Flywire Corporation

Greetings and welcome to Flywire Corporation's fourth quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during a conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Akil Hollis, Vice President, Investor Relations and FP&A. Thank you. You may begin.

Thank you and good afternoon. With me on today's call are Mike Massaro, Chief Executive Officer, Rob Orgel, President and Chief Operating Officer, and Mike Ellis, Chief Financial Officer. Our fourth quarter and fiscal year 2023 earnings press release, supplemental presentation, and when filed, quarantine K can be found at ir.flywire.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 in different materials 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'd now like to turn the call over to Mike Massaro.

Thank you, Akhil, and thank you to everyone that is joining us today. We are pleased to share our Q4 and fiscal 2023 results with you all, showing strong performance across the business. We are also eager to share our business priorities and financial outlook for 2024. In a few minutes, Rob Orgel, our President and COO, and Mike Ellis, our CFO, will go into greater detail about our results for Q4 2023. We will try to keep our prepared remarks short to leave more time for questions. I will start with a few financial highlights from Q4 2023. Revenue less ancillary services was 96.1 million in Q4, an increase of 43% year-over-year. Adjusted gross profit for the quarter was 63.5 million, an increase of 42% year-over-year. And adjusted EBITDA was 7.7 million for the quarter, increasing by 6.7 million year-over-year. These Q4 results now cap off another great year for Flywire. I will take a few moments to talk about some of the key achievements in fiscal year 2023. First, starting with our fiscal year 2023 financial highlights. Flywire's revenue, less ancillary services, grew by 43% year on year, and our adjusted EBITDA increased to 42 million, or 11% of revenue, less ancillary services. Both results were well above our targets discussed at the beginning of the year. In FY 2023, we also added more than 700 new clients across all verticals and now serve more than 3,800 clients globally. Finally, we moved more than $24 billion through our global payment in 2023, a 33% increase year over year. We also achieved a number of business highlights across all verticals and geographies. In education, we continue to expand our higher education footprint globally, including notable growth in the United Kingdom and throughout Asia Pacific. We also continue to see success in our land and expand strategy in the United States, increasing the footprint of our full suite solution, landing many blue chip clients. In travel, we experienced strong growth in terms of new clients signed, most notably with tour operators and destination management companies, in EMEA and APAC regions. In B2B, we continue to sign large enterprise deals and see success in our partner strategy. In healthcare, we accelerated our partnership strategy, solidifying relationships with Cerner and FinThrive. We bolstered our global payment network with a focus on supporting our strategic payer markets like India and China, enhancing our relationships with WeChat Pay as well as three of the largest banks in India. Lastly, we continued our strong track record of strategic M&A with the acquisition of StudyLink, and our sizable cash position allows us to pursue additional M&A that fits our core thesis. Now let's look ahead to 2024. Mike Ellis and Rob Orgel will talk about full-year 2024 guidance in detail, but our plan anticipates strong growth numbers in a complex macro environment, further expansion of EBITDA in alignment with our multi-year expectations, and delivering positive net income. We are truly excited for what is ahead for Flywire. As we look at 2024, We remain focused on optimizing our go-to-market capabilities, expanding our Flywire advantage, and strengthening our Flymate community. We are continuously working to optimize and invest in our go-to-market efforts to sustain our growth algorithm. For example, in fiscal year 2023, we improved our sales ramp time from hire date to first deal close by more than 30%. This year, we plan to increase our investment in sales and relationship managers by more than 15% in aggregate, spread across all verticals and geographies. As we continue to grow, we will do so in the context of a very disciplined hiring plan that focuses on key roles to meet our objectives. Another area of investment in go-to-market is our channel partnership strategy. We plan to grow our channel effectiveness and deepen partnerships by investing in channel sales teams. integration engineering resources, and building more certified integrations with our partners. Today, we have more than 90 partnerships in tech ERP integrations across our verticals that help us identify new clients, find clients faster, and accelerate our implementations. We have seen significant success with partners like Ellucian and Bank of America, and we strongly believe further investment in channel partners can be a significant driver of future revenue. As for expanding our Flywire advantage, we remain focused on product and payment innovation to power the vertical ecosystems in the industries that we serve. This year, we are focusing on our ability to embed payments into the existing software and workflow processes of clients, partners, and payers to add more value to our growing ecosystems. A cornerstone of us capitalizing on this opportunity is our API strategy to better serve our clients and partners and complement the Flywire software solutions they use today. In 2023, we began to invest in building a public API to surface the power of the entire Flywire payments platform. This allows our customers across all verticals to integrate our API into their existing ERPs or software to leverage everything from our KYC and AML processes all the way through our global payment network. So they can control their workflows and user experience in a PCI compliant fashion. We believe Flywire will be even more unique in our ability to provide a ready-to-use platform for complex domestic and cross-border payments, along with optional flexibility to use components of our powerful API when clients seek deeper integrations into their workflows. Likewise, we will be exposing our new payables platform as an API, which can embed into any AP process of an ERP. We have proven our ability to identify new use cases where software drives value and payment, and we'll continue to invest more to drive growth and value for our clients. One example is our investment in StudyLink, which we acquired in Q4, and whose software connects agents in Australian education institutions and powers the application and offer of admission and acceptance process for their international students. Embedding Flywire's payment technology into StudyLink's international admissions, application, and agent management software unlocks our opportunity to monetize the nearly $1 billion in deposit volume their platform is involved in today. Our vision is to extend the StudyLink platform beyond Australia, leveraging Flywire's global clients and teams. We will also focus on the strategic payables opportunity, particularly around commission payments in our travel and education verticals. As a reminder, we are applying our existing framework of using software in our global payment network to solve specific payable use cases for our clients. In travel, payable volumes, clients, and our network of beneficiaries continues to grow since we piloted the solution last year. For many European DMCs, Flywire is the only way they can both receive and pay out cross-border high-value travel payments. And in our education vertical, we are growing the number of clients who are using our solution to pay commissions to international education agents. We are also expanding our partner ecosystem of U.S. investment savings accounts. We're using Flywire's payable solution to digitally disperse 529 plan payments to U.S. colleges and institutions. Finally, we also continue to be focused on strengthening and growing our Flymate community. As I've referenced in the past, our culture in Flymates are what makes Flywire successful. We believe that our financial success enables us to give back to our communities and empowers our flymates to build their careers of a lifetime. As we continue into 2024, we remain committed to building and maintaining high performance teams, developing exceptional talent, and having a positive impact on the world around us. In closing, I could not be more proud of the progress we made in 2023. I am excited for the years ahead as we seek to continue to grow Flywire into one of the leading global payments companies of our generation. Before turning the call over to Rob, I wanted to officially welcome our incoming CFO, Cosmin Pitigoy, who will officially join Flywire on March 4th. Most recently, a senior vice president in finance at PayPal, Cosmin brings decades senior financial leadership and a proven track record of scaling organizations in complex global environments. He is the ideal CFO to help us achieve the next level of scale and solidify our leadership position in the global payments ecosystem. I wanted to also thank Mike Ellis for his many contributions to Flywire over the past nine years, including establishing many of our finance functions, taking the company public, and managing many strategic acquisitions. He has been a trusted partner to me, and we appreciate the seamless CFO transition that he is enabling. 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?