Flywire Corporation

Flywire fourth quarter 2025 earnings conference call. At this time all participants are in a listen only mode. After the speaker's presentation there will be a question and answer session. To ask a question during the session you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Masha Khan, VP, Investor Relations. Please go ahead.

Thank you, and good afternoon. With us on today's call are Mike Massara, Chief Executive Officer, Rob Orgel, President and Chief Operating Officer, and Kazem Pitigai, Chief Financial Officer. Our fourth quarter 2025 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 this forward-looking statement. Unless otherwise mentioned, all financial measures discussed on this conference call are non-GAAP. Please refer to our press release and SEC filings for more information on the basis regarding this forward-looking statement that could cause actual results to differ materially and require disclosures and reconciliations related to non-GAAP financial measures. Please refer to our press release and SEC filings for more information on the risks regarding this forward-looking statement that could cause actual results to differ materially and the required disclosures and reconciliations related to non-GAAP financial measures. This call has been webcast live and will be available for replay on our website. I would now like to turn the call over to Mike Matar.

Thank you, Masha, and thank you all for joining us here today. Before we share more details about an outstanding quarter across all our operating metrics, I want to step back and revisit the progress we've made, the structural advantages of our model, and how we've positioned Flywire for continued durability and growth. Since our IPO nearly five years ago, we have scaled Flywire into a diversified, resilient, and increasingly profitable business. We have grown across multiple verticals and geographies, expanded margins, reached GAAP net income profitability, and continue to generate increasing levels of free cash flow, all while navigating significant macro disruption across payments, software, and global education and travel markets. That progress reflects consistent execution against a deliberate strategy designed to leverage our competitive strengths, deepen our moat, and deliver long-term shareholder value. Our strategy remains just as relevant and differentiated today as it has ever been. At our core, Flywire operates across multiple industries, but we execute a single scalable playbook. We embed deeply into mission critical financial workflows, solve complex payments end to end, and expand over time as clients turn to us for more of their critical operations. A defining characteristic And key competitive advantage of our business is the complexity of the environments in which we operate. We specialize in large-value cross-border receivables in highly complex verticals, where payments must be processed with precision, compliance, and full reconciliation. This complexity creates real barriers to entry and allows us to embed deeply within systems of record and core financial workflows of our clients. Once embedded, expansion becomes a natural motion. We process a greater share of payment volume and attach value-added software that improves client outcomes, creating a flywheel that reinforces our position and value to our clients over time. Today, approximately 90% of our education revenue and over 70% of our travel revenue come from enterprise clients, which we define as clients generating more than $100,000 in the last 12 months revenue. With more than 100 direct integrations into ERP and vertical systems, including over 70 in education alone, we are embedded into the operational fabric of our clients. As a result, revenue churn across education and travel was below 1% last year. This advantage compounds through our proprietary global payment network, which supports transactions across more than 240 countries and territories, in over 140 currencies and through more than 1,200 local payment methods fully integrated into enterprise platforms. That infrastructure is difficult to replicate and becomes more valuable with scale. As our volumes grow, our routing intelligence, compliance capabilities, and localized economics improve. Access to direct relationships with China UnionPay, leading Indian banks, and in-country accounts across markets such as Vietnam, Mexico, and Brazil are just a few examples of our network in action. These specialized partnerships allow us to localize payment flows and deliver outcomes that generic providers cannot. As AI adoption accelerates, we believe value will increasingly concentrate in platforms that already control trusted financial workflows and proprietary transaction data. Flywire operates at that control point where data, compliance, workflow, and transactional execution intersect. We are embedding automation and AI across routing, reconciliation, compliance, and our client-facing software, enhancing productivity and lowering friction. while the underlying system of record remains ours. The takeaway is simple. Flywire delivers an end-to-end embedded receivables platform, not a standalone payment solution or point software tool. We are structurally integrated into mission-critical workflows of our clients where reliability, compliance, trust, and scale matter most. That structural position translates into measurable, consistent outcomes. durable client relationships, expanding gross profit per client over time, and increasing lifetime value. Our competitive position continues to strengthen, not because of market cycles, but because of how deeply we are embedded in enterprise systems in the industries we serve. These advantages are durable. They do not fluctuate quarter to quarter. They compound as we scale. With that proven foundation established, let me now shift to how we are extending our advantage, balancing revenue growth with gross profit expansion, margin progression, and disciplined capital allocation. As CEO, I'm focused on three core metrics. First, revenue and gross profit dollar growth. Together, they reflect demand for our platform, the durability of our client relationships, Expansion of payment volume over time and the incremental value created through software adoption across verticals and geographies. Second, EBITDA margin progression. Over the last three years, we've increased adjusted EBITDA margins from nearly 6% to 20%. This reflects the scalability of our operating model and our ability to grow profitably while driving disciplined operating leverage, including continued discipline around stock-based compensation, and dilution. Third, multiple year annual free cash flow growth. Free cash flow generation and capital efficiency are central to how we think about long-term shareholder value. Over the past several years, we have meaningfully inflected and scaled free cash flow from 5 million in 2021 to 62 million in 2025. Together, these metrics define how we run Flywire and how we allocate capital. As we have scaled, we have deliberately shifted from a pure revenue lens towards gross profit growth, margin expansion, gap profitability, free cash flow generation, and capital efficiency. That shift reflects the strength and maturity of our business model. With that context, we continue to transform Flywire into a more scalable and efficient company. This transformation is structural, not cyclical. We are strengthening the core drivers of our business pricing, routing, productivity, capital allocation, so that our performance is powered by execution, not external conditions. Our execution is anchored around three operating priorities that reinforce our strategy and support durable value creation. First, accelerating product and platform innovation. We are not focused on incremental features. We are focused on solving high-value problems deeper in client workflows. We are consolidating our platforms into a unified modular architecture where core services like payments, effects, risk and compliance are shared across verticals. This build once deploy everywhere model increases development velocity, improves durability and supports margin expansion as we scale. Second, building a scalable enterprise growth engine. We are increasingly focused on larger clients Higher value deals and repeatable vertical playbooks that we are successfully executing across geographies flywire already operates as a global platform with deep local integrations and payment infrastructure across major markets. That means we can scale efficiently within our existing footprint and capture a significant portion of our global tam. This is driving measurable improvements in pipeline creation, sales productivity, and lifetime value per client, while strengthening revenue durability and expanding unit economics. As a result, our go-to-market model is becoming structurally more efficient and globally scalable, supporting durable growth and long-term margin expansion. Third, accelerating our internal transformation. scaling the company through data automation and high-performing teams. We are building a unified data architecture, automating core internal processes, and deploying AI-enabled decision support across the business. Our transaction data, reconciliation data, and workflow data are all strategic assets, not just reporting tools. They improve routing economics, reduce manual intervention, enhance risk management, and accelerate innovation. The impact is clear in our financial results. From 2022 to 2025, revenue has compounded at approximately 31% annually, with gross profit growth only slightly below revenue, while non-GAAP operating expenses have grown just 17%. That spread reflects operating leverage driven by systems, automation, and execution discipline, rather than short-term cost reductions. At the same time, we are strengthening high-performing teams with clear accountability and strong pay-for-performance culture. The combination of proprietary data, automation, and operational discipline enables us to scale revenue and gross profit without proportional cost growth. Together, these pillars reinforce one another. They enable faster innovation, more efficient execution, and disciplined scaling, while staying aligned with the outcomes that matter most to clients and long-term shareholders. You see this reflected in financial outcomes that matter, expanding EBITDA margins, sustained GAAP profitability, and growing free cash flow even amid macro headwinds. As AI adoption accelerates, we believe AI will amplify platforms that already control trusted financial workflows and proprietary data. The winners in the agentic era will combine innovation with end to end workflow ownership, embedded data, measurable ROI, and disciplined capital allocation. Because we own the workflow, the reconciliation layer, and the underlying transactional data across complex and highly regulated verticals, we believe Flywire is structurally positioned to be one of those winners. Together, these priorities are reinforcing Flywire's structural advantages and positioning us to scale efficiently, expand margins, and capture our global market opportunity. With that context, Rob will walk you through how our go-to-market execution is driving this model across our verticals.