Flywire Corporation

Ladies and gentlemen, greetings and welcome to the Flywire Corporation fourth quarter and full year 2024 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 signal the operator by pressing star and zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Marsha Khan, Vice President, Investor Relations. Please go ahead.

Thank you and good afternoon. With us in today's call are Mike Massara, Chief Executive Officer, Rob Orgel, President and Chief Operating Officer, and Kazim Pidigay, Chief Financial Officer. Our fourth quarter 2021 earnings press release, supplemental presentation, and when filed, Form 10-K can be found at ir.flywire.com. During the call, we'll be discussing certain forward-looking information. Actual results could differ materially from those contemplated by these forward-looking statements. We'll 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, Maja, and thank you, everyone, for joining us today. We have a lot to cover today. Here's a quick summary of what we will be discussing. I will start the call by covering key performance milestones from FY24 with some detail on the headwinds we are facing in our education business. I will speak about our announced acquisition of Certify and our drive towards further efficiency and focus, including our announced restructuring. Rob Orgel, our president and COO, will review trends in each of our verticals, performance in our key markets, and our top priorities for 2025. And finally, Cosmin will wrap up with a more detailed look at Q4 2024 and full-year 2024 financials, our capital allocation strategy, and our outlook for the year ahead. Now, let me summarize some of the most important milestones from 2024. We grew our revenue less ancillary services by 24% in 2024 and increased adjusted EBITDA margins by 540 basis points. Despite significant macro revenue headwinds, we faced mainly from student visa policy changes in Canada. We signed over 180 new clients in Q4, finishing with over 800 new clients in the year, surpassing our 2023 new client ads, Flywire now serves approximately 4,500 clients globally. Our travel vertical became our second largest vertical in terms of revenue, with particularly strong growth in EMEA and APAC regions, with exciting growth in our destination management company, tour operator, accommodations, and ocean experience segments. In global education, we strengthened our core markets with standout performance in the UK, driven by both new client wins and strong net revenue retention. We grew our full suite student financial services software footprint, and we expanded our international agent recruitment network, further connecting our ecosystem of clients, agents, and payers. We made significant strides in our global payment network, optimizing for vertical growth through new acceptance rails and expanded market coverage. In key payer markets like India and China, we enhanced our capabilities, particularly in digitizing Indian student loan disbursements and deepening relationships with India's three largest banks. Finally, we continued our strategic M&A success with the acquisition of invoiced in our B2B segment, our fastest growing vertical. While 2024 presented some headwinds, particularly in our education business, With double digit declines in student visa issuance in our big four geographic markets, Flywire was well positioned to navigate these challenges. We actively supported our education clients through this period of adjustment, leveraging our unique assets to maximize opportunities and strengthen our strategic position. We recognize the cyclical nature of these trends, noting historic rebounds in international education following disruptive periods. such as the COVID-19 pandemic. As we anticipate continued visa policy restrictions in 2025, we are taking steps across all aspects of our business to identify and execute against opportunities that are within our control, to offset macro and regulatory headwinds that we do not control. Within our existing education business, this means we are strategically investing in new products, payment network capabilities, and targeted go-to-market expansion. prioritizing return on investment and revenue diversification. We are confident the demographic trends in the global competition for talent will ultimately fuel a resurgence in international student mobility. We are already seeing growth in some markets and expect this trend to continue as the international student ecosystem adapts. Rob will provide more details momentarily about some of the high impact initiatives to capitalize on this future and solidify Flywire's leadership position in the education sector. In the travel vertical, we are very excited about the acquisition of Certify that we announced today. Certify helps over 20,000 hotel locations globally automate key workflows around events and group booking sales and has hospitality-specific integrations that give Flywire immediate access to new subsegments of the global travel industry. We believe we have the opportunity to monetize the several billion dollars of payment volume that the Certify platform is enabled annually. Together with Certify, Flywire can become a market leader with a strong presence across many of the world's leading hotel brands, a great position in the United States, and an opportunity to build on their early international success with our global go-to-market teams and capabilities. In the long term, Certify's expertise and property management system integrations provide a foundation for deeper penetration with large hotel brands, opening doors for us to address complex challenges like outbound payments using our strategic payables capability. This acquisition is being funded with a mix of cash and debt, preserving liquidity for corporate purposes and potential share buybacks. For those who followed us over the years, you would be familiar with our capital allocation strategy. Our data-driven approach, rapidly testing and iterating and investing in high traction areas has been key to our success. When we see traction, like we did in our B2B and travel verticals, we invest to further accelerate growth. In that spirit, and to continue to streamline our business portfolio and extract more synergies between our verticals, we are also undertaking an operational and portfolio review. A comprehensive business portfolio review will focus on Flywire's core strengths, such as complex, large-value payment processing, our global payment network, and verticalized software. This review will encompass geographies, products, verticals, cost structure, and explore various options. Cosmin will elaborate further on these initiatives, but it's important to understand that these actions represent a comprehensive approach. We have several tools at our disposal to drive value, and we are actively utilizing all of them that we believe will drive positive results. These include disciplined investment in the business, highly complementary acquisitions, cost reductions, operational review, portfolio review, and capital return. The operational review aims to identify efficiencies and synergies across all our business areas. This includes a review of vendor and other costs, in addition to the employee restructuring announced today. By combining and optimizing systems and processes, we can continue to manage operating expenses and reallocate some of the savings to further fund investment in our product, data, automation, and AI initiatives. In closing, I would like to express my sincere gratitude to the departing flymates impacted by these changes. While a difficult decision, we believe this restructure will help ensure that Flywire operates as efficiently and effectively as possible, setting us up for future success. On behalf of the whole company, thank you for your hard work, dedication, and contributions to our Flywire journey. We wish all of you the best in your future endeavors and are committed to supporting you during the transition. Now I'll turn it over to Rob Orgel to discuss operational performance.