Flywire Corp Q1 FY2025 earnings call

• Laser-focused on innovation, delivering value to clients, and executing strategic initiatives. Signed 200 new clients in the quarter. - Built a resilient business adaptable to challenging conditions, with low churn rate. - Unique position in market with vertical-specific software, global payment network, and comprehensive platform. - Operational and portfolio review: streamlining structure, accelerating payment strategy, OpEx discipline, digital transformation. - Education vertical: strong results in challenging climate, growth in non-traditional markets, SFS adoption. - Travel vertical: momentum in customer acquisition, revenue growth, integration with Sertifi. - B2B vertical: payment volume monetization and cross-selling. - Health care: preparing for strong growth with key deals and integrations.

Revenue less ancillary services was $128.7 million in Q1 2025, representing a 16.8% year-over-year growth rate or 18.6% on an FX-neutral basis. Excluding Sertifi, revenue was $124 million in Q1, up 12.6% year-over-year or 14.4% on an FX-neutral basis. Transaction revenue increased 14% year-over-year, with platform and other revenues up 35% year-over-year. Adjusted gross profit was $82.5 million, up 14.6% year-over-year. Adjusted EBITDA was $21.6 million for the quarter, above guidance. Education vertical saw growth in various markets, travel vertical had strong momentum with Sertifi acquisition, B2B vertical had payment volume monetization, and health care was preparing for growth.

• Full year revenue guidance: excluding Sertifi, 10%-14% FX-neutral growth; including Sertifi, 17%-23% FX-neutral. - Q2 guidance: excluding Sertifi, 7%-11% FX-neutral growth; including Sertifi, 17%-23% with revenue $10M-$12M. - Adjusted EBITDA margins expected to expand, with 150-350 bps margin improvement in Q2. - Focus on automation, product development, and strategic investments despite uncertain macro environment.

• Macro environment uncertainties impacting demand. - U.S. education market dynamics, including China-U.S. tensions and visa trends. - Geopolitical factors affecting international student flows and market conditions.

Q: John Davis asked about the FX-neutral guide and slowdown in 2Q with reacceleration in back half.

A: Cosmin Pitigoi explained lapping, Canada impact, easier laps in Q4, and ramping clients like health care and B2B.

Q: John Davis inquired about sales cycle impact on international student demand.

A: Mike Massaro stated no kick-out in demand, clients focused on ROI and vendor consolidation, and team continuing to sign new clients.

Q: Timothy Chiodo asked about U.K. mix growth.

A: Cosmin Pitigoi and Rob Orgel mentioned U.K. is largest education market, strong growth with new products and domestic components.

Q: Tien-Tsin Huang asked about growth sources and conviction on upside.

A: Cosmin Pitigoi and Mike Massaro discussed travel as top driver, Australia less negative than expected, and U.S. higher ed software layering.

Q: Dan Perlin asked about travel customer growth and operational review margin implications.

A: Rob Orgel talked about quick travel customer deployment, and Mike Massaro/Cosmin Pitigoi discussed operational review including restructuring, procurement, and product pricing impacting margins.

Q: Cris Kennedy asked about NRR and travel customer expansion.

A: Cosmin Pitigoi and Mike Massaro discussed NRR history, travel customer dynamics, and layering software products for growth.

Q: Charles Nabhan asked about EBITDA cadence and travel customer expansion.

A: Cosmin Pitigoi explained EBITDA timing and travel customer dynamics related to COVID, and gross profit expansion over travel customer relationships.