Flywire(US:FLYW)2023-05-13 21:23Financial Data and Key Metrics Changes - Adjusted gross profit for Q1 2023 was $59.9 million, a 50% increase year-over-year [3] - Adjusted EBITDA was $7 million for the quarter, representing a 470 basis point increase in adjusted EBITDA margin compared to Q1 2022 [3] - Revenue less ancillary services was $89.1 million, reflecting a 50% year-over-year growth or 57% on a constant currency basis [7][11] - Payment volume processed was $5.7 billion, a 36% increase from $4.2 billion in Q1 2022 [11][35] Business Line Data and Key Metrics Changes - The company signed more than 170 new clients in Q1, including a record number in the travel vertical [9][31] - In the B2B vertical, the integration with Salesforce for the Specialty Coffee Association was highlighted as a significant development [10] - The travel vertical saw substantial growth, with destination management company revenues in the APAC region growing almost tenfold [31] Market Data and Key Metrics Changes - The reopening of China is expected to boost international student mobility, with outbound travel projected to recover to around two-thirds of 2019 levels [9] - The U.S. Transportation Security Agency screened over 58 million passengers in February 2023, indicating a recovery in travel numbers [9] - The company noted that 87% of CFOs are looking to offer additional payment methods to streamline their payment processes [9] Company Strategy and Development Direction - The company is focused on enhancing go-to-market efforts, particularly in high ROI areas, and integrating with channel and technology partners [3] - The Flymate community is being strengthened, with investments in local expertise and technical support to better serve clients [8] - The company aims to expand its ecosystem through strategic acquisitions and partnerships, as evidenced by the recognition received from Illusion for integration excellence [3][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth trajectory, citing strong performance across various verticals despite macroeconomic concerns [74] - The company anticipates a steady recovery in international student numbers and expects to reach pre-pandemic levels gradually [40] - Management highlighted the importance of maintaining a disciplined approach to expenses while continuing to invest in growth initiatives [11][24] Other Important Information - The company expects full-year 2023 revenue less ancillary services to be in the range of $360 million to $370 million, representing a year-over-year growth rate of 37% at the midpoint [13] - Adjusted EBITDA for the full year is projected to be between $30 million and $36 million, reflecting an increase from previous guidance [13] Q&A Session Summary Question: What are you seeing in terms of client response given the macroeconomic concerns? - Management noted that clients are looking for solutions that optimize back-office operations, which aligns with the company's value proposition [15][16] Question: Where are you exceeding expectations, and what areas may have concerns? - Management indicated strong performance across all verticals, particularly in travel, while maintaining a cautious outlook on certain segments [17][39] Question: Can you provide an update on the WPM acquisition? - Management reported positive progress in onboarding clients and optimizing implementations, with confidence in achieving anticipated volumes [42][43] Question: How is the company addressing the impact of credit card usage on gross margins? - Management explained that while increased credit card usage may lower adjusted gross margins, the overall unit economics remain strong [78][79] Question: What is the contribution of the Cohort Go acquisition to current performance? - Management confirmed that Cohort Go is expected to contribute low single-digit percentages to overall growth for the year, enhancing capabilities in the Asia Pacific region [51][52]