Flywire(US:FLYW)2022-05-15 03:22Financial Data and Key Metrics Changes - Revenue less ancillary services for Q1 2022 was $59.3 million, representing a year-over-year growth of 47% [7][28] - Total payment volume for the quarter increased by 46% compared to Q1 2021, reaching $4.2 billion [7][28] - Adjusted gross profit was $38.8 million, a 41% increase year-over-year, with an adjusted gross margin of 65.5% [29][34] Business Line Data and Key Metrics Changes - In the travel vertical, over 40 new clients were added, with net revenue retention exceeding 145% [15][48] - The education vertical saw a surge in international applications, with a 34% increase in international applicants reported [10] - In healthcare, the need for technology-driven solutions is highlighted due to rising out-of-pocket costs, with over 25% of Americans reporting medical debt [11] Market Data and Key Metrics Changes - TSA traveler checkpoint data indicated passenger counts reached 91% of pre-pandemic levels [9] - The Common Application reported a 34% increase in international applicants since 2020, compared to a 12% growth for U.S. applicants [10] - In the B2B segment, 92% of finance professionals indicated that improved accounts receivable management could increase their earnings per share [12][24] Company Strategy and Development Direction - The company focuses on high-stakes payments in industries like education, healthcare, travel, and B2B, capitalizing on the ongoing digitization trends [8] - The company plans to continue investing in its global payment network and expanding its payment methods, particularly in Latin America [26] - An Analyst Day is scheduled to discuss the company's vision, competitive advantages, and key investment areas [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in growth across all verticals, particularly in education and travel, and raised revenue guidance for 2022 to $249 million to $257 million [36][44] - The company anticipates a strong Q3 due to positive trends in admissions data and client additions [61] - Management acknowledged macroeconomic uncertainties but emphasized the critical nature of their solutions in such environments [8] Other Important Information - The company added over 130 new clients in Q1 2022, the highest number since going public [7][14] - Adjusted EBITDA for Q1 2022 was $1.8 million, a decrease from $7.0 million in Q1 2021, attributed to increased hiring and operational costs [34] - The company had $365.7 million in cash and cash equivalents as of March 31, 2022 [35] Q&A Session Summary Question: Inquiry about new client distribution and impact - Management confirmed a healthy distribution of new clients across various verticals, with education being the largest segment [40] Question: Follow-up on domestic education solutions - Management noted that existing clients often lead to domestic wins, but new clients are also being acquired for both domestic and cross-border solutions [42] Question: Guidance for 2022 revenue sources - Management highlighted confidence across all sectors, with education and travel being significant contributors to the optimistic outlook [44] Question: Margin investments and expectations - Management discussed ongoing investments in sales and marketing, emphasizing the long-term nature of these investments [52] Question: FX impacts on guidance - Management indicated that FX impacts are minimal due to hedging strategies [64] Question: Gross margin expectations for the year - Management expects gross margins to improve in the second half of the year due to seasonal trends and higher average payment sizes [66]