Payment solutions provider WEX (NYSE: WEX) reported Q3 CY2025 results exceeding the market’s revenue expectations, with sales up 3.9% year on year to $691.7 million. The company expects the full year’s revenue to be around $2.64 billion, close to analysts’ estimates. Its non-GAAP profit of $4.59 per share was 3.1% above analysts’ consensus estimates.

Is now the time to buy WEX? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

WEX’s third quarter results for 2025 were marked by a modest negative market reaction, despite the company delivering revenue and non-GAAP profit above Wall Street expectations. Management attributed the return to growth primarily to the resilience of the Mobility segment and stabilization in Corporate Payments following the resolution of a large online travel agency (OTA) customer transition. CEO Melissa Smith addressed ongoing challenges in the over-the-road trucking market and described the macroeconomic environment as “a bit of a slog,” but highlighted efforts to retain customers and strengthen small business acquisition, which increased new small business customers by 12% year-over-year.

Looking forward, WEX’s guidance is built around its ability to drive continued growth through targeted sales investments and product innovation, particularly in its Mobility and Corporate Payments segments. Management pointed to the upcoming BP portfolio conversion and legislative changes expanding Health Savings Account (HSA) eligibility as factors that could benefit revenue in 2026 and beyond. CFO Jagtar Narula cautioned that operating margins are likely to remain pressured by elevated investment and macro uncertainty, but expects improved results as these headwinds abate, stating, “We remain cognizant of the macro uncertainty, but are encouraged by the building blocks we've established this year.”

Key Insights from Management’s Remarks

Management cited improvements in customer retention, expansion in small business channels, and technology innovation as major drivers of the quarter. The company also completed a portfolio review with outside advisors, reaffirming its multi-segment strategy.

• Mobility segment resilience: Despite softening in the over-the-road trucking market, management emphasized strong free cash flow and noted increased customer acquisition efforts in small fleets, leading to a 12% rise in new small business clients year-over-year.

• Corporate Payments recovery: The company largely moved past the headwind from the OTA customer transition, resulting in a return to segment growth. Investments in embedded payments and direct accounts payable solutions are broadening its reach and supporting robust new customer pipelines.

• Benefits segment expansion: WEX grew SaaS accounts by 6% and HSA accounts by 7%, now supporting over 8.8 million HSA accounts. The company highlighted its partnership-driven distribution model as a key advantage for capturing growth from new HSA eligibility legislation.

• AI-driven operational efficiency: Management described how artificial intelligence has accelerated product innovation velocity by 20% and reduced claims processing times in the Benefits segment from days to minutes, while also improving fraud prevention and customer service productivity.

• Portfolio review outcome: After a comprehensive review with Bank of America and JPMorgan, the Board determined that WEX’s Mobility, Benefits, and Corporate Payments segments are stronger together. Cross-selling and shared infrastructure were cited as sources of operating leverage and financial resilience.

Drivers of Future Performance

WEX expects revenue growth to be driven by product innovation, new customer wins, and legislative changes, but acknowledges ongoing macroeconomic and margin pressures.

• BP portfolio impact: Management anticipates that the conversion of the BP customer portfolio will add between 0.5 to 1 percentage point to revenue over the 12 months following its onboarding, with sales to new customers beginning late this year.

• HSA eligibility expansion: The upcoming legislative change to allow Health Savings Accounts for public health exchange participants could expand WEX’s addressable market by 3 to 4 million accounts. Management believes its strong partner distribution channel positions it to capture a significant share of this growth in 2026 and beyond.

• Margin headwinds and investment: Management expects operating margins to remain under pressure due to ongoing investments in sales, marketing, and product development, as well as continued softness in certain Mobility markets. However, they view these investments as crucial for long-term competitiveness and operating leverage.

Catalysts in Upcoming Quarters

Looking ahead, the StockStory team will be monitoring (1) the ramp-up and revenue contribution from the BP portfolio conversion in Mobility, (2) the impact of HSA eligibility expansion on Benefits segment growth, and (3) progress in onboarding new Corporate Payments customers and embedded payment volumes. We will also track margin trends as investment levels and macro conditions evolve.

WEX currently trades at $152.02, down from $154.12 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).

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