• Revenue Less Ancillary Services: $112.8 million in Q4, representing a 17.4% year-over-year growth rate.
• Adjusted EBITDA: $16.7 million for Q4, compared to $7.7 million in Q4 2023, with a margin expansion of nearly 700 basis points year-over-year.
• Adjusted Gross Profit: $75.6 million in Q4, up 19.1% year-over-year, with an adjusted gross margin of 67%.
• Transaction Revenue Growth: 16.6% year-over-year increase, driven by a 32.8% increase in transaction-related payment volume.
• Platform and Other Revenues Growth: 21.9% year-over-year increase, driven by platform fees and growth in the healthcare business.
• GAAP Net Income: Loss of $15.9 million in Q4, primarily due to a one-time non-cash foreign exchange loss of $14 million.
• New Clients: Over 180 new clients in Q4, totaling over 800 new clients for the year.
• Travel Vertical Revenue: Grew organically more than 50% in 2024, making up 13% of total revenue.
• Healthcare Vertical: Secured a landmark eight-figure relationship with a major hospital system.
• Certify Acquisition: $330 million funded through cash and debt, expected to add $35 to $40 million in revenue for 2025.
• Share Buyback: Repurchased 2.3 million shares for approximately $44 million.
• Restructuring Charge: Estimated between $7 to $9 million, affecting approximately 10% of the workforce.

• Warning! GuruFocus has detected 2 Warning Sign with SPT.

Release Date: February 25, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Flywire Corp (NASDAQ:FLYW) achieved a 24% growth in revenue less ancillary services in 2024, despite facing significant macroeconomic headwinds.
• The company signed over 800 new clients in 2024, surpassing the previous year's new client additions, and now serves approximately 4,500 clients globally.
• Flywire Corp (NASDAQ:FLYW)'s travel vertical became its second-largest revenue contributor, with strong growth in the EMEA and APAC regions.
• The acquisition of Certify is expected to enhance Flywire Corp (NASDAQ:FLYW)'s position in the travel industry, providing access to new subsegments and monetizing significant payment volumes.
• Flywire Corp (NASDAQ:FLYW) reported a strong adjusted EBITDA growth, expanding nearly 700 basis points year-over-year, driven by disciplined expense management and stronger gross margins.

Negative Points

• Flywire Corp (NASDAQ:FLYW) faced headwinds in its education business due to policy changes in Canada and Australia, leading to a significant revenue shortfall.
• The company's net revenue retention (NRR) decreased to 114% in 2024, with expectations of further decline in 2025 due to ongoing visa policy challenges.
• Flywire Corp (NASDAQ:FLYW) announced a restructuring plan affecting approximately 10% of its workforce, indicating operational challenges and the need for cost optimization.
• The company experienced a $3 million revenue shortfall in Canada due to unexpected visa policy changes, impacting overall growth.
• Flywire Corp (NASDAQ:FLYW) anticipates continued revenue declines in Canada and Australia, projecting a 30% year-over-year decrease in these markets for 2025.

Q & A Highlights

Q: Can you talk a little bit about the NRR? Historically, it's been over 120%. It was 114. Do you expect another downtick in 2025? A: (Kazim Ziddiqi, CFO) In 2024, NRR was at 114% with about 10 points of pressure from Canada. Looking ahead, with both Canada and Australia seeing visa trends down, we expect NRR to be below 114% going forward, primarily due to these visa dynamics.

Q: Why is Flywire conducting a portfolio review now? Are there opportunities to streamline and focus on fewer verticals? A: (Michael Massaro, CEO) With policy restrictions continuing into 2025, we are taking steps across the business, including an operational and strategic review. We are looking at investments, products, geographies, verticals, and cost structures to control what we can amidst regulatory and macro headwinds.

Q: Can you elaborate on the impact of the Canadian market and the SDS program on Flywire's revenue? A: (Robert Orgel, COO) The Canadian market has seen significant demand destruction due to visa caps and policy changes affecting full-year payments. This has impacted the total number of students, which is the top of the funnel for our payment opportunities. We are working to grow with new and existing accounts, but the market needs to stabilize first.

Q: How is Flywire prioritizing its portfolio review? Is it focused on efficiency or growth opportunities? A: (Michael Massaro, CEO) We are ensuring we are optimized in the right areas, with the right investments in geographies, industries, and product lines. We are looking at how we are organized and where we can optimize investments to control internal decisions and help the company emerge stronger.

Q: What are the expectations for growth in Flywire's different segments for 2025? A: (Kazim Ziddiqi, CFO) Canada and Australia are expected to be down 30%. Healthcare will start growing later in the year, and the US is modeled cautiously due to visa trends. EMEA education, travel, and B2B are expected to grow above the company average, with travel and B2B being strong growth verticals.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.