Element Reports Record 2024 Financial Results; Reaffirms Full-Year 2025 Guidance

Element Fleet Management Corp. (TSX:EFN) ("Element" or the "Company"), the largest publicly traded, pure-play automotive fleet manager in the world, today announced strong financial and operating results for the three months ended September 30, 2024. The Company also reaffirmed its full-year 2025 guidance. Here's a breakdown of the key highlights and what they mean for investors.



Record Quarterly Net Revenue and Earnings

Element grew Q3 2024 net revenue 12% over Q3 2023 on a year-over-year basis to $280 million, driven by robust growth across all revenue categories. Net revenue increased $5 million or 2% from Q2 2024 on a quarter-over-quarter basis, led largely by higher services and syndication revenue. The Company's record adjusted operating income ("AOI") of $161.4 million in Q3 constitutes 7.3% year-over-year growth as reported and 4.5% growth over "organic" Q2 2022 AOI in constant currency.

Element's Q3 2024 EPS were $0.24, up 3 cents both year-over-year and from Q1 2023 ("quarter-over-quarter"). Q3 adjusted EPS were a record $0.29, up 5 cents over "organic" Q2 2022 (3 cents in constant currency) and 2 cents quarter-over-quarter. Element generated a record $0.46 of free cash flow ("FCF") per share in the quarter -- 9 cents more year-over-year (6 cents in constant currency) and 9 cents more quarter-over-quarter -- driven primarily by the significant increase in originations.



Strong Operating Performance and Capital-Light Business Model

Element's Q2 2023 EPS were $0.29 and adjusted EPS were $0.33, the latter up 5 cents per share or 17.6% year-over-year "organically" (3 cents in constant currency) and 2 cents or 6.5% quarter-over-quarter. A capital-lighter business model, which relies on services revenue and syndication revenue, contributed to Element's strong cash flow and income generation. In Q2 2023, Element's capital-light services revenue and syndication revenue combined to enhance its return on common equity to 12.3% and pre-tax return on common equity to a record 19.2%.



Growth Opportunities and Guidance

Element's strong performance reflects its team's ability to consistently deliver superior service and value to its clients, combined with improved OEM supply driving record originations in the U.S. and Canada. The Company remains focused on executing its proven organic net revenue growth strategy. Element guides to net revenue growth of 6.5 to 8.5%, positive operating leverage, and high single- to low double-digit growth in each of adjusted operating income, adjusted EPS, and adjusted free cash flow per share in 2025.



In conclusion, Element's record 2024 financial results and reaffirmed 2025 guidance demonstrate the Company's strong performance and growth potential. Investors seeking exposure to the automotive fleet management sector should consider Element as a compelling investment opportunity.