All right, I think we're going to go ahead and get started. Good afternoon, my name is John Davis. I'm the Payments and Fintech Analyst here at RayJay. We're excited to have FLEETCOR's CFO Tom Panther with us this afternoon. He's going to go through a brief presentation, and then we'll open up some audience questions. So with that, we'll kick it off to Tom.
All right, JD, thanks. It's great to be here. We decided to come and showcase our new name. We've been known as FLEETCOR Technologies for the longest, and this month we're going to be changing our name to Corpay. It came with the garb. Jim and I said no sport coats this trip. We were taking off our finance hats and wearing our marketing hats and coming with some Corpay swag. Speaking of, so Jim doesn't have to carry them back on Delta, there's some Corpay portfolios, leatherbound portfolios. First come, first serve. On the way out, you can grab a Corpay portfolio. We are launching our brand. We've actually been in the market for two years under the Corpay name associated with our corporate payments business.
We want to demonstrate the expansion of what we do as a company to be more reflective in our name, which is helping companies with all sorts of corporate payment needs. So we'll be launching this, as I said, later in March, and we think the name much more exemplifies what we do as a company. From a fuel perspective and fleet, that's only 40% of our company today. So we think the name Corpay will resonate well with investors, existing and prospective, employees, customers, you name it. The local brands that we have across the markets, though, will continue to stay the same because they have a tremendous amount of brand equity, and they'll continue to represent their local products.
So I know this is a generalist conference, so we get people who know a lot about our company, and we get people who know, frankly, very little about our company. So what is Corpay? What do we do? We are a spend management company predominantly focused on B2B. We do have about 15% of our business down in Brazil that's consumer-based. But we help companies pay their expenses of all sorts and sizes of companies and types. So as long as there is spending going on in the markets in which we operate, we're there to meet their needs. And we'll unpack what that means here in a little bit. But we operate in Brazil, the U.S., U.K., Europe, and Australia. But the preponderance of our company is in those first three of Brazil, U.K., and U.S. Now, it's more than just helping affect a transaction.
We are bringing control, we're bringing spend management, we're bringing reporting, bringing some analytics. Our value proposition is beyond just payment processing. Our value proposition is around bringing the employers greater control around employee-related spend across our various products. This is kind of our baseball card. You can kind of see a little bit in terms of our stat sheet. You can read that; I won't read it back to you. $20 billion market cap company and one that has been around since 2000 has developed a significant amount of scale, both organically and inorganically. We've purchased around 100 companies over the course of our history and have formed what we know today as Corpay. What's not on here is one of the things that I think is particularly important, although maybe you'd read into in terms of the $1.3 billion adjusted net income.
That is essentially a free cash flow number. The amount of CapEx demand for this company is next to nothing. We spend $150 million on CapEx every year, and that's primarily on tech, product development, things like that. So the cash flow generation of this company is significant. So we do this across three segments: vehicle payments, which is the largest one, corporate payments, and then lodging. We'll talk a little bit about what each one of those are here as we click through these slides. Corporate payments is about 25% of the company. You can see what its spend levels are. We support a wide variety of verticals, but these are the primary verticals that we support. A lot of that has to do with kind of the company's history and some of the ERP platforms that we're integrated into.
But the corporate payments business is broken up between a payables business and a cross-border business. It's about a $1 billion business in total. And as I said earlier, we will go to companies of generally middle market and up. Think of over 70% of our customers have revenues of $20 million and up. So we're dealing with companies of some size, some scale. They actually have a meaningful amount of AP that we're here to support them. We do this either through some proprietary networks that we have, closed loop, or we are the number one B2B Mastercard issuer in the world in terms of using Mastercard as a network provider. And you can see the number of countries that we support from a cross-border perspective.
One of our secret sauces, or one of our moats, if you will, is that proprietary network of merchants that we have the capability of settling transactions with. That provides us the opportunity to go to customers and, when we get a hold of their AP file, be able to penetrate more and more of their spend through a virtual card, which has attractive economics associated with it. This is the product journey that we take customers on. We can do something as simple as a walk-around business card like you may have in your wallet, all the way up to virtual card, all the way up to full AP, where we're doing the whole nine yards in terms of workflow, P2P, reconciliation. And then we also offer the cross-border solution. But at its core, it's about payment automation and expense management.
At its core, that's what we're trying to accomplish. On the vehicle payments side, you can see that that's a little bit over 50% of the company. You also see the verticals that we predominantly support. As I mentioned, of the total company, fuel is only 40%. We're doing a lot more across the payments ecosystem now than just the fuel card. We are offering EV to customers, particularly in the U.K., where we have an 80% rapid charging network in the U.K., including recently adding Tesla to the network. We also have a repair and maintenance business where a fleet manager can get their tires changed, their oil changed, their car worked on. We have a network of over 10,000 garages in the U.K. We do all of this predominantly through an app or a series of apps, depending on the market that we're in.
Because one of the theses of our company, one of the things that underpins what we do, is taking large numbers of customers. We think about customers as times of users, not just a company of one, but a user of, call it, 200. We think of those as the number of users. Millions of users bouncing up against our proprietary networks. That's what we sit in the middle of that payments ecosystem where we bounce up those millions of customers against our proprietary networks and handle all sorts of vehicle-related payments. One of the things that we've done to try to supercharge, if you will, the vehicle payments business is introduce a few new capabilities. One is EV. Particularly in the U.K., where we saw a little bit of an evolution towards EV utilization, we've added, as I mentioned earlier, 80% coverage on the network.
We're basically agnostic as to whether or not a fleet customer today who sends their employees out into the field, whether or not they charge or they pump. We basically follow the same playbook that built the petrol stations in the U.K. We follow that same playbook in terms of getting proprietary relationships with the merchants that have invested capital in charge point stations. And we go to those merchants and say, "Listen, I've got 1,000 drivers in the U.K." Now, very few of them today use EV, but the thesis out there is that they will someday. Do you want access to those customers? Absolutely. I'd love to get access to 1 million customers. So that's the model that we've used to build out that network. We've also introduced a capability.
We're blending together that payables business that I talked about a few minutes ago and our fleet business, where we can go to a customer today who may only use our fuel card and say, "Listen, we'll give you some attractive economics if you give us access to your AP file. And by giving us access to your AP file, we can also pay a lot of your bills for you, and we'll give you some rebate back." And oh, by the way, you probably have people who need a walk-around business card and not just a fuel card. We can also arm you with a fuel card and do this bundled pricing and bundled product. It brings some attractive economics to us, and it brings some attractive economics to the customer. And most recently, consumer vehicle.
So one of the ideas we had was that we can leverage these networks, whether they're fuel or EV or insurance or parking or garages. We can leverage those networks and sell them to consumers, introduce consumers to them as well. And I'll give you an example of that here in just a minute. But that's also something that we think has the opportunity to take. I mentioned Brazil is about the consumer business in Brazil is about 10%-15% of the company today. Call it a $450 million-$500 million business. We think that business can double to a $1 billion consumer business, not Brazil, but consumer as a whole over the next three or four years. And so we're excited about the incremental revenue that that would bring to the company. This is a bit of a snapshot of the EV strategy.
I think I covered a fair amount of this. I'll kind of keep moving, and we'll have some time for questions. But we're really excited about what we've done on the EV front in order to try to build out that network. We view EV as an opportunity, not as a threat, would be the takeaway I'd leave you with. So back to this ecosystem and the different use cases of vehicle payments. You can see the variety of things that we offer today in some of our markets. And in Brazil, we've actually been doing this for quite some time, where it started as a simple toll tag. And you think about a toll tag, this is just kind of a barcode that you stick on your windshield, and you drive through tolls. We don't make money based on driving through tolls. We receive a subscription.
It's basically $5 a month. We receive a subscription fee for selling toll tags. We've sold 7 million toll tags in Brazil. 6 million of them are with consumers, and 1 million of them are with businesses. But the business didn't stop there. Instead, what we did strategically in Brazil is we enveloped products such as these around that toll tag, where the toll tag can not only read somebody driving through the toll, but they can read somebody going into a parking garage. They can read somebody going to a gas station. They can read somebody going to charge their vehicle. And the other thing that we've done that's particularly special is enveloped that all with an app where people, over 3 million of those 6 million consumers today, use the Sem Parar mobility app. It's one of the most viewed mobility apps in market.
Think of it like an Uber type app. It's one of the most viewed ones. And now we've pushed other product across that app. People use it as a retail store. They use it to sell insurance. Insurance has become a multi-million dollar business for us in terms over just the last three or four years in terms of the amount of insurance that we've sold. What did we say, Jim, on our earnings call? We have what, over 1 million policies outstanding, just 1 million policies of insurance. Now, we're not underwriting it. We're just in the middle between us and the insurer. And so you can see how that expanded network beyond just the toll and what a significant piece of business that's created. What that allows us to do is export that idea.
When I talked about consumer vehicles earlier as a way to supercharge the durability of the vehicle payments growth is by taking that same idea and applying it to the U.S. and the U.K. Now, toll won't be the anchor product. Maybe it's parking. Maybe it's something else. But the idea of an anchor product attached to an app and running use cases of payment solutions across that anchor app is something that we think is a winning idea. And this is just an example of the different things that we can do. In September, we embarked on that expanded strategy by buying a company called PayByPhone that allows us to take 6 million customers that are just single point solution parking customers today.
Our idea is to take those 6 million customers that are already glued to an app and putting other solutions in front of them. Again, similar to what we did in Brazil, but in that case, it was a parking app instead of a toll. And we think the tech is pretty interesting where we can provide all those different solutions for them, not just where to find it, but how to pay for it. This is a little bit of what we've done on the 3-in-1 solution within the EV world of the U.K. Again, we're agnostic. You can have one card in your wallet that allows you to pump on the road, charge on the road, or if you have an at-home charger, through a few clicks of downloading an app, you can then charge at home.
It then monitors the bifurcation of the electricity coming into the house to know what's going towards you charging your vehicle versus you running your oven. And then we pay. We have proprietary integrations with all the utility companies in the U.K. We then pay the utility bill on behalf of the employer, and then the employer reimburses us. So no ransacking through a utility bill as an employee trying to figure out what was related, what were the kilowatt hours related to charging my work vehicle. And in the U.K., this is much more common, where employers do loan the vehicle to the employee quite commonly. In fact, there was even some regulation that was coming about that provoked the company that built this software that we acquired two years ago.
Well, I guess it was January of last year, but caused them to develop this software because there was a lot of blowback in terms of employees having a hard time with the reimbursement model. So we feel like when, if, whatever your view is on EV, whatever it is, we've got the solutions where we're agnostic as to what the vehicle of choice is for the employer and his or her employees. So quickly on lodging, this is 15% of the company. Again, it's more specialized. Clearly, AP is the most general payment solution that we have. Vehicles is broader in terms of all the different use cases. Lodging is us helping employers who put employees out into the field to work, giving them places to stay. And so we have a network of 40,000 hotels, 15,000 of them are proprietary where we get better rate.
And it's a simple model where because we bring we do almost 40 million room nights a year. It's an incredible number of people that we're putting up night after night. So when we go to a hotel and say, "Do you want access to 40 million nights?" and the number of customers that we have, "Yes." And so how do they get that? They give us a lower rate than what you'd see in terms of the rate at the hotel. And then we pass those savings on to our customers, still getting a lower rate. And then we get a little bit of spread in between. So it's a pretty simple model in terms of the revenue model.
We support a range of verticals, whether it's workforce, putting out kind of think of them as people who lay fiber optic cable or who go to Walmart to do merchandising, and they have to pull merchandise off the shelf and put new merchandising on. Think of tree cutters. People just out in the workforce doing generally labor. We also support people who are traveling, whether it's railroads or airlines. We have airlines all over the world that use our product where we're putting up the pilots and the flight attendants. We also have a distressed product where if your plane takes a mechanical and you've got to stay somewhere overnight, by the time you deplane, if you have our software, you'll already have a QR code that tells you where to go check into a hotel, show them the QR code.
You're not queuing up in some line at midnight at Heathrow trying to figure out where you're going to stay. And then we have an insurance business that helps policy owners, homeowners who've been displaced from their homes, generally because of some type of event and some natural disaster, whether it's a hurricane or pipes breaking, a flood, whatever it may be. And we have a network of insurers that use us to put their policyholders into lodging. And all this is a model where we make a spread or a commission. So pretty proprietary stuff, right? I mean, these aren't networks where you just sit there and say, "Well, I'm going to go tomorrow replicate these networks," whether you're talking about the merchant network on the payable side, the lodging network, or the things that we've done on the vehicle side.
Customers and networks, customers and networks, that's what we do where we have millions of customers and proprietary networks and the rails to be able to support payments and controls across those two groups. And they feed one another. What do customers want? They want more networks. What do networks want? They want more customers. So these things are just kind of a self-feeding set of groups. That's a little bit more on lodging. This is just kind of, again, of a use case. One of the things that we're trying to do is go to somebody, take a construction company. We did some advertising back about a year ago, maybe a little bit less. Think of a construction company. They have all three of these things. They have people out in the field that need lodging. They're driving trucks. They need fuel.
And they have a ton of AP because they're construction companies that are spending a bunch on raw materials. So one of the things that we are doing is recognizing where those overlaps are across our segment base and cross-selling them and recognizing the relatedness of the businesses that we have. So financially, our model is a consistent 10% grower, 13% EBITDA, so positive operating leverage. We consistently grow revenue faster than we grow expenses. And because of that free cash flow that I mentioned earlier on in the discussion, because of that level of free cash flow that we generate, we can then produce, call it high teens, mid to high teens of earnings growth. That's our model. And it's been a model that let me skip over. It's been a model that has been successful for our history.
This one, I think, starts at the time we went IPO in 2010. You can see the level of both revenue on the left and earnings on the right that we've been able to consistently generate, obviously with a little bit of a hiccup in the COVID year. But how do we do it? I'll back up. One is sales. We think about, we're one of the most from the companies that I've been in. I've been in this role for 30 years. It is one of the most sales-oriented organizations I've been associated with. It recognizes that a healthy company starts with healthy distribution and effective sales management. So in a very analytically oriented way, we drive 20%+ sales growth and very high customer retention. That's how you get 10%.
20% sales growth at the top, 10% falls out, give or take, every year, you grow revenue 10%. Now, there's other things that obviously go into that equation. I'm oversimplifying. But that's where you get a sense of the durability. And how do we generate 20%? It's feet on the street. It's digital. It's sales and marketing. It's something that we feel like we've got a proven model for. If we put the dollars to work, we know we're going to get the sales in return. High margins. You can see the level of EBITDA margins that we operate, north of 50%, generally tracking up 100-ish kind of basis points every year. It's something that we take great pride in. Some of that is just, frankly, structural. There's just a lot of fixed costs in this business.
So you're just going to get the mathematical lift of margin accretion just from the structure of the business. It's also based on business mix and things like that that will drive the higher margins as we go out. And then that free cash flow conversion number is something that I'm particularly proud of in terms of the level of free cash flow conversion that we're able to generate year after year by just simply not having a whole lot of CapEx that we need to spend money on. We've got a long history of capital deployment. It's kind of a 3 or 4-pronged model, depending on how you want to think about it. One is M&A. As I mentioned earlier, we've acquired almost 100 companies over our history. And we have a team dedicated to M&A within the organization that focuses on nothing but inorganic growth.
We look across all three segments in terms of areas that we're interested in growing. What we said this year as we talked about 2024, was that corporate payments in particular, both cross-border and the payable side, was an area that we were most focused on growing. But that's not to say we're not keeping an eye on the other two segments. If it's not M&A, if we're not buying other companies, we're buying ourselves. FLT, soon to be CPAY, Corpay, will be our new ticker later this month. We think it's a good return on the free cash flow that we generate. And so we've been pretty active buyers of our own stock, and we'll continue to do that. We announced an $800 million buyback program at the time of our earnings release last month.
I would view that as the floor, not the ceiling, just depending on what M&A looks like. But because we're able to have a strong balance sheet, leverage under 2.5, a ton of cash on our balance sheet, access to a lot of liquidity, we have the ability to do both. We're not a one-trick pony. We can buy companies of size and scale, and we can also buy our own stock back. And if we're not doing one of those two things, we're parking the cash on our balance sheet, either in high-interest bearing accounts or paying down our debt, which on average, our debt is around 6.5%. So you know you've got an automatic return there, but that's not the return that we're shooting for. So that's kind of the option of last resort.
But you can see the level of buybacks that we've done over the last seven years, and excited to continue on that path. And then just finally, kind of our wrap-up slide, investment thesis. I mean, we're, as I mentioned, a company that we think has a tremendous amount of value proposition to customers and to the networks that we offer. We think it's a pretty sizable, addressable market out there. As long as companies are spending money, we're there meeting their needs. That's not to say there aren't disintermediation threats out there, sure. But we separate ourselves on the issuing side by being there to support companies in all spending needs. And then from the financial standpoint, just a highly attractive business model that has generated some pretty high returns over our history that we're proud of.
Now, we set a high bar, and these aren't laydown kind of numbers. We got to work hard every day, frankly, to be able to generate these kinds of returns. But over time, we've demonstrated a consistency of being able to achieve it. So with that, John, I don't know, do you want to do a few questions? I think we've got maybe 10 minutes left or so.
Yeah. I think we have about 5 minutes. I'll start with a couple of questions and then open up to the audience. So I really kind of want to double-click on capital allocation. I think balance sheet, as you mentioned, levered under 2.4 times. We committed to $800 million of buyback this year. But historically, Fleet's been very acquisitive, I would say less so in the last few years for a number of factors. I'm just curious what you're seeing from a valuation perspective. Maybe talk a little bit about what would be interesting on the M&A front.
Yeah. Well, it takes two to tango, obviously. M&A is our number one use of the excess capital that we create. We're also not going to let that burn a hole in our pocket and do something that we don't think makes sense. We're a super analytical company, starts with our CEO and on down. So we need to make sure that the opportunities that we're looking at, one, have a good strategic fit, and two, the valuations make sense for us. We're not ones to do a transaction with meaningful dilution and kind of a betting on the come that either the multiple is going to re-rate or, trust me, in three years, we'll be back to $19+ EPS.
I think we're selective. In the last, call it COVID-forward year, so 2020 forward, I think it's just been a weird market. Obviously, you lost the COVID year almost altogether. Then valuations kind of got crazy, particularly in some of the assets that we would be looking at that just caused us to certainly shop but not buy. I am optimistic about the 2024 year and how it's shaping up. One, I think there's greater clarity around the economic outlook. I think the elevated cost of capital now that companies have been eating for the last almost two years from when the Fed started to hike - and that's also true in our other markets as well - I think causes companies to be, I think, a little bit more realistic around valuation.
So maybe there's some opportunities there where the two to tango actually tangos rather than just dates. The space that we would be most interested in, as I said earlier, is probably in the corporate payment space. It's 20%-ish, 25%-ish% of our business. We think that'll grow, increase just from the sheer fact that it grows about 20% top line. So that will help it just become a bigger portion of our business organically. But we could supercharge that with some inorganic growth that we think would be pretty exciting on either the cross-border or the payable side.
Okay. I'll open it up to see if there's any questions in the audience.
Whoever gets a question gets an automatic portfolio that.
What is the name? Yeah. It's a really well-known name. FLEETCOR?
Yeah.
It is well-known. I appreciate that comment. It just doesn't describe what we do as a company. People think FLEETCOR, they think vehicle, they think fuel. And I think we wanted to have a name that exemplified more of what we do. And that's helping with all sorts of corporate payments. So that's the motivation. And it's really at the corporate and the enterprise level. As I said, the local brands won't be changing. But from an enterprise standpoint, the name and the ticker will be changing later this month. Ron still there? Yeah. Ron still there? Active and going? Yep. He's having a little bit of a withdrawal, losing the FLEETCOR name. But he's getting over it. He's getting over it. He. Appreciate the feedback. Right. Yeah. Right. Any other questions in the audience? John, you got any? Yeah. I mean. You got anything?
We'll do one more on corporate payments because I had such an important segment from a valuation perspective. Obviously, last quarter, you sell very modestly. But just talk about the different pieces of that business, how you guys think about it internally, and kind of what the problem child was and why you're so kind of 20%.
Sure. Yeah. We think the corporate payments business, as I said, that's where we want to deploy most of our capital. We're excited about the business. It's called two-thirds the FX business that I talked about, that cross-border business, and one-third payables. We see that growing 20%-ish annually. The sales model there just continues to perform extremely well. The retention, you think about just a simple same-store sales, retention, and sales, we see same-store sales at a base level being relatively stable, kind of growing GDP kind of levels.
We see very low retention. We showed a line average of whatever it was, 91%-92%. It would be even higher retention. And the sales engine there has just been growing extremely well. And so it just continues to feed itself. There is a small piece of the business that's like a $50 million piece of the billion-dollar business that decelled over the course of 2023. 2023 is a bit of a transition year for that business. We call it our channel business, where we're just behind the scenes doing processing. We see that kind of running stable from here on out just based on the customers that we have in that portfolio and having a good line of sight into what their spend levels are going to be in 2024. Just greater predictability around that. The transition over some of those contracts has sorted itself out.
All right. Thank you.