The following is a summary of the Element Fleet Management Corp. (ELEEF) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Element Fleet Management reported strong Q3 results with double-digit year-over-year growth in revenue, adjusted operating income, EPS, and free cash flow per share.

• Net revenue increased by 12% year-over-year to $280 million, driven by higher service revenue and net financing revenue.

• Adjusted operating income reached $161 million, up 15% year-over-year.

• Free cash flow per share grew 13% to $0.36.

Business Progress:

• New acquisition of Autofleet was completed to enhance digitization and automation in fleet management.

• Added 38 new clients, with a significant portion being self-managed conversions.

• Syndicated $1 billion of assets for the second consecutive quarter, indicating strong capital sourcing capabilities.

• Launched new high-margin products leading to revenue growth in Mexico services.

Opportunities:

• Expansion into digitization and automation through the acquisition of Autofleet.

• Expectations of continued growth in the U.S. and Canadian markets with higher vehicle prices influencing asset originations.

• Forecasted net revenue growth of 6.5% to 8.5% for 2025, suggesting sustained solid performance.

Risks:

• Broad measures to manage increased funding costs and interest expenses following the redemption of preferred shares.

• Market risks such as FX impacts due to a devaluation in the Mexican peso, affecting revenue projections.

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