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Summary of Significant Accounting Policies | 9 Months Ended
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Sep. 30, 2024
Accounting Policies [Abstract] |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation Throughout this Quarterly Report on Form 10-Q, the terms "our," "we," "us," and the "Company" refers to Corpay, Inc. and its subsidiaries. Effective March 25, 2024, FLEETCOR Technologies, Inc. ("FLEETCOR") changed its corporate name to Corpay, Inc. At that time, the Company ceased trading under the ticker symbol "FLT" and began trading under our new ticker symbol, "CPAY," on the New York Stock Exchange ("NYSE") effective March 25, 2024. The Company prepared the accompanying unaudited interim consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations, although we believe that the disclosures made are adequate to make the information not misleading. In our opinion, the unaudited interim consolidated financial statements reflect all adjustments considered necessary for fair presentation. These adjustments consist of normal recurring accruals and estimates that impact the carrying value of assets and liabilities. Actual results may differ from these estimates. The unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Future events and their effects cannot be predicted with certainty; accordingly, accounting estimates require the exercise of judgment. These financial statements were prepared using information reasonably available to us as of September 30, 2024 and through the date of this Quarterly Report. The accounting estimates used in the preparation of the Company’s interim consolidated financial statements may change as new events occur, as more experience is acquired, as additional information is obtained and as the Company’s operating environment changes. Actual results may differ from these estimates. Foreign Currency Translation Assets and liabilities of foreign subsidiaries as well as intra-entity balances denominated in foreign currency and designated for long-term investment are translated into U.S. dollars at the rates of exchange in effect at period-end. The related translation adjustments are recorded to accumulated other comprehensive loss. Income and expenses are translated at the average monthly rates of exchange in effect during the year. Gains and losses from foreign currency transactions of these subsidiaries are included in net income. The Company recognized foreign exchange losses (gains), which are recorded within Other (income) expense, net in the Unaudited Consolidated Statements of Income, for the three and nine months ended September 30, 2024 and 2023 as follows (in millions):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Foreign exchange losses (gains) | $ | (1.2) |  |  | $ | 6.4 |  |  | $ | 5.8 |  |  | $ | 6.2 |
The Company recorded foreign currency losses and gains on long-term intra-entity transactions included as a component of foreign currency translation gains (losses), net of tax, in the Unaudited Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2024 and 2023 as follows (in millions):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Foreign currency losses (gains) on long-term intra-entity transactions | $ | 67.4 |  |  | $ | (31.0) |  |  | $ | 148.2 |  |  | $ | (43.4) |
Cash and Cash Equivalents and Restricted Cash The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the Consolidated Balance Sheets to amounts within the Unaudited Consolidated Statements of Cash Flows (in millions).
| September 30, 2024 |  | December 31, 2023 |  | September 30, 2023 |  | December 31, 2022
Cash and cash equivalents | $ | 1,303,464 |  |  | $ | 1,389,648 |  |  | $ | 1,094,234 |  |  | $ | 1,435,163 |
Restricted cash | 2,851,547 |  |  | 1,751,887 |  |  | 1,702,040 |  |  | 854,017 |
Total cash and cash equivalents and restricted cash | $ | 4,155,011 |  |  | $ | 3,141,535 |  |  | $ | 2,796,274 |  |  | $ | 2,289,180 |
Financial Instruments - Credit Losses The Company accounts for financial assets' expected credit losses in accordance with Accounting Standards Codification (ASC) 326, "Financial Instruments - Credit Losses". The Company’s financial assets subject to credit losses are primarily trade receivables. The Company utilizes a combination of aging and loss-rate methods to develop an estimate of current expected credit losses, depending on the nature and risk profile of the underlying asset pool, based on product, size of customer and historical losses. Expected credit losses are estimated based upon an assessment of risk characteristics, historical payment experience, and the age of outstanding receivables, adjusted for forward-looking economic conditions. The allowances for remaining financial assets measured at amortized cost basis are evaluated based on underlying financial condition, credit history, and current and forward-looking economic conditions. The estimation process for expected credit losses includes consideration of qualitative and quantitative risk factors associated with the age of asset balances, expected timing of payment, contract terms and conditions, changes in specific customer risk profiles or mix of customers, geographic risk, economic trends and relevant environmental factors. The Company's provision for credit losses is recorded within processing expenses in the Unaudited Consolidated Statements of Income. Revenue The Company provides payment solutions to our business, merchant, consumer and payment network customers. Our payment solutions are primarily focused on specific commercial spend or geographically-defined categories, including Vehicle Payments, Corporate Payments, Lodging Payments and Other. The Company provides solutions that help businesses of all sizes control, simplify and secure payment of various domestic and cross-border payables using specialized payment products. The Company also provides other payment solutions for fleet maintenance, employee benefits and long haul transportation-related services. Our revenue is generally reported net of the cost for underlying products and services purchased through our payment solutions. In this report, we refer to this net revenue as "revenue". Revenues from contracts with customers, within the scope of ASC 606, "Revenue Recognition", represent approximately 85% of total consolidated revenues, net, for the nine months ended September 30, 2024 and 2023. In its cross-border payments business, the Company enters into foreign currency forwards, option derivative contracts and swaps for its customers to facilitate future payments in foreign currencies. These contracts are accounted for in accordance with ASC 815, "Derivatives and Hedging" and represent approximately 8% of total consolidated revenues for the nine months ended September 30, 2024 and 2023. Additionally, the Company accounts for revenue from late fees and finance charges, in jurisdictions where permitted under local regulations, primarily in the U.S., Canada and Brazil, in accordance with ASC 310, "Receivables". Such fees are recognized net of a provision for estimated uncollectible amounts, at the time the fees and finance charges are assessed and services are provided and represent approximately 4% and 5% of total consolidated revenues, net for the nine months ended September 30, 2024 and 2023, respectively. The Company's remaining revenue represents float revenue earned on invested customer funds in jurisdictions where permitted. Such revenue represented approximately 3% and 2% of consolidated revenues, net for the nine months ended September 30, 2024 and 2023, respectively. Disaggregation of Revenues Revenues, net by segment for the three and nine months ended September 30, 2024 and 2023 was as follows (in millions, except percentages):
Revenues, net by Segment* | Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2024 |  | % |  | 2023 |  | % |  | 2024 |  | % |  | 2023 |  | %
Vehicle Payments | $ | 506.8 |  |  | 49 | % |  | $ | 500.6 |  |  | 52 | % |  | $ | 1,511.1 |  |  | 51 | % |  | $ | 1,505.8 |  |  | 53 | %
Corporate Payments | 321.9 |  |  | 31 | % |  | 257.8 |  |  | 27 | % |  | 875.7 |  |  | 30 | % |  | 730.0 |  |  | 26 | %
Lodging Payments | 134.0 |  |  | 13 | % |  | 141.4 |  |  | 15 | % |  | 367.7 |  |  | 13 | % |  | 400.3 |  |  | 14 | %
Other | 66.5 |  |  | 6 | % |  | 71.0 |  |  | 7 | % |  | 185.6 |  |  | 6 | % |  | 184.3 |  |  | 7 | %
Consolidated revenues, net | $ | 1,029.2 |  |  | 100 | % |  | $ | 970.9 |  |  | 100 | % |  | $ | 2,940.2 |  |  | 100 | % |  | $ | 2,820.4 |  |  | 100 | %
*Columns may not calculate due to rounding. Revenue by geography for the three and nine months ended September 30, 2024 and 2023 was as follows (in millions, except percentages):
Revenues, net by Geography* | Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2024 |  | % |  | 2023 |  | % |  | 2024 |  | % |  | 2023 |  | %
United States | $ | 572.5 |  |  | 56 | % |  | $ | 561.4 |  |  | 58 | % |  | $ | 1,605.7 |  |  | 55 | % |  | $ | 1,609.8 |  |  | 57 | %
Brazil | 144.9 |  |  | 14 | % |  | 134.2 |  |  | 14 | % |  | 442.4 |  |  | 15 | % |  | 382.0 |  |  | 14 | %
United Kingdom | 131.3 |  |  | 13 | % |  | 114.5 |  |  | 12 | % |  | 377.2 |  |  | 13 | % |  | 333.4 |  |  | 12 | %
Other | 180.5 |  |  | 18 | % |  | 160.8 |  |  | 17 | % |  | 514.9 |  |  | 18 | % |  | 495.2 |  |  | 18 | %
Consolidated revenues, net | $ | 1,029.2 |  |  | 100 | % |  | $ | 970.9 |  |  | 100 | % |  | $ | 2,940.2 |  |  | 100 | % |  | $ | 2,820.4 |  |  | 100 | %
*Columns may not calculate due to rounding.
Contract Liabilities Deferred revenue contract liabilities for customers subject to ASC 606 were $43.4 million and $45.7 million as of September 30, 2024 and December 31, 2023, respectively. We expect to recognize approximately $32.3 million of these amounts in revenues within 12 months and the remaining $11.1 million over the next five years as of September 30, 2024. Revenue recognized in the nine months ended September 30, 2024 that was included in the deferred revenue contract liability as of December 31, 2023 was approximately $26.4 million. Spot Trade Offsetting The Company uses spot trades to facilitate cross-currency corporate payments. The Company applies offsetting to spot trade assets and liabilities associated with contracts that include master netting agreements with the same counterparty, as a right of setoff exists, which the Company believes to be enforceable. As such, the Company has netted spot trade liabilities against spot trade receivables at the counter-party level. The Company recognizes all spot trade assets, net in accounts receivable and all spot trade liabilities, net in accounts payable, each net at the counterparty level, in its Consolidated Balance Sheets at their fair value. The following table presents the Company’s spot trade assets and liabilities at their fair value at September 30, 2024 and December 31, 2023 (in millions):
| September 30, 2024 |  | December 31, 2023
| Gross |  | Offset on the Balance Sheet |  | Net |  | Gross |  | Offset on the Balance Sheet |  | Net
Assets |  |  |  |  |  |  |  |  |  |  |
Accounts Receivable | $ | 3,630.2 |  |  | $ | (3,424.7) |  |  | $ | 205.5 |  |  | $ | 2,499.9 |  |  | $ | (2,373.8) |  |  | $ | 126.1 |
Liabilities |  |  |  |  |  |  |  |  |  |  |
Accounts Payable | $ | 3,510.4 |  |  | $ | (3,424.7) |  |  | $ | 85.7 |  |  | $ | 2,457.3 |  |  | $ | (2,373.8) |  |  | $ | 83.5 |
Reclassifications Segment disclosures for the prior period have been reclassified to conform with current segment presentation. Recent Accounting Pronouncements Not Yet Adopted Segment Reporting In November 2023, the Financial Accounting Standards Board (FASB) issued ASU No. 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures". The ASU enhances disclosures about significant reportable segment expenses. The ASU is effective on a retrospective basis for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. We are currently evaluating the impact this guidance will have on the disclosures within our consolidated financial statements. Income Taxes In December 2023, the FASB issued ASU No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" ("ASU 2023-09"). The amendments require disclosure of specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold and further disaggregation of income taxes paid for individually significant jurisdictions. The ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted. We are currently evaluating the impact that this guidance will have on the disclosures within our consolidated financial statements. Disaggregation of Income Statement Expenses In November 2024, the FASB issued ASU No. 2024-03, "Disaggregation of Income Statement Expenses". The ASU, among other items, requires additional financial statement disclosures in tabular format disaggregating information about prescribed categories (including employee compensation, depreciation and amortization) underlying any relevant income statement expense captions. The ASU is effective on a prospective basis for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption and retrospective application permitted. We are currently evaluating the impact this guidance will have on the disclosures within our consolidated financial statements.

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- Definition The entire disclosure for the basis of presentation and significant accounting policies concepts. Basis of presentation describes the underlying basis used to prepare the financial statements (for example, US Generally Accepted Accounting Principles, Other Comprehensive Basis of Accounting, IFRS). Accounting policies describe all significant accounting policies of the reporting entity. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 235 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/235/tableOfContent + Details
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