Corpay Financial Model

Vehicle Payments

• Segment name: Vehicle Payments
• Revenue driver formula: Active Cards x Transactions per Card x Revenue per Transaction (including fuel spreads and finance charges)
• Historical growth rate: 8-10% CAGR
• Key growth levers and headwinds: Fuel price volatility, fuel spread margins, commercial fleet activity, and the transition to electric vehicles (currently supporting 1 million EV charge points).
• Pricing dynamics: Highly sensitive to spot fuel prices and negotiated merchant fuel spreads.
• Revenue recognition notes: Recognised at the point of transaction processing.
• Seasonality: Stronger in the second and third quarters due to higher commercial driving and construction activity.

Corporate Payments

• Segment name: Corporate Payments
• Revenue driver formula: Spend Volume x Net Take Rate (Interchange + FX Spread) + Float Revenue
• Historical growth rate: 15-20% CAGR (fastest-growing segment)
• Key growth levers and headwinds: Adoption of accounts payable automation, cross-border payment volumes, and interest rates driving float revenue.
• Pricing dynamics: Contractual software fees combined with variable interchange and foreign exchange spreads.
• Revenue recognition notes: Transaction fees recognised upon payment execution; subscription fees recognised over time.
• Seasonality: Generally stronger in the fourth quarter due to year-end corporate budget flushes.

Lodging Payments

• Segment name: Lodging Payments
• Revenue driver formula: Room Nights Booked x Revenue per Room Night
• Historical growth rate: Flat to low single digits
• Key growth levers and headwinds: Workforce travel demand, airline crew logistics, and corporate travel budgets.
• Pricing dynamics: Negotiated discount rates with hotel networks.
• Revenue recognition notes: Recognised when the lodging stay occurs.
• Seasonality: Peaks in the summer months aligned with construction and infrastructure project travel.

• Total assets are approximately $16 billion.
• Key asset categories include massive trade receivables (representing customer spend that Corpay has funded but not yet collected) and goodwill.
• Goodwill & intangibles represent over 50% of total assets due to the company's aggressive acquisition history.
• Working capital profile:
• Days Sales Outstanding (DSO): 30-40 days
• Days Payable Outstanding (DPO): 15-25 days
• Net working capital is highly variable and requires significant funding; as fuel prices or spend volumes rise, the company must fund the receivables gap.
• PP&E is minimal (asset-light model), consisting mostly of IT infrastructure and office leases.
• Right-of-use assets are immaterial relative to the overall balance sheet scale.

• Capex as % of revenue: 2-3% (historically very low).
• Maintenance capex vs. growth capex: Approximately 30% maintenance and 70% growth (primarily capitalised software development).
• Major capex programmes relate to cloud migration and integrating AI into accounts payable automation.
• M&A pattern: Serial acquirer executing both transformational deals (Alpha Group, Cambridge) and bolt-on acquisitions.
• Typical acquisition multiple paid: 10x to 15x forward EBITDA, depending on the technology and growth profile.

• Total long-term debt: $6.7 billion at the end of 2025.
• Cash and cash equivalents: $2.5 billion.
• Debt/EBITDA ratio: 2.8x at year-end 2025 (target range is 2.5x to 3.0x).
• Credit rating: BBB- (investment grade).
• Key debt instruments include a large revolving credit facility, term loans, and senior unsecured notes.
• Interest rate profile: A mix of fixed notes and floating-rate term loans, with interest rate swaps used to manage exposure.
• Share repurchase programme: Highly active, repurchasing 2.57 million shares for $782 million in 2025, with $1.5 billion remaining under authorisation.
• Dividend policy: The company does not pay a regular dividend, preferring to return capital via share buybacks and M&A.

• Operating cash flow conversion: OCF / Net Income typically runs at 1.2x to 1.5x.
• Free cash flow margin: Approximately 33% (generated $1.5 billion in FCF on $4.5 billion in revenue in 2025).
• Major non-cash items bridging net income to OCF include massive intangible amortisation and stock-based compensation.
• Working capital cash flow impact: Can be a significant use of cash during periods of rising fuel prices or rapid volume growth.
• Capex intensity is extremely low, leading to high free cash flow conversion.
• Cash tax rate is generally lower than the GAAP effective tax rate due to the tax deductibility of goodwill amortisation from certain asset purchases.

1. Assumptions: Hardcoded drivers for macro inputs (fuel prices, interest rates), segment growth rates, and margin targets.
2. Revenue Build: Detailed volume and yield calculations for Vehicle Payments, Corporate Payments, Lodging Payments, and Other.
3. Income Statement: GAAP P&L down to Net Income, followed by a reconciliation to Adjusted EBITDA and Adjusted Net Income.
4. Balance Sheet: Assets, liabilities, and equity, with a specific breakout for customer receivables and customer deposits.
5. Cash Flow Statement: Operating, investing, and financing cash flows, highlighting M&A spend and share repurchases.
6. Working Capital Schedule: Detailed AR, AP, and deferred revenue roll-forwards.
7. Debt & Interest Schedule: Tranche-by-tranche debt roll-forward, calculating interest expense based on floating vs fixed rates.
8. Intangibles & D&A Schedule: Waterfall of existing and newly acquired intangible amortisation.
9. SOTP Valuation: Sum-of-the-parts DCF and multiples valuation, separating the high-multiple Corporate Payments business from the lower-multiple Vehicle Payments business.

1. Vehicle Payments Revenue = (Active Cards x Transactions per Card) x Average Revenue per Transaction
2. Corporate Payments Revenue = Total Spend Volume x Net Take Rate + (Average Float Balance x Short-Term Interest Rate)
3. Lodging Payments Revenue = Room Nights x Revenue per Room Night
4. Total Revenue = Vehicle Payments Revenue + Corporate Payments Revenue + Lodging Payments Revenue + Other Revenue
5. Gross Profit = Total Revenue - Processing and Network Fees
6. Adjusted EBITDA = GAAP Net Income + Income Taxes + Interest Expense + D&A + Stock-Based Compensation + M&A Integration Costs
7. Adjusted Net Income = GAAP Net Income + Acquired Intangible Amortisation (net of tax) + Stock-Based Compensation (net of tax)
8. Free Cash Flow = Operating Cash Flow - Capital Expenditures
9. Ending Shares Outstanding = Beginning Shares Outstanding - (Share Repurchase Spend / Average Share Price)
10. Interest Expense = Average Debt Balance x Weighted Average Interest Rate

The Assumptions sheet feeds the Revenue Build and Cost Structure inputs. The Revenue Build drives the top line of the Income Statement. Net Income from the Income Statement flows to the top of the Cash Flow Statement. The Working Capital Schedule calculates changes in operating assets and liabilities, which feed the Operating Cash Flow section. The Cash Flow Statement determines the cash available for debt paydown or share repurchases, feeding the Debt & Interest Schedule. The Debt Schedule calculates interest expense, which creates a circular reference back to the Income Statement. The Share Repurchase output from the Cash Flow Statement reduces the share count on the Income Statement for EPS calculations.

• Revenue, assets, and cash balances are positive.
• Expenses, capital expenditures, and liability balances are positive in their supporting schedules but subtracted in aggregation formulas.
• On the Cash Flow Statement, cash inflows are positive and cash outflows are negative.
• Contra-asset accounts (like allowance for doubtful accounts) are entered as positive numbers and subtracted from gross assets.

• Float revenue is highly sensitive to central bank interest rates; failing to link Corporate Payments revenue to a macro interest rate assumption will cause forecast errors.
• The company relies heavily on Adjusted EPS for valuation; failing to add back acquired intangible amortisation will make the company look artificially expensive on a P/E basis.
• Fuel price volatility directly impacts Vehicle Payments revenue; the model must include a fuel price sensitivity toggle.
• Working capital swings violently with fuel prices; AR and AP days must be modelled dynamically rather than held flat.
• The company frequently divests non-core assets (e.g. PayByPhone in 2026); historical financials may include revenue from segments that no longer exist.
• Share repurchases are a massive driver of EPS growth; failing to model the $1.5 billion buyback authorisation will understate future EPS.
• M&A activity inflates operating cash flow relative to true organic free cash flow due to working capital adjustments at the close of transactions.
• Foreign currency translation impacts revenue by 2-4% annually; the model should ideally include a constant-currency growth view.

• Adjusted EBITDA margin should remain in the 56-58% range; flag if it deviates outside this band.
• Leverage ratio (Net Debt / Adjusted EBITDA) should remain between 2.5x and 3.0x per management guidance.
• Free Cash Flow conversion (FCF / Adjusted Net Income) should be approximately 1.0x.
• Capex as a percentage of revenue should not exceed 3.5%.
• The Balance Sheet must balance perfectly in every period (Total Assets = Total Liabilities + Equity).
• Corporate Payments should represent an increasing percentage of total revenue over the forecast period (exceeding 40% by 2026).
• Effective tax rate should remain between 24% and 26%.
• Organic revenue growth should reconcile to the 10% management target for FY2026.

• SEC EDGAR for Corpay (CPAY) 10-K and 10-Q filings.
• Corpay Investor Relations website for earnings presentations and the Q4 2025 earnings call transcript.
• Key peers for benchmarking: WEX Inc. (WEX), Edenred (EDEN.PA), AvidXchange (AVDX), and Bill Holdings (BILL).
• Industry data sources: Nilson Report for commercial card volumes, US Energy Information Administration (EIA) for retail fuel price forecasts.
• Consensus estimates source: FactSet or Bloomberg for forward EPS and revenue estimates.

• Corpay Q4 2025 Earnings Release (February 4, 2026)
• Corpay Q4 2025 Earnings Call Transcript
• Corpay 2025 Annual Report (Form 10-K)
• Quartr Corpay Q4 2025 Earnings Summary
• TradingView Corpay Financial Results