Flywire Corporation

Good day and thank you for standing by. Welcome to the Flywire Corporation's second quarter 2026 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'll 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'd now like to hand the conference over to Masha Kahn, Vice President of Investor Relations. Please go ahead.

Thank you and good afternoon. With us today are Mike Massaro, Chief Executive Officer, Rob Orgel, President and Chief Operating Officer, and Cosmin Pitigoi, Chief Financial Officer. Our second quarter 2026 earnings press release Supplemental Presentation, and when filed, Form 10-Q are available at ir.flywire.com. Today's call is being recorded and will be available for replay on our website. During the call, we'll be discussing certain forward-looking information. Actual results could differ materially from those contemplated by these statements. In addition, unless otherwise indicated, all financial measures discussed on this conference call are non-GAAP financial measures. Please refer to our press release and SEC filings for more information on the risks related to forward-looking statements and the required reconciliations of non-GAAP financial measures. With that, I'll turn the call over to Mike Massaro.

Thank you, Masha, and thank you to those joining us today. We are excited to announce yet another quarter of strong revenue and EBITDA growth, as well as momentum in the business continuing to build. Sign deals are getting bigger and clients are replacing legacy providers in point solutions to consolidate onto Flywire. We will take you through the quarter in much more detail, but first I want to step back because I want stakeholders to see Flywire the way we do. We continue to deliver solid growth and the quality of that growth is improving. We are converting incremental dollars of gross profit into durable earnings, expanding our free cash flow, and we believe we are well positioned to continue gaining market share. Let me explain why Flywire's moats and financial model don't just coexist, they compound, each getting stronger as we scale. You know the Flywire model, we go where others are unwilling or unable to go, embedding into complex mission critical workflows and solving payment challenges that are larger, more international and far more difficult than simple checkout transactions. That complexity is our moat and it deepens on its own, rising regulation, expanding global flows and deeper integration requirements are headwinds for simpler competitors and tailwinds for Flywire. Once deployed, We become critical infrastructure with revenue churn across enterprise clients in education and travel below 1% as of 2025. So today, I also want to put our model into financial terms, what it means for revenue, margins, and cash flow over the next few years. At CEO, I am focused on three core metrics. First, revenue and gross profit dollar growth. On this foundation, we are aiming to achieve $1 billion of annual organic revenue within the next few years. Given the free cash flow this business is expected to generate, acquisitions remain an additional powerful lever. Our diversification engine underpins the path. Growth outside our traditional big four education markets continues to outpace the overall business. differentiated software offerings like SFS driving domestic growth above and beyond visa trends. Travel continues to perform well, and the payments modernization in our hospitality business is outperforming our expectations. And our smaller verticals, B2B and healthcare, are gaining scale and becoming growth contributors on their own. Second, EBITDA margin progression. We believe a 30% adjusted EBITDA margin is achievable over the next few years, with most of the expansion coming from operating leverage we can already see in our expense base. The productivity gains from our transformation are real. They're improving both LTV to CAC and our cost to serve, proving that operating expenses can grow well below gross profit growth for longer. Scaling fast organically and through acquisitions naturally adds costs and friction across systems, vendors, and processes. We are consolidating that into a leaner foundation purpose-built for the next phase of growth and scale. At the center of this is our payment platform investment. We are unifying systems onto a single modern payment architecture. And our digital transformation is re-architecting our internal operating systems so that our people and AI agents can seamlessly work side by side to structurally lower our cost to scale. Because these investments fundamentally change how work gets done, the operating leverage they create is durable. And third, multi-year free cash flow and gap earnings growth. Free cash flow generation and capital efficiency are central to long-term shareholder value. We remain highly committed to strong free cash flow conversion alongside continued discipline on stock-based compensation and dilution. Combined with a strong balance sheet, this cash flow generation is a powerful source of strategic flexibility. We can invest organically, repurchase shares, and stay opportunistic on M&A, all from a position of strength and all while growing free cash flow per share. Durable gross profit growth, compounding earnings, and expanding free cash flow. That is how we intend to build shareholder value. But reaching our $1 billion annual organic revenue target requires high conviction and concentrated investment. Today, we are directing our capital into three core areas. First, gaining share and expanding our software moat. We are actively investing to expand our software and workflow capabilities across all verticals, such as investing in more functionality and integrations for SFS and taking our hospitality software from a historically US-focused business into a global hospitality platform. Second, expanding our payments platform. As our volume scales, we are driving operational discipline to improve unit economics and strengthen our value proposition. Better corridor economics, deeper local banking relationships, and a cost per transaction that is expected to decline as we grow. Third, our digital transformation, a major priority in strengthening internal operations through data architecture investments, AI integration, and systems consolidation. This is designed to drive productivity and long-term operating leverage across the business. Cosmin will walk you through the rigorous financial framework we use to evaluate these organic investments alongside our broader capital allocation and share repurchase strategy. Our ability to confidently execute this capital strategy stems directly from our resilience in the market. Our team continues to deliver in an uncertain macro environment. What matters most is that clients are seeing ROI from consolidating their payment flows on Flywire. Some clients need help to grow while others are automating to reduce costs. Across all market conditions, the value Flywire delivers speaks for itself and interest in our solutions continues to grow both in markets that are under pressure and those that benefit from higher numbers of international students. Let me be direct about the current environment. The macro backdrop remains challenging. We see recent negative trends in UK visas, Australia has raised visa fees again, and regulations in both the US and the UK have become more stringent. Enterprise sales cycles are long, and large healthcare deals like Cleveland Clinic can boost growth one year and create a tough comp the next. But here's what really matters. The Flywire business is vertically diverse, geographically diverse, and has multiple product growth levers. This means we can navigate challenging macro conditions while hitting the framework I just described. We don't need conditions to improve to build a business with $1 billion in annual organic revenue with 30% margins. And in some ways, the industry pressure works in our favor. When institutions face cost and volume pressure, The case for automating manual payment flows gets stronger, not weaker. When they consider choosing a partner for the future, they look to companies that are innovating, growing, and financially strong. Ultimately, Flywire is succeeding on the strength of our business, not because of easy market conditions. Let me now shift to AI and how it is becoming an enabler for Flywire. AI increases the value of whoever owns the workflow and the data, and we own both. This quarter, I want to show you how this thesis is playing out in delivering real results, not projections. About 45% of customer inquiries now resolve automatically without human intervention. And with the support platform adopting generative AI across chat, email, and phone, We are targeting over 50% auto resolution rate by the end of the year. More broadly, AI is embedded across Flywire's engineering and product teams with frontier models, shared best practices, strong governance, and autonomous agents handling tasks like code retirement, conflict resolution, bug fixing, and test maintenance. This allows our teams to focus on building new products. making digital transformation a fundamental shift in how work gets done, not just a cost-saving initiative. And AI is transforming our go-to-market as well. Enablement is now always on. AI captures winning tactics from live client conversations and delivers them as continuous coaching, cutting new hire ramp times and scaling the flywire way without additional management overhead. In closing, none of this happens without our flymates. We recently completed our company-wide engagement survey called Flyover, and the results were strongly positive. Our teams are embracing AI and the productivity it unlocks. And they tell us they feel more creative and more energized in their work. Ultimately, transformations succeed when people lean into them. Flymates are doing this. And that kind of organizational momentum is rare. Flywire is a great business with a powerful financial model and an exceptional team, and we are built to keep getting stronger. With that, I will hand it over to Rob to take you through more details on the execution from the quarter.