Element Reports Fourth Quarter and Record 2025 Financial Results, Raises Common Dividend and Provides Full-Year 2026 Guidance
Element Reports Fourth Quarter and Record 2025 Financial Results, Raises Common Dividend and Provides Full-Year 2026 Guidance |
| [24-February-2026] |
Amounts in US$ unless otherwise noted
TORONTO, Feb. 24, 2026 /CNW/ - Element Fleet Management Corp. (TSX: EFN) ("Element" or the "Company"), the largest publicly traded, pure-play automotive fleet manager in the world, today announced financial and operating results for the three months ended December 31, 2025 and for full-year 2025. The following table presents Element's selected financial results.
"Element's performance in 2025 reflects consistent growth across the business and the continued execution of our strategy," said Laura Dottori-Attanasio, Chief Executive Officer of Element. "We saw strong client engagement across our markets and made meaningful progress advancing our technology platform capabilities, including the acquisition of Car IQ, while maintaining focus on both near-term results and long-term objectives." Dottori-Attanasio continued, "During the year, we sharpened our strategic focus, delivered for our clients, and improved the scalability of the business. Throughout this progress, we remained focused on disciplined execution, reinforcing our commitment to delivering value for our shareholders and supporting sustainable growth." Net revenue growth The Company generated $1.2 billion in net revenue in 2025, an increase of $98 million or 9% from 2024 ("year-over-year"), supported by solid performance across all revenue categories. In Q4 2025, net revenue increased by $43 million or 16% compared with Q4 2024, driven by strong syndication and net financing revenue. Net revenue grew by $7 million or 2% from Q3 2025 ("quarter-over-quarter") to $313 million, reflecting strength in services and syndication revenue. Service revenue Element's largely unlevered services revenue continues to underpin the Company's capital-light business model and long-term growth strategy, and remains a key component driving the improvement in return on equity. In 2025, services revenue increased by $27 million, or 5% year-over-year to $623 million. This was driven by increased penetration and utilization rates of our service offerings from new and existing clients. As previously disclosed, Q1 2024 benefited from $7 million in certain items. Excluding this amount, 2025 services revenue would have been 6% higher than 2024. Q4 2025 services revenue of $163 million increased by $1 million or 1% compared with Q4 2024, and increased by $7 million or 4% quarter-over-quarter, driven by ANZ, Autofleet, and VUM partly offset by rate and mix effects. Net financing revenue Net financing revenue in 2025 totaled $498 million, an increase of $49 million or 11% year-over-year. In Q4 2025, net financing revenue grew $26 million or 25% year-over-year to $129 million, driven by higher net earning assets in the U.S. and Mexico, higher gains on sale ("GOS") in Mexico, as well as the continued execution of the Company's strategic leasing initiatives. The increase was further supported by funding efficiencies, which helped offset the higher financing costs associated with the preferred share redemptions (previously recorded below the AOI line) and the incremental debt related to the Autofleet acquisition in October 2024. Net financing revenue modestly decreased by $1 million or 1% from Q3 2025, primarily reflecting higher provisions for credit losses related to client-specific credit activity and seasonally lower GOS in the fourth quarter. This was partly offset by lower funding costs associated with the Company's ongoing funding initiatives. Syndication volume The Company syndicated $2.4 billion in 2025 and $666 million in Q4 2025, representing year-over-year declines of $1.1 billion or 31%, and $369 million or 36%, respectively. Syndicated volumes in the prior year benefited from a $346 million bulk syndication of a Canadian lease portfolio at a lower average yield, undertaken to diversify funding sources. Despite lower syndicated asset volumes year-over-year, syndication revenue in 2025 increased to $64 million, up $21 million or 50%. In Q4 2025, syndication revenue totaled $21 million, an increase of $15 million compared with Q4 2024. This growth primarily reflects a more favourable client mix, the reinstatement of 100% bonus depreciation in July 2025, and the absence of the lower-yielding Bulk Sale completed in the prior year. On a quarter-over-quarter basis, syndication revenue was up by $1 million or 5%, driven by a $34 million or 5% increase in syndicated assets from Q3 2025. Adjusted operating expenses Adjusted operating expenses of $520 million in 2025 increased by $33 million or 7% year-over-year, driven by strategic investments to support future growth and operational scalability, including technology modernization and product expansion initiatives, along with higher professional and software costs. In Q4 2025, adjusted operating expenses were $138 million, representing an increase of $10 million or 8% compared with Q4 2024, and an increase of $9 million or 7% compared with Q3 2025. These increases reflect the same strategic investment drivers as the full-year. Adjusted operating income and adjusted operating margins AOI reached $666 million in 2025, an increase of $65 million or 11% year-over-year, resulting in a margin of 56.2%. AOI in Q4 2025 rose to $176 million, up $32 million or 22% compared with Q4 2024, with a margin of 56.0%. The year-over-year improvements were supported by higher revenues. On a quarter-over-quarter basis, AOI was down by $2 million or 1%, primarily due to higher expenses incurred in the quarter, as discussed in the adjusted operating expenses commentary above. Q4 2025 Non-Recurring Items To arrive at the Adjusted results, the Company adjusts for non-recurring items that have impacted the Reported results. Several non-recurring items impacted the Reported Q4 2025 results and are detailed below. Management believes that these non-recurring items did not have a material effect on the financial position of the Company, and that the Adjusted results are more indicative of the underlying business performance.
Originations The Company originated $6.5 billion of assets in 2025, a decrease of $0.3 billion or 4% from 2024. In Q4 2025, originations totaled $1.4 billion, down $147 million or 10% year-over-year, and $371 million or 22% quarter-over-quarter. The decline was driven by the cumulative impact of seasonal softness in client ordering during the summer months, in combination with later-year model availability and mix, resulting in extended delivery timelines for originations. Despite lower originations, order volumes reached record levels of $6.2 billion in 2025 and $2.0 billion in Q4 2025, indicating strong underlying demand and positive momentum for future originations. The table below sets out the geographic distribution of Element's originations for 2025 and 2024.
Adjusted free cash flow per share and returns to shareholders On an adjusted basis, the Company generated $1.57 in diluted FCF per share in 2025, up $0.21 or 15% from $1.36 in 2024. In Q4 2025, diluted FCF per share was $0.39, up 30% year-over-year and down 7% quarter-over-quarter. The decline from Q3 2025 reflects timing, with pull forward of certain lease-related costs and a greater portion of sustaining capital investments incurred in the quarter. On a full-year basis, our total capital investment spend was $71 million, a decrease of 8% compared to the prior year. During 2025, the Company returned $269 million of cash to shareholders through common share dividends ($149 million) and common share repurchases ($120 million). Common dividend and share repurchases On February 24, 2026, the Board of Directors (the "Board") authorized and declared a quarterly cash dividend of CAD$0.15 per common share of Element for the first quarter of 2026, representing a 15% increase to its common dividend (from CAD$0.52 to CAD$0.60 per share annually). The dividend will be payable on April 15, 2026 to shareholders of record as at the close of business on March 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 renewed its normal course issuer bid (the "NCIB") for its common shares. Under the NCIB, the Company has approval from the TSX to purchase up to 39,930,568 common shares during the period from November 20, 2025, to November 19, 2026. The Company intends to remain active under its NCIB in 2026. 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. Any subsequent renewals of the NCIB will be in the discretion of the Company and subject to further TSX approval. During 2025, the Company purchased 5,366,200 common shares for cancellation under its NCIB at a volume weighted average price of CAD $32.10. During Q4 2025, the Company purchased 1,294,600 common shares under its NCIB, for cancellation at a volume weighted average price of CAD $36.64. During January and up to February 23, 2026, the Company purchased 1,351,200 common shares under its latest NCIB, for cancellation at a volume weighted average of CAD $34.57. 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 Commencing Q4 2024, the Company changed its banking covenants from a tangible leverage ratio ("TLR") to debt-to-capital, which the Company regards as a more meaningful measure of its leverage. At December 31, 2025, the Company's debt-to-capital ratio was 76.9% (December 31, 2024 74.1%), within the target range of 73% to 77%. The Company remains committed to maintaining a strong investment grade balance sheet. Acquisition of Car IQ On December 31, 2025, the Company completed its acquisition of Car IQ, a leader in connected vehicle payments, for a purchase price of $80 million net of working capital adjustments. Car IQ provides innovative payment technology that enables fleets to automate transactions and improve connectivity across fleet operations. This acquisition establishes the industry's first fleet management platform with embedded vehicle-initiated payments, marking an advancement in the Company's integrated digital and mobility strategy. The transaction is expected to open new opportunities to deepen the client experience through a more automated fleet management platform. Car IQ's financial results have been consolidated with those of the Company and $9 million of acquisition-related and restructuring costs were incurred in the quarter. Positioning Element for Long-Term Growth In 2025, the Company made meaningful progress on advancing its strategic and innovation priorities, and strengthening its digital capabilities while maintaining focus on enhancing client experience. These efforts were supported by focused execution on the investments undertaken since 2024 to improve efficiency and scalability, which have continued to drive margin expansion and strengthen competitive positioning. Notable achievements include:
Guidance Full-Year 2025 Guidance Element delivered full-year 2025 results within or above the high-end of its guidance ranges, with the exception of originations, as previously communicated. The following table highlights our full-year 2025 Guidance compared to the full-year 2025 results.
Full-Year 2026 Guidance The following table presents the Company's full-year 2026 Guidance, compared with full-year 2025 results.
Conference call and webcast A conference call to discuss these results will be held on Wednesday, February 25, 2026 at 8:00 a.m. Eastern Time. The conference call and webcast can be accessed as follows:
A taped recording of the conference call may be accessed through March 25, 2026 by dialing 1-800-770-2030 (Canada/U.S. Toll Free) or 1-647-362-9199 (International Toll) and entering the access code 1612454#. IFRS to Non-GAAP Reconciliations, Non-GAAP Measures and Supplemental Information The Company's audited 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 audited consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary to present fairly the Company's financial position as at December 31, 2025 and December 31, 2024, the results of operations, comprehensive income and cash flows for the three-month periods-ended December 31, 2025, September 30, 2025 and December 31, 2024. Non-GAAP and IFRS key annualized operating ratios and per share information of the operations of the Company:
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 they believe that they may 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.
The following table summarizes key statement of financial position amounts for the periods presented.
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.
Adjusted operating income or Pre-tax adjusted operating income Adjusted operating income reflects net income or loss for the period adjusted for the amortization of debenture discount, 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 tables reconciles income before taxes to adjusted operating income.
Adjusted operating margin Adjusted operating margin is the adjusted operating income before taxes for the period divided by the net revenue for the period. After-tax adjusted operating income After-tax adjusted operating income reflects the adjusted operating income after the application of the Company's effective tax rates. Adjusted net income Adjusted net income reflects reported net income less the after-tax impacts of adjusting items. The following table reconciles reported net income to adjusted net income. After-tax adjusted operating income attributable to common shareholders After-tax adjusted operating income attributable to common shareholders is computed as after-tax adjusted operating income less the cumulative preferred share dividends for the period.
About Element Fleet Management Element Fleet Management (TSX: EFN) is the largest publicly traded pure-play automotive fleet manager in the world. As a Purpose-driven and client-centric company, we deliver value through scalable, sustainable, and technology-enabled fleet and mobility solutions. With operations across North America, Australia, New Zealand, Ireland, and a growing global footprint through our Mobility platform, we provide our clients with end-to-end fleet management solutions - from vehicle acquisition, maintenance, and risk management to route optimization, electric vehicle integration, and remarketing. At Element, we combine our fleet management expertise with advanced digital capabilities in order to unlock real-time data insights, dynamic planning tools, and advanced optimization that enhances the cost efficiency and vehicle productivity of our clients' fleets. 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 revenues 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. 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Company Codes: Toronto:EFN | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
