Revenue Growth Drivers
The company's services revenue growth was driven by its Vehicle Utilization Management (VUM) growth, which resumed in the second half of the year, providing a strong momentum going into 2026. Net financing revenue was $498 million, an 11% year-over-year increase, driven by ongoing efficiencies from leasing and funding initiatives. The company's originations guidance for 2026 is expected to grow 7% at the upper end of the range, with $2 billion of orders received in Q4 2025.
Operational Highlights
Element Fleet Management made significant progress in electrification, with electric vehicles under management increasing by 36% year-over-year to approximately 129,000 vehicles. The company's charging platform is live in the U.S. and Canada, with plans to expand globally in 2026 through new partnerships. The acquisition of Car IQ is expected to drive more profitability over time, with modest accretion starting in 2027.
Valuation and Outlook
With a P/E Ratio of 22.41 and an ROE of 15.57%, the company's valuation appears reasonable, considering its growth prospects. The dividend yield stands at 1.57%, providing a relatively stable return for investors. As the company continues to invest in digitization, scalability, and product expansion, it is well-positioned to drive innovation across the fleet landscape, with a focus on next-wave technologies such as autonomous vehicles, AI, and robotics.
Future Prospects
The company's guidance for 2026 suggests continued growth, with revenue expected to increase by 7.9% according to analyst estimates. With its strong funding platform, optimizing internal funding structures, and commitment to its insurance offering, Element Fleet Management is poised for long-term success. The company's focus on innovation and growth initiatives is expected to drive positive operating leverage and increase shareholder value.