Flywire(FLYW) - 2024 Q2 - Quarterly Results

Flywire Second Quarter 2024 Financial Results Second Quarter 2024 Financial Highlights The company delivered strong Q2 revenue growth and significantly improved profitability despite headwinds in its Canadian education business Q2 2024 GAAP Financial Results (vs. Q2 2023) | Metric | Q2 2024 | Q2 2023 | Change | | :--- | :--- | :--- | :--- | | Revenue | $103.7M | $84.9M | +22% | | Gross Profit | $61.9M | $48.8M | +26.8% | | Gross Margin | 59.7% | 57.5% | +220 bps | | Net Loss | ($13.9M) | ($16.8M) | Narrowed | Q2 2024 Key Operating Metrics and Non-GAAP Results (vs. Q2 2023) | Metric | Q2 2024 | Q2 2023 | Change | | :--- | :--- | :--- | :--- | | Total Payment Volume | $4.9B | $4.1B | +19% | | Revenue Less Ancillary Services | $99.9M | $79.5M | +26% | | Adjusted Gross Profit | $63.4M | $50.5M | +25.5% | | Adjusted EBITDA | $5.8M | ($0.1M) | +$5.9M | - The company's growth was achieved despite revenue headwinds related to ongoing Canadian government actions involving student study permits[2] Business Highlights and Strategic Initiatives Key strategic initiatives included the acquisition of Invoiced, significant client growth, and a $150 million share repurchase authorization - Announced the acquisition of Invoiced, an award-winning Accounts Receivable SaaS platform, to accelerate progress in the fast-growing B2B vertical[1][2][5] - The Board of Directors authorized a share repurchase program for up to $150 million of its common stock, reflecting confidence in the business's long-term potential[1][5][6] - Key operational achievements include signing more than 200 new clients, expanding its partnership with HDFC Credila, and enhancing invoicing capabilities[2][5] Third Quarter and Fiscal-Year 2024 Outlook The company updated its FY2024 outlook, lowering revenue guidance while raising its Adjusted EBITDA forecast due to margin improvements - The company lowered its FY2024 revenue outlook due to softer than expected performance in its Canadian education business, but raised its full-year Adjusted EBITDA guidance[6] Q3 2024 Guidance | Metric | Guidance Range | | :--- | :--- | | Revenue | $146M - $157M | | Revenue Less Ancillary Services | $141M - $151M | | Adjusted EBITDA | $37M - $43M | Fiscal-Year 2024 Guidance | Metric | Guidance Range | | :--- | :--- | | Revenue | $483M - $506M | | Revenue Less Ancillary Services | $469M - $485M | | Adjusted EBITDA | $72M - $80M | Consolidated Financial Statements This section provides the unaudited condensed consolidated financial statements for the three and six months ended June 30, 2024 Condensed Consolidated Statements of Operations and Comprehensive Loss The company reported Q2 revenue of $103.7 million and narrowed its net loss to $13.9 million, or ($0.11) per share Q2 Statement of Operations Highlights (in thousands) | Metric | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Revenue | $103,676 | $84,869 | | Loss from operations | ($15,787) | ($16,808) | | Net Loss | ($13,880) | ($16,813) | | Net loss per share | ($0.11) | ($0.15) | Condensed Consolidated Balance Sheets As of June 30, 2024, total assets were $998.7 million and cash and cash equivalents stood at $539.3 million Balance Sheet Highlights (in thousands) | Metric | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $539,300 | $654,608 | | Total assets | $998,712 | $1,079,731 | | Total liabilities | $196,152 | $293,614 | | Total stockholders' equity | $802,560 | $786,117 | Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2024, net cash used in operating activities was $57.4 million Six Months Ended June 30 Cash Flow Highlights (in thousands) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | ($57,414) | ($25,652) | | Net cash used in investing activities | ($62,234) | ($3,483) | | Net cash provided by financing activities | $3,859 | $5,701 | | Net decrease in cash | ($115,308) | ($23,114) | | Cash, end of period | $539,300 | $328,063 | Reconciliation of Non-GAAP Financial Measures This section reconciles GAAP results to non-GAAP measures like Adjusted EBITDA to clarify core operational performance - Flywire uses non-GAAP measures to better understand consolidated financial performance and project future results[12][13] Reconciliation of Revenue and Gross Profit Q2 2024 GAAP Revenue of $103.7M is reconciled to Revenue Less Ancillary Services of $99.9M and Adjusted Gross Profit of $63.4M Q2 2024 Reconciliation of Revenue and Gross Profit (in millions) | Metric | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Revenue (GAAP) | $103.7 | $84.9 | | Less: Ancillary Services | ($3.8) | ($5.4) | | Revenue Less Ancillary Services | $99.9 | $79.5 | | Gross Profit (GAAP) | $61.9 | $48.8 | | Adjusted Gross Profit | $63.4 | $50.5 | | Adjusted Gross Margin | 63.5% | 63.5% | Reconciliation of EBITDA and Adjusted EBITDA Q2 2024 Net Loss of $13.9M is reconciled to Adjusted EBITDA of $5.8M, a significant improvement from the prior year Q2 Reconciliation of Net Loss to Adjusted EBITDA (in millions) | Metric | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Net loss | ($13.9) | ($16.8) | | EBITDA | ($10.3) | ($13.2) | | Stock-based compensation | $17.5 | $11.7 | | Other adjustments | ($1.4) | $1.4 | | Adjusted EBITDA | $5.8 | ($0.1) | Margin Analysis The company demonstrated significant year-over-year margin improvement, with Adjusted EBITDA margin turning positive to 5.6% Q2 Margin Comparison (vs. Q2 2023) | Margin Metric | Q2 2024 | Q2 2023 | Change (bps) | | :--- | :--- | :--- | :--- | | Net margin (C/A) | -13.4% | -19.8% | +640 | | Adjusted EBITDA Margin (E/A) | 5.6% | -0.1% | +570 | | Adj. EBITDA Margin using RLAS (E/B) | 5.8% | -0.1% | +600 |