Element Reports Q3 2026 Results
Amounts in US$ unless otherwise noted
- Net revenue of $321 million increased 5% year-over-year, supported by strength in net financing revenue, increased services revenue and growth in vehicles under management ("VUM").
- Adjusted2diluted EPS rose 6% to $0.35 and Adjusted2free cash flow per share climbed 7% year-over-year to $0.45, reflecting resilient earnings growth and underscoring the strong cash-generative nature of Element's business.
- Adjusted2 return on equity of 20.2% increased 140 basis points year-over-year, while maintaining a debt-to-capital ratio of 76.7% and returning $341 million to shareholders through dividends and buybacks.
- Subsequent to quarter end, Element expanded its strategic partnership with Waymo to support autonomous mobility operations in Toronto.
- Element expects full-year 2026 Originations to be below its Guidance range, and other full-year 2026 financial metrics to be at or near the lower end of their respective ranges; currently expects 2027 net revenue growth to moderate to low-single digit range excluding the impact of foreign exchange translation, with full 2027 Guidance to be provided alongside Q4 2026 results in February.
TORONTO, Nov. 3, 2026 /CNW/ -- Element Fleet Management Corp. (TSX: EFN) ("Element" or the "Company"), a global leader in intelligent fleet and mobility solutions, today announced financial and operating results for the three and nine-month periods ended September 30, 2026. The following table presents Element's selected financial results.
Q3 2026 | Q2 2026 | Q3 2025 | QoQ | YoY | |
In US$ millions, except percentages and per share amounts | $ | $ | $ | % | % |
Selected results - as reported | |||||
Net revenue | 320.7 | 316.6 | 306.4 | 1 % | 5 % |
Pre-tax income (income before income taxes) | 170.2 | 146.7 | 159.7 | 16 % | 7 % |
Pre-tax income margin | 53.1 % | 46.3 % | 52.1 % | 680 bps | 100 bps |
Earnings per share (EPS) [diluted] | 0.33 | 0.28 | 0.31 | 18 % | 6 % |
Adjusted results1,2 | |||||
Adjusted net revenue1,2 | 320.7 | 318.1 | 306.4 | 1 % | 5 % |
Adjusted operating income (AOI)2 | 182.0 | 176.9 | 177.7 | 3 % | 2 % |
Adjusted operating margin2 | 56.8 % | 55.6 % | 58.0 % | 120 bps | (120 bps) |
Adjusted EPS2 [diluted] | 0.35 | 0.34 | 0.33 | 3 % | 6 % |
Other highlights: | |||||
Adjusted free cash flow per share2(FCF/sh) - diluted | 0.45 | 0.39 | 0.42 | 15 % | 7 % |
Originations | 1,693 | 1,724 | 1,722 | (2 %) | (2 %) |
Vehicles under management | 1.580 | 1.561 | 1.530 | 1 % | 3 % |
Adjusted ROE2 | 20.2 % | 19.6 % | 18.8 % | 60 bps | 140 bps |
1. | Adjusted items in Q3 2026 included $0.7 million in costs associated with the proposed acquisition of FleetPartners. Q2 2026 included $11 million in severance expenses related to targeted organizational changes driven by the Company's digitization and automation initiatives, $3.7 million associated with the development of the equity residual program, and $0.5 million for payments to certain Car IQ personnel contingent upon their continued employment. Q2 2026 also excluded $1.5 million of upfront costs associated with the inaugural equity residual transaction, reflected in syndication revenue. Q3 2025 included $2 million in set-up costs associated with the development of the equity residual program. |
2. | Adjusted results are non-GAAP or supplemental financial measures, which do not have any standard meaning prescribed by GAAP under IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers. For further information, please see the "IFRS to Non-GAAP Reconciliations" section in this earnings release. The Company uses "Adjusted Results" because it believes that they provide useful information to investors regarding its performance and results of operations. |
"Element continues to demonstrate the resilience of our leading global franchise, supported by deeply embedded client relationships, structural competitive advantages, and substantial cash generation," said Laura Dottori-Attanasio, Chief Executive Officer of Element. "We are working hard to drive stronger, more consistent commercial growth that better reflects the full potential of our platform by making changes to strengthen new client acquisition, improve conversion, and accelerate growth in vehicles under management and services penetration."
Dottori-Attanasio continued, "Our underlying market opportunity remains attractive, and the investments we have made in technology and operating capabilities are beginning to deliver tangible productivity benefits and improvements to our client experience. Our focus is on translating these advantages into stronger organic growth, consistent positive operating leverage, and attractive long-term shareholder returns."
Adjusted net revenue growth
Adjusted net revenue reached $321 million in Q3 2026, $14 million or 5% above Q3 2025 ("year-over-year"), including a $10 million favourable foreign exchange impact, with underlying growth supported by higher services revenue.
Compared to Q2 2026 ("quarter-over-quarter"), net revenue grew $3 million or 1%, led by higher net financing revenue.
Services revenue
Element's largely unlevered services revenue continues to underpin the Company's capital-light business model and long-term growth strategy, contributing to the expansion in return on equity.
Services revenue totalled $164 million, an increase of $8 million or 5% from the prior year, primarily attributed to continued VUM growth and higher services revenue per VUM. Services revenue was largely unchanged from the prior quarter.
VUM remains the Company's primary measure of franchise growth, reflecting the addition of new clients and expansion within existing client fleets. Element's commercial priorities are focused on growing VUM, deepening services penetration, and increasing revenue per vehicle.
Net financing revenue
Net financing revenue of $138 million was $8 million or 6% higher year-over-year, primarily driven by favourable foreign exchange impacts and continued benefits from Element's leasing and funding initiatives which underpinned an expansion in the core NFR yield to 5.76%. This was partially offset by lower gains on sale ("GOS"), particularly in Australia and New Zealand as pricing normalized.
Net financing revenue also improved sequentially by $2 million or 1%, reflecting similar funding and GOS dynamics.
The core NFR yield was further supported by a lower average net earning asset base, a timing-related interest benefit, and the decline in the provision for credit losses to $0.2 million in Q3 2026 from $4.6 million in Q2 2026.
Syndication volume and revenue
During the quarter, the Company syndicated $806 million of assets, compared with $632 million in Q3 2025 and $634 million of volumes in Q2 2026. The prior quarter also included $729 million of equity residual funding, bringing combined activity in Q2 2026 to $1.36 billion.
Syndication revenue was $19 million, down $1 million or 6% from Q3 2025, primarily reflecting a shift in the mix of syndication activity, with higher yields achieved in the prior year period.
Sequentially, syndication revenue increased by 3%, reflecting higher core syndication volumes. The comparison is based on Q2 2026 adjusted revenue of $18 million, which excludes a $1.5 million one-time adjustment related to the inaugural equity residual transaction.
The Company continues to evaluate syndication and equity residual funding opportunities based on their relative economics, while preserving capital efficiency and balance sheet flexibility.
Adjusted operating expenses
Adjusted operating expenses rose $10 million or 8% year-over-year to $139 million, compared with net revenue growth of 5%, resulting in negative operating leverage.
The increase primarily reflected inflationary pressures, continued investments in the Company's Mobility initiatives, as well as higher depreciation and amortization expenses.
The Company is beginning to realize the productivity benefits of its investments in technology, digitization, and automation. The organizational actions announced in Q2, enabled by these investments, are expected to generate approximately $20 million of annualized savings in 2027.
Compared with Q2 2026, adjusted operating expenses decreased by $3 million or 2%, primarily reflecting the initial benefits from these actions and the timing of technology costs. Both expenses and their year-over-year growth rate have moderated sequentially over the past two quarters.
Adjusted operating income and adjusted operating margin
Adjusted operating income ("AOI") was $182 million in Q3 2026, up $4 million or 2% year-over-year, and up $5 million or 3% quarter-over-quarter.
Adjusted operating margin was 56.8% compared with 58.0% in Q3 2025, and 55.6% in Q2 2026, primarily due to the same factors discussed in the adjusted operating expenses section.
Element remains focused on advancing technology and automation initiatives to drive operational efficiencies, structurally reduce its cost to serve, and generate consistent positive operating leverage.
Originations
Element originated $1.7 billion of assets in Q3 2026, down $29 million or 2% compared to Q3 2025, and down $31 million or 2% from Q2 2026.
On a year-to-date basis, originations decreased 5% year-over-year, but increased 2% excluding the originate-to-syndicate client discussed in preceding quarters.
Orders reached $1.4 billion during the quarter, increasing both sequentially and from a year ago, partly reflecting the resumption of orders previously deferred by clients.
However, overall commercial performance in the quarter remained below the Company's expectations.
This performance reflects the need for stronger commercial execution to improve conversion. To address this, Element has implemented changes aimed at improving pipeline quality, driving new client acquisition, increasing win rates, and ensuring more consistent conversion of wins and orders into funded assets and recurring revenue growth.
The pace of originations also continued to reflect client caution as macroeconomic and trade uncertainty continue to affect the timing of client purchasing decisions.
Originations and orders remain important indicators of activity within Element's financing business, with client replacement cycles and vehicle delivery timing influencing quarterly volumes.
The table below sets out the geographic distribution of Element's originations for the three-month periods indicated.
(in US$000's for stated values) | September 30, 2026 | June 30, 2026 | September 30, 2025 | |||
$ | % | $ | % | $ | % | |
United States and Canada | 1,246,934 | 74 | 1,268,535 | 74 | 1,275,484 | 74 |
Mexico | 323,868 | 19 | 346,165 | 20 | 342,007 | 20 |
Australia and New Zealand | 122,237 | 7 | 109,513 | 6 | 104,801 | 6 |
Total | 1,693,039 | 100 | 1,724,213 | 100 | 1,722,292 | 100 |
Adjusted free cash flow per share and returns to shareholders
Adjusted diluted free cash flow ("FCF") per share was $0.45 in Q3 2026, up 7% year-over-year, primarily reflecting the timing of capital expenditures, a 3% reduction in weighted average shares outstanding, and higher AOI. Sequentially, FCF per share increased 15% driven by the timing of cash tax payments and capital spending.
Element returned $84 million to shareholders during the quarter, comprised of $42 million in common share dividends and $42 million through common share repurchases.
Common dividend and share repurchases
The Company's Board of Directors (the "Board") authorized and declared a quarterly cash dividend of CAD$0.15 per common share of Element for the fourth quarter of 2026. The dividend will be payable on January 15, 2027 to shareholders of record as at the close of business on December 31, 2026.
The Company's common dividends are designated to be eligible dividends for purposes of section 89(1) of the Income Tax Act (Canada).
In furtherance of the Company's return of capital plan, Element intends to renew its NCIB for its common shares. If accepted by the TSX, the Company would be permitted to purchase for cancellation, through facilities of the TSX or such other permitted means, up to 10% of the public float (calculated in accordance with TSX rules) of Element's issued and outstanding common shares during the 12 months following such TSX acceptance at prevailing market prices (or as otherwise permitted). The actual number of the Company's common shares, if any, that may be purchased under the NCIB, and the timing of any such purchases, will be determined by the Company, subject to applicable terms and limitations of the NCIB (including any automatic share purchase plan adopted in connection therewith). There cannot be any assurance as to how many common shares, if any, will ultimately be purchased pursuant to the NCIB. If the NCIB renewal is accepted by the TSX, any subsequent renewals of the NCIB will be in the discretion of the Company and subject to further TSX approval.
During the first nine-months of 2026, the Company purchased 10,551,500 common shares for cancellation under its NCIB at a volume weighted average price of CAD$28.56.
Element applies trade date accounting in determining the date on which the share repurchase is reflected in the consolidated financial statements. Trade date accounting is the date on which the Company commits itself to purchase the shares.
Debt-to-capital leverage ratio
At September 30, 2026, the Company's debt-to-capital ratio was 76.7% (December 31, 2025 - 76.9%), within the target range of 73% and 77%.
The Company remains committed to maintaining a strong investment-grade balance sheet.
2026 Financial Guidance and preliminary 2027 outlook
Element currently expects full-year 2026 originations will be below the Financial Guidance range, and that other full-year 2026 financial metrics will be at or near the lower end of their respective ranges. This reflects continued client hesitation amid economic and trade uncertainty, together with the time required for orders to convert into funded assets and revenue growth. The following table presents year-to-date results against full-year Guidance.
(in US$, except per share amounts) | Full-Year 2026 Guidance | Year-to-date 2026 Actuals |
Adjusted net revenue | $1.280 - $1.305 billion | $0.962 billion |
Implied YoY Growth | 8%-10% | |
Adjusted operating margin | 56.3% to 57.3% | 56.2 % |
Adjusted operating income | $720 - $745 million | $541 million |
Implied YoY Growth | 8-12% | |
Adjusted EPS [diluted] | $1.40-$1.45 | $1.04 |
Implied YoY Growth | 13%-17% | |
Adjusted free cash flow per share | $1.67-$1.72 | $1.29 |
Implied YoY Growth | 6-10% | |
Originations | $6.5 - $6.9 billion | $4.9 billion |
Implied YoY Growth | 0-7% |
Looking ahead to 2027, Element expects net revenue growth to moderate to the low-single-digit range, excluding the impact of foreign exchange translation, as slower commercial growth continues to impact the Company's near-term outlook. The translation impact of the Mexican peso relative to the U.S. dollar is expected to create an additional headwind to reported revenue growth.
Against this backdrop, the Company is intensifying its focus on productivity, operational efficiencies and disciplined cost management, while continuing to deploy capital through share repurchases to support adjusted earnings per share and free cash flow per share growth.
As is customary, Element will provide its full 2027 Financial Guidance alongside the Company's Q4 and full-year 2026 results in February 2027.
Conference call and webcast
A conference call to discuss these results will be held on Wednesday, November 4, 2026 at 8:00 a.m. Eastern Time.
The conference call and webcast can be accessed as follows:
Webcast: | |
Telephone: | Click here to join the call most efficiently, or dial one of the following numbers to speak with an operator: |
Canada/USA toll-free: 1-800-715-9871 | |
International: +1-647-932-3411 |
A replay of the conference call may be accessed through December 4, 2026 by dialing 1-800-770-2030 (Canada/U.S. Toll Free) or 1-647-362-9199 (International Toll) and entering the access code 7734045#.
IFRS to Non-GAAP Reconciliations, Non-GAAP Measures and Supplemental Information
The Company's Unaudited Interim Condensed Consolidated Financial Statements have been prepared in accordance with IFRS as issued by the IASB and the accounting policies we adopted in accordance with IFRS. These Unaudited Interim Condensed Consolidated Financial Statements reflect all adjustments that are, in the opinion of management, necessary to present fairly the Company's financial position as at September 30, 2026 and September 30, 2025, the results of operations, comprehensive income and cash flows for the three-month period ended September 30, 2026, June 30, 2026 and September 30, 2025, and nine-month period ended September 30, 2026 and September 30, 2025.
Non-GAAP and IFRS key annualized operating ratios and per share information of the operations of the Company:
As at and for the three-month period ended | As at and for the nine-month period ended | |||||
(in US$000's except ratios and per share amounts or unless otherwise noted) | September 30, | June 30, | September 30, | September 30, | September 30, | |
Key annualized operating ratios | ||||||
Leverage ratios | ||||||
Financial leverage ratio | P2/(P2+R) | 76.7 % | 76.5 % | 75.7 % | 76.7 % | 75.7 % |
Average financial leverage ratio | Q/(Q+V) | 76.5 % | 76.5 % | 76.0 % | 76.5 % | 75.8 % |
Other key operating ratios | ||||||
Allowance for credit losses as a % of total finance receivables before allowance | F/E | 0.25 % | 0.26 % | 0.10 % | 0.25 % | 0.10 % |
Adjusted operating income on average net earning assets | B/J | 8.87 % | 8.36 % | 8.26 % | 8.52 % | 8.15 % |
Adjusted operating income on average tangible total equity of Element | D/(V-L) | 51.7 % | 50.3 % | 45.2 % | 51.3 % | 43.9 % |
Per share information | ||||||
Number of shares outstanding | W | 388,921 | 391,332 | 400,519 | 388,921 | 400,519 |
Weighted average number of shares outstanding [basic] | X | 391,009 | 394,744 | 401,029 | 394,599 | 402,057 |
Weighted average number of shares outstanding [diluted] | Y | 391,082 | 394,876 | 401,267 | 394,731 | 402,244 |
Net income per share [basic] | A/X | $0.33 | $0.28 | $0.31 | $0.90 | $0.85 |
Net income per share [diluted] | A/Y | $0.33 | $0.28 | $0.31 | $0.90 | $0.84 |
Adjusted EPS [basic] | D/X | $0.35 | $0.34 | $0.33 | $1.04 | $0.91 |
Adjusted EPS [diluted] | D/Y | $0.35 | $0.34 | $0.33 | $1.04 | $0.91 |
Management also uses a variety of both IFRS and non-GAAP and Supplemental Measures, and non-GAAP ratios to monitor and assess their operating performance. The Company uses these non-GAAP and Supplemental Financial Measures because management believes these measures provide useful information to investors regarding their performance and results of operations.
The following table provides a reconciliation of certain IFRS to non-GAAP measures related to the operations of the Company and other supplemental information.
For the three-month period ended | For the nine-month period ended | |||||
(in US$000's except per share amounts or unless otherwise noted) | September 30, | June 30, | September 30, | September 30, | September 30, | |
Reported results | $ | $ | $ | $ | $ | |
Services income, net | 164,007 | 163,865 | 156,170 | 489,997 | 459,988 | |
Net financing revenue | 137,809 | 135,863 | 130,208 | 411,190 | 368,846 | |
Syndication revenue, net | 18,898 | 16,874 | 20,012 | 59,645 | 43,253 | |
Net revenue | 320,714 | 316,602 | 306,390 | 960,832 | 872,087 | |
Operating expenses | 142,064 | 160,928 | 138,982 | 460,464 | 412,498 | |
Operating income | 178,650 | 155,674 | 167,408 | 500,368 | 459,589 | |
Operating margin | 55.7 % | 49.2 % | 54.6 % | 52.1 % | 52.7 % | |
Total expenses | 150,535 | 169,938 | 146,726 | 487,007 | 432,502 | |
Income before income taxes | 170,179 | 146,664 | 159,664 | 473,825 | 439,585 | |
Net income attributable to common shareholders | A | 127,392 | 110,907 | 125,232 | 356,841 | 339,848 |
EPS [basic] | 0.33 | 0.28 | 0.31 | 0.90 | 0.85 | |
EPS [diluted] | 0.33 | 0.28 | 0.31 | 0.90 | 0.84 | |
Adjusting items | ||||||
Impact of adjusting items on net revenue: | ||||||
Non-recurring items - Syndication revenue | -- | 1,490 | -- | 1,490 | -- | |
Total impact of adjusting items on net revenue | -- | 1,490 | -- | 1,490 | -- | |
Impact of adjusting items on operating expenses: | ||||||
Strategic initiatives costs – Salaries, wages, and benefits | -- | 11,245 | -- | 15,606 | -- | |
Strategic initiatives costs – General and administrative expenses | 692 | 3,699 | 2,004 | 6,594 | 2,004 | |
Share-based compensation | 2,693 | 4,790 | 8,252 | 16,818 | 28,768 | |
Total impact of adjusting items on operating expenses | 3,385 | 19,734 | 10,256 | 39,018 | 30,772 | |
Total pre-tax impact of adjusting items | 3,385 | 21,224 | 10,256 | 40,508 | 30,772 | |
Total after-tax impact of adjusting items | 2,557 | 16,035 | 7,718 | 30,604 | 23,054 | |
Total impact of adjusting items on EPS [basic] | 0.01 | 0.04 | 0.02 | 0.08 | 0.06 | |
Total impact of adjusting items on EPS [diluted] | 0.01 | 0.04 | 0.02 | 0.08 | 0.06 | |
For the three-month period ended | For the nine-month period ended | |||||
(in US$000's except per share amounts or unless otherwise noted) | September 30, | June 30, | September 30, | September 30, | September 30, | |
Adjusted results | $ | $ | $ | $ | $ | |
Adjusted net revenue | 320,714 | 318,092 | 306,390 | 962,322 | 872,087 | |
Adjusted operating expenses | 138,679 | 141,194 | 128,726 | 421,446 | 381,726 | |
Adjusted operating income | 182,035 | 176,898 | 177,664 | 540,876 | 490,361 | |
Adjusted operating margin | 56.8 % | 55.6 % | 58.0 % | 56.2 % | 56.2 % | |
Provision for income taxes | 43,039 | 35,748 | 34,432 | 117,227 | 99,737 | |
Adjustments: | ||||||
Pre-tax income | 2,966 | 7,919 | 4,668 | 17,293 | 13,069 | |
Foreign tax rate differential and other | (1,497) | (415) | 4,880 | (2,275) | 10,130 | |
Provision for taxes applicable to adjusted results | C | 44,508 | 43,252 | 43,980 | 132,245 | 122,936 |
Adjusted net income attributable to common shareholders | D | 137,779 | 133,637 | 133,684 | 408,874 | 367,425 |
Adjusted EPS [basic] | 0.35 | 0.34 | 0.33 | 1.04 | 0.91 | |
Adjusted EPS [diluted] | 0.35 | 0.34 | 0.33 | 1.04 | 0.91 | |
The following table summarizes key statement of financial position amounts for the periods presented.
Selected statement of financial position amounts | For the three-month period ended | For the nine-month period ended | ||||
(in US$000's unless otherwise noted) | September 30, | June 30, | September 30, | September 30, | September 30, | |
$ | $ | $ | $ | $ | ||
Total finance receivables, before allowance for credit losses | E | 7,774,353 | 7,667,134 | 8,553,935 | 7,774,353 | 8,553,935 |
Allowance for credit losses | F | 19,624 | 19,648 | 8,533 | 19,624 | 8,533 |
Net investment in finance receivables | G | 5,058,350 | 4,956,017 | 6,053,540 | 5,058,350 | 6,053,540 |
Equipment under operating leases | H | 3,023,649 | 3,005,941 | 2,736,904 | 3,023,649 | 2,736,904 |
Net earning assets | I=G+H | 8,081,999 | 7,961,958 | 8,790,444 | 8,081,999 | 8,790,444 |
Average net earning assets | J | 8,138,930 | 8,482,370 | 8,532,704 | 8,486,973 | 8,046,268 |
Goodwill and intangible assets | K | 1,650,698 | 1,659,545 | 1,650,804 | 1,650,698 | 1,650,804 |
Average goodwill and intangible assets | L | 1,655,225 | 1,664,761 | 1,653,981 | 1,664,935 | 1,659,414 |
Borrowings | M | 9,518,258 | 9,431,337 | 9,502,222 | 9,518,258 | 9,502,222 |
Continuing involvement liability | O | (272,089) | (269,999) | (157,384) | (272,089) | (157,384) |
Total debt | P=M+O | 9,246,169 | 9,161,338 | 9,344,838 | 9,246,169 | 9,344,838 |
Cash and restricted funds | P1 | 410,152 | 504,337 | 527,612 | 410,152 | 527,612 |
Total net debt | P2 = P-P1 | 8,836,017 | 8,657,001 | 8,817,226 | 8,836,017 | 8,817,226 |
Average debt | Q | 8,805,536 | 8,890,196 | 8,954,986 | 8,905,454 | 8,723,894 |
Total shareholders' equity | R | 2,677,096 | 2,666,355 | 2,828,592 | 2,677,096 | 2,828,592 |
Common shareholders' equity | T | 2,675,540 | 2,665,054 | 2,828,592 | 2,675,540 | 2,828,592 |
Average common shareholders' equity | U | 2,709,690 | 2,730,465 | 2,826,512 | 2,730,727 | 2,777,977 |
Average total shareholders' equity | V | 2,711,565 | 2,730,899 | 2,826,512 | 2,731,497 | 2,777,977 |
Throughout this press release, management uses the following terms and ratios which do not have a standardized meaning under IFRS and are unlikely to be comparable to similar measures presented by other organizations. Non-GAAP measures are reported in addition to, and should not be considered alternatives to, measures of performance according to IFRS.
Adjusted operating expenses
Adjusted operating expenses are equal to salaries, wages and benefits, general and administrative expenses, and depreciation and amortization less adjusting items impacting operating expenses. The following table reconciles the Company's reported expenses to adjusted operating expenses.
For the three-month period ended | For the nine-month period ended | ||||
(in US$000's except per share amounts or unless otherwise noted) | September 30, | June 30, | September 30, | September 30, | September 30, |
$ | $ | $ | $ | $ | |
Reported expenses | 150,535 | 169,938 | 146,726 | 487,007 | 432,502 |
Less: | |||||
Amortization of intangible assets from acquisitions | 8,337 | 8,971 | 7,831 | 26,287 | 23,459 |
Loss / (Gain) on investments | 134 | 39 | (87) | 256 | (3,455) |
Operating expenses | 142,064 | 160,928 | 138,982 | 460,464 | 412,498 |
Less: | |||||
Share-based compensation | 2,693 | 4,790 | 8,252 | 16,818 | 28,768 |
Strategic initiatives costs - Salaries, wages and benefits | -- | 11,245 | -- | 15,606 | -- |
Strategic initiatives costs - General and administrative expenses | 692 | 3,699 | 2,004 | 6,594 | 2,004 |
Total adjustments | 3,385 | 19,734 | 10,256 | 39,018 | 30,772 |
Adjusted operating expenses | 138,679 | 141,194 | 128,726 | 421,446 | 381,726 |
Adjusted operating income or pre-tax adjusted operating income
Adjusted operating income reflects net income or loss for the period adjusted for the share-based compensation, amortization of intangible assets from acquisitions, provision for or recovery of income taxes, loss or income on investments, and adjusting items from the table below.
The following table reconciles income before taxes to adjusted operating income.
For the three-month period ended | For the nine-month period ended | |||||
(in US$000's except per share amounts or unless otherwise noted) | September 30, | June 30, | September 30, | September 30, | September 30, | |
$ | $ | $ | $ | $ | ||
Income before income taxes | 170,179 | 146,664 | 159,664 | 473,825 | 439,585 | |
Amortization of intangible assets from acquisitions | 8,337 | 8,971 | 7,831 | 26,287 | 23,459 | |
Loss / (Gain) on investments | 134 | 39 | (87) | 256 | (3,455) | |
Operating income | 178,650 | 155,674 | 167,408 | 500,368 | 459,589 | |
Adjusting Items: | ||||||
Share-based compensation | 2,693 | 4,790 | 8,252 | 16,818 | 28,768 | |
Non-recurring items - Syndication revenue | -- | 1,490 | -- | 1,490 | -- | |
Strategic initiatives costs - Salaries, wages and benefits | -- | 11,245 | -- | 15,606 | -- | |
Strategic initiatives costs - General and administrative expenses | 692 | 3,699 | 2,004 | 6,594 | 2,004 | |
Total pre-tax impact of adjusting items | 3,385 | 21,224 | 10,256 | 40,508 | 30,772 | |
Adjusted operating income | B | 182,035 | 176,898 | 177,664 | 540,876 | 490,361 |
Adjusted operating margin
Adjusted operating margin is the adjusted operating income before taxes for the period divided by the adjusted net revenue for the period.
Adjusted net income attributable to common shareholders
Adjusted net income attributable to common shareholders reflects reported net income attributable to common shareholders after incorporating the after-tax impacts of adjusting items. The following table reconciles reported net income attributable to common shareholders to adjusted net income attributable to common shareholders.
For the three-month period ended | For the nine-month period ended | ||||
(in US$000's except per share amounts or unless otherwise noted) | September 30, | June 30, | September 30, | September 30, | September 30, |
$ | $ | $ | $ | $ | |
Net income attributable to common shareholders | 127,392 | 110,907 | 125,232 | 356,841 | 339,848 |
Share-based compensation | 2,693 | 4,790 | 8,252 | 16,818 | 28,768 |
Amortization of intangible assets from acquisition | 8,337 | 8,971 | 7,831 | 26,287 | 23,459 |
Loss / (Gain) on investments | 134 | 39 | (87) | 256 | (3,455) |
Non-recurring items - Syndication revenue | -- | 1,490 | -- | 1,490 | -- |
Strategic initiatives costs - Salaries, wages and benefits | -- | 11,245 | -- | 15,606 | -- |
Strategic initiatives costs - General and administrative expenses | 692 | 3,699 | 2,004 | 6,594 | 2,004 |
Provision for income taxes | 43,039 | 35,748 | 34,432 | 117,227 | 99,737 |
Provision for taxes applicable to adjusted results | (44,508) | (43,252) | (43,980) | (132,245) | (122,936) |
Adjusted net income attributable to common shareholders | 137,779 | 133,637 | 133,684 | 408,874 | 367,425 |
Adjusted net revenue
Adjusted net revenue is equal to reported net revenue plus or minus adjusting items impacting net financing revenue, services revenue, or syndication revenue. The following table reconciles the Company's reported revenue to adjusted net revenue.
For the three-month period ended | For the nine-month period ended | ||||
(in US$000's except per share amounts or unless otherwise noted) | September 30, | June 30, | September 30, | September 30, | September 30, |
Reported results | $ | $ | $ | $ | $ |
Services income, net | 164,007 | 163,865 | 156,170 | 489,997 | 459,988 |
Net financing revenue | 137,809 | 135,863 | 130,208 | 411,190 | 368,846 |
Syndication revenue, net | 18,898 | 16,874 | 20,012 | 59,645 | 43,253 |
Reported net revenue | 320,714 | 316,602 | 306,390 | 960,832 | 872,087 |
Adjusting items | |||||
Impact of adjusting items on net revenue: | |||||
Non-recurring items - Syndication revenue | -- | 1,490 | -- | 1,490 | -- |
Total impact of adjusting items on net revenue | -- | 1,490 | -- | 1,490 | -- |
Adjusted net revenue | 320,714 | 318,092 | 306,390 | 962,322 | 872,087 |
About Element Fleet Management
Element Fleet Management (TSX: EFN) is a global leader in intelligent fleet and mobility solutions. Guided by our Purpose to Move the world through intelligent mobility, we help clients manage the vehicles, data, technology, and decisions that keep their businesses moving. Fleet is our foundation, and intelligent mobility is how we lead. By combining deep fleet expertise with connected technologies, data-driven intelligence, and strategic partnerships, Element helps clients lower total cost of ownership, improve uptime and driver experience, and build more resilient operations. Element manages over 1.5 million vehicles globally and leverages this scale and data to help clients optimize performance, identifying over $1.8 billion in cost savings opportunities across our clients' fleets in the past year. Through Element Mobility, we are advancing our leadership into the next era of intelligent mobility to deliver measurable business outcomes for our clients. For more information, visit: https://www.elementfleet.com
This press release includes forward-looking statements regarding Element and its business. Such statements are based on management's current expectations and views of future events. In some cases the forward-looking statements can be identified by words or phrases such as "may", "will", "expect", "plan", "anticipate", "intend", "potential", "estimate", "believe" or the negative of these terms, or other similar expressions intended to identify forward-looking statements, including, among others, statements regarding Element's financial performance, including future cash flows, financial condition, operating performance, operating income, financial ratios, capital structure and capital expenditures; expectations regarding acquisitions and strategic initiatives and the benefits to be derived therefrom; expected enhancements to client experience; expectations regarding client and revenue retention trends; management of operating expenses; increases in efficiency; Element achieving its digital platform ambitions; the Element Mobility strategy enabling the Company to increase client and shareholder value and unlock new revenue streams; EV strategy and capabilities; global EV adoption rates; dividend policy and the payment of future dividends; the costs and benefits of strategic initiatives; creation of value for all stakeholders; expectations regarding syndication; growth prospects and expected revenue growth; level of workforce engagement; improvements to magnitude and quality of earnings; executive hiring and retention; focus and discipline in investing; balance sheet management and plans and expectations with respect to leverage ratios; Element's ability to achieve its sustainability objectives; and Element's proposed share purchases, including the number of common shares to be repurchased, the timing thereof and TSX acceptance of the NCIB and any renewal thereof. No forward-looking statement can be guaranteed. Forward-looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause Element's actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statement or information. Accordingly, readers should not place undue reliance on any forward-looking statements or information. Such risks and uncertainties include those regarding the fleet management, mobility and finance industries, economic factors, regulatory landscape and many other factors beyond the control of Element. A discussion of the material risks and assumptions associated with this outlook can be found in Element's annual MD&A, and Annual Information Form for the year ended December 31, 2025, each of which has been filed on SEDAR+ and can be accessed at www.sedarplus.ca. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and Element undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.
SOURCE Element Fleet Management Inc.
Contacts: Sumit Malhotra, SVP & Head of Financial Performance, (437) 343-7723, [email protected]; Crystal Zhu, Manager, Investor Relations, (437) 341-3789, [email protected]
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