WEX recently released its 10-Q report for the quarter ended June 30, 2026. The company operates a commerce platform in the U.S. and abroad through three segments: Mobility, Corporate Payments, and Benefits. Mobility focuses on fleet payment and transaction-processing services for commercial vehicles and government fleets; Corporate Payments provides embedded payments and accounts payable automation; and Benefits offers SaaS-based consumer-directed healthcare and enrollment tools, including HSA-related services.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
WEX said its MD&A is meant to explain year-over-year changes in the financial statements, the drivers behind those changes, and the effect of accounting estimates, with separate discussion of the three operating segments and unallocated corporate costs. The section is organized into Executive Overview, Company Highlights, Results of Operations, Liquidity and Capital Resources, Critical Accounting Policies and Estimates, and Recently Adopted Accounting Standards.
In the second quarter, WEX reported total revenue of $753.5 million, up from $659.6 million a year earlier. Net income attributable to shareholders rose to $108.5 million from $68.1 million, while diluted EPS increased to $3.11 from $1.98. For the first half, revenue reached $1.427 billion versus $1.296 billion, and net income attributable to shareholders increased to $186.2 million from $139.6 million. Net cash used in operating activities was $408.4 million for the six months, compared with $217.0 million in the prior-year period. Adjusted net income attributable to shareholders was $186.5 million in the quarter and $331.9 million for the first half, while adjusted free cash flow was $268.5 million and total company volume was $68.862 billion in the quarter.
Mobility
Mobility revenue rose 22% in the quarter to $422.4 million and 13% for the first half to $767.0 million. Payment processing revenue increased to $210.8 million from $160.4 million in the quarter, and finance fee revenue climbed to $101.6 million from $80.0 million. WEX said the main driver was higher average U.S. fuel prices, which lifted payment processing revenue by $63.8 million in the quarter and $61.7 million in the first half. Foreign exchange added $1.8 million in the quarter and $4.6 million in the first half.
Mobility total volume increased to $26.700 billion in the quarter from $18.833 billion, and payment processing dollars of fuel rose to $17.191 billion from $12.216 billion. Average U.S. fuel prices were $4.70 per gallon versus $3.28 a year earlier. The net payment processing rate declined to 1.23% from 1.31%.
Late fee revenue rose to $82.6 million from $65.9 million in the quarter, and factoring fee revenue increased to $18.9 million from $14.1 million. WEX attributed the late fee gain to higher outstanding balances subject to late fees, while factoring fees rose on larger invoice sizes tied to higher spot rates and fuel costs.
Mobility operating income increased to $147.5 million from $101.1 million in the quarter, and segment adjusted operating income rose to $182.7 million from $134.0 million. The segment adjusted operating margin improved to 43.2% from 38.7%.
Provision for credit losses in Mobility more than doubled to $32.3 million from $15.4 million in the quarter and to $57.9 million from $29.3 million in the first half. WEX tied that increase to higher receivable balances from fuel-driven spending and higher loss rates in the first half. Sales and marketing expense rose to $72.2 million from $63.6 million in the quarter.
Benefits
Benefits revenue increased 6% in the quarter to $206.0 million and 7% in the first half to $422.1 million. Other revenue rose to $69.0 million from $57.4 million in the quarter, driven by higher average HSA deposit balances held by WEX Bank. Payment processing revenue increased to $29.5 million from $27.2 million, reflecting higher purchase volumes.
Purchase volume in Benefits rose to $2.188 billion from $2.003 billion in the quarter, while total volume declined to $3.578 billion from $3.729 billion. Average HSA custodial cash assets increased to $5.227 billion from $4.705 billion. The average number of SaaS accounts rose to 21.7 million from 21.2 million.
Account servicing revenue fell to $107.4 million from $110.4 million in the quarter, as WEX said program fees on custodial services declined because more deposits were transferred to WEX Bank from third-party depository banks. That decline was partly offset by growth in SaaS account servicing.
If you want, I can continue with the Corporate Payments section in the same fact-heavy style. As a result of these announcements, the company's shares have moved 10.47% on the market, and are now trading at a price of $171.985. If you want to know more, read the company's complete 10-Q report here.
