Corpay's Corporation Payments expansion: Group President Mark Frey discusses Q1 2024
In a recent financial update, Corpay, formerly known as Fleetcor, announced impressive growth in its Corporate Payments segment for Q1 2024. The segment's EBITDA surged by 24.6% to $125.5 million, with an EBITDA margin of 47%.
The growth was primarily driven by a 17% Year-over-Year (YoY) increase in revenues to $265.4 million, a 25% increase in sales, and a notable 18% growth in cross-border revenue. These key factors have contributed to the segment accounting for a larger share of Corpay's total revenue, now at 36%, up from 30% a year earlier.
The success of the Corporate Payments division can be attributed to several key factors. Strong spend volume growth, broad geographic coverage, record cross-border sales, and expansion of its payables technology platform have all played a significant role. Specifically, Corporate Payments revenue grew 36% overall, with a 36% reported increase in spend volume to over $58 billion.
Corpay's new enterprise clients in the Payables business and the international expansion of its Corpay Complete payables platform have also contributed to this growth. The acquisition of Alpha Group, whose expertise in cross-border FX and treasury management, has complemented Corpay's services and enhanced cross-border payment volumes, a critical driver for Corporate Payments expansion.
Looking forward, the acquisition of accounts-payable-focused corporate payments company Paymerang, expected to close in Q2, is anticipated to contribute to growth from 2025. Corpay projects high teens growth in Corporate Payments revenue for the full year and expects this segment to exceed $2 billion in revenue next year, representing over 40% of the company's revenue after adding AvidXchange and Alpha Group acquisitions.
Corpay's Q1 2024 revenues grew 4% YoY to $935.3 million, with the Corporate Payments segment being the primary driver of this growth. The company's rebranding from Fleetcor to take the name of its Corporate Payments division was completed earlier this year.
In conclusion, Corpay's Corporate Payments division has shown significant growth in Q1 2024, driven by strong spend volume growth, broad geographic coverage, record cross-border sales, and expansion of its payables technology platform. The acquisition of Paymerang is expected to further boost growth from 2025, and Corpay projects high teens growth in Corporate Payments revenue for the full year.
Investors should be encouraged by the surge in Corpay's Corporate Payments segment revenue, which grew 36% overall and 17% Year-over-Year (YoY), primarily due to increased sales, cross-border revenue, and revamped payables technology. Additionally, upcoming acquisitions, such as Paymerang in Q2, are projected to boost this growth further, making Corpay's Corporate Payments division an attractive business investment for the near future.
