Flywire(FLYW)2025-02-26 03:55Financial Data and Key Metrics Changes - Revenue less ancillary services grew by 17.4% year-over-year to 8 million primarily due to macro factors in Canada and foreign exchange (FX) [47][48] - Adjusted EBITDA increased to 7.7 million in Q4 2023, with adjusted EBITDA margin expanding nearly 700 basis points year-over-year [52][53] - GAAP net income reflected a loss of 14 million on intercompany loans [56] Business Line Data and Key Metrics Changes - The travel vertical grew organically more than 50% in 2024, becoming the second largest vertical, contributing 13% of total revenue, up from 7% two years ago [34] - The education vertical in EMEA and the UK saw over 50% year-over-year revenue growth, despite headwinds in Canada and Australia [24][30] - The healthcare vertical is expected to start growing later in 2025 as a new large client goes live with Flywire's products [40][66] Market Data and Key Metrics Changes - Canadian higher education revenue was down over 50% year-over-year, resulting in a nine percentage points headwind to growth in Q4 [48] - The U.S. market saw a 10% decline in F-1 visa issuance, contributing to slower growth expectations [121] - The company anticipates revenue in Canada and Australia to be down over 30% year-over-year due to recent policy changes [64][66] Company Strategy and Development Direction - The company announced the acquisition of Sertifi to enhance its travel vertical and streamline operations, aiming to monetize several billion dollars of payment volume [15][16] - A comprehensive operational and portfolio review is underway to optimize investments across geographies, products, and verticals [18][19] - The company is focusing on product innovation, driving productivity, and building a high-performance culture as part of its 2025 priorities [42][45] Management's Comments on Operating Environment and Future Outlook - Management acknowledged significant macro revenue headwinds, particularly from student visa policy changes in Canada, but expressed confidence in navigating these challenges [9][12] - The company expects continued visa policy restrictions in 2025 but is taking steps to identify and execute opportunities within its control [13][14] - Management remains optimistic about the long-term demand for international education and the potential for recovery in student mobility [30][114] Other Important Information - The restructuring plan announced will affect approximately 10% of the workforce, with expected charges of 9 million primarily in severance payments [54][56] - The company has repurchased 2.3 million shares for approximately $44 million as part of its buyback program [58] Q&A Session Summary Question: Can you talk about the NRR? - Management indicated that NRR was at 114% in 2024, with expectations for it to be below that in 2025 due to visa dynamics in Canada and Australia [72] Question: Why is the portfolio review happening now? - Management stated that ongoing policy restrictions prompted the need for an operational and strategic review to control internal factors [76][77] Question: What is the impact of the SDS on Canada? - Management explained that the SDS program's elimination has led to significant demand destruction, affecting overall student volume and payments [80][82] Question: What is the outlook for education markets outside Canada and Australia? - Management noted strong performance in the UK and EMEA, with growth opportunities in APAC and LATAM, despite challenges in Canada and Australia [100][102] Question: How is the company addressing the softening visa trends in the U.S.? - Management highlighted a 10% decline in F-1 visa issuance and emphasized ongoing efforts to add new clients and differentiate from competitors [121][124] Question: What is the strategic focus of the company? - Management confirmed that the review includes optimizing investments across verticals and geographies, but they remain committed to all four verticals [127][128]