WEX Board of Directors Authorizes $1 Billion Increase to Share Repurchase Program

Rhea-AI Summary

WEX Inc. (NYSE: WEX) has announced a $1 billion increase to its share repurchase program, expanding the total authorization to $2.05 billion through December 31, 2025. This move is part of WEX's balanced capital allocation framework and value creation strategy. CEO Melissa Smith highlighted the company's strong balance sheet and cash generative business model, which enable investments in growth while returning capital to shareholders. WEX has already spent over $1 billion repurchasing stock since restarting its program. The expanded authorization allows for discretionary repurchases through various methods, subject to market conditions and other factors. The program can be modified or suspended at any time and does not obligate WEX to acquire a specific number of shares.

Positive

• Increased share repurchase program by $1 billion, totaling $2.05 billion authorization
• Strong balance sheet and highly cash generative business model
• Already spent over $1 billion on stock repurchases
• Flexibility in repurchase methods and timing
• Potential to increase shareholder value through stock buybacks

Negative

• Repurchase program may limit funds available for other investments or growth opportunities
• Program subject to market conditions and company's financial performance
• No guarantee of completing the full authorized repurchase amount

Insights

Financial Analyst

WEX's $1 billion increase in their share repurchase program is a significant move that signals strong confidence in the company's financial health and future prospects. This expansion brings the total authorization to $2.05 billion through 2025, demonstrating a long-term commitment to returning value to shareholders. The company's ability to allocate such a substantial amount towards buybacks suggests robust cash flow generation and a solid balance sheet. This strategy can potentially boost earnings per share and stock price by reducing the number of outstanding shares. However, investors should consider whether this capital could be better utilized for growth initiatives or acquisitions. The flexibility in the repurchase timing allows WEX to optimize market conditions, potentially enhancing the program's effectiveness.

Market Research Analyst

WEX's expanded share repurchase program reflects a broader trend among companies with strong cash positions in the current market environment. This move could be interpreted as management's belief that the stock is undervalued, potentially signaling an attractive entry point for investors. The $1 billion increase is substantial, representing about 15% of WEX's current market capitalization. This aggressive buyback strategy might lead to increased demand for WEX shares, potentially supporting the stock price in the short term. However, it's important to analyze whether this capital allocation aligns with the company's long-term growth strategy and industry trends in the global commerce platform sector. Investors should also consider the impact on WEX's financial flexibility for future strategic initiatives or navigating potential economic headwinds.

Corporate Governance Expert

The board's decision to significantly increase the share repurchase program demonstrates strong alignment with shareholder interests. This move, coupled with CEO Melissa Smith's comments, indicates a clear focus on value creation and efficient capital allocation. The extended timeframe until 2025 provides management with flexibility to execute the program strategically. However, shareholders should scrutinize whether this large buyback might limit funds available for innovation or strategic acquisitions in the rapidly evolving commerce platform industry. The use of various repurchase methods, including Rule 10b5-1 plans and accelerated share repurchase programs, suggests a sophisticated approach to execution. Investors should monitor the actual pace and timing of repurchases to ensure they align with market conditions and the company's stated goals of unlocking embedded value.

PORTLAND, Maine--(BUSINESS WIRE)-- WEX Inc. (NYSE: WEX), the global commerce platform that simplifies the business of running a business, today announced that its board of directors has authorized an amended share repurchase program under which up to an additional $1.0 billion worth of WEX’s common stock may be repurchased, expanding the total authorization to $2.05 billion through December 31, 2025.

“This is yet another important milestone in the execution of our balanced capital allocation framework that is key to our value creation strategy,” said Melissa Smith, WEX’s Chair, Chief Executive Officer, and President. “Our strong balance sheet and highly cash generative business model enable us to invest in growth while also effectively returning capital to shareholders. Since restarting our repurchase program we have spent more than $1.0 billion repurchasing stock, including our recently announced accelerated share repurchase agreement. This expanded authorization provides additional opportunity to return capital and unlock value that we believe is embedded in our business.”

Under the amended program, repurchases may be made on a discretionary basis from time to time through December 31, 2025, through Rule 10b5-1 trading plans, open market purchases, privately negotiated transactions, accelerated share repurchase programs, block trades, or otherwise. The timing and amount of any transactions will be subject to the discretion of WEX based upon, among other things, market conditions and other opportunities that the Company may have for the use or investment of its cash balances. In addition, repurchases are subject to the availability of shares of stock for purchase, prevailing market conditions, the trading price of the Company’s stock, and the Company's financial performance. The repurchase program does not obligate WEX to acquire any specific number of shares and may be modified, discontinued, or suspended at any time. WEX intends that all instructions for the repurchase of shares under this program shall be in compliance with Rule 10b-18 as required or deemed appropriate and the covenants or provisions of any debt or other obligations then outstanding.

About WEX

WEX (NYSE: WEX) is the global commerce platform that simplifies the business of running a business. WEX has created a powerful ecosystem that offers seamlessly embedded, personalized solutions for its customers around the world. Through its rich data and specialized expertise in simplifying benefits, reimagining mobility and paying and getting paid, WEX aims to make it easy for companies to overcome complexity and reach their full potential. For more information, please visit www.wexinc.com.

Forward-Looking Statements

This press release contains forward-looking statements including, but not limited to, statements about management’s plans, goals and expectations with respect to the Company’s financial position and share repurchase program. Any statements in this press release that are not statements of historical facts are forward-looking statements. When used in this press release, the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “will,” “positions,” “confidence,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such words. Forward-looking statements relate to our future plans, objectives, expectations, and intentions and are not historical facts and accordingly involve known and unknown risks and uncertainties and other factors that may cause the actual results or performance to be materially different from future results or performance expressed or implied by these forward-looking statements, including a change in the Company's financial position or ability to effectuate or realize the benefits of the share repurchase program; as well as other risks and uncertainties identified in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission on February 23, 2024 and subsequent filings with the Securities and Exchange Commission. The forward-looking statements speak only as of the date of this press release and undue reliance should not be placed on these statements. The Company disclaims any obligation to update any forward-looking statements as a result of new information, future events, or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240906075947/en/

News media contact:

WEX

Julie Lydon, 415-816-9397

Julie.Lydon@wexinc.com



Investor contact:

WEX

Steve Elder, 207-523-7769

Steve.Elder@wexinc.com

Source: WEX

FAQ

What is the new total authorization for WEX's share repurchase program?

WEX has expanded its share repurchase program to a total authorization of $2.05 billion through December 31, 2025.

How much has WEX (NYSE: WEX) already spent on stock repurchases?

WEX has spent more than $1 billion repurchasing stock since restarting its repurchase program.

When does WEX's expanded share repurchase authorization expire?

The expanded share repurchase authorization for WEX is valid through December 31, 2025.

What methods can WEX use for share repurchases under this program?

WEX can repurchase shares through Rule 10b5-1 trading plans, open market purchases, privately negotiated transactions, accelerated share repurchase programs, and block trades.

Is WEX (NYSE: WEX) obligated to repurchase the full authorized amount of shares?

No, the repurchase program does not obligate WEX to acquire any specific number of shares and can be modified, discontinued, or suspended at any time.