Flywire Reports Third Quarter 2024 Financial Results
Third Quarter Revenue Increased 27.2% Year-over-Year
Third Quarter Revenue Less Ancillary Services Increased 29.6% Year-over-Year
BOSTON, Nov. 07, 2024 (GLOBE NEWSWIRE) -- Flywire Corporation (NASDAQ:FLYW) ("Flywire" or the "Company") a global payments enablement and software company, today reported financial results for its third quarter ended September 30, 2024.
"Our third quarter results highlight our ability to capture higher payment volumes with new and existing clients, signaling the growth potential within our accounts and verticals." said Mike Massaro, CEO of Flywire. "These results reflect our diversified business, strength of our land and expand Go To Market motion, and strong performance culture of our Flymates."
Third Quarter 2024 Financial Highlights:
GAAP Results
Revenue increased 27.2% to $156.8 million in the third quarter of 2024, compared to $123.3 million in the third quarter of 2023.
Gross Profit increased to $100.3 million, resulting in Gross Margin of 64.0%, for the third quarter of 2024, compared to Gross Profit of $78.4 million and Gross Margin of 63.6% in the third quarter of 2023.
Net income was $38.9 million in the third quarter of 2024, compared to net income of $10.6 million in the third quarter of 2023.
Key Operating Metrics and Non-GAAP Results
Total Payment Volume increased 24.2% to $11.0 billion in the third quarter of 2024, compared to $8.9 billion in the third quarter of 2023.
Revenue Less Ancillary Services increased 29.6% to $151.4 million in the third quarter of 2024, compared to $116.8 million in the third quarter of 2023. Revenue Less Ancillary Services in the third quarter of 2024 was favorably impacted by changes in foreign exchange rates between June 30, 2024 and September 30, 2024 by approximately $2.5 million.
Adjusted Gross Profit increased to $101.9 million, up 27.2% compared to $80.1 million in the third quarter of 2023. Adjusted Gross Margin was 67.3% in the third quarter of 2024 compared to 68.6% in the third quarter of 2023.
Adjusted EBITDA increased to $42.2 million in the third quarter of 2024, compared to $27.5 million in the third quarter of 2023. Our adjusted EBITDA margins increased 429 bps year-over-year to 27.9% in the third quarter of 2024.
Third Quarter 2024 and Recent Business Highlights:
Signed more than 200 new clients across all verticals.
Showcased strengths in its U.S. higher education business at its inaugural client conference, Flywire Fusion, which brought together more than 100 top U.S. institutions benefiting from Flywire's cross-border and domestic payments solutions.
Enhanced the payer experience for international students and seamlessly supported the nearly 2x Total Payment Volume spike in its Q3 peak education quarter compared to the average Total Payment Volume processed during the first 2 quarters of the year.
Repurchased 1.3 million shares for approximately $23 million, inclusive of commissions, under its share repurchase program announced on August 6th, 2024.
Fourth Quarter and Fiscal-Year 2024 Outlook:
"We delivered another strong quarter with both revenue and Adjusted EBITDA coming in at the high end of our guidance, driven by strong core performance across our verticals, during our largest education peak quarter", said Cosmin Pitigoi, CFO of Flywire. "For Full Year 2024, we are raising the low end of revenue and Adjusted EBITDA guidance. Flywire has been and expects to continue to be a Rule of 40 company and we are confident in our strong Free Cash Flow and GAAP net income profitability trajectory ahead."
Based on information available as of November 7, 2024, Flywire anticipates the following results for the fourth quarter and Fiscal-Year 2024.
Fiscal-Year 2024*
Revenue
$495 to $503 million
Revenue Less Ancillary Services
$479 to $485 million
Adjusted EBITDA**
$76 to $80 million
Fourth Quarter 2024*
Revenue
$121 to $129 million
Revenue Less Ancillary Services
$118 to $124 million
Adjusted EBITDA**
$15 to $19 million
*The Company has assumed foreign exchange rates prevailing as of September 30, 2024.
**Flywire has not provided a quantitative reconciliation of forecasted Adjusted EBITDA to forecasted GAAP net income (loss) or to forecasted GAAP income (loss) before income taxes within this earnings release because Flywire is unable, without making unreasonable efforts, to calculate certain reconciling items with confidence. These items include, but are not limited to income taxes which are directly impacted by unpredictable fluctuations in the market price of Flywire's stock.
These statements are forward-looking and actual results may differ materially. Refer to the "Safe Harbor Statement" below for information on the factors that could cause Flywire's actual results to differ materially from these forward-looking statements.
Conference Call
The Company will host a conference call to discuss third quarter 2024 financial results today at 5:00 pm ET. Hosting the call will be Mike Massaro, CEO, Rob Orgel, President and COO, and Cosmin Pitigoi, CFO. The conference call can be accessed live via webcast from the Company's investor relations website at https://ir.flywire.com/. A replay will be available on the investor relations website following the call.
Note Regarding Share Repurchase Program
Repurchases under the Company's share repurchase program (the Repurchase Program) may be made from time to time through open market purchases, in privately negotiated transactions or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, in accordance with applicable securities laws and other restrictions, including Rule 10b-18. The timing, value and number of shares repurchased will be determined by the Company in its discretion and will be based on various factors, including an evaluation of current and future capital needs, current and forecasted cash flows, the Company's capital structure, cost of capital and prevailing stock prices, general market and economic conditions, applicable legal requirements, and compliance with covenants in the Company's credit facility that may limit share repurchases based on defined leverage ratios. The Repurchase Program does not obligate the Company to purchase a specific number of, or any, shares. The Repurchase Program does not expire and may be modified, suspended or terminated at any time without notice at the Company's discretion.
Key Operating Metrics and Non-GAAP Financial Measures
Flywire uses non-GAAP financial measures to supplement financial information presented on a GAAP basis. The Company believes that excluding certain items from its GAAP results allows management to better understand its consolidated financial performance from period to period and better project its future consolidated financial performance as forecasts are developed at a level of detail different from that used to prepare GAAP-based financial measures. Moreover, Flywire believes these non-GAAP financial measures provide its stakeholders with useful information to help them evaluate the Company's operating results by facilitating an enhanced understanding of the Company's operating performance and enabling them to make more meaningful period to period comparisons. There are limitations to the use of the non-GAAP financial measures presented here. Flywire's non-GAAP financial measures may not be comparable to similarly titled measures of other companies. Other companies, including companies in Flywire's industry, may calculate non-GAAP financial measures differently, limiting the usefulness of those measures for comparative purposes.
Flywire uses supplemental measures of its performance which are derived from its consolidated financial information, but which are not presented in its consolidated financial statements prepared in accordance with GAAP. These non-GAAP financial measures include the following:
Revenue Less Ancillary Services. Revenue Less Ancillary Services represents the Company's consolidated revenue in accordance with GAAP after excluding (i) pass-through cost for printing and mailing services and (ii) marketing fees. The Company excludes these amounts to arrive at this supplemental non-GAAP financial measure as it views these services as ancillary to the primary services it provides to its clients.
Adjusted Gross Profit and Adjusted Gross Margin. Adjusted gross profit represents Revenue Less Ancillary Services less cost of revenue adjusted to (i) exclude pass-through cost for printing services, (ii) offset marketing fees against costs incurred and (iii) exclude depreciation and amortization, including accelerated amortization on the impairment of customer set-up costs tied to technology integration. Adjusted Gross Margin represents Adjusted Gross Profit divided by Revenue Less Ancillary Services. Management believes this presentation supplements the GAAP presentation of Gross Margin with a useful measure of the gross margin of the Company's payment-related services, which are the primary services it provides to its clients.
Adjusted EBITDA. Adjusted EBITDA represents EBITDA further adjusted by excluding (i) stock-based compensation expense and related payroll taxes, (ii) the impact from the change in fair value measurement for contingent consideration associated with acquisitions,(iii) gain (loss) from the remeasurement of foreign currency, (iv) indirect taxes related to intercompany activity, (v) acquisition related transaction costs, and (vi) employee retention costs, such as incentive compensation, associated with acquisition activities. Management believes that the exclusion of these amounts to calculate Adjusted EBITDA provides useful measures for period-to-period comparisons of the Company's business.
Revenue Less Ancillary Services at Constant Currency. Revenue Less Ancillary Services at Constant Currency represents Revenue Less Ancillary Services adjusted to show presentation on a constant currency basis. The constant currency information presented is calculated by translating current period results using prior period weighted average foreign currency exchange rates. Flywire analyzes Revenue Less Ancillary Services on a constant currency basis to provide a comparable framework for assessing how the business performed excluding the effect of foreign currency fluctuations.
Non-GAAP Operating Expenses - Non-GAAP Operating Expenses represents GAAP Operating Expenses adjusted by excluding (i) stock-based compensation expense and related payroll taxes, (ii) depreciation and amortization, (iii) acquisition related transaction costs, if applicable, (iv) employee retention costs, such as incentive compensation, associated with acquisition activities and (v) the impact from the change in fair value measurement for contingent consideration associated with acquisitions.
These non-GAAP financial measures are not meant to be considered as indicators of performance in isolation from or as a substitute for the Company's revenue, gross profit, gross margin or net income (loss), or operating expenses prepared in accordance with GAAP and should be read only in conjunction with financial information presented on a GAAP basis. Reconciliations of Revenue Less Ancillary Services, Revenue Less Ancillary Services at Constant Currency, Adjusted Gross Profit, Adjusted Gross Margin, Adjusted EBITDA and non-GAAP Operating Expenses to the most directly comparable GAAP financial measure are presented below. Flywire encourages you to review these reconciliations in conjunction with the presentation of the non-GAAP financial measures for each of the periods presented. In future fiscal periods, Flywire may exclude such items and may incur income and expenses similar to these excluded items. Flywire has not provided a quantitative reconciliation of forecasted Adjusted EBITDA to forecasted GAAP net income (loss) or to forecasted GAAP income (loss) before income taxes within this earnings release because it is unable, without making unreasonable efforts, to calculate certain reconciling items with confidence. These items include but are not limited to income taxes which are directly impacted by unpredictable fluctuations in the market price of Flywire's stock.
About Flywire
Flywire is a global payments enablement and software company. Flywire combines its proprietary global payments network, next-gen payments platform and vertical-specific software to deliver the most important and complex payments for its clients and their customers.
Flywire leverages its vertical-specific software and payments technology to deeply embed within the existing A/R workflows for its clients across the education, healthcare and travel vertical markets, as well as in key B2B industries. Flywire also integrates with leading ERP systems, so organizations can optimize the payment experience for their customers while eliminating operational challenges.
Flywire supports more than 4,000* clients with diverse payment methods in more than 140 currencies across 240 countries and territories around the world. Flywire is headquartered in Boston, MA, USA with additional offices around the globe. For more information, visit www.flywire.com. Follow Flywire on X (formerly known as Twitter), LinkedIn and Facebook.
*excludes clients acquired from the Invoiced acquisition
Safe Harbor Statement
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding Flywire's future operating results and financial position, Flywire's business strategy and plans, market growth, and Flywire's objectives for future operations. Flywire intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terms such as, but not limited to, "believe," "may," "will," "potentially," "estimate," "continue," "anticipate," "intend," "could," "would," "project," "target," "plan," "expect," or the negative of these terms, and similar expressions intended to identify forward-looking statements. Such forward-looking statements are based upon current expectations that involve risks, changes in circumstances, assumptions, and uncertainties. Important factors that could cause actual results to differ materially from those reflected in Flywire's forward-looking statements include, among others, Flywire's future financial performance, including its expectations regarding Revenue, Revenue Less Ancillary Services, and Adjusted EBITDA and foreign exchange rates. Risks that may cause actual results to differ materially from these forward looking statements include, but are not limited to: Flywire's ability to execute its business plan and effectively manage its growth; Flywire's cross-border expansion plans and ability to expand internationally; anticipated trends, growth rates, and challenges in Flywire's business and in the markets in which Flywire operates; the sufficiency of Flywire's cash and cash equivalents to meet its liquidity needs; political, economic, foreign currency exchange rate, inflation, legal, social and health risks, that may affect Flywire's business or the global economy; Flywire's beliefs and objectives for future operations; Flywire's ability to develop and protect its brand; Flywire's ability to maintain and grow the payment volume that it processes; Flywire's ability to further attract, retain, and expand its client base; Flywire's ability to develop new solutions and services and bring them to market in a timely manner; Flywire's expectations concerning relationships with third parties, including financial institutions and strategic partners; the effects of increased competition in Flywire's markets and its ability to compete effectively; recent and future acquisitions or investments in complementary companies, products, services, or technologies; Flywire's ability to enter new client verticals, including its relatively new business-to-business sector; Flywire's expectations regarding anticipated technology needs and developments and its ability to address those needs and developments with its solutions; Flywire's expectations regarding its ability to meet existing performance obligations and maintain the operability of its solutions; Flywire's expectations regarding the effects of existing and developing laws and regulations, including with respect to payments and financial services, taxation, privacy and data protection; economic and industry trends, projected growth, or trend analysis; the effects of global events and geopolitical conflicts, including without limitation the continuing hostilities in Ukraine and involving Israel; Flywire's ability to adapt to changes in U.S. federal income or other tax laws or the interpretation of tax laws, including the Inflation Reduction Act of 2022; Flywire's ability to attract and retain qualified employees; Flywire's ability to maintain, protect, and enhance its intellectual property; Flywire's ability to maintain the security and availability of its solutions; the increased expenses associated with being a public company; the future market price of Flywire's common stock; and other factors that are described in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of Flywire's Annual Report on Form 10-K for the year ended December 31, 2023, and Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, which are on file with the Securities and Exchange Commission (SEC) and available on the SEC's website at https://www.sec.gov/. Additional factors may be described in those sections of Flywire's Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, expected to be filed with the SEC in the fourth quarter of 2024. The information in this release is provided only as of the date of this release, and Flywire undertakes no obligation to update any forward-looking statements contained in this release on account of new information, future events, or otherwise, except as required by law.
Contacts
Investor Relations:Masha
Media:Sarah
Condensed Consolidated Statements of Operations and Comprehensive Loss
(Unaudited) (Amounts in thousands, except share and per share amounts)
Three Months Ended September 30,
Nine Months Ended September 30,
2024
2023
2024
2023
Revenue
$
156,815
$
123,323
$
374,594
$
302,549
Costs and operating expenses:
Payment processing services costs
54,557
42,900
136,106
110,559
Technology and development
16,695
14,591
49,266
45,130
Selling and marketing
34,228
27,084
96,082
78,791
General and administrative
31,065
26,862
94,620
79,559
Total costs and operating expenses
136,545
111,437
376,074
314,039
Income (loss) from operations
$
20,270
$
11,886
$
(1,480
)
$
(11,490
)
Other income (expense):
Interest expense
(128
)
(99
)
(403
)
(280
)
Interest income
4,970
3,841
16,568
7,711
Gain (loss) from remeasurement of foreign currency
5,457
(4,233
)
2,079
(3,518
)
Total other income (expense), net
10,299
(491
)
18,244
3,913
Income (loss) before provision for income taxes
30,569
11,395
16,764
(7,577
)
Provision (benefit) for income taxes
(8,327
)
752
(2,035
)
2,276
Net Income (Loss)
$
38,896
$
10,643
$
18,799
$
(9,853
)
Foreign currency translation adjustment
4,904
(2,581
)
3,736
(499
)
Unrealized gains (losses) on available-for-sale debt securities, net
$
702
$
—
$
$ 649
$
—
Total other comprehensive income (loss)
$
5,606
$
(2,581
)
$
4,385
$
(499
)
Comprehensive income (loss)
$
44,502
$
8,062
$
23,184
$
(10,352
)
Net income (loss) attributable to common stockholders - basic and diluted
$
38,896
$
10,643
$
18,799
$
(9,853
)
Net income (loss) per share attributable to common stockholders - basic
$
0.31
$
0.09
$
0.15
$
(0.09
)
Net income (loss) per share attributable to common stockholders - diluted
$
0.30
$
0.08
$
0.15
$
(0.09
)
Weighted average common shares outstanding - basic
124,887,591
116,492,191
124,204,873
112,495,539
Weighted average common shares outstanding - diluted
129,155,010
125,480,393
129,321,573
112,495,539
Condensed Consolidated Balance Sheets
(Unaudited) (Amounts in thousands, except share amounts)
September 30,
December 31,
2024
2023
Assets
Current assets:
Cash and cash equivalents
$
565,035
$
654,608
Short-term investments
116,091
—
Accounts receivable, net
27,510
18,215
Unbilled receivables, net
11,659
10,689
Funds receivable from payment partners
130,391
113,945
Prepaid expenses and other current assets
24,847
18,227
Total current assets
875,533
815,684
Long-term investments
40,357
—
Property and equipment, net
17,684
15,134
Intangible assets, net
126,966
108,178
Goodwill
156,292
121,646
Other assets
23,200
19,089
Total assets
$
1,240,032
$
1,079,731
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable
$
23,182
$
12,587
Funds payable to clients
298,239
210,922
Accrued expenses and other current liabilities
46,227
43,315
Deferred revenue
7,692
6,968
Total current liabilities
375,340
273,792
Deferred tax liabilities
15,573
15,391
Other liabilities
5,874
4,431
Total liabilities
396,787
293,614
Commitments and contingencies (Note 16)
Stockholders' equity:
Preferred stock, $0.0001 par value; 10,000,000 shares authorized as of September 30, 2024 and December 31, 2023; and no shares issued and outstanding as of September 30, 2024 and December 31, 2023
—
—
Voting common stock, $0.0001 par value; 2,000,000,000 shares authorized as of September 30, 2024 and December 31, 2023; 126,156,494 shares issued and 122,575,857 shares outstanding as of September 30, 2024; 123,010,207 shares issued and 120,695,162 shares outstanding as of December 31, 2023
13
11
Non-voting common stock, $0.0001 par value; 10,000,000 shares authorized as of September 30, 2024 and December 31, 2023; 1,873,320 shares issued and outstanding as of September 30, 2024 and December 31, 2023
—
1
Treasury voting common stock, 3,580,637 and 2,315,045 shares as of September 30, 2024 and December 31, 2023, respectively, held at cost
(23,851
)
(747
)
Additional paid-in capital
1,016,349
959,302
Accumulated other comprehensive income
5,705
1,320
Accumulated deficit
(154,971
)
(173,770
)
Total stockholders' equity
843,245
786,117
Total liabilities and stockholders' equity
$
1,240,032
$
1,079,731
Condensed Consolidated Statement of Cash Flows
(Unaudited) (Amounts in thousands)
Nine Months Ended September 30,
2024
2023
