Q4 2021 Flywire Corp Earnings Call

March 2, 2022

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Ladies and gentlemen, thank you for standing by the conference call will begin shortly thank you.

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Greetings and welcome to the fly Wire Corporation fourth quarter 2021 earnings call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad. Please note. This conference is being recorded I will now.

I'll turn the conference over to your host or kill haulage you may begin.

Thank you and good afternoon.

With me on today's call are Mark Massaro, Chief Executive Officer, Rob logo, President and Chief operating Officer, and Mike Ellis Chief Financial Officer.

Our fourth quarter 2021 earnings press release supplemental presentation, and when filed associated Form 10-K can be found at IR <unk> com.

Please note that the financial results discussed on this call are preliminary unaudited and represent the most current information available to the company's management as financial closing procedures for the year ended December 31st 2021 are not yet complete please.

Please refer to our press release for more information regarding these preliminary and unaudited results during the call we will be discussing certain forward looking information.

Actual results could differ materially from those contemplated by these forward looking statements. We will also be discussing certain non-GAAP financial measures refer to our press release and SEC filings for more information on the risks regarding.

Forward looking statements that could cause actual results to differ materially risk.

Risk factors associated with our business and required disclosure related to non-GAAP financial measures.

This call is being webcast live and will be available for replay on our website.

I would now like to turn the call over to Mark Massaro.

Thank you appeal and thank you to everyone that is joining us today, we're excited to share our Q4 and fiscal year 2021 results with all of you and appreciate the strong interest. So many of you continue to show and fly wire.

The fourth quarter was another strong quarter for fly wire completing a very successful year.

Our first as a public company, Rob or goal, our president and COO and Michael <unk>, Our CFO will go into greater detail later on about our operating and financial performance.

But first let me start with a few financial highlights from our fourth quarter.

Revenue less ancillary services was $45 9 million representing.

Representing a year over year revenue growth of 56%.

Total payment volume increased 75% compared to fourth quarter 2020.

We also completed our first acquisition as a public company, we acquired WPM, which we believe will further accelerate our market share in the U K education sector, adding an additional 40, new fly in that region.

Having personally spent time with our UK team and clients last month.

Could not be more excited about this combined team and look forward to see what they accomplish together in 2022 and beyond.

We believe our Q4 results validate <unk> powerful combination of software and payments capabilities.

This unique combination lets us deliver high stakes high value payments in a series of industries that have historically been poorly digitized, specifically education healthcare travel business to business payments.

I want to take a moment to celebrate some of the great milestones of 2021.

Truly great year for fly wire.

A few highlights include a 58% increase in revenue less ancillary services when compared to 2020 <unk>.

Adjusted EBITA of.

$22 7 million for the year significantly higher than the initial guidance, we provided within our Q2 2021 earnings release of $4 million to $6 million.

This was driven by faster than anticipated growth of our international education business.

We also added clients across all regions in vertical through the year, our total payment volume was over $13 billion.

We saw continued client appreciation for our innovation and execution that fly wire provides resulting in stronger customer loyalty driving record net revenue retention of 140% for the year.

We also completed our IPO.

As we call it our flywheel.

We have continued to invest heavily in our teams by adding almost 240 net new flights, including those from the recent acquisition.

And while we experienced strong growth in 2021.

We're really only scratching the surface of what is possible within the industries that we serve.

The demand for domestic and cross border money movement continues to accelerate.

You get tremendous market opportunity.

For the education health care and travel industries, we serve we estimate the current addressable market for our solutions to be approximately $1 seven trillion in global payment volume.

Our <unk> business expands the addressable market for our solutions, which we estimate to be over 10 trillion in payment volume.

We believe we have the opportunity to capture a meaningful share of this payment volume.

Bravo Oracle will go into great detail about some of the momentum we are enjoying in this sector shortly.

We also continue to see positive macro trends in the industries that we serve.

In education, where we support universities colleges boarding schools language and vocational schools all around the world.

Strong demand for global education experiences.

In a new report from open doors higher education institutions in the United States reported a 68% increase in.

And the number of new international students enrolling for the first time at a U S institution.

What they described as a notable surge from the 46% decline reported in fall 2020.

In health care patient engagement continues to be an important area of investment and focus for hospitals and health systems.

According to a new report from the center of connected medicine about 74% of health system executives will likely invest in technology that supports patient access and convenience such as self scheduling bill pay and price transparency tools.

This prioritization of investment matches, well with fly wires focused in health care.

Delivering solutions that solve complexity create great patient experiences and yield strong ROI for our clients.

Despite the ongoing presence of COVID-19 in the World. There is strong demand to travel again, especially among luxury travelers a key demographic for fly wire travel client.

According to a report we just published 72% of luxury travelers plan to spend more on traveling this year than they did pre pandemic.

Recent positive results reported by some major travel and tourism companies also validates these findings and we are optimistic about travelers in our target segments.

Leveraging their savings from the past year to spend on travel experiences in 2022 and beyond.

And we continue to see a huge opportunity in our <unk> segment as so many businesses are still plagued by inefficient technology. When it comes to getting paid the average U S firm now wait 33 days to receive a cross border payments.

According to a recent payment dot com study, 92% of organizations still receive paper checks to BTB payments. According to the 2022 AFP payment cost benchmarking survey.

As a result, many businesses are prioritizing the launch of more efficient systems when it comes to getting paid.

These are just some of the macro trends, we see further evidence that our belief the digitization of payments in these industries is not only well underway.

But also inevitable.

As we enter 2020 to fly wire is very well positioned to help these industries digitize.

We have a next generation payment platform that facilitates global payment flows, allowing the availability of our core technology services to the industries and regions we serve.

We have a proprietary global payment network, which took us over 10 years to build with a single connection to fly wire, our clients can accept and settle payments and over 240 countries and territories and in over 140 currencies across various types of payment methods.

We have vertical specific software built to solve some of the most complex payment challenges facing our clients.

We are distinctively talented and passionate team of finite with deep industry expertise distributed all around the world to help serve clients and capture new opportunities.

At fly, where we have multiple growth levers in our business such as new client acquisition geographic expansion and solution expansion with a proven ability to execute on the successful growth strategy.

As we look ahead to 2022, our plan is to continue to grow and invest responsibly in the areas. We believe will result in long term success.

Specifically, new product and payment innovation.

Additional go to market capacity to attract delight our clients.

In strengthening our fly may community to continue to win in the global talent War.

Let me take a few minutes to provide you with a little more color on these three major investment areas.

First on product and payment innovation. The industries, we operate in have historically been underserved by legacy software providers and outdated payment infrastructure.

<unk> has built a strong reputation for innovation, we saw major pain points for our clients and we will continue to accelerate our ability to build so.

<unk> and deploy solutions.

We believe this massive market opportunity will be realized over the next decade, and our product technology roadmap is critical to our future success.

Technology investments entering 2020 to have four central themes first expanding our payment flows on the receivable side.

Our clients believe in our technology and our people they want us to do even more for them, we see a huge opportunity in building.

A deeper relationship by helping automate more of our clients receivables. This involves broadening our ability to enable domestic payments for clients across all industries.

Raising our global payment network to further enable even more payment flows.

One example of this is the work we are doing it to 529 plants in education, which Rob will speak to later. Another example, we've been healthcare.

We will be looking to meet patient increasing needs for payment flexibility by enhancing affordability tools, such as dynamic discounting and partnerships to enable new powerful client and patient financing alternatives.

Another area of investment we are excited about is supporting new use cases within our existing industries over the last couple of years, we have seen that our clients and payers are actually part of a larger ecosystem that has complex workflows related to payments.

We have identified ways for fly wired to drive incremental value to the broader ecosystem.

For example think of the role of host agencies, and destination management companies or travel or the dynamics between educational institutions and admissions agents and education. These relationships are complex and there has not been software helping streamline these interactions.

And the payments that result from them, we see a huge opportunity here and we have a roadmap to attack. This.

With more embedded software, we have a unique opportunity to become mission critical provider to the entire industry ecosystem.

Our next area of product investment is to deepen our technical integrations. While this is true across verticals and a good example is at <unk> will be we're working increasingly with systems like net suite and Salesforce as well as partners like <unk> to accelerate our deployment. These integrations whether in the form of certified apps.

Yes.

Our connector kits helped validate our ability to work seamlessly in these environments.

Our connections with Cerner and epic are also important in areas will continue to enhance where.

Where we know these investments lead to faster deployment more effective solution.

In higher client satisfaction.

Lastly, we've talked a lot in the past about solving pain points for our clients.

We're also working hard to enable an EBIT more seamless experience for their payers.

That involves improving the user experience throughout the entire payment journey, improving payer engagement and adding new offerings and local markets with special attention to Asia Pacific.

These are just some examples of the product and payment investments, we expect to make and we look forward to sharing more about our technology roadmap at our 2022 Investor day and additional progress throughout this year.

Moving on to our second investment area.

Still being an incredible suite of products only gets you. So far so in 2022, we're also significantly expanding our sales relationship management and delivery teams across all sectors. After aggressive hiring in our second half of 2021, we plan to continue growing these teams another 50% on average.

Over fiscal year, 2022, spanning all verticals and geographies.

And our largest verticals, we expect to augment newer regions and look to repeat successful acceleration we saw in Canada, The UK Europe , Latin America and Asia.

We aim to deepen our relationship management and delivery capabilities for our largest verticals to keep up with our rapid client growth and the expanding software capabilities available to our customer base.

We anticipate that our newer verticals will benefit disproportionate expansion of our sales teams and marketing lead generation efforts as we take fly wire story and value proposition rapidly to new clients and capture more of these large addressable markets.

Our strong history of LTV to CAC underscored by our three year average net revenue retention of 123%.

All combined with our proven unit economics demand has continued to go to market investment.

As far as third investment area, it's our amazing flight we.

We are all aware that the global pandemic has truly changed the marketplace for talent, making it competitive and global.

In 2022, we plan to continue our investment to aggressively grow and strengthen our flight community.

It is critical for <unk> future success that we compete well in obtaining and retaining our amazing climates.

Culture has always been a strategic asset for us and I'm proud that we continue to be recognized for it.

Last quarter, we redeemed a great place to work and received several additional awards, maintaining our culture as we build out capabilities necessary to operate as a public company with a key focus of 2021 and we are excited to continue this investment into 2022.

<unk> has also received recognition for our commitment to equity inclusion and diversity. This.

This year, we look to further our efforts to be an employer of choice and to provide our fly and its all the resources they need to feel fulfilled in and out of the workplace.

I'm extremely proud of the culture and team we have built here at fly wire.

Our flight 700 of them around the world, representing 40, plus cultures speaking over 30 languages.

Truly operate as one team.

And are the cornerstone of our current and future success.

In closing we believe the opportunity ahead of us is large and growing.

We believe that our investment plan is critical to sustaining long term compounded growth.

Ensuring fly wire has the technology people and culture to digitize and transform how our clients get paid for years and years to come.

I'd now like to turn the call over to Rob <unk>, our president and COO to review some operational highlights from the quarter in the context of our growth strategy Rob.

Thanks, Mike and good afternoon, everyone as Mike indicated in his opening comments, we had a strong Q4 capping off a great year for the company. Our results. This quarter reflected continued execution of our growth strategies to begin growth with our existing clients remained robust as Mike mentioned.

We ended the year with a three year average net revenue retention of 123%.

We saw strong year over year growth across all our verticals with particular strength in our education business, where we had success expanding with new products for both domestic and international students.

Strong growth in our travel segment as the world returns towards normal activity and even makes up for some lost time.

Notably MLR for this year exceeds recent pre COVID-19 years.

As in previous calls I will start with some examples of expansions during the quarter at our existing customers followed by talking about new customers.

With health care.

<unk> developed and launched an affiliated provider program with client partners advent health and envision healthcare both were existing customers and their core business.

Health is a faith based nonprofit health care system headquartered in Florida, whose integrated network spans 130 healthcare facilities across nine states, serving more than 5 million patients annually.

Envision healthcare, a leading national Medical group is a family of health care company is focused on delivering high quality care to patients revisions 25000, physicians and advanced practice providers deliver care to 42 million patients each year across the U S.

With the fly wire enabled affiliates program that builds on the work we had done for each client separately.

Physician and hospital partners can collectively bill on their individual visits in a shared digital experience.

In a typical health care billing environment patients received multiple bills from providers delivering here, which can create a confusing experience for patients and impose an administrative burden on providers to.

The fly wire program with advent and envision those patients a consolidated view across their entire patient journey, even though the visits are technically the responsibility different billing entities.

Floodwater applied its deep expertise in enterprise integrations to deliver the program, which is designed to increase patient satisfaction and improved collections for the participating health care providers.

Switching to education, another client expansion took place with Stanford University stamp.

Stanford started working with lie wire in 2016, primarily around cross border payments.

Ambitious and innovative effort to improve the student experience Stanford selected <unk> to replace its online tuition payment system.

Stanford went live with our student billing and payment suite, starting in Q3 2021 with the remaining full suite of solutions, including secured checkout and our E store slated for implementation in 2022, we're obviously very pleased to have partnered with Stanford as part of their commitment around innovation, we work continuously.

With our education clients on enhancements and expansions of their fly wire enabled capabilities.

We also saw growth in existing travel customers to give you a sense with another example, bellacoola largest telecom company in the World uses Flywheels invoicing for both Canadian domestic and international payments group.

This 2021 winter season, we saw volume, notably higher than pre pandemic 2019.

We've seen a favorable pattern apply wire travel clients enjoying increasing activity as border and travel restrictions ease.

Continue to believe that our focus segments within the broader travel industry, especially around luxury travel operators and premier Dmc's will return faster than the broader industry.

Continuing with travel expansions can pronto capital, which is an integrated investor developer and operator of real estate headquartered in Madrid signed with US in October 2020 for Portugal and Spain.

Pronto focuses on the creation and operations of purpose built student accommodation and development of co living residences together they have over 10000 beds under management within their portfolio.

In the fourth quarter, we deepened our relationship by integrating their resident management system and now <unk> is the only way to pay outside of paper checks.

They have been acquiring new properties and we see additional upside as they continue to grow.

As you can see our travel segment continues to cover a broad set of sub segments as illustrated by Bellacoola and Tempur Arnaud.

As Mike mentioned, a moment ago, one of the investment areas. We are emphasizing in 2022 is the addition of more relationship managers to help us find ways to create value for our clients through our software offerings.

Turning to our second growth lever new clients. We also continue to win new clients at a rapid rate.

We added over 100, new clients in the quarter for a total of over 400, new clients in 2021.

We saw impressive growth in our newer verticals as we continue to build out our teams for.

<unk> as examples we added Mongo DB database platform provider and biotech, which is the largest closed captioning solution provider in North America.

These forward thinking companies are using fly wire to streamline both domestic and cross border accounts receivable.

They were part of a slate of client wins that represent our best quarter, yet with estimated IRR signings and b to be.

Giving us further confidence in our ability to serve this enormous segment and the foundation on which we plan to continue to accelerate our investment in engineering and our go to market team to support this vertical.

We also continued to enjoy these wins with a great group of core technology and financial system partners to play a pivotal role in the operation of these companies.

And then integrate and work seamlessly with fly wire around the payments aspects.

In travel we signed a great group of new clients. As an example, we added Lufthansa City Center DMC, which is representative of our efforts to grow in our travel vertical through a leading global destination management companies.

Based in Frankfurt, Germany, Lufthansa was founded in 1991 and has a membership of 67 individual agencies around the world, providing expertise and their local regions and organized around our city center.

Congress signed with wildfire in late November 2021, and was live by mid December 2021.

<unk> because of our large global footprint and variety of payment methods. We're excited from the early results based on our initial focus with them on Latin America, and look forward to expanding our payment solutions with coupons into new regions in early 2022, as well as growing more broadly and travel operators.

Amcs and accommodations.

We also saw strong growth in new clients for education and health care during the quarter for education, our international team is growing and proving effective.

One example, among many wins in education is hedged business school, which is a premier business school based in Marseille, Bordeaux, Paris, and too long offering undergraduate and graduate management programs, we will be helping them improve the student experience across domestic and international payments and our plan.

To highlight these kinds of notable wins in exciting markets like France.

And healthcare St. Clair healthcare is the largest integrated health system in north Eastern Kentucky with over 200 staff members, representing more than 30 medical specialties.

Includes the largest rural hospital in the area seven family Medicine locations specialty physician practices and homecare and retail services.

In 2021, St. Clair went live on fly wire with a primary goal of providing their patients are more robust and clear billing and payment experience.

<unk> proven automation and integration into Meditech St. Clair patients are now able to manage a single balance across all of their accounts and receive payment plan options tailored to each patient's capacity to pay all through a self service experience further.

<unk> is leveraging fly wire to drive digital first servicing and reduced reliance on inbound and outbound phone calls, allowing them to cut costs and improve the overall patient experience.

Can see between the advent envisioned example in St. Clair the power of our solutions to help our health care clients you can see from the examples of Bellacoola Pronto capital and Lufthansa City Center DMC.

Along with our many education wins that we are very effective and adding new customers as Mike mentioned, we are making significant investments in 2022 to grow our go to market capabilities as part of our long term growth strategy.

Our third primary growth lever our channel partnerships also continued to be a great source of growth for the company.

For education, we recently announced a partnership with a census, with technology and expertise to help millions of people save for education retirement at health care.

The partnership is to digitize and streamline tuition payments from 529 College savings plans to higher education institutions throughout the United States.

Solution takes aimed at the complexity of 529 payments to schools, we have checks, which can be difficult for institutions to process and reconcile while also making it easier for families to manage payments to schools.

In addition to generating revenue our relationship with our sensus strategically valuable as it gives us the basis for establishing a relationship with virtually every higher education institution in the country.

Lastly, on M&A and international expansion late in Q4, we announced the acquisition of WPM, a leading software provider that enables seamless and secure payment experiences for universities and colleges across the United Kingdom.

The acquisition of WPM as an opportunity to leverage our world class payment network with Wpm's customers, who have grown to trust their team and their excellent vertical software.

And also helps us fortify an important geographic and market <unk>.

WPM has more than 170 clients in the UK, where we.

Estimate total addressable payment volume to be approximately $30 billion.

Our team has been hard at work integrating the systems and welcoming new flying rates to the larger team.

Things are off to a very good start on the acquisition.

We are well underway and on track with the team and product integration and our joint integrated solution should be available and market in this Q2.

WPM held its highly regarded and well attended annual conference in the UK just a few weeks ago and we were very encouraged by the positive client reaction to the joint fly Wired WPM vision strategy and execution plan.

Even the substantial market opportunity of the joint solution will be investing even more in the UK market and go to market and product innovation.

Our teams are hard at work, making sure we will deliver great results for clients and we're very focused and confident that the acquisition will deliver on increased opportunities for fly wire in the U K in 2022.

I would now like to turn the call over to Mike Ellis, Our CFO to review our results for the fourth quarter and guidance for 2022.

Mike.

Thank you Rob good afternoon, everyone today I'll be discussing our non-GAAP financial metrics for our fourth quarter of 2021, including revenue less ancillary services adjusted gross margin and adjusted EBITDA.

For our financial results prepared in accordance with U S. Generally accepted accounting principles. Please read the preliminary and unaudited financial statements included within our earnings release and the audited financial statements that will be included in our Form 10-K , when filed with the SEC.

Revenue less ancillary services for Q4, 2021 was $45 9 million, representing a 56% growth rate compared to Q4 2020.

This increase was driven by an increase in our total payment volume and exceeded our expectations due to strong performance, particularly from our international cross border payment volumes in our education and travel verticals as well as domestic education payment volumes.

We processed $3 1 billion and total payment volume during Q4, 2021, which was an increase of 75% from the $1 8 billion. We process during Q4 2020, we.

We experienced revenue and total payment volume growth across all regions verticals and our revenue types when compared to Q4 2020.

Specifically transaction revenue increased 69% compared to Q4 2020, driven by an 81% increase in transaction payment volume platform and usage based fee revenue increased 16% compared to Q4 2020 due to a 65% increase in platform and usage based payment volume.

Platform and usage based fee revenue growth would have been higher but for the loss of a client in our health care vertical. However, we continue to be successful expanding existing clients and adding new clients and health care.

Platform and usage based fee revenue is driven by the accounts receivable, we manage the initiation of new payment plans and payments made against those payment plans and not solely a function of payment volume.

Adjusted gross margin for Q4, 2021 was 66, 9% down from 68, 5% in Q4 2020.

This decrease was primarily the result of our transaction revenue outpacing our platform revenue driven by the growth of our transaction payment volume from both cross border and domestic transactions within our education vertical and cross border transactions from our travel clients.

For context, adjusted gross margin for full year, 2021 was 69, 1% compared to 69, 4% for full year 2020.

The lower adjusted gross margin of 66, 9% in Q4 2021 as compared with full year 2021 of 69, 1% is consistent with previous seasonality and adjusted gross margin.

We expect continued quarterly seasonality in our adjusted gross margin based on multiple factors, including changes in revenue and vertical mix changes in payment method mix, the average transaction payments I's and cross border currency mix.

Key points to take away that we expect to continue to have strong adjusted gross margins and that our platform and proprietary global payments network allows us to support many payment types from multiple verticals across many currencies all of which have strong economics for Guadalajara.

During Q4, 2021 revenue less ancillary services as a percentage of total payment volume was lower than Q4, 2020, driven primarily by mix changes along the lines I just mentioned in particular when clients add domestic services revenue as a percentage of that payment volume is lower and as a reminder.

This expansion of our product offering drives both revenue growth and incremental adjusted gross profit dollars.

Moving onto operating expenses technology and development expenses were $9 1 million for Q4 2021, an increase of 36% over the $6 7 million incurred during Q4 2020. This.

This increase was the result of our hiring activities during 2021, where we increased the number of employees within our technology and development teams by over 40%.

Selling and marketing expenses were $15 9 million for Q4 2021, an increase of 92% over the $8 3 million incurred during Q4 2020.

This increase was primarily due to our hiring efforts as we added over 100, new employees within these departments during 2021 as well as higher sales commissions due to our 58% revenue less ancillary services growth rate achieved in 2021.

<unk> and administrative expenses were $17 5 million during Q4 2021, an increase of 80% over the $9 7 million incurred during Q4 2020.

Many factors impacted our general and administrative costs incurred during Q4 2021, but the primary factors included number one our hiring activities number to incremental costs associated with operating as a public company, which consisted primarily of professional fees and insurance costs and number three stock based compensation charges.

Adjusted EBITDA for Q4, 2021 was a negative $1 9 million compared to a positive $1 8 million. During Q4 2020. This was driven by hiring in 2021 as well as increased cost from operating as a public company adjusted EBITDA was within our implied guidance range for Q4 2021, but we did hire.

Faster than expected during the second half of 2021 across all departments of the company.

For context, we generated $22 7 million of adjusted EBITDA and recorded a 58% revenue less ancillary services growth rate with a strong adjusted gross margin of 69, 1%. During the year ended December 31 2021.

Moving to the balance sheet with respect to capitalization as of December 31, 2021, we had $389 4 million in cash and cash equivalents and $25 9 million long term debt.

As of December 31, 2021, we had $106 7 million shares of common stock outstanding which is different than the weighted average shares outstanding used to calculate net loss per share due to the timing of our IPO.

Moving onto guidance for 2022, as we are an increasingly international company, we continually monitor risk factors, both domestically and globally, but are optimistic that 2022, we'll see improved conditions for our clients and the industries. They serve relative to recent years. We currently have minimal exposure to the impacts from the difficult circumstances.

In Ukraine, but our thoughts are with those in that country. We will continue to monitor these events and their potential impact on our business as they unfold.

That said, we expect revenue less ancillary services to be in the range of $244 million to $252 million, resulting in an annual revenue growth rate of 37% at the midpoint for the year ended December 31 2022.

Our 2022 expected annual organic revenue growth rate, excluding the impact of our recent WPM acquisition approximate 33% at the midpoint, our full year 2022 expectations for revenue less ancillary services reflect our confidence in the growth of our existing clients across all of our verticals and a ramp up of the clients. We added during 2021.

Our guidance also assumes a revenue benefit in the second half of 2022 due to our planned investments in additional go to market resources to attract and signed new clients and sell new products to existing clients.

We remain confident in our original expectation of a rolling recovery from Covid through midyear 2022, and remain excited about the strength across the verticals we serve as this proves out.

We expect adjusted EBITDA to be in the range of 9 million to $13 million for the year ended December 31 2022.

Our full year of 2022 expectations for adjusted EBITDA reflects strong revenue lift ancillary services as just discussed offset by meaningful investments across the organization will continue to drive revenue growth in 2022 and beyond.

Although we generated $22 7 million in adjusted EBITDA. During 2021, we communicated during our previous earnings calls that we intended to continue to invest in the development of our capabilities across the business as a result, our full year 2022, adjusted EBITDA expectations are moderated by the investments we plan to make in our technology payment net.

<unk> go to market resources and people as detailed by Mike earlier, we are bullish on the strategic and economic returns on these planned investments.

That said, we would like to provide some detail on the scale of these planned investments as a onetime disclosure. There are three primary areas that we expect to be the drivers of incremental spend in 2022 over 2021.

The annualized <unk> of compensation for our employees, we hired during 2021 and compensation increases for our existing employees in order to retain them in a very competitive labor market will amount to approximately 20 million incremental spend during 2022, a second driver of the incremental spend during 2022 as general and administrative costs.

Primarily associated with becoming a public company that amounts to approximately $10 million.

Finally, we expect to invest approximately $20 million in 2022, and new personnel that will be predominantly directed towards growth and our go to market rolls and innovation within our product and technology teams.

Look forward to detailing out more of our product strategy in other forums as you've heard us say before we see opportunity everywhere and we are excited about the innovation and the go to market investments, we plan to make to enhance our market position and deliver long term revenue growth in 2023 and beyond.

Finally, we are providing revenue less ancillary services guidance for Q1 2022, as a onetime disclosure to address the seasonality of our business.

Revenue less ancillary services for Q1 2022 is expected to be in the range of 55 million $57 million, representing a 39% revenue less ancillary fees growth rate based on $56 million of revenue at the midpoint with that I'd like to turn the call over to the operator for questions operator.

Thank you at this time, we will be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if you'd like to remove your question from the queue for participants using speaker equipment and may be necessary to pick up your handset before pressing the star keys.

One moment, please while we poll for questions.

Our first question is from Dan Perlin with RBC capital markets. Please proceed with your question.

Thanks, Good evening, everyone and great results here.

As has been the case since going public we appreciate that.

The question I have is around how the domestic education opportunity I know you've mentioned, Stanford, which is clearly a marquee client.

But I'm just wondering if you could kind of outline maybe in a broader context, what you're seeing from <unk>.

The institutions that you currently have in order to kind of flip over to the domestic side.

What kind of cadence do you think maybe you could see in terms of.

Gaining some of that.

Market share as we think about this year and then again, maybe understanding the implications to the P&L is as that becomes more prominent again. Thank you.

Hey, Dan Thanks for the question I'm going to hand that one over to Rob.

As close to that and we'll jump in.

So.

First of all thanks, Dan for the question.

One of the core elements of the strategy for the company has been the expansion in domestic education and we continue to win great accounts. Obviously, we shared the name of Stanford today, we talked about Texas A&M last call. We talked about and then you as a domestic wind in the U K, meaning we are taking the opportunity to take.

On domestic business not just in the U S, but internationally and it's great business for the company as we said in the past it's a revenue multiplier for US every time, we take on one of these accounts.

These are the accounts that they're on.

The sales cycle side, they are more involved.

But we view ourselves as being very successful and effective in the opportunities that we tackle and all of this and we continue to expect to have a great 2022, winning more accounts. We've got a nice pipeline. We have a nice set of sort of secured opportunities that we are moving forward and executing on and look forward to being able to share with you in upcoming calls.

Sorry, the second part of your question was just around sort of the financial implications of all of this.

<unk>.

The revenue piece I, just referred to in terms of being a very good revenue multiplier for us.

In terms of the EBITDA contribution. Obviously these are these are good accounts that flowed through nicely.

The only place where we would call out something that many of you look at some of you. Despite our requests that you've not focus on the monetization rate. The one thing about the domestic accounts as there is often a lot of volume there and monetize as overall at a lower rate and so you would see that trend in the overall.

But again. These are these are great deals with great economics and benefit for the company.

At healthy margins and the only place where the trend might be notable and categorize in that monetization rate, but again, we're focused on.

On the revenue margin and gross profit.

Yep understood Thats, Great and then just a quick follow up on the.

And one of the areas of investment and I appreciate all the detail around around those buckets, but on the on the go to market strategy and leaning in I think incrementally on these relationship management opportunities was that driven by looking at the cohorts in the portfolio that you have and just realizing that there is a lot more to extract from those existing client.

Or did you feel like as you were moving to certain types of.

New clients, whether that be more complex ones in health care or otherwise you needed to have not just the <unk>.

Kind of a well and from Salesforce, but true relationship managers. Thank you.

Yeah I'll take that one this is Mike.

I would say, it's a combination of more things to bring to our customers and our customers wanting to do more with US. We've got this great set of relationship managers across industry and also geographically distributed right of course, where the clients are and so what we saw is a direct correlation with.

That team growing our ability to get more business to build more senior relationships in these clients.

And ultimately grow so think of it as our teams going deeper meaning fewer accounts more focused by region by sub region by category, even in some some sectors in some industries.

And again, it's it's a clear correlation to that and growth rate because the closer we are to these clients the more we understand the problems.

Problems turned into new products new capabilities new features.

And then were also obviously right there when theyre thinking about a new product.

Our new solution change or maybe.

Our new domestic provider and thats exactly the strategy.

Excellent Thanks, Mike I appreciate it great quarter.

Thank you. Our next question is from Jason Cooper Berg with Bank of America. Please proceed with your question.

Thanks, guys I appreciate it I just wanted to start with a question on the on the EBITDA side of things. So the guidance calls for around 3% to 5% margins. This year you did a great job of laying out a lot of the opex initiatives for the year I know in the past you've talked about a multi year, our medium term target of 25% or so.

So just any way to think about potential timing there does it really just kind of depend when the top line growth normalizes down into the medium term target range, which I think is around 25% to 30% just trying to get a sense of how we should think about trajectory. It does sound like 2022 is just going to be a bit of an outsized investment year.

<unk>.

But obviously theres a lot of opportunity to capitalize on so would just love your thoughts there. Thanks.

Yes. Thanks for the question this is Mike Ellis.

So the way we're thinking about it is that would be the size of the Tam that we get to go after our very significant. So you can kind of see that investment thesis really come through in 2022.

And we do have long term aspirations to derive better adjusted EBITDA margins, but that's not the short term outlook. We are viewed ourselves as a long term revenue growth and we will continue to invest appropriately to ensure.

To ensure that we're driving long term revenue growth first and foremost with the site towards.

Appropriate profitability levels.

Based on the long term position of the business.

Jason This is Mike hopefully people got from additional detail we shared in the investment areas. These are investments that we think is the time is now to make.

The opportunity in front of us is strong.

And at the same time pretty.

Pretty clear indication that we want to show the strength financially in our business.

And I think that came through pretty clearly in the flow through last year, and so we're taking that opportunity to make sure we invest properly.

Right right. Okay. So it sounds like Theres no change in that longer term objective, but you're trying to strike while the iron is hot now, which is which is obviously understandable on the WPS side of things just wanted to get your view on how long it potentially takes to kind of drive some of what seems to be some pretty significant <unk>.

Energy opportunities there.

Yeah I'll take that one this is Mike again.

Obviously, it's a deal we're quite excited about we've known that team for a while.

Couldn't be more excited having I mentioned in my earlier comments that I made two trips to the U K to international trips already in the last four to five months and seeing how clients have received the combination as well as how the teams are working.

We expect results again really monetization of payment volume within that region, which is obviously, what we were working to do.

And that deal provides us great opportunity. So I expect to see some benefits in 'twenty, two I expect us to see benefits for years and years to come.

It's a great opportunity for us we're super excited we got the deal done.

Excellent okay, well thank you.

Thank you. Our next question is from Darrin Peller with Wolfe Research. Please proceed with your question.

Hey, Thanks, guys. When we look at the forecast and we try to back out.

The inorganic contribution it looks like you are in the low to mid 30% range in terms of targets, which.

Obviously is extremely strong off a year that we just had maybe you could just give us a little bit of an understanding as to the same store sales thoughts embedded in that.

Revenue retention looks like.

You're going to improve.

But just thoughts on same store given the land and expand strategy you guys keep doing well with across multiple verticals.

Versus the new customers coming in because to us. It just seems like there may even believe it or not be some conservatism in that but love to hear your thoughts.

Yes.

So.

Our belief is that we're going to continue to work on the playbook that we've always worked on right. So if you look at our <unk> you can see that it's back to sort of pre pandemic levels.

Certainly a core element of our growth strategy to drive that NR you heard Mike just a moment ago talk about the addition of the relationship managers.

At our core we believe we're going to keep doing it right. We've got the sort of the product suite, the offering and the strategy that lets us sort of continue to execute on existing client land and expand and so that's what we plan to do that's been the the larger portion of driving growth in prior years and.

It will be complemented this year by new client growth and new client revenue as well.

But that's those are those are the elements that drive the overall growth rate that we've shown you in the guidance and.

We have every reason to be confident that we're going to continue with that land and expand successfully.

Okay.

I mean, there seems to be a.

Broad based expansion of of your opportunities across verticals beyond even education and so maybe you could just give us one sense of like if you were to highlight where you're most excited about some of the transformation occurring into much bigger opportunities than even you expected. When you started in for example, health care <unk> travel.

Perhaps not moving away from your biggest vertical for a moment can you just touch on that in terms of what's seeing the most momentum it seems like it's pretty broad based but maybe a little bit more fine tuning. Thanks guys.

I'll jump in this is Mike I've got four kids I always say that's the question of what you could do I like the most which I always struggle to answer but.

I'll go first and talk with you Rob for me its travel the travel team has done an amazing job over the last two years.

Navigating a pandemic right.

Grew that business, even in 'twenty actually we grew all verticals.

In 'twenty, even in the face of the first wave of the pandemic and then to see what they've been able to do.

In 2021 significantly growing that business and positioning us really well for 'twenty, two and beyond for me.

Just massively exciting we havent, even seen the world come back and the strength of that pipeline and the new client signs is really great. So that's mind I don't know Rob if you have a different one is really a travel travel is very exciting each of the vertical that was very exciting. If you. If you look at <unk>. This is sort of the first call that we've made much commentary around the <unk> side of things.

Youll see us this year continue to expand that team.

We are feeling really good about the kinds of clients that we are adding and the value proposition that we have form and in terms of growing that team, adding more leadership into that team, adding more product capability in terms of integrations and things like net suite and Salesforce like where we're moving on multiple fronts in the in the <unk> space and so very.

Excited about that one as well.

Got it.

Alright, thanks, guys nice job.

Thanks Sarah.

Thank you. Our next question is from Ash, one share of icon with Citi. Please proceed with your question.

Thanks.

Mike.

Good quarter.

I guess, let me start with the sales head count.

The investment in growth could you remind me how you typically think of sales productivity and sort of the lag I guess between adding sales and getting the result is that the.

Is that the six months at the back half.

Orientation that you've talked about or is that just to get the salespeople.

So we will start adding people sooner than the back half of the year. There is sort of the timing of bringing people on the timing of them getting productive and the timing of clients actually producing revenue and all of that so we're pretty good at all three of those steps, but the reason you will.

See the effect, mostly in the back half as we've talked about often.

There is some lag time between when the when the clients or the sales cycle start they sign and then they're implemented even even when that implementation cycle is quite quick and so that's why you see sort of the effect driven primarily.

Primarily in the latter half of the year of course, we did do hiring in 2021 and lots of those people are starting to come online and become effective now so really its sort of a steady effect that you should expect to see as we as we make these people productive and they contribute to the client count.

Yeah.

Okay.

And if I think beyond what <unk>, if you could maybe provide some incremental color with regard to just cadence of how are you.

How you see the.

Revenues coming through because last year was kind of.

But a little bit wonky with Delta and omicron in radio.

So that effect so both from a revenue growth perspective, and Youre, making investments this year so from a.

From a margin perspective, how are you thinking of cadence through the year.

Yes, I'll take that this is Mike Ehlers, so both at the revenue less ancillary services and the adjusted EBITDA basis, you should be thinking about the seasonality of the business in 2022 very similar to what we reported in 2021.

It's really a function of the vertical makeup of our business and if you think about it Q3 will be a very important quarter for the business in 2022, it will be our biggest quarter. It always is our biggest quarter both in revenue and adjusted EBITDA generation.

Then after that it comes down to Q1, and then Q4 and then Q2 so.

I would expect that you should expect that revenue and adjusted EBITDA of 2022 on a quarterly basis should follow the relatively consistent pattern than previous year's reported.

Got it thank.

Thank you guys.

Thanks, guys. Thank you.

Our next question is from John Davis with Raymond James. Please proceed with your question.

Hey, good afternoon, guys I want to spend a minute on WPM, Mike maybe just talk a little bit about the revenue model today kind of what you have embedded in the 'twenty two guide.

And then how you think about that $30 billion addressable payments are they monetizing payments today, but the opportunity just trying to think about how we could see this business grow over the next couple of years.

Sure Hey, Jamie Thanks for the question so.

WEL again.

Think of it as a software play again non venture backed business has had two founders who a bootstrap it since the beginning and have built a great business and so again, it's a company we've known for a while have had great respect for them and to be able to get a deal done was really exciting so they have not monetize payments directly.

It is really the crux of the opportunity that we see so think of it as software revenue as Mike.

Articulated.

Small single digit inorganic part of our 2022.

And then when you think of the opportunity. It is exactly that where can our flywheel can the combination of teams and technology help drive payment monetization inside the UK and that combination is quite exciting.

Last month I was at a conference with.

A huge amount of clients many of them shared clients.

As well as net new clients and I think the opportunity is really there for us to deliver value. So already excited the team integrated offerings already underway. The response has been super strong and again I think it's just going to help us accelerate as we said earlier in the comments.

Okay, Great and then maybe I just wanted to touch on <unk> for a second obviously a 140% in.

In 'twenty one.

It's pretty remarkable definitely benefited from.

Kind of schools.

Seeing more full enrollment.

How should we think about the normalized MLR should we think about constantly is seen in 2019 levels of the I'll call. It $1 25 to 130 level, clearly youre growing a little bit above.

Your kind of medium to long term, 30% range in the near term, but just maybe spend a minute talking about the kind of in our Rps plus plus the new wins and how should we think about that over.

Over the next year or so.

Yes sure thing so that's one of the exciting things, we've always talked about multiple growth levers right. So when people think about us we encourage them to look at that NRI, but really think of it as the three year average obviously with the Covid impacted years throughout that average gives you a more consistent baseline to use.

And.

And so for US that's at 123 that includes that Covid impacted year, we've talked about prior.

With a record year last year in NRI. So I think that helps blend out that term, but it's right in the range that you shared.

And then I would just say, obviously, we look to add new clients and add new.

New logos to the tape every year and I think we've got a consistent track record of doing that but that isn't we don't need it's not just that lever we have for growth rates. So it's that combination of NRI growth plus net new ads that really.

<unk> is one of the exciting things about <unk> and why we're so confident in that kind of compounding growth story over the long term.

Yes.

Okay I appreciate the color thanks, guys.

Thank you. Our next question is from Tien Tsin Huang with Jpmorgan. Please proceed with your question.

Hey, Thanks, so much great results here I guess on bookings and I know you've got a question on harvesting about AAR.

In your pipeline and how the year closed.

How are you thinking about bookings in 2022, how might it be different in terms of composition of quality versus what you saw in 2021 any any color there.

Hey, Tien Tsin got here good to hear your bill good to hear your voice.

I think in terms of sort of composition and quality, we expect it to be consistent with what we've shown in the past I think the big difference being that the pipeline continues to grow and the expectations for signing a continue to grow as we look into the year ahead right. So.

Very very healthy dynamics in the pipeline very healthy dynamics in adding new clients.

As we mentioned we're going to be growing the go to market team by what amounts to about another 50% growth in sort of go to market capabilities across the teams and so with that we expect to show.

That kind of IRR build that supports the future growth.

Great I appreciate that Rob I was just my quick follow up.

This is on pricing and I know, Mike you'd want us talking about take rate. So it's more about just the pricing environment, given inflation and really volatile FX right now any any thoughts on what might be different here again same thing 22 versus 21 with respect to pricing.

So.

Again, where we're fortunate not to be one of those company as it has sort of a cost of goods subject to inflationary pressures and so overall we.

Our business model is such that as the pricing changes for the underlying service.

I'll do the transactional work on top of it but sort of don't feel that we see sort of a difference in inflation in that regard in terms of FX, we have always been good at the.

The hedging of risk in that regard and so we don't really see anything different or plan for anything different in terms of 'twenty two versus 21 excellent.

Thank you so much.

Thank you. Our final question comes from Bob Napoli with William Blair. Please proceed with your question.

Hi, Thank you good afternoon.

Nice job in the quarter good outlook.

So just you did your first acquisition as a public company I know, Mike you guys have done a couple previously.

Previously.

But whatever I would imagine you're you're engaged or are you looking for new verticals add ons.

The.

Metrics or criteria.

Are you using and should we expect you to be active in 2022.

Yeah, Hey, Bob.

Your voice.

For us it's W. Beam is a great example of the type of deal.

The three pillars, we've talked about before some way to go ahead, and accelerate and existing industry or region that were already in the opportunity to layer in additional product or capability is the second pillar, we've talked about before and then the third and I have said.

Less likely in the first two is the ability to enter a new region or new industry through an acquisition and so that those.

Those three pillars are still the core strategy.

We have our Corp Dev in M&A team that is.

Continues to be quite quite active in.

Also very picky as I've shared before the WPM deals a great deal for US It was the right team and culture fit as well as the right thing for clients.

And that was really a cornerstone we're going to keep looking for that we don't feel like there is pressure to do something but at the same time.

I wouldn't be surprised if you saw us active but we're going to find the right thing first.

Thank you and then.

Education, obviously third quarter is a big quarter, but the first quarter.

As we sit here today, you know who is enrolled and what University for this semester is that is your visibility for for the year on and for third quarter on.

The education business.

And how would you how would you look at the the visibility today for your business not only for <unk>.

And education, but obviously, that's the biggest sector.

But for the other parts of your business.

One thing that many folks know about fly, whereas we see visibility into all types of point payments, including admissions and deposits and things throughout the year. So that speaks a bit to your visibility question, but one thing I would tell you it's still pretty early in the year right. We're just just two months in.

The last two years has taught us anything that it's quite a dynamic world.

And so I would say we sit here feeling quite good in the first two months of the year at the same time.

We've just come through two years of global pandemic and things things have changed.

Quickly on all of us around the world. So.

We're cautiously optimistic but feeling really good about the first two months of the year.

Thank you and if I could just sneak in you haven't had any issue with cross border payments and now with Swift and now with the.

Honestly.

Sad occurring.

Occurrences in Europe has that had any effect on your business.

Yes, Robert speaking here, Bob first just just quickly to acknowledge the difficult circumstances for Ukraine and that we're all thinking about those difficult circumstances.

In terms of our business and in terms of Swift.

Are all of our work has been done to ensure that we are sort of appropriately compliant with sanctions and regulatory requirements that are sort of arisen just in the last little bit here around around those events.

So we're sort of.

<unk> done that work and overall at this time don't see a disrupting other aspects of the business.

Okay. Thank you appreciate it nice job.

Thanks, Paul you have reached the end of the question and answer session and I will now turn the call over to Mr. Mike Massaro for closing remarks.

Thank you operator, and thank you all for joining US today, we appreciate everybody's time and thoughtful questions look forward to speaking to many of you and even maybe seeing some of you over the next few weeks have a great day.

This concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation.

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I will now turn the conference over to your host Carol Haulage you may begin.

Thank you and good afternoon.

With me on today's call are Mark Massaro, Chief Executive Officer, Rob logo, President and Chief operating Officer, and Mike Ellis Chief Financial Officer.

Our fourth quarter 2021 earnings press release supplemental presentation, and when filed associated Form 10-K can be found at IR that flatware dot com.

Please note that the financial results discussed on this call are preliminary unaudited and represent the most current information available to the company's management.

Financial closing procedures for the year ended December 31, 2021 are not yet complete.

Please refer to our press release for more information regarding these preliminary and unaudited results.

During the call we will be discussing certain forward looking information.

Actual results could differ materially from those contemplated by these forward looking statements.

We will also be discussing certain non-GAAP financial measures refer to our press release and SEC filings for more information on the risks regarding forward.

Forward looking statements that could cause actual results to differ materially risks.

Risk factors associated with our business and required disclosures related to non-GAAP financial measures.

This call is being webcast live and will be available for replay on our website.

I would now like to turn the call over to Mark Massaro.

The fourth quarter was another strong quarter for fly wire completing a very successful year.

Our first as a public company <unk>, our president and COO and Michael <unk>, Our CFO will go into greater detail later on about our operating and financial performance.

But first let me start with a few financial highlights from our fourth quarter.

Revenue less ancillary services was $45 9 million.

On a year over year revenue growth of 56%.

Total payment volume increased 75% compared to fourth quarter 2020.

We also completed our first acquisition as a public company, we acquired W. P M, which we believe will further accelerate our market share in the UK education sector, adding an additional 40, new fly in that region.

Having personally spent time with our UK team and clients last month I cannot be more excited about this combined team and look forward to see what they accomplish together in 2022 and beyond.

We believe our Q4 results validate <unk> powerful combination of software and payment capabilities.

I want to take a moment to celebrate some of the great milestones of 2021, a truly great year for fly wire.

A few highlights include a 58% increase in revenue less ancillary services when compared to 2020.

Adjusted EBITDA of $22 7 million for the year significantly higher than the initial guidance. We provided within our Q2 2021 earnings release of $4 million to $6 million.

This was driven by faster than anticipated growth of our international education business.

We also added clients across all regions and verticals for the year, our total payment volume was over $13 billion.

We saw continued client appreciation for our innovation and execution that fly wire provides resulting in stronger customer loyalty driving record net revenue retention of 140% for the year.

We also completed our IPO.

As we call it our <unk> and.

Have continued to invest heavily in our teams by adding almost 240 net new flights, including those from the recent acquisition.

And while we experienced strong growth in 2021.

We're really only scratching the surface of what is possible within the industries that we serve.

The demand for domestic and cross border money movement continues to accelerate.

Do you get tremendous market opportunity.

For the education health care and travel industries, we serve we estimate the current addressable market for our solutions to be approximately $1 seven trillion in global payment volume.

<unk> business expands the addressable market for our solutions, which we estimate to be over 10 trillion in payment volume.

We believe we have the opportunity to capture a meaningful share of this payment volume and Bravo Oracle will go into great detail about some of the momentum we are enjoying in this sector shortly.

We also continue to see positive macro trends in the industries that we serve.

In education, where we support universities colleges boarding schools language and vocational schools all around the world, we see strong demand for global education experiences.

In a new report from open doors higher education institutions in the United States reported a 68% increase.

And the number of new international students enrolling for the first time at a U S institution.

What they described as a notable surge from the 46% decline reported in fall 2020.

In healthcare patient engagement continues to be an important area of investment and focus for hospitals and health systems.

This prioritization of investment matches, well with fly wires focused on health care delivering.

Delivering solutions that solve complexity create great patient experiences and yield strong ROI for our clients.

Despite the ongoing presence of COVID-19 in the World. There is strong demand to travel again, especially among luxury travelers a key demographic for fly wire travel client.

According to a report we just published 72% of luxury travelers plan to spend more on traveling this year than they did pre pandemic.

Recent positive results reported by some major travel and tourism companies.

Also validates these findings and we are optimistic about travelers in our target segments.

Leveraging their savings from the past year to spend on travel experiences in 2022 and beyond.

According to a recent payment dot com study, 92% of organizations still receive paper checks for BTB payments. According to the 2022 AFP payment cost benchmarking survey.

As a result, many businesses are prioritizing the launch of more efficient systems when it comes to getting paid.

These are just some of the macro trends, we see further evidence that our belief the digitization of payments in these industries is not only well underway.

But also inevitable.

As we enter 2020 to fly wire is very well positioned to help these industries digitize.

We have a next generation payment platform that facilitates global payment flows, allowing the availability of our core technology services to the industries and regions we serve.

We have vertical specific software built to solve some of the most complex payment challenges facing our clients.

We are distinctively talented and passionate team of finite with deep industry expertise distributed all around the world to help serve clients and capture new opportunities.

At <unk>, we have multiple growth levers in our business such as new client acquisition geographic expansion and solution expansion with a proven ability to execute on the successful growth strategy.

As we look ahead to 2022, our plan is to continue to grow and invest responsibly in the areas. We believe will result in long term success.

Specifically, new product and payment innovation.

Additional go to market capacity to attract delight our clients.

In strengthening our fly may community to continue to win in the global talent War.

Let me take a few minutes to provide you with a little more color on these three major investment areas.

First on product and payment innovation. The industries, we operate in have historically been underserved by legacy software providers and outdated payment infrastructure.

<unk> has built a strong reputation for innovation, we saw major pain points for our clients and we will continue to accelerate our ability to build sell and deploy solutions.

We believe this massive market opportunity will be realized over the next decade, and our product technology roadmap is critical to our future success.

Our technology investments entering 2020 to have four central themes first expanding our payment flows on the receivable side are.

Our clients believe in our technology and our people they want us to do even more for them, we see a huge opportunity in building.

A deeper relationship by helping automate more of our clients receivables. This involves broadening our ability to enable domestic payments for clients across all industries.

<unk>, our global payment network to further enable even more payment flows.

One example of this is the work we are doing with the 529 plants in education, which Rob will speak to later. Another example, within health care, we will be looking to meet patient increasing needs for payment flexibility by enhancing affordability tools, such as dynamic discounting and partnerships to enable new powerful.

And patient financing alternatives.

We have identified ways for flowers to drive incremental value to the broader ecosystem.

Here, we have a roadmap to attack this with.

With more embedded software, we have a unique opportunity to become mission critical provider to the entire industry ecosystem.

Our next area of product investment is to deepen our technical integrations. While this is true across verticals. A good example is at <unk>.

We're working increasingly with systems like net suite and Salesforce as well as partners like gateway to accelerate our deployment. These integrations whether in the form of certified apps.

Our connector kit helped validate our ability to work seamlessly in these environments.

Our connections with Cerner and epic are also important in areas will continue to enhance where we know these investments lead to faster deployment more effective solution.

And higher client satisfaction.

Lastly, we've talked a lot in the past about solving pain points for our clients.

We're also working hard to enable an even more seamless experience for their payors.

That involves improving the user experience throughout the entire payment journey, improving payer engagement and adding new offerings and local markets with special attention to Asia Pacific.

Moving onto our second investment area.

Building, an incredible suite of products only gets you. So far so in 2022, we're also significantly expanding our sales relationship management and delivery teams across all sectors. After aggressive hiring in our second half of 2021, we plan to continue growing these teams another 50% on average.

Over fiscal year, 2022, spanning all verticals and geographies.

And our largest verticals, we expect to augment newer regions and look to repeat successful acceleration we saw in Canada. The UK Europe , Latin America, and Asia, We aim to deepen our relationship management and delivery capabilities for our largest verticals to keep up with our rapid client growth and the expanding soft.

We're capabilities available to our customer base.

We anticipate that our newer verticals will benefit from disproportionate expansion of our sales teams and marketing lead generation efforts as we take fly wire story and value proposition rapidly to new clients and capture more of these large addressable markets.

Our strong history of LTV to CAC underscored by our three year average net revenue retention of 123%.

All combined with our proven unit economics demands. This continued go to market investment.

As far as third investment area, it's our amazing fly mates we are.

All aware that the global pandemic has truly changed the marketplace for talent, making it competitive and global and.

In 2022, we plan to continue our investment to aggressively grow and strengthen our flight community.

It is critical for <unk> future success that we compete well in obtaining and retaining our amazing fly mix.

Culture has always been a strategic asset for us and I'm proud that we continue to be recognized for it.

<unk> has also received recognition for our commitment to equity inclusion and diversity. This.

This year, we look to further our efforts to be an employer of choice and to provide our flying at all the resources they need to feel fulfilled in and out of the workplace.

I'm extremely proud of the culture and team we have built here at fly wire.

Our flight 700 of them around the world, representing 40, plus cultures speaking over 30 languages.

Truly operate as one team.

And are the cornerstone of our current and future success.

In closing we believe the opportunity ahead of us is large and growing.

We believe that our investment plan is critical to sustaining long term compounded growth.

Ensuring fly wire has the technology people and culture to digitize and transform how our clients get paid for years and years to come.

I'd now like to turn the call over to Rob <unk>, our president and COO to review some operational highlights from the quarter in the context of our growth strategy Rob.

And we ended the year with a three year average net revenue retention of 123%.

Strong growth in our travel segment as the world returns towards normal activity and even makes up for some lost time.

Notably MLR for this year exceeds recent pre COVID-19 years.

As in previous calls I will start with some examples of expansions during the quarter at our existing customers followed by talking about new customers.

<unk> with health care.

<unk> developed and launched an affiliated provider program with client partners advent health and envision healthcare both were existing customers and their core business.

<unk> health is a faith based nonprofit health care system headquartered in Florida, whose integrated network spans 130 healthcare facilities across nine states, serving more than 5 million patients annually.

Envision healthcare, a leading national Medical group is a family of health care companies focused on delivering high quality care to patients musicians 25000, physicians and advanced practice providers deliver care to 32 million patients each year across the U S.

With the fly wire enabled affiliates program that builds on the work we had done for each client separately.

Physician and hospital partners can collectively bill on their individual visits in a shared digital experience.

In a typical health care billing environment patients received multiple bills from providers delivering care, which can create a confusing experience for patients and impose that administrative burden on providers.

The fly wire program with advent and envision gives patients a consolidated view across their entire patient journey, even though the visits are technically the responsibility of different billing entities.

Switching to education, another client expansion took place with Stanford University.

Sanford started working with <unk> in 2016, primarily around cross border payments.

In an ambitious and innovative effort to improve the student experience Stanford selected <unk> to replace its online tuition payment system.

We're obviously very pleased to have partnered with Stanford as part of their commitment around innovation.

We work continuously with our education clients on enhancements and expansions of their fly wire enabled capabilities.

We also saw growth in existing travel customers to give you a sense with another example, bellacoola largest tele skiing company in the World uses Flywheels invoicing for both Canadian domestic and international payments.

This 2021 winter season, we saw volume, notably higher than pre pandemic 2019.

We've seen a favorable pattern apply wire travel clients enjoying increasing activity as border and travel restrictions ease.

We continue to believe that our focus segments within the broader travel industry, especially around luxury travel operators and premier Dmc's will return faster than the broader industry.

Tim Pronto focuses on the creation and operations of purpose built student accommodations and development of co living residences together they have over 10000 beds under management within their portfolio.

In the fourth quarter, we deepened our relationship by integrating their resident management system and now <unk> is the only way to pay outside of paper checks.

<unk> been acquiring new properties, and we see additional upside as they continue to grow.

As you can see our travel segment continues to cover a broad set of sub segments as illustrated by Bellacoola and Tempur Arnaud.

Turning to our second growth lever new clients. We also continue to win new clients at a rapid rate.

We added over 100, new clients in the quarter for a total of over 400, new clients in 2021.

We saw impressive growth in our newer verticals as we continue to build out our teams.

Or b to B as examples we added Mongo DB database platform provider and biotech, which is the largest closed captioning solution provider in North America.

These forward thinking companies are using <unk> to streamline both domestic and cross border accounts receivable.

They were part of a slate of client wins that represent our best quarter, yet of estimated IRR signings in <unk> <unk>.

US further confidence in our ability to serve this enormous segment and the foundation on which we plan to continue to accelerate our investment in engineering and our go to market team to support this vertical.

We also continued to enjoy these wins with a great group of core technology and financial system partners to play a pivotal role in the operation of these companies.

And then integrated and works seamlessly with fly wire around the payments aspects.

Based in Frankfurt, Germany, Lufthansa was founded in 1991 and has a membership of 67 individual agencies around the world.

<unk> expertise and their local regions and organized around our city center.

With Congress signed with wildfire in late November 2021, and was live by mid December 2021.

Signed with <unk> because of our large global footprint and variety of payment methods. We're excited from the early results based on our initial focus with them on Latin America, and we look forward to expanding our payment solutions with coupons into new regions in early 2022, as well as growing more broadly and travel operators.

Amcs and accommodations.

We also saw strong growth in new clients for education and health care during the quarter for education, our international team is growing and proving effective.

One example, among many wins in education, and <unk> business School, which is a premier business school based in Marseille, Bordeaux, Paris, and too long offering undergraduate and graduate management programs, we will be helping them improve the student experience across domestic and international payments and our plan.

To highlight these kinds of notable wins in exciting markets like France.

And healthcare St. Clair healthcare is the largest integrated health system and north Eastern Kentucky with over 200 staff members, representing more than 30 medical specialties.

Includes the largest rural hospital in the area seven family Medicine locations specialty physician practices and homecare and retail services.

In 2021, St. Clair went live on fly wire with a primary goal of providing their patients are more robust and clear billing and payment experience.

<unk> proven automation and integration into med attack St. Clair patients are now able to manage a single balance across all of their accounts and receive payment plan options tailored to each patient's capacity to pay all through a self service experience further.

<unk> is leveraging fly wire to drive digital first servicing and reduced reliance on inbound and outbound phone calls, allowing them to cut costs and improve the overall patient experience.

Can see between the advent envisioned example, and Sinclair the power of our solutions to help our health care clients you can see from the examples of Bellacoola Pronto capital and Lufthansa City Center DMC.

Our third primary growth lever our channel partnerships also continued to be a great source of growth for the company.

For education, we recently announced a partnership with a census, with technology and expertise to help millions of people save for education retirement and health care.

The partnership is to digitize and streamline tuition payments from 529 College savings plans to higher education institutions throughout the United States.

The solution takes aim at the complexity of 529 payments to schools, we have checks, which can be difficult for institutions to process and reconcile while also making it easier for families to manage payments to schools.

In addition to generating revenue our relationship with the census is strategically valuable as it gives us the basis for establishing a relationship with virtually every higher education institution in the country.

The acquisition of W. P M as an opportunity to leverage our world class payment network with Wpm's customers, who have grown to trust their team and their excellent vertical software.

And also helps us fortify an important geographic end market.

<unk> has more than 170 clients in the UK, where we estimate total addressable payment volume to be approximately $30 billion. Our team has been hard at work integrating the systems and welcoming new flying rates to the larger team.

Things are off to a very good start on the acquisition.

We are well underway and on track with the team and product integration and our joint integrated solution should be available in market in this Q2.

Given the substantial market opportunity of the joint solution will be investing even more in the UK market and go to market and product innovation.

I would now like to turn the call over to Mike Ellis, Our CFO to review our results for the fourth quarter and guidance for 2022.

Mike.

For our financial results prepared in accordance with U S. Generally accepted accounting principles. Please read the preliminary unaudited financial statements included within our earnings release and the audited financial statements that will be included in our Form 10-K , when filed with the SEC.

Revenue less ancillary services for Q4, 2021 was $45 9 million, representing a 56% growth rate compared to Q4 2020.

We processed $3 1 billion and total payment volume during Q4, 2021, which was an increase of 75% from the $1 8 billion. We processed during Q4 2020, we.

We experienced revenue and total payment volume growth across all regions verticals and our revenue types when compared to Q4 2020.

Adjusted gross margin for Q4, 2021 was 66, 9% down from 68, 5% in Q4 2020.

For context, adjusted gross margin for full year, 2021 was 69, 1% compared to 69, 4% for full year 2020.

The lower adjusted gross margin of 66, 9% in Q4 2021 as compared with full year 2021 of 69, 1% is consistent with previous seasonality and adjusted gross margin.

This expansion of our product offering drives both revenue growth and incremental adjusted gross profit dollars.

Moving on to operating expenses technology and development expenses were $9 1 million for Q4 2021, an increase of 36% over the $6 7 million incurred during Q4 2020. This.

This increase was the result of our hiring activities during 2021, where we increased the number of employees within our technology and development teams by over 40%.

Selling and marketing expenses were $15 9 million for Q4 2021, an increase of 92% over the $8 3 million incurred during Q4 2020.

<unk> and administrative expenses were $17 5 million during Q4 2021, an increase of 80% over the $9 7 million incurred during Q4 2020.

Many factors impacted our general and administrative costs incurred during Q4 2021, but the primary factors, including number one our hiring activities number to incremental costs associated with operating as a public company, which consisted primarily of professional fees and insurance costs and number three stock based compensation charges.

Adjusted EBITDA for Q4, 2021 was a negative $1 9 million compared to a positive $1 8 billion. During Q4 2020. This was driven by hiring in 2021 as well as increased cost from operating as a public company adjusted EBITDA was within our implied guidance range for Q4 2021, but we did hire.

Faster than expected during the second half of 2021 across all departments of the company.

For context, we generated $22 7 million of adjusted EBITDA and reported 15% revenue less ancillary services growth rate with a strong adjusted gross margin of 69, 1%. During the year ended December 31 2021.

Moving to the balance sheet with respect to capitalization as of December 31, 2021, we had $389 4 million in cash cash equivalents and $25 9 million long term debt.

But our thoughts are with those in that country. We will continue to monitor these events and their potential impact on our business as they unfold.

That said, we expect revenue less ancillary services to be in the range of $244 million for $252 million, resulting in an annual revenue growth rate of 37% at the midpoint for the year ended December 31 2022.

We remain confident in our original expectation of a rolling recovery from Covid through mid year 2022, and remain excited about the strength across the verticals we serve as this proves out.

We expect adjusted EBITDA to be in the range of 9 million to $13 million for the year ended December 31 2022.

Our full year of 2022 expectations for adjusted EBITDA reflects strong revenue lift the ancillary services as just discussed offset by meaningful investments across the organization will continue to drive revenue growth in 2022 and beyond.

<unk> go to market resources and people as detailed by Mike earlier, we are bullish on the strategic and economic returns on these planned investments.

Primarily associated with becoming a public company that amounts to approximately $10 million.

Finally, we are providing revenue less ancillary services guidance for Q1 2022, as a onetime disclosure to address the seasonality of our business.

Thank you at this time, we'll be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if you'd like to remove your question from the queue for participants using speaker equipment and may be necessary to pick up your handset before pressing the star keys.

One moment, please while we poll for questions.

Our first question is from Dan Perlin with RBC capital markets. Please proceed with your question.

Thanks, Good evening, everyone and great results here.

As has been the case since going public so we appreciate that.

The question I have is around how the domestic education opportunity I know you mentioned, Stanford, which is clearly a marquee client.

But I'm just wondering if you could kind of outline maybe in a broader context, what you're seeing from <unk>.

The institutions that you currently have in order to kind of flip over to the domestic side.

What kind of cadence do you think maybe you could see in terms of gaining some of that.

Market share as we think about this year and then again, maybe understanding the implications to the P&L is as that becomes more prominent again. Thank you.

Hey, Dan Thanks for the question I'm going to hand that one over to Rob.

Close to that and we'll jump in.

So.

First of all thanks, Dan for the question.

One of the core elements of the strategy for the company has been the expansion in domestic education and we continue to win great accounts. Obviously, we shared the name of Stanford today, we talked about Texas A&M last call. We talked about and then you as a domestic win in the UK, meaning we are taking the opportunity to take.

Domestic business not just in the U S, but internationally and it's great business for the company as we said in the past it's a revenue multiplier for US every time, we take on one of these accounts.

These are the accounts that they're on.

The sales cycle side, they are more involved.

Sorry, the second part of your question was just around sort of the financial implications of all of this.

<unk>.

The revenue piece I, just referred to in terms of being a very good revenue multiplier for us.

In terms of the EBITDA contribution. Obviously these are these are good accounts that flowed through nicely.

But again. These are these are great deals with great economics and benefit for the company.

At healthy margins and the only place where the trend might be notable and categorize in that monetization rate, but again, we're focused on.

On the revenue margin and gross profit.

Yes, understood Thats, Great and then just a quick follow up on the.

Or did you feel like as you were moving to certain types of.

New clients, whether that'd be more complex ones in health care or otherwise you needed to have not just the <unk>.

Kind of a well and from Salesforce, but true relationship managers. Thank you.

Yeah I'll take that one this is Mike.

That team growing our ability to get more business to build more senior relationships in these clients.

And ultimately grow so think of it as our teams going deeper meaning fewer accounts more focus by region by sub region by category, even in some some sectors in some industries.

And again, it's it's a clear correlation to that and growth rate.

Does the closer we are to these clients the more we understand the problems.

Problems, turning to new products new capabilities new features.

We're also obviously right there when theyre thinking about a new product.

Our new solution change or maybe up.

New domestic provider and Thats exactly the strategy.

Excellent Thanks, Mike I appreciate it great quarter.

Thank you. Our next question is from Jason Cooper Berg with Bank of America. Please proceed with your question.

Out of the Opex initiatives for the year I know in the past you've talked about a multi year, our medium term target of 25% or so so just any way to think about potential timing there or does it really just kind of depend when the top line growth normalizes down into the medium term target range, which I think is around 20.

Five years to 30% just trying to get a sense of how we should think about trajectory. It does sound like 2022 is just going to be a bit of an outsized investment year.

But obviously theres a lot of opportunity to capitalize on so would just love your thoughts there. Thanks.

Yes. Thanks for the question this is Mike Ellis.

So the way we're thinking about it is that would be the size of the Tam that we get to go after our very significant. So you can kind of see that investment thesis really come through in 2022, and we do have long term aspirations to derive better adjusted EBITDA margins, but that's not the short term outlook, we are viewed ourselves as a long.

Term revenue growth and we will continue to invest appropriately.

To ensure that we're driving long term revenue growth first and foremost with the site towards.

Appropriate profitability levels.

Based on the long term position of the business.

And Jason hopefully this is Mike hopefully people got from additional detail we shared in the investment areas. These are investments that we think is the time is now to make.

The opportunity in front of us is strong.

And at the same time pretty.

Pretty clear indication that we want to show the strength financially in our business.

And I think that came through pretty clearly in the flow through last year, and so we're taking that opportunity to make sure we invest properly.

Energy opportunities there.

Yeah I'll take that one this is Mike again.

Obviously, it's a deal we're quite excited about we've known that team for a while.

Couldn't be more excited having I mentioned in my earlier comments that.

Two trips in the UK to international trips already in the last four or five months and seeing how clients have received the combination as well as how the teams are working.

We expect results again really monetization of payment volume within that region, which is obviously, what we were working to do.

And that deal provides us great opportunity. So I expect to see some benefits in 'twenty, two I expect us to see benefits for years and years to come.

It's a great opportunity for us we're super excited we got the deal done.

Excellent okay, well thank you.

Thank you. Our next question is from Darrin Peller with Wolfe Research. Please proceed with your question.

Hey, Thanks, guys. When we look at the forecast and we try to back out.

The inorganic contribution it looks like Youre in a low to mid 30% range in terms of targets, which obviously is extremely strong off a year that we just had maybe you could just give us a little bit of an understanding as to the same store sales thoughts embedded in that I know the revenue retention it looks like it's continuing to improve.

But just thoughts on same store given the land and expand strategy you guys keep doing well with across multiple verticals.

Versus the new customers coming in because to us. It just seems like there may even believe it or not be some conservatism in that but love to hear your thoughts.

Yeah.

So.

Our belief is that we're going to continue to work on the playbook that we've always worked on right. So if you look at our <unk> you can see that it's back to sort of pre pandemic levels.

Certainly a core element of our growth strategy to drive that NR you heard Mike just a moment ago talk about the addition of the relationship managers.

At our core we believe we're going to keep doing it right. We've got the sort of the product suite, the offering and the strategy that lets us sort of continue to execute on existing client land and expand and so thats. What we plan to do that's been the the larger portion of driving growth in prior years and.

It will be complemented this year by new client growth and new client revenue as well.

But that's those are those are the elements that drive the overall growth rate that we've shown you in the guidance and.

We have every reason to be confident that we're going to continue with that land and expand successfully.

Okay.

I mean, there seems to be a.

I'll jump in this is Mike I've got four kids I always say that's the question of what you could do I like the most which I always struggle to answer but.

I'll go first and talk to Robb for me its travel the travel team has done an amazing job over the last two years.

Navigating a pandemic.

Grew that business, even in 'twenty actually grew all verticals.

In 'twenty, even in the face of the first wave of the pandemic and then to see what they've been able to do in.

In 2021 significantly growing that business and positioning us really well for 'twenty, two and beyond for me.

Just massively exciting we havent, even seen the world come back and the strength of that pipeline and the new client signs is really great. So that's mine I don't know Rob if you have a different one it's really the travel travel is very exciting each of the vertical that was very exciting. If you. If you look at <unk>. This is sort of the first call that we've made much commentary around the <unk> side of things.

As you will see us this year continue to expand that team.

We are feeling really good about the kinds of clients that we are adding and the value proposition that we have for them.

And in terms of growing that team, adding more leadership into that team, adding more product capability in terms of integrations and things like net suite and Salesforce like where we're moving on multiple fronts in the in the <unk> space and so very excited about that one as well.

Got it.

Alright, thanks, guys nice job.

Thanks Sarah.

Thank you. Our next question is from Ash, one share of icon with Citi. Please proceed with your question.

Thanks.

Mike.

Good quarter.

I guess, let me start with the sales head count.

The investment in growth could you remind how you typically think of sales productivity and sort of the lag I guess between adding sales and getting the result is that the.

Is that the six months at the back half.

Orientation that you've talked about or is that just to get the salespeople.

So we'll start adding people sooner than the back half of the year, there sort of the timing of bringing people on the timing of them getting productive and the timing of clients actually producing revenue and all of that so we're pretty good at all three of those steps, but the reason you will.

See the effect, mostly in the back half as we've talked about often.

There is some lag time between when the when the clients or the sales cycle start they sign and then theyre implemented even even when that implementation cycle is quite quick and so that's why you see sort of the effect driven primarily.

Okay.

And if I think beyond <unk>, if you could maybe provide some incremental color with regard to just cadence of how are you.

How do you see the.

Revenues coming through because last year was kind of.

Little bit wonky with Delta genomics, <unk> and radius.

Effect, so both from a revenue growth perspective, and Youre, making investments this year so from a.

From a margin perspective, how are you thinking of cadence through the year.

It's really a function of the vertical makeup of our business and if you think about Q3 will be a very important quarter for the business in 2022, it will be our biggest quarter. It always is our biggest quarter both in revenue and adjusted EBITDA generation.

Then after that it comes down to Q1, and then Q4 and then Q2. So I would expect that you should expect that revenue and adjusted EBITDA of 2022 on a quarterly basis should follow the relatively consistent pattern than previous year's reported.

Got it thank.

Thank you guys.

Thanks, guys. Thank you.

Our next question is from John Davis with Raymond James. Please proceed with your question.

Hey, good afternoon, guys I want to spend a minute on W. P. M. Mike maybe just talk a little bit about the revenue model today kind of what you have embedded in the 'twenty two guide.

Sure Hey, Jamie Thanks for the question so.

WEL again.

Think of it as a software.

Again non venture backed business.

I had two founders who a bootstrap it since the beginning and have built a great business and so again, it's a company we've known for a while have had great respect for them and to be able to get a deal done. It was really exciting so they have not monetize payments directly.

It is really the crux of the opportunity that we see so think of it as software revenue as Mike articulated.

Articulated.

<unk> single digit inorganic part of our 2022.

Then when you think of the opportunity it is exactly that where can our flight where can the combination of teams and technology help drive payment monetization inside the UK and that combination is quite exciting.

Last month I was at a conference with.

A huge amount of clients many of them shared clients.

As well as net new clients and I think the opportunity is really there for us to deliver value. So already excited the team integrated offerings already underway. The response has been super strong.

Again, I think it's just going to help us accelerate as we said earlier in the comments.

Okay, Great and then maybe I just wanted to touch on <unk> for a second obviously a 140%.

'twenty one.

It's pretty remarkable.

We benefited from.

Kind of schools.

More full enrollment.

How should we think about the normalized MLR should we think about kind of 2018 in 2019 levels of the I'll call. It $1 25 to 130 level clearly you are growing a little bit above.

Youre kind of medium to long term, 30% range in the near term, but just maybe spend a minute talking about the kind of in our Rps plus plus the new wins and how should we think about that over.

Over the next year or so.

And.

And so for US that's at 123 that includes that Covid impacted year, we've talked about prior and obviously the record year last year and an IRR. So I think that helps blend out that turn but it's right in the range that you shared.

And then I would just say, obviously, we look to add new clients and add new.

I think as one of the exciting things about <unk> and why we're so confident in that kind of compounding growth story over the long term.

Yeah.

Okay I appreciate the color thanks, guys.

Thank you. Our next question is from Tien Tsin Huang with Jpmorgan. Please proceed with your question.

Hey, Thanks, so much great results here I guess on bookings and I know you've got a question on harvesting about AAR.

And your pipeline and how the year closed.

How are you thinking about bookings in 2022, how might it be different in terms of composition of quality versus what you saw in 2021 any any color there.

Hey, Tien Tsin got here good to hear your voice good to hear your voice.

Very very healthy dynamics in the pipeline very healthy dynamics in adding new clients.

As we mentioned we're going to be growing the go to market team by what amounts to about another 50% growth in sort of go to market capabilities across the teams and so with that we expect to show.

That kind of IRR build that supports the future growth.

Great I appreciate that Rob I was just my quick follow up.

This is on pricing and I know, Mike you'd want us talking about take rate. So it's more about just the pricing environment, given inflation and really volatile FX right now.

Any thoughts on what might be different here again same thing 22 versus 21 with respect to pricing.

So.

Again, where we're fortunate not to be one of those companies that have sort of a cost of goods subject to inflationary pressures right and so overall we.

Our business model is such that as the pricing changes for the underlying service, we'll do the transactional work on top of it but sort of don't feel that we see sort of a difference in inflation in that regard.

In terms of FX, we have always been good at the <unk>.

Hedging of risk in that regard and so we don't really see anything different or planned for anything different in terms of 'twenty two versus 21.

Excellent.

Thank you so much.

Thank you. Our final question comes from Bob Napoli with William Blair. Please proceed with your question.

Hi, Thank you good afternoon.

Nice job in the quarter good outlook.

So just you did your first acquisition as a public company I know, Mike you guys have done a couple previously.

Previously.

But whatever I would imagine you're you're engaged or are you looking for new verticals add ons.

What.

Metrics or criteria.

Are you using and should we expect you to be active in 2022.

Yeah, Hey, Bob good to hear your voice.

For us its WPS is a great example of the type of deal.

Less likely in the first two is the ability to enter a new region or new industry.

Through an acquisition and so that those.

Those three pillars are still the core strategy.

We have our Corp Dev in M&A team that is.

Continues to be quite quite active in.

Also very picky as I've shared before the WPM deals a great deal for US It was the right team and culture fit as well as the right thing for clients.

And that was really a cornerstone we're going to keep looking for that we don't feel like there's pressure to do something but at the same time.

I wouldn't be surprised if you saw us active but we're going to find the right thing first.

Thank you and then.

Education, obviously third quarter is a big quarter, but the first quarter.

As we sit here today, you know who is enrolled and what University for this semester is that is your visibility for for the year on and for third quarter on.

The education business.

How would you how would you look at the the visibility today for your business not only for <unk>.

The education, but obviously, that's the biggest sector.

But for the other parts of your business.

The last two years has taught us anything that it's quite a dynamic world.

And so I would say we sit here feeling quite good in the first two months of the year at the same time.

We've just come through two years of global pandemic and things things have changed.

Very quickly on all of us around the world. So we're cautiously optimistic but feeling really good about the first two months of the year.

Thank you and if I could just sneak in you haven't had any issue with cross border payments.

With Swift and now with the.

Obviously.

The sad.

Currencies in Europe has that had any effect on your business.

Yeah, Robert speaking here, Bob first just just quickly to acknowledge the difficult circumstances for Ukraine and that we're all thinking about those difficult circumstances.

In terms of our business and in terms of Swift.

So we're sort of done that work and overall at this time don't see a disrupting other aspects of the business.

Okay. Thank you appreciate it nice job.

We have reached the end of the question and answer session and I will now turn the call over to Mr. Mike <unk> for closing remarks.

This concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation.

Q4 2021 Flywire Corp Earnings Call

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