Flywire Corporation

Greetings and welcome to the Flywire Corporation first quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to To introduce your host, Akhil Hollis, VP of SPNA and Investor Relations. Please go ahead.

Thank you and good afternoon. With me on today's call are Mike Massaro, Chief Executive Officer, Rob Ogle, President and Chief Operating Officer, and Mike Ellis, Chief Financial Officer. Our first quarter 2023 earnings press release, supplemental presentation, and when filed, form 10-Q can be found at ir.flower.com. During the call, we will be discussing certain forward-looking information. Actual results could differ materially from those contemplated by these forward-looking statements. We will also be discussing certain non-GAAP financial measures. Please refer to our press release and SEC filings for more information on the risks regarding these forward-looking statements that could cause actual results to differ materially and the required disclosures and reconciliations related to non-GAAP financial measures. This call is being webcast live and will be available for replay on our website. I would now like to turn the call over to Mike Massaro.

Thank you, Akhil, and thank you to everyone that is joining us this afternoon. We are excited to share our Q1 2023 results that show strong performance and momentum across the business. In a few minutes, Rob Orgel, our president and COO, as well as Mike Ellis, our CFO, will go into greater detail about our results for the quarter. But I will first share some highlights from our Q1 performance. Revenue-less ancillary services was 89.1 million during the quarter, representing year-over-year growth of 50%, or 57% on a constant currency basis. Adjusted gross profit for the quarter was 59.9 million, an increase of 50% year-over-year. And adjusted EBITDA was 7 million for the quarter, representing a 470 basis point increase in our adjusted EBITDA margin versus Q1 2022. So as you can see, Q1 2023 was a great quarter for Flywire, driven by the efforts of our Flymates all around the world, continuing to execute against our growth strategies while also making progress against our three investment areas that I will provide more updates on now. First, we continue to invest in enhancing and optimizing our go-to-market efforts. with a key focus on high ROI areas. As we have shared before, a key part of our focus go-to-market this year is around accelerating our channel and technology partners across all verticals. When we integrate directly with our partners, it makes the onboarding process and technology implementation faster and more effective for our clients. And it further deepens Flywire's defensible moat As validation of our focus in this area, we are proud to share that Flywire was recently named the 2022 Partner of the Year for Integration Excellence by Ellucian, one of our strategic partners in education and a leading ERP with major market share in North America. Our Ellucian integration is core to how we sell our full suite solution in North America, and we believe this recognition improves our competitive positioning going forward. We also continued enhancing our sales efforts with targeted investments in our globally distributed sales team. For example, after recently focusing travel sales and marketing efforts in South Africa, we signed a number of net new travel clients that include destination management companies, accommodation providers, and tour operators, underscoring our ability to scale up quickly in new geographic regions. Geographic expansion, in addition to other go-to-market efficiencies, helped yield our largest ever revenue quarter to date for our travel sector, with our team bringing in a record number of net new travel clients in Q1. Our second investment area is how we expand our flywire advantage. Part of our long-term vision to power the ecosystems in our core industries of education, healthcare, travel, and B2B. It is hard to believe that our first analyst day was almost a year ago, which is where we initially outlined some of the product and payment innovation happening around payer services and our vision to pursue these TAM expansion opportunities to enhance the lifetime value of our payers and deliver more value to Flywire over time. One of the areas where we are seeing success is in the selection of student health insurance for Australia bound international students. Flywire has implemented our insurance comparison tool as part of the overall payer experience. And in doing so, we deliver added value to multiple stakeholders in the ecosystem, including students and agent partners. Continuous health insurance is mandatory in order to obtain a student visa, and we provide a seamless option as well as choice to the student and family. We also offer this marketplace to our vast network of agent partners. We now have our insurance solution embedded within the Flywire agent portal. As a reminder, agents are an important component of the education ecosystem, and it is common practice for international students to partner with them. In fact, 75% of students being placed in Australia have partnered with an education agent. This is just one example of our proven ability to drive value for multiple stakeholders in our ecosystems. And we are encouraged by the growth and potential of this new solution. And our third key investment area was to strengthen and grow our FlyMate community. In Q1, I had the privilege of traveling around the world to visit clients, partners, and, of course, our incredible flymates. I continue to hear firsthand from our clients and partners that industry expertise, global payment knowledge, and local market support helps us build trust and drive value with our software. During my trip to Edinburgh for our annual Flywire User Conference, I got to spend time with more than 200 representatives from our UK education clients. I was so impressed by our Flymates who bring a unique combination of local experience and technical expertise to better serve our clients. There was great energy at this event. Seeing our clients' commitment to Flywire and our mutual desire to continue to innovate for students and parents gives me a lot of confidence in our expansion efforts in this key market. On my visit to Singapore, I was lucky to be part of the ribbon-cutting ceremony for our new office opening. True to Flywire's philosophy of promoting a hybrid work environment, the new office features thoughtful meeting spaces that encourage collaboration both in person and virtually. Spending time with our expanded team, hearing the multiple languages being spoken and the breadth of countries represented, It was no surprise to me that my visit coincided with the incredible recognition of being named a great place to work in Singapore. And finally, on a trip to Vietnam, I attended a strategic team offsite with our APAC education team. The roles of these flymates at this offsite ran the gamut from sales to implementation to agent partnerships, product, technology, as well as our global payment network. They all shared a common passion for our products and for solving even the most complex payment challenges for our clients and payers. With global mobility returning to post-pandemic levels, this opportunity to meet many new flymates in person, as well as catch up with long-term flymates who have helped build this company, was truly special. I couldn't help but come away feeling reinvigorated by our mission and the team that we have built. In closing, these quarterly results are also supported by positive tailwinds across the industries that we serve, giving us even more confidence in our path ahead. For example, China's move to reopen its borders and resume issuing visas signals an uptick in international student mobility for both our education business and a positive trend for our travel business. According to the China Outbound Research Tourism Institute, Chinese outbound travel is expected to recover to around two-thirds of its 2019 highs and with around 110 million border crossings expected from China. Also in travel, the U.S. Transportation Security Agency screened over 58 million passengers in February alone, continuing the early 2023 trend of travel numbers outperforming pre-pandemic volume at a national level. In B2B, We are encouraged to see the CFOs and other financial professionals focused on streamlining their payment processes. According to our new survey, 87% of respondents would like to offer additional payment methods in an effort to decrease day's sales outstanding. In healthcare, hospitals and health systems continue to choose Flywire in part due to our integrations with the leading EHRs. And according to our latest research, 97% of IT leaders state that tight integration with EHR and a streamlined implementation process are important considerations when you're choosing a technology vendor. This was truly a tremendous start to our year, thanks to our winning strategy, execution in our key investment areas, and tailwinds across the industries that we serve. And I couldn't be more excited to what's ahead this year. I would now like to turn the call over to Rob Orgel, our president and COO, to review some operational highlights from the quarter. Rob?