growth beyond the current comparison period?
- How quickly will free cash flow and the maintenance-business proceeds reduce debt?
- Will fuel prices, foreign exchange movements and borrowing costs remain close to the assumptions underpinning guidance?