Flywire(US:FLYW)2023-03-01 15:28Financial Data and Key Metrics Changes - For Q4 2022, revenue less ancillary services was $67.4 million, representing year-over-year growth of 47% or 57% on a constant currency basis [5][41] - Adjusted gross profit for Q4 was $44.5 million, an increase of 40% year-over-year, while adjusted EBITDA was $1 million for the quarter [5][78] - For the full year 2022, revenue less ancillary services was $267.1 million, reflecting a 47% growth rate [40] Business Line Data and Key Metrics Changes - The travel vertical saw significant growth, with revenue more than tripling, and Q4 travel revenue in the Asia Pacific region exceeded 80% of total travel revenue for Q4 2021 [6][18] - In education, Flywire expanded its offerings to existing clients, such as St. Louis University, enhancing their payment solutions [16] - The B2B vertical is expanding integrations with leading ERP systems to drive higher adoption of invoicing and accounts receivable collection solutions [37] Market Data and Key Metrics Changes - In the travel sector, over 80% of luxury travelers reported spending more on travel in 2023 compared to 2022, indicating strong demand [12] - The company is optimistic about international education, with positive trends in student mobility and enrollment [59] - The health care vertical signed over 15 new clients and expanded services with 22 existing clients in 2022 [35] Company Strategy and Development Direction - The company aims to invest in go-to-market strategies, expand the Flywire Advantage, and strengthen the FlyMates community [9][11] - Focus on product and payment innovation to enhance vertical ecosystems, particularly in education and health care [28][29] - Continued integration of Cohort Go to enhance capabilities and expand client offerings [34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of their verticals and the strong underlying economics of the business [51] - The company anticipates adjusted EBITDA improvement in 2023 and continued growth in 2024 [14] - Management highlighted the importance of client retention and expansion, with a net revenue retention (NRR) rate of 124% for 2022 [62] Other Important Information - The company processed $4.1 billion in total payment volume during Q4 2022, a 29% increase from Q4 2021 [73] - Adjusted gross margin for Q4 2022 was 66.0%, down from 69.3% in Q4 2021, primarily due to growth in travel and B2B verticals [75] - The company had $349 million in cash and cash equivalents and no long-term debt as of December 31, 2022 [47] Q&A Session Summary Question: What assumptions are made regarding macro expectations for guidance? - Management indicated that the model does not assume extreme changes in the macro environment, focusing instead on existing client growth and strong pipeline numbers [84][85] Question: How does the company envision expanding the Flywire Advantage? - The company sees opportunities to convert non-Flywire clients into payment clients, enhancing the funnel for future growth [86][100] Question: What factors could drive the lower or upper part of the revenue outlook range? - Management highlighted confidence in the range due to strong NRR and new client signs, with no significant assumptions around inorganic growth [94][95]