Element Fleet Management Reports Record Q2 Earnings

Element Fleet Management Corp. ((TSE:EFN)) has held its Q2 earnings call. Read on for the main highlights of the call.

Element Fleet Management Corp. recently held its earnings call, revealing a generally positive sentiment driven by strong financial performance and strategic growth initiatives. The company reported record results and an expanding client base, although it faced challenges such as foreign exchange impacts and moderated growth in service revenue and originations.

Record Second Quarter Results

Element Fleet Management delivered record results in the second quarter of 2025, with adjusted earnings per share reaching $0.30 and free cash flow per share at $0.40. This marks a year-over-year growth of 7% and 8%, respectively, showcasing the company’s robust financial health.

Strong Top Line Growth

The company experienced a 6% year-over-year increase in net revenue, totaling $290 million. When adjusted for foreign exchange, the net revenue growth was even more impressive at 9%, demonstrating a positive operating leverage of 2.5%.

Expansion in Client Base

Element welcomed 46 new clients during the second quarter, with many transitioning from self-managed fleets. Additionally, the company added 265 new service enrollments, indicating a successful expansion in its client base.

Strategic Partnerships and Digital Innovation

Element launched Element Mobility and formed partnerships with Samsara and Modis, aiming to enhance integrated tech-enabled solutions and drive innovation in fleet management. These strategic moves are expected to strengthen Element’s market position.

Commitment to Sustainability

In its fifth annual sustainability report, Element emphasized transparency and environmental responsibility, reinforcing its commitment to sustainable business practices.

Foreign Exchange Impact

The depreciation of the Mexican peso by 13% against the U.S. dollar resulted in a $10 million reduction in net revenue and a $0.02 decrease in diluted earnings per share, highlighting the challenges posed by foreign exchange fluctuations.

Decline in Originations

Origination volumes fell to $1.9 billion, down 4% year-over-year, primarily due to foreign exchange impacts. When adjusted for FX, the decline in originations was 2%, reflecting moderated growth in this area.

Servicing Revenue Growth Moderation

Service revenue increased by 8% year-over-year to $151 million, although this represents slower growth compared to previous quarters, indicating a moderation in servicing revenue growth.

Forward-Looking Guidance

Looking ahead, Element Fleet Management anticipates finishing the year at or above the high end of its guidance across key financial metrics, excluding originations. The company expects continued growth in net revenue and client order volumes, driven by strategic initiatives and disciplined expense management.

In summary, Element Fleet Management’s earnings call conveyed a positive outlook, with record financial results and strategic growth initiatives leading the way. Despite challenges such as foreign exchange impacts, the company remains optimistic about its future performance, aiming to exceed its financial guidance by year-end.