Growth in payment-processing business in North America and continued success with its MasterCard corporate card program helped generate a 54.6% increase in second-quarter revenue for fleet card provider Wright Express Corp.
Revenue for the quarter ended June 30 totaled $141.3 million, up $91.4 million during the same period last year. Net income was up 35.3%, to $40.6 million from $30 million, the company reported Aug. 3.
MasterCard corporate card purchase volume rose 82.7%, to $1.9 billion from $1.04 billion, generating a 66.7% boost in program revenue, to $18.5 million from 11.1 million. “This product continues to surpass our expectations,” Mike Dubyak, Wright Express chairman, president and CEO, told analysts in a conference call.
Online travel bookings drove much of that growth, Dubyak tells PaymentsSource.
Among Wright Express’ new clients is the online travel site Expedia.com, he says, though the company declines to confirm this.
“Expedia moved more business to [Wright Express’s] platform at a faster rate than they expected, plus we’re seeing strong cross-border travel spend on Visa and MasterCards,” says Tien-tsin Huang, an analyst at J.P. Morgan Securities Inc. “Online travel is very healthy, and [Wright Express] is taking more wallet share among its clients.”
The MasterCard program accounted for about 20% of the company’s revenue for the quarter, says Huang.
Wright Express also experienced 8% payment-processing transaction growth in North America, which Dubyak attributes to more new business, including the Conoco Philips’ private-label card portfolio and a private-label card deal with the Wawa chain of 580 convenience stores. “The addition of Wawa increases our capability to penetrate the small-fleet market,” Dubyak said during the call.
Fleet payment-processing revenue was $78.4 million for the quarter, up 43.9% 43.9% from $54.5 million a year earlier. Payment processing of transactions where Wright Express owns the receivables increased 14.7%, to 63.2 million from 55.1 million. Transactions processed where Wright Express does not own the receivables increased 34.3%, to 18 million from 13.4 million.
The domestic retail fuel price increased 34.5%, to $3.86 per gallon from $2.87 per gallon, helping boost quarterly results. Wright Express processed 81.2 million fuel transactions during the quarter, up 22.5% from 66.3 million a year earlier. Fuel sales processed totaled $4.8 billion, up 54.8% from $3.1 billion.
The average number of vehicles Wright Express serviced worldwide was 6.3 million, up 37% from 4.6 million.
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