FLYW - Earnings call transcript Q1 2024

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Operator

Greetings, and welcome to Flywire Corporation First Quarter 2024 Earnings Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host Mr. Akil Hollis, VP, Financial Planning and Analysis. Mr. you, Thank Hollis.

begin. You may

Akil Hollis

Officer. and are good President on you, Chief With Chief afternoon. Massaro, Chief call Financial Pitigoi, Mike Cosmin Orgel, Officer; today's Executive Operating Thank and me Officer; and Rob

when Our first quarter XX-Q earnings press ir.flywire.com. be at filed presentation found release, can Form supplemental XXXX and

discussing call, those forward-looking these contemplated be information. results certain the During will could Actual by statements. forward-looking we differ from materially

for release more financial non-GAAP on We required will materially to and Please measures. related to these SEC our discussing in non-GAAP reconciliations filings could results regarding also risks measures. press that cause information refer the certain the statements to and financial be forward-looking disclosures actual differ

I to is the live This being would Massaro. available Mike and like webcast for to call be turn our over call will now website. replay on

Michael Massaro

Thank you you, is today. everyone joining us that Akil, thank to and

share are Orgel, into Cosmin of showing new go here greater today, all pleased FY a CFO, the Pitigoi, We detail minutes, with across In to 'XX COO; quarter. results will and you President business. and few performance our strong our QX about the our Rob

increase ancillary year first, highlights from less few I a $X.X $XXX.X gross services the for year-over-year. million, XX% financial was was will year-over-year. million, to Revenue These XXXX. And XX% million But are Flywire. $XX.X adjusted Adjusted QX start by an great profit of quarter with year-over-year. quarter, an start the increasing million of for QX increase EBITDA was the $XX.X a results for

results. strong core start continue with drive that our me of the fundamentals Let some to

IPO XXXX. Xx X,XXX clients. increase exceeded a As since is This over now nearly have company, a in the we

XXX diversification. have over from global strengthen over subverticals. countries over We to territories, countries, have to and XXX in process clients in numerous they continue strong all verticals ability the providing We currencies in payments XX X now

with XX 'XX and less also We over ancillary X% LTV diversification FY generating top and with less clients retention less ancillary of NRR, than CAC. great client XX% accounting All of logo revenue revenue revenue great combined enjoyed to for services no service.

Fly innovation be Our nationalities than ambitious believe across with and around that continues and different more representing countries, real a mates we XX culture advantage. execution to languages span a centered spoken, XX

in momentum see year currency We are confident will this will Cosmin a basis, review. constant revenue the our on you guidance from as

EBITDA margin our adjusted expect prior in also with We guidance. line expansion

key for I Now in overall much many international in QX few Visa tightening want highlighting policies business. has a to environment numbers about students navigate been key reasons. Flywire's reiterate education education student to my The changes, factors these important written indeed visa and ability for confidence markets. in are our

to a average, than clients instance, throughout of the strong our benefit First, above with revenue nearly speed study rolling higher for having expected, of demonstrated education ramp business. periods business outperformance are normal we other they government has an Canada, clients cadence. Visa-related U.K., number the admissions, that previously diversified with In and back allocations permit growing our recent company In driven our by of new a doubled and the in a well quarter, better global say a NRR. market increasingly resilience change, and this winning

wanting an Second, market. believe long-term the in find student of it the we international education growth Students somewhere. international will

capture existing sizable these expect a portion We footprint of will Flywire the payments.

view who adjust their process, education. to are support students this students their help to the globally that Our in plans continue needed as inclined agent partners application

their and to We a have great that countries the also colleges. of host many are lifeblood and students believe universities value international

in now of education long policies growth continue. the moderated clients we will trajectory adjustment, Our the international period and discussing the will are long-term in rephasing of deal be expect will with the term, but

and are organic markets our in early we growth Lastly, the still industries in we are demonstrating large serve. to strong end journey our penetrate

also continue ongoing our effective and innovation clients, new go-to-market We business. to across an win grow existing strategy and product thanks clients with to

We our Flywire also and progress made X-pronged community. advantage our strengthening strategy our FlyMate expanding great capabilities, in our of go-to-market optimizing QX against

and we As to support go-to-market, continue invest for to our algorithm. optimize growth

said I our last more relationship and throughout and As spread XX% managers in investment XXXX, sales to quarter, geographies. by plan we aggregate, verticals than in increase across

this a marketing our up seeing in some For sales early we example, net Indonesia. new efforts. and momentum experiences, with We allowing in Chile and on travel subvertical team, to bring travel, We in for started example, in of clients are new investment. our strong combination already of returns year the ocean opened new geographies, from investing

in Additionally, South months. in we XX market has investment a another us, continue to clients seen increase over Xx last success Africa, see the for which great

While Flywire we on our payment our to and advantage, innovation product remain vertical power expanding focused ecosystems.

funded For example, healthcare, party out patient third rolled a by in integrated financing our we powerful affordability option suite. augment to

providers and patients balance and collectibility. Our affordability a as for solution clients to increase see this clear

financing patient gives a patients increase financing nonrecourse financial our plans fulfill solution, other among cash from payments client and payment in payment As from just integrated lower our in longer terms benefits. One reported months monthly their to XX% solution responsibility. X

go We be this our strengthening growing community. on health our into business detail quarter's to And care focused supplement. we FlyMate about more in and continue

to here critical values to quickly our FlyMates like empowers our mentioned component hard solve for Living Flywire, I've clients. maintaining and have performance ambitious a which we teams. culture move values-driven and at problems is high to execution before, innovation collaborate a As

in experts, and large ended that on the meetings After legal was client sales, for was of implementation and contract. when of education example, relationship suite global display benefits product, global the team convinced institution For a this FlyMates so a our team sign States. of Flywire multiyear to with prominently came United together deal quarter full the of this a a they

is now be what ever. team to company's on enterprise-level the deployment Our is track fastest underway with

library through the FlyMates their in and called from serve. Panama around our for of quarter, partner to ours and Our work the a in of also Last FlyMates the culture and build World. a to is students fulfillment commitment together underpinned to came motivation communities world in with nonprofit local back back world, School came the their by a perspective lives. school new giving sense families on we

As with global better responsibilities in and fellow experience The put an my it mark such strong to proud it, FlyMate endlessly and indelible to whatever employees do the willing a are me, X takes place. a is supports done. company supportive making kind job social Flywire world I'm learned its and I FlyMates that that in the left on get

some the our highlights now verticals. the strategy to quarter. of COO; Orgel, turn Rob like and the across I we during business operational call how winning our closing, are the to Rob? first resilience the would to with pleased business performed In and from quarter, our over President review underscoring

Rob Orgel

afternoon, and Thanks, on It adjusted results EBITDA. another both good Good Mike. quarter was of everyone. with revenue performance company strong the for

and delivery delivered client during the service quarter. sales, Our teams results great

Here the are highlights. just few a of

We their a travel over across added over with highest XXX health growth ARR We a creation all-time high vertical an new XX% and quarter. particular clients, all with quarter. projected in in mostly our single year-over-year signed giving all-time in saw strength generated We care BXB single quarter. pipeline verticals pipeline the signed during

strategic execution This growth by pillars. quarter's growth the X our continued driven of strong was

ecosystem those and strategic new partnerships, products industries, pillars with a through acquisitions. expanding channel growing value-enhancing geographies adding expanding existing As reminder, finally, and our include to clients, clients, new

new compared how in Starting briefly saw to quarter, we we like with first those estimated X clients billion, growth and increase across last our during in I'd to win $XXX pillars. education rate increase with an grew an year. the our in of of an discuss percentage line verticals with QX TAM signed

For bolstering on prestigious now live to the founded students. home With a higher as a universities XXXX leading South with a solutions education University for private of the provider university Flywire largest several solid in in position university payment Kookmin XX,XXX seventh Seoul. and Kookmin is Korea, in It example, Kookmin in region Korean leading University us. board, is over we University market. in our South is which went Korea, is growth supports

growing beyond QX, and end school in our reach into expanding and also of active higher our Korea our the Korean region. another We first to signed recognition sector education a testament K-XX in impact in

to value continue to ] for solutions in growth we'll payments, to and continue drive cases new also and use develop value drives and We [ software education, where our identify clients.

For example, power administrative are the and third-party parsing platform invoicing part of early availability sponsors such our ease burden, solution, pay we or the enable lower students expanded their benefits. directly. government fees as employers, other increased revenue reconciliation organizations Institutions of of agencies Flywire reporting to the of as tuition and to

third-party timely XXX student a seen leveraging proven these base. Once and them of institution record clients, Flywire's has large a than is a One which we tuition helping are their payment better strong third-party collections research and again, NRR. serve elite have organization. Flywire, They unique and global third-party increase manage is via delivering more value XX% Flywire showing vendors drives after that for requesting invoicing and in software payment solution of track to our

providers health billion, generated TAM with a In care, as on in an we which new creation, pipeline we saw basis specialty $XXX XXX% U.S. grew estimated with momentum year-over-year of a record the over

care During the several quarter, clients. we health new signed

system surgical over partners We the centers States International. client, XXX Surgical hospitals the largest U.S. expand with is Health Solutions Partners to network across XX are over surgery in states XX the continuing USPI and ambulatory with and health Conifer United United in ambulatory

are live the network We with with surgical currently more centers on way. of USPI's a or portion

Oracle the live a We with also went handful during clients quarter. CommunityWorks Health of

Henry County future works to the platform in care providing focused There the For live Health facility, example, of users Center, rehabilitation become Oracle community hundreds with on went suited a West well hospitals of works large Health are Flywire we that the Tennessee. platform. Medical community are

In $XXX on the clients brought across ARR billion, we generated estimated of our of TAM record an an quarter all-time we signed projected travel subverticals. new as all with during

ancient companies, and went of Chile terms with and partnership based capabilities a of with our among [indiscernible], new the of Santiago, Andy's in us oldest the America's live we Flywire geography, [indiscernible], first strategic mountains routes travel South [indiscernible]. and X with providing integration into ever Chile. in experiences software travelers travel lakes company saline client expanding trade win travel In helped

market. new is clients and deepen Our work partners local of this our corner to excited in with travel to our expertise the global team

subvertical experience during success Japan As ocean in and early peak our saw Mike in mentioned we're their in traction February. January strong and ski earlier, season seeing

increased to about last $XX BXB We wins, the pipeline in team business, which broad of compared quarter-to-date covers be size, client projected BXB QX highest and Finally, year increased ARR average had our a estimated for our to generation of team. deal our number trillion. increased

have in and X/X of providing traction roughly to We represent now integrated clients which distribution sophisticated in solutions. our accounts receivable clients, by great continue manufacturing and BXB,

platform that the processes. tackle distributors ability and and enables built their our to bases, to payment combination payments deliver ability infrastructure Flywire our where stands to and and in major capabilities, domestic financial non-card our a out international payments of complex companies global challenges are accept step many us customer in seamless of phases cloud-based card manufacturers and with of systems BXB solutions forward our early for digitizing the integrated payments

example, this outside we invoice countries XX U.S. both manufacturer added and be flows. components. of will Missouri-based For rubber traditional [indiscernible] for plastic Flywire and exclusive payment and in of as quarter, platform their the using transacts e-commerce [indiscernible]

customers to with formed Flywire has international hardware X,XXX local expand [ clients helped computer MCX distributor XXXX live globally. Group, options cost with payments. MCX wholesale and payment went these we a for receive ] over reduce Additionally, in

scale, verticals remain to prudently. Stepping our out invest efficiency control and to and our we of moving efforts towards costs committed and

our revenue down of to percent We than QX, this percent continue Flywire's to expenses a In as X revenue expenses scaling of that effectively. improve go-to-market a our points as also of model operational QX business X customer hiring in points of showing the has reflecting growth our XXXX been continue revenue and cost and scalability are down and teams were our More teams sequentially. half year to commitment as fall. operating versus

each is of the for is enjoys reflecting of our verticals Flywire of guidance business our business of X our Advantage. to discuss X That well. the over will of core leveraged the turn payments for our shared the now line strength verticals model is as Flywire by because With We Cosmin well as for results global I growth, the law. remain over bottom to as elements to top service of the call QX payment network vigilant part the deliver our leverage on XXXX. core shared around and quarter that, go our Cosmin? and and the as and operating solution platform

Cosmin Pitigoi

Thank and good everyone. you, Rob, afternoon,

and the As leadership potential at payers, I results about the I'm our and for partners, the to deliver shareholders. of many business then and forward outline our I'll energized through . Today, primates for by about clients, next our phase Flywire, of you the of know, and to X of months the overview Flywire QX long-term especially I discuss look and to will growth shortly, year. outlook quarter excited for provide fiscal first continue as ago, value to provide joined the and I an incredibly helping culture

financials. As Mike QX, Revenue in had QX an billion, quarter less have representing XX% across and volumes XX% remained services of our XXXX. relatively during over QX consistent year XXXX. growth increase last and start $XXX.X metrics quarters. compared compared several the rate the of a mentioned, was the Payment Rob standpoint, were From strong and our a million we reporting to ancillary to stable which many $X operating represented a monetization to spreads

rate growth headwind and a strong as growth StudyLink payment driven percentage our as acquisition, revenue higher education by to business. despite We in to related our quarter. Canadian other in million increases revenue the single-digit $X.X volume was transaction platform ] contributed Our saw [ well high which

compared Our rates growth Asia. and accommodation services revenue in to U.K. from flat year-over-year. expectations relatively stronger-than-expected QX from and FX clients travel stronger-than-expected outperformance Europe list volumes new primarily education higher was driven clients were by ancillary our

based provided a exchange on million the However, against for rates. FX $X.X guidance was XX December headwind QX we

driven year-over-year, travel. the our quarter, primarily XX% transaction and as in increased vertical XX% education a in increase U.S. revenue volume, by payment transaction well During International as

StudyLink. revenues increase as increased volumes, by associated that revenue and volume other from a the in with driven well from platform Platform XX% not primarily revenues year-over-year, carry X% fees contribution and platform as specifically do other payment

our from the gross generated cards XX% was revenue land-and-expand down and basis Adjusted driven margin gross QX our domestic XXXX. XXX above we QX transaction profit of the won gross XX.X% during vertical in more million in increased million quarter. change was points platform $XX.X of versus success $XX.X XXXX, adjusted for of business, prevalent. higher primarily by both the the XXXX. our our year-over-year growth The strong QX education margin Adjusted for strategy, U.S. areas from credit are particularly where revenue, travel where; XX.X%

settlement in past shifts highlighted As occurred FX we've quarters, during of transactions.

revenue million margin and we shares over driven $XX increase With March stock no million XXXX, XXX.X EBITDA The was losses prior up management. of on respect largely XX, almost outstanding. million long-term in In equivalents, Adjusted for XXX adjusted million were $XX.X to quarter, offset in resulted bps of and in was as had that capitalization these the shifts Adjusted $X these hedges, cost double by quarter, resulting impacts by EBITDA mitigated This outperformance XXXX. in grew impacted FX in our year-over-year. QX and common cash sales. quarter, to a cash impact to debt EBITDA generated of adjusted EBITDA. cost

last allocation execution, strong opportunity have build growth months. to and Similar cash over generation both inorganically. further have and to the we flow strategy short, In ample XX seen EBITDA, organically our on adjusted capital and we

to Moving on guidance.

based our our in The December FX. to spot FX international year-over-year rates XX, full midpoint XXXX, is which revenue since the represents growth when rates a spot revenue reported strengthening less services exchange XXXX, last at million the as the March XX% be the is of XXXX. driven $XXX to year due guidance midpoint. based of U.S. of XX, foreign reduced range For $X changes by $XXX prior expect the from of reduction of in dollars. on on projections to in This we at dollar as ancillary This million the rate million

continued note since Please March that dollar the XX. to strengthen U.S. has

to $XXX XXX ancillary as EBITDA million year guidance. improvement, We change services EBITDA This by the $XX in to expect to revenue earlier our midpoint range we line in in impacted our $XX prior our QX thoughts which million At range guidance to range, XXXX deliver adjusted generate spot is $XX discussed full is and of already adjusted to in XXXX the less primarily year expect FX be rate, the margin million. Canada. million. year approximately guidance XXXX with of points of of full this basis the expected is the relative to

of We expect to we more the second realized half evenly distributed previously more as year our Canadian be education versus higher in expected. revenue the of

EBITDA discussion, in of QX guidance expect the million. range to we adjusted $X be to the million out $X Rounding

our adjusted the few expect be traditional the that to will reminder, a due lowest business. seasonality And been the seasonality past over repeated. EBITDA of has quarter for we our years As QX

and gain In while given closing, long-term my continued step Flywire prop, payment early of very market value than standard back I and Starting has automating that growth client on the provide our share compelling offering. to legacy are outside clear customized opportunity it's want that early approach Flywire. from and perspectives in capabilities, to verticals other a benefited much X unique more with payments stages verticals of its their

to have opportunity we large, look capture we verticals given our single-digit to solution. solve in positioned cross-selling we software capability. as share opens low to So payments, starts complex these but believe penetration these we're continue problems ahead, increasingly with customer into cross-border multidimensional large uniquely The and domestic the to door

are committed strategy transparency our I'm external in our to algorithm. executing against continue growth and how to drive we internal

over retention the First, which stable main rate, unpack there or has components. that, years. we've net revenue To talked NRR, been X about are

mentioned, double high based to growth trends. including low verticals X our single see just external I on we digits in as TAM secular First, factors,

over These has growth our of have stable existing years. meaningful growth, been combined driving the expanding been add X can clients. with Second, X/X drivers which we from we approximately quite believe our

combination further comes as the ramping additions year. innovations, services. of our roughly such last payer top client early from addition, this, and our clients new growth added in can even X/X In we year's of through On accelerate of

Finally, we're continuously evaluating strategic acquisitions. value-enhancing

this growth and drive is of we productivity to scale, top line as in data, through systems bottom even result automation. growth faster All expected line in investments

I am it scale. operator we excited about now problems back early journey customer questions. to over as solving in the ahead for at Operator? still the I'll turn clearly unique are

Operator

the Markets. [Operator Instructions] from RBC of comes question first with Capital Dan Perlin The line

Daniel Perlin

more, are to talk visas kind pervasive. bit I just I and just issue. just to being like trends? And market getting with those tools ultimately how Mike, it wanted you about mean, to more back understanding as comfortable other Canadian go little a you that the a could, was want I used little seems like are if things. of student immigration

just Just visibility got would that have. rate second Where a get visibility from? looks in you So us there? that assumption you like it remind is your anything coming the of you incremental that recovery there. where Is the maybe the Part half recapture be helpful. agents from there

Rob Orgel

giving from Canada, the piece that understanding in to guidance are have on that And clients market, sort I'm and conversations you happening Dan, into from from can the get the the it's clarity Rob. in of of some going I don't then of that here. why can the regulatory jump you perspective that. start also with sort we so

Canada, all around move forward. of the last from what's considerably So about how more for schools they time talked able and to sort are clarity the happening we there's

that March, with process. on they to became that use now what calling that admitting their leads into to on normal caps the beginning announcements allowed return. a of given activities to call they set moving they're They taking able clarity what allocations clarity the what leads the you'd pursue have under is they and a they were the obviously, are for means we're forward ramping have account that April. payments, And are right of So what allocations, are around end enrollment, to of and students,

results teams sort And uncertainty. that when of up general and of and feared Canada. with extreme are what sense client they in time more less I spent sort I with of operating things were was almost the complete they talking manageable than our is actual the

talking able more for everybody understanding comfort forward. the to about so resume from agents gives for move being that understanding, activity their our to they how And plans

way build So guidance just hand a that I'll and based our we a the model. we is to do modeling, bottoms-up our second, here off in Cosmin on

school-by-school level, how what So there's a of expectations. summarized from doing And it but with allocations to build about allocations to up, you we're that up, what guidance. at will was obviously, essentially approach able their that, mean their their and actually essentially been of understand province relative perspective, approach -- sort school-by-school discussion we're our to able do inside lots level from bottoms a we're this, the it

So you add? with do that, Cosmin, to just want

Cosmin Pitigoi

question. the for thanks Dan,

guidance around Canada. as kind So let thinking about and the how of put to it me we're numbers some then relates

we've So basis. on first said, full we've the off, that maintained for a currency guidance the as based constant year,

So the FX. driver there main is

As about we and heard talked about Rob Canada, of think sort you've it.

about specific think talk that I Let areas me just X were out. called

So and year in then QX, half full recapture second particular.

QX, more what we're we seeing enrollment. -- for is in ramp of gradual So a rolling

So of a rather or bounce surge. than sort

a roughly impact is assuming we're that, with QX. in mid-single-digit negative So revenue

you Second, mid-teens if impact. low we past what seeing to full the about a year, -- teens now talked for we're the in closer revenue million is recall,

you've digits mid- then in to QX everyone of and sort be heard of high again, QX sort was it to we single impact. about initially, us updated So talk mid-single

All we of QX, in outperformed. saw as those things, again, you

impact that so And QX. the in was

your to add and recapture you see to a that, in this we -- that second transparency supplemental point. how lot we on make our Now we half, sure think question wanted on more as about materials,

in as as to students So international revenue have a dollar million right half. we Canada mid-single-digit countries far is what of outside going second now in recapture

that So countries. international students into other is going those

some that events. we we get will us around that through for growth market midpoint these range also step a feel about So again, have of be external as Canada we and good we just back, the the as

Daniel Perlin

That's super helpful. Great.

different guidance you do thought in as factor just cetera? said, there maybe now. ways a present since I've you how in you Just to you company. areas around would think for forward of might I'm be Cosmin, there. et FX you any of as months about philosophically, lot definitely want helpful quickly, like guidance as well? other KPIs, been numbers a what or you wondering, there be FX-neutral -- Maybe anything given swing couple to And big the got that, and Just have which a you've thinking plays for to

Cosmin Pitigoi

Yes, of was that growth I course. rates. or I And I of background first of of constant neutral about X -- probably things and from talking come currency in came the FX currency a sort when heard

So that's something that we will be forward. looking to going build that and be able to start looking at

in So noise as the outside as kind especially our that revenue is, think the principle, of half think of is how outside than know, FX, of more growth true U.S. the our of about we business of business, you the you about

obviously, that's a impact. have large going So pretty to

So here maybe big can just unpack quickly full currencies. for a factor you we we year. FX in that about since terms have I realize the for how I of think

British Canadian dollar, the X [indiscernible], the So component the that Aussie currencies and the the are dollar, have biggest we pound big euro.

when those, gave was across you guidance earlier as December a based rate -- look As XX. we as of that remember, year, on we this

X% -- X% time last dollar a in we of the by gradual currencies, of those And quarter, XX. of saw of weakened some some currencies the the sort throughout significantly across look quarter those better you into were to If while ended Then the the rest strengthening into December X%. to actually of sort by we is X% cases, the dollar. year

in million all pressure of that created of that -- So QX. has $X.X

the on sort that that QX. impact of since was gradual, Now was

now, sort As you versus and move look these you QX guidance are gradually And an QX, quarter, becomes little a as course, But on the bit look QX, that, present as of the and things a time. as of if our in rates you international calculate the our to the does offset hopefully, guidance I that as almost has million help saw, were right however, our can going this again, to top of line. with numbers. of is we maintain strengthened year throughout move that for that you But -- help? of But rates that based we'll we headwind rate is XX. terms lot that, business QX, that in we $X.X quarter how FX-neutral some and of think an for also actually, margins March we Does as and double impact Again, something forward. keep to we being as our able we this growth to again, far that our imagine, focus every was as commitments now, sort it dollar those neutralize noise. through and of ensuring

Operator

comes Sachs. Goldman question Nance with line Will the from of Next

William Nance

more numerical I'll Maybe start with a question.

I'm quarter-to-date. of point point be all same $X revenue said make million the at on kind like eyeballing to incremental I FX so FX XQ maybe we at rate done course the on would magnitude FX quarter. you using Just help to quickly to of I of kind of of or the saw you're the of the finer FX level relative quarter, roughly this we the rates guide what FX the quarter instead the rates the kind impact like is think setting thing. were guide of to the the use [ current you could over But the XQ have just on in -- spot from of sure movements? we're the put full of a kind the in adjustment end rates year if ] I what know rates of glance guidance. And what seems half it

Rob Orgel

Yes.

so see right you I weakened So just the actually -- if few the now, days. did say dollar would we a last little bit

kind would as pressure, almost million digits sort $X but of around to low single I the even of there today, less. of were look So if is little of year, sort the you it's or full of bit very a for say in

of impact, really not material. sort a it it's but immaterial It's pressure. very So small is

less again, full million, the or So would throughout year, than I say, spread quarters. $X evenly less for the somewhat

William Nance

Got it.

just helpful. And then a bigger That's picture Okay. question. maybe

that of tuition unpack on sort that I'm growth the around the of the that high growth you sort and campus double immigration the seems the low more in around point now, single comes of digits. And can the much kind TAM think second up mentioned thing. world. at controls that, going that how between that's of then the right you across the price international increases, sort college part number beta geographies. I wondering be students And of of just -- of and given pricing to around the all from to if the I world? different ask

students the look So when I'm what just on students international of education the NRR? at years? of in same-store curious of kind to the over in the expecting you growth contributing And that components you sales are the number business, what kind is then NRR of

Michael Massaro

Will, and sure, that. jump take I'll in

if if So of you'll international over kind COVID a single-digit, see right, look couple low the period. of the low mid-single-digit decades, out you'd variation since you again, last normalize for

time. that, I think And that's then is say, the think just view I I've of there, you're So drive student we're And you would obviously in so be information growth, but our go of industry-based whether to when going X where it, build when supplement, seen the again, right, I broad there's of over relatively I growth down international joke increases, never And dynamics help through a some to kind kids. see that's always tuition seeing you modest down. going growth right? tuition that got break

time. over average have size again, going component increase to some So of transaction you're

tell we strategy to the in You're is to the that and especially digits thing see we in just there. the for that have of for vertical a education of growth international the TAM embedded TAM single of . And expansion us significant base. you are kind today being remember, of going land-and-expand just the customer That's explanation I'd other area a huge opportunity part that where and students.

So hopefully [indiscernible]. that

Rob Orgel

say. I'd

So automated what of where solutions. adopting and these the terms me in players clients you too, payment sort heard curve is sort describe, more are are a A lot maybe of behind. of behind are lot behind of these verticals of

of from see the efforts verticals, you capabilities. do that do So and can of it's money. are -- lot any up of tailwind or picking looking of these of We whether because we them see X name of to also all really savings for in if looking save them sort a automation cost now that

looking around space. a is it play into customized so right be for so going automation. And they're to software lot solutions, we that And of

secular on that's come with think very of that in so of for I sort targeted growth, top So a solution we -- them.

Operator

Next question of line Darrin Research. comes from the with Peller Wolfe

Darrin Peller

nothing Look, mean sounds FX else it make constant I with maybe that like from unchanged change you guidance is currencies the it's said, trying see. XXX% impacting associated for Canada, to purely the as could I be to point just want everyone. what but business and then you clear you're

I one, right, want just make impacting? nothing number to So sure that there's is else

could remind the And Canada beyond you accelerated by implied in the points us just just components more a on few then obviously rates half growth ramp, the XXX of if or the just the year. maybe the timing of reacceleration, second basis

again, about year-over-year, be seasonality, forgetting not So just would helpful.

Unknown Executive

Yes.

So maybe me start. let

in And of so first QX off, impact. terms

portion a that's -- FX it. about talked of we So

Canada. is it Second,

discussed we as again, impact, that seeing we're earlier. so And

also that puts In addition, question half portfolio is and reason, second but say half a across health other into to of first business takes which there of the second the the softness other acceleration. the would ties I are your in care sort impacted, number around

health in And of the acceleration -- about unpack growth if we've Canada. we the again, -- care to half. can sort you numbers large portion second that about the a you business, first that, were to look first second of as from if half mid-single-digit sort there. how of a some disclosed of you is builds think half to half, the see A if acceleration to -- implied into at So rates that

second that. portion of of feel we see across the mid-single-digit uncertain macro But the into and comfortable business range of signings, strength a we've as that captured in client Obviously, first components. half sort recovering feel different everyone lot like good and captured portion rest the it's of that a half. a acceleration areas third, wide those an into is some of half think possibilities a second faster-growing from And again, I is new the do as then it looking overall is And in strength of number overall, care we've with we Another verticals, environment. half. we health other second driving in our of of that just

Rob Orgel

to -- in just just in jump comment we speaking sure little because color put want can of that perspective. just flavor make Scott, Rob we a and I with of health sort bit care

One So going X is that on. half. clients second that really acceleration in the things second half is in good of go-lives just go live the

has part this thing. The there second is been that

of health to an you was ability many with them incident, care, disclosed a cyber incident in the helping responsibility that where bills. away were industry if And that nothing our the that it cyber care event we're patient their again, of see there their do of in You'll where of the hospitals as bills. involved far Flywire remember, consequence portion you lot patient know, change to a from was health in the but collect Flywire, primarily had in put delayed out incident, their Q,

our some saw the half So from year. the push from into on half we events the really see of the that first -- based what of had delay hospitals second year sort happened was of you that of that billing the their this

but so of natural understand as pieces of just we've of in things X big talked not And that the about, half growth together sort trying that that as the a it's the you to help other That's second as bunch is the in accelerant you're put them. a second half.

Darrin Peller

being segments? word so customer little color across XXX adds just it more travel Rob. quick the within if a strong, is on Guys, helpful, broad-based Was new That's it -- be would a great. very education

Rob Orgel

well, I in Darrin. that X Yes. can as with jump

quarter, count, the terms beat education this bit. travel -- most was winner little the by if but out So in of a you for only

QX, out said our remember, you education If beat travel. we

I Health in they're care in added period. comment So good added QX that prior a close number of that clients. they number BXB the of think pretty mix. that clients same the would I added,

a And out well. strong so great will very education was travel but X have as quarter, and overall,

Operator

of question Nate Bank. with line the Deutsche Svensson comes Next from

Christopher Svensson

earlier. you in clarify to wanted said questions I something response to X of Dan's

moved issued a mid-teens out just of impact impact So a from guide same in number feared. called you teens you being low the in impact. less at the with But to terms originally extreme permits a X-year than filed time, the of Canada

for So comes causing I'm recapture that's is when the first trying it is it just through? to year understand the half the assumptions? of that more delta Is to it the on worse lower Or just full the of expected? there sort timing uncertainty worse that be is than year? what revenue of Is it you had

Rob Orgel

Rob. is this jump can in. I So

perception their inside the to in about they processes, an confidence trying give commentary with still to is understanding that do there now they that people to again, standard was more to undergo work So proceed Canada proceed how So cap, that -- and that more how they that need with know new that's grown and to of in mid-teens. this in to low comply the in need rules. QX mind from ramp explains QX, the us, is slightly, effect they Keep terms still expansion teens having the behind know what right?

Christopher Svensson

Okay.

all being than Got expected. to XQ due worse So it.

Rob Orgel

the and mean for new are the is to is with year that under. operate back I way of the doing I QX they overall rest mean here, the ramping there's that the picture their behind understand rules trajectory of dealing set us they effect. here the but multiple dynamics is big

Christopher Svensson

Got outlook. The I on your appreciate it. that. I growth follow-up had XQ was question

around of by is months the than few thought high lower guess So you X had XX-point been end like little so FX even the which a of you talked the guide, and just from about quarters. the more ago. [indiscernible], looks wider about end Canada, typically, points range, thinking about that's the in a I impact the reason that's guiding is low or than past range X there's it But QX you've why growth maybe

across giving little more in look wondering remaining business, the forecast guess, I you maybe in you seeing beyond Canada that's maybe guess, out, the I a as FX the what you're months X So previdation just to quarter.

Cosmin Pitigoi

that So thanks question. for

Cosmin. number in a So takes QX. Obviously, it's of there's puts and

make some what so to we that sure And is capture we wanted that. of

too Rob of it is as part a think about you've talk rolling I is is, back. ramp Canada heard

of good. here, And of I in think we the kind think So we feel in potential -- the midpoint we quarter. general, have relatively that terms capture obviously, scenarios. feel about way -- -- want the it's still a third we to through as range But we're of we

we're so still of all to more these but go. And watching trends,

the that quarter. of wanted rest make we we as So the we scenario look sure capture to the into

Michael Massaro

kind we snapback just seen normal right? We didn't Yes. see, is cadence Mike. we return back rolling a which of only that seeing add this return of had something process. Nate, a in admission very clearly I'd if The thing this or that this is hinted we're making to sure of Canada,

trying what to And that's our we're guide. so in cover

Operator

Research. Next comes from of Cantwell Jeff line question with the Seaport

Jeff Cantwell

you I see can then want your that if clarification. to I'm anything needs and understanding clarify commentary if

now and And Canada. slightly You in issue there. updated the unboring situation was stacking since about some margin then, got there's expected, is worse things but then stabilizing the QX than

in So full Canada, some Is by impact other offset partly a that's mid-teens on that right? revenue now basis, mid-single you're recapture year saying in countries digits. and [indiscernible] at

Michael Massaro

on, Jeff. That's spot

Cosmin Pitigoi

exactly. Yes,

Jeff Cantwell

student you that, with Or underneath Canada developing? right your follow-up situations stable, not as that now think the are seeing Okay. where the [indiscernible] do globally would also opinion, medium and you -- up and mid-single in going more Canada, be any Great. come then expect on -- you term? situation up you a is, to are how my numbers over And that to you international in recapture like is areas overall, see longer

Cosmin Pitigoi

with me question. start Let modeling the

destination. they go to So sort help find in general, we understand have to students to their and how country if obviously, another others we cannot original -- agents to of their planning they're our talk

a that macro that's at So that's sort trend of continues. like a we level, feel

So say, ground it's given the on and if estimate, people it's on sort our I and an of that, with it's based of conversations obviously, would agents. experience sort our

the captured for guidance year. well that within So like, again, of range feels it's the

patterns So year. that. based on range But we've we other it's students impacts, we've feel our feel in it's good experience. well estimate of sort for the of exactly our and expectations many Obviously, sort like but captured we that of and captured difficult what about behavior to that

Michael Massaro

at look made just when earlier commentary mean, I'd I an just U.K. I we mean, around example. markets, Jeff, other strength And some as say, I Yes. the

situation process We million there's plus in is just a with Canada that strength. not delay impact, to even really headwind markets. it FX QX in for we year to outperformed which And $X QX. the admissions obviously but again, put in headlines [indiscernible] know the the unique we've again, allocations known, in other so high QX, way continued and out we pretty there, see that permit in mid- single-digit see that of the still a impacted kind good with were

we're environment that a unique at the year knowing is us. with so And for again, macro confidence it and full strength looking

Operator

Blair. question of the Kennedy William Chris line from with Next comes

Cristopher Kennedy

up talk about you the that year-over-year. in pipeline Can Rob, of talked in driving health type XXX% about care growth is the strategy you in health that's changes just go-to-market care?

Rob Orgel

to. happy Thanks question. for Yes, the

couple ago of that of we outlined a business. things to quarters a we in doing bunch performance So were address that the

a sales team, new and a business. elected very first did of I seeing work that. very some of sorry, in head appointed the some we're the So that strong inside benefits foremost, of strong think -- we And

pipeline that done we significant the growth past period. obvious shows the most saw effect up of having the that the over So in

that's probably the #X thing. So

positioning of of supplement the around and can we've think in business. we quite the the see you done materials that that, I bit provided, all that also a

existing We great financing around returns clients. We've the performance got show to integrated were offering. our the of innovation on based able

their guess pipeline is combination All the helping efforts the I'm first, the as of point sure, to being I'd sales helping those things in all But team I pipeline. I'd that, that point drive to of growth. what's drive

Operator

of comes line Fargo. Wells with question Next from Bauch Andrew the

Andrew Bauch

U.S. the regulatory it around policy. far this to how other follow characterized is the of any visibility, can where resolve how and kind to, there wanted this get barrier you uncertainty environment patterns understand a the of around that when we as of some could to kind just getting the to of are sense would as kind clear it and -- of like And I'm we just education the as And need you to look I of what made a remarks go. on historical rephasing the environment election? up is itself? trying that

Michael Massaro

for say, a in permits. seen decade limitation of the I'd issued over would on Canada their unique government say Yes, we've government general, study in Mike. was there was somewhat changes different policy countries around world. a because I

the so that QX. from admitting, lot universities not has to And That a impact be there out to the [indiscernible] all Canada. many in up which clarity the caused is know how students clients, they government should the come

that's rolling again, back. that so And . recovery

put that business, mean about business. our any we across navigating expansion we a great it's and a climate. up an put numbers diverse all It's macro business. As of geopolitical look X of if up We last industry strength you types as expansion, we diverse QX diverse I here, XXX EBITDA. look events XX% see year, sub-vertical growth and geographically with even we and business, for points in pretty growth It's basis talked right? a headwinds us in margin EBITDA of at

of again, And years we to us see something government operating changes over good that our XX-plus for the as see pretty and us macro strength. uncommon environments. company policies, a changes So in that last gives We not of in in these is feel the again, business it's conditions. diverse,

comfortable And we're environment. so in operating that

Rob Orgel

grew Australia U.S. talked many talked overperformance. really, we about We Education growth. the specifically performed haven't well. U.K. mean right? I in areas, business the well talked -- had We very really

all there. So may out of questions grew well all that be us. these sort China really these of despite climate for growing of are well

in is growth the when of its terms U.S. in the sort to strong So India you to macro growth, sorry, at my U.K. growth, China -- to contribution of its contribution strong apologies. environment, look

All of that strong. is

Andrew Bauch

stock down concerns by some weighed the the months of been here. couple has of over these last Clearly,

to revisit allocation. wanted Just capital

lead thinking strategy, into? about forward? valuation M&A your stock the the you you Given And of strategy in how would are potentially where going that revisiting

Michael Massaro

ultimately, around to Yes. structure. the obviously, you'd Board continue conversations have always mean, we'll had and capital I has imagine

in do to record track a have M&A. We

the generation EBITDA strong also We cash have position, quite a is strong business. for

us lots So optionality. it of gives

at have the I it's would and been pillars. seeing potential Board level would of we've got continues report And deals. comfortable say to same a . At around growth with happen. -- but the before, I've pipeline I say, strategic we nothing time, now, So conversation been it we've the to said what that also in as happens

We we and have kind take those that make we discipline as decisions. deals, of account into all financial investment around

Operator

The comes of from the of next question line Jason Bank with Kupferberg America.

Tyler DuPont

Canadian talked I repeatedly on following DuPont by Tyler about Jason. the question. Visa call. permits I on is wanted just know up for start Jeff's This on to we

legislation ask There's seen if and of the particularly geographies, also So And those of is outperformance sort seeing are U.K. given be should good on Australia. education passed? other legislation international the by just similar might I see. quarter, last which or the growth that impacted shape was mentioned those to outside U.K., in talk the limit How some in of in that how to Canada. the to like how a regions, has get does just strength, contribution question Australia of in students we form to number want that potential meaningful been that legislation you and think about you in regions

Rob Orgel

has on growth strong a large students. a is Australia. for company a showed rate. performed very of comments This little us, moment well, I lots my bit ago grew very Look, about from the well TAM, expand can Yes. Australia Australia above maybe growth Rob.

One of new that call of thing you regulatory is audience. And the our clients mostly was call We discussion I to is addition clients. continue existing and with was to business address Australia to skews institutions. -- sort both there in true what many of of focus if the different towards as through the in what places, at out high-quality look sort a grow

very . our in we've business. good growth Australia seen across So

So of none our about taking we these obviously, when all could that there we it into understand even of but effects, that were we've bigger talk if be account guidance.

If at for months. or has changes us. grew course the nicely. been U.K., policy last And the the some have been very the U.K. super over It look U.K. strong more of business you in there X the

land and U.K. the expand existing there, adding as both activating of Our business well terms as in well to our continues new to strategy clients. clients, perform in really

Michael Massaro

And students think positive are I thing to education, the huge of only mean, The just, the countries I add I'd they're kind shift. a to of see international is lifeblood there which in. studying Yes. going mean you're a of I factor and in universities lot colleges.

policies the come be that a they and study seeing study around positive the potentially different it's those You're edges going adjust where places tweak those [indiscernible] and of to very countries where areas but them and different education travel around their trend want to to world, in want will students and are students to want there. and

so through this like But And seen XX-plus you're of shifting some that think we've years. the that. again, shifting over going I last

Tyler DuPont

as respect. a beyond what Okay. cash look but focused, of Mike. on sort quick just XXXX just you more sort that are more quality And Understood, seeing flow, and qualitatively in X really of free trends modeling we -- through

Just how additional any or free rates flow? on conversion about should think we color cash

Michael Massaro

Yes.

our usually, would and EBITDA say But I that. trends on think we about guide are cash how our necessarily directional general EBITDA good margin don't we view obviously, So flows. a of

say EBITDA think is kind around specifically, without So probably getting I of free again, EBITDA that's would good to guidance -- about good it, way specifics a think way cash into flow adjusted to a it. the about of

Operator

We have of next question from time the Huang more for comes The with Tien-Tsin JPMorgan. line question. X

Tien-Tsin Huang

I Visa with for would your like surcharging. long, early, want I guess embrace reading the straightforward. thoughts, now, opportunity. that partners interchange [indiscernible] your I that network separate, not be there's the think an that know but credit and Canada, your to business. I curious some reduction settlement or to something I the happens MDL-XXXX, know thoughts is just you call Rob But positive a could of extent correctly? on I and on getting would I clients that add is it's be hear settlement, I'm know Mike, the but work that card that to Am Cosmin? It your love feels

Michael Massaro

kind of for support payment Yes, our in supportive and we're see would this choose here handle clients and general, question. resolution, however think come a they to to the I to to say, transactions. Tien-Tsin, we're I thanks

kind trends the But they of of us I'd So again, want what fees. obviously those that our within want clients whether for can we say soon we implement customers not. probably to with that do can to I how too do, But positive or system. to transactional to say again, kind focus deal decisions. think those to defer and And our handle on

Tien-Tsin Huang

the fair. to always that's the you with I Okay. some front, dynamics, second the seasonality, the gross on respect of quarter just anything quickly No, lead then on margin? And us to there's and to margin gross half know second given but

Rob Orgel

Yes.

So stepping of of because usually businesses back, talk think gross I higher of in mix mostly you've us coming with under about our heard down our pressure, sort margins credit faster-growing mix. card some

range that almost that So is that half on about. down by OpEx. margin bps was just that's talked back year-over-year. to the you that seen sure so QX, impact saw FX that on far. to in XXX to XXX is tie what that offset And actually down of What was of about gross of bps I in XXX QX we've we settlement sort make an

some EBITDA adjusted on basis, we hedge So that. of do

we right range. more look We that lot is still XXX like again, the at XXX But QX, actually, gross it -- longer like of a as moving sort probably for you But you to again, as feel was parts. decline bps. look margin down through when technically, term. So bps of XXX

end look it the could So of that as of the to rest we year. through be high the sort

Operator

concludes Thank you. This today's teleconference.

you may your your disconnect time. at lines for participation. You this Thank

Flywire (FLYW) 7 May 242024 Q1 Earnings call transcript