Q4 2023 Flywire Corporation Earnings Call

[music].

Operator: Greetings and welcome to Flywire Corporation's Quarter, 2023 Earnings Conference. Next time, all participants are on a listen-only basis. This question and answer session will follow the formal. If anyone should require operator assistance during a conference call, please let us know. Press Star Zero on your telephone.

Greetings and welcome to fly wire corporations fourth quarter 2023 earnings conference call.

This time, all participants are in a listen only mode.

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.

Operator: As a reminder, this conference is being held, and it is now my pleasure to introduce your host, Akil Hollis, Vice President, Investor Relations. P and A. Thank you. You may begin. Thank you and good afternoon.

As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host a keel Hollis Vice President Investor Relations and F. PNA. Thank you you may begin.

Thank you and good afternoon.

Akil Hollis: With me on today's call are Mike Massaro, Chief Executive Officer, Rob Borgel, President and Chief Operating Officer, and Mike Ellis, Chief Financial Officer. Our fourth quarter and fiscal year 2023 earnings press release, supplementary presentation, and, when filed, Quarantine K can be found at ir.flywire.com. During the call, we will be discussing certain forward-looking information. However, actual results could differ materially from those contemplated by these forward-looking statements.

With me on today's call are Mike Massaro, Chief Executive Officer, Rob <unk>, President and Chief operating Officer, and Mike <unk> Chief Financial Officer.

Our fourth quarter fiscal year 2023 earnings press release supplemental presentation, and then quantum K can be found at <unk>.

Dot com.

During the call we will be discussing second quarter information.

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

Akil Hollis: We will also be discussing certain non-GAAP financial measures. Please refer to our press release and SEC filings for more information on the risks regarding these forward-looking statements, which could cause actual results to differ materially from the required disclosures and reconciliations related to non-GAAP financial measures.

I'll be discussing certain non-GAAP financial measures.

Please refer to our press release and SEC filings for more information on the risks regarding these forward looking statements.

It could cause actual results to differ materially and the required disclosures and reconciliations related to non-GAAP financial measures.

Mike Massaro: This call is being webcast live and will be available for replay on our website. I'd now like to turn the call over to Mike Mathurin. Thank you, Akil, and thank you to everyone that is joining us today. We are pleased to share our Q4 and fiscal 2023 results with you all, showing strong performance across the business. We are also eager to share our business priorities and financial outlooks for 2024. In a few minutes, Rob Orgel, our President and COO, and Mike Ellis, our CFO, will go into greater detail about our results for Q4 2023. We will try to keep our prepared remarks short to leave more time for questions.

This call is being webcast live and will be available for replay on our website I'd now like to turn the call over to Microsoft.

Thank you <unk> and thank you to everyone that is joining us today, we're pleased to share our Q4 and fiscal 2023 results with you all showing strong performance across the business.

We are also eager to share our business priorities and financial outlook for 2024.

In a few minutes, Rob Oracle, our president and COO and Mike Ellis, Our CFO will go into greater detail about our results for Q4 2023, we will try to keep our prepared remarks short to leave more time for questions.

Mike Massaro: I will start with a few financial highlights from Q4 2023. Revenue less ancillary services was $96.1 million in Q4, an increase of 43% year-over-year. Adjusted gross profit for the quarter was $63.5 million, an increase of 42% year-over-year.

I will start with a few financial highlights from Q4 2023.

Revenue less ancillary services was $96 1 million in Q4, an increase of 43% year over year.

Adjusted gross profit for the quarter was $63 5 million, an increase of 42% year over year and adjusted EBITDA was $7 7 million for the quarter, increasing by $6 7 million year over year.

Mike Massaro: And adjusted EBITDA was $7.7 million for the quarter, increasing by $6.7 million year-over-year. These Q4 results now cap off another great year for Flywire, and we'll take a few moments to talk about some of the key achievements in fiscal year 2023. First, starting with our fiscal year 2023 financial highlight. Flywire's revenue less ancillary services grew by 43% year-on-year, and our adjusted EBITDA increased to $42 million, or 11% of revenue less ancillary services. Both results were well above our targets discussed at the beginning of the year.

These Q4 results now cap off another great year for fly wire I will take a few moments to talk about some of the key achievements in fiscal year 2023.

First starting with our fiscal year 2023 financial highlights.

Why whereas revenue less ancillary services grew by 43% year on year, and our adjusted EBITDA increased to $42 million or 11% of revenue less ancillary services bolt results were well above our targets discussed at the beginning of the year.

Mike Massaro: In FY 2023, we also added more than 700 new clients across all verticals and now serve more than 3,800 clients globally. Finally, we moved more than $24 billion through our Global Payment Network in 2023, a 33% increase year over year. We also achieved a number of business highlights across all verticals and geographies. In education, we continue to expand our higher education footprint globally, including notable growth in the United Kingdom and throughout Asia Pacific. We also continue to see success in our land and expand strategy in the United States, increasing the footprint of our full suite solution, landing many blue chip clients. In travel, we experienced strong growth in terms of new clients signed, most notably with tour operators and destination management companies, in the EMEA and APAC regions.

In FY 2023, we also added more than 700, new clients across all verticals and now serve more than 3800 clients globally.

Finally, we moved more than $24 billion through a global payment in 2023% to 33% increase year over year.

We also achieved a number of business highlights across all verticals and geographies.

In education, we continue to expand our higher education footprint globally, including notable growth in the United Kingdom and throughout Asia Pacific.

We also continued to see success in our land and expand strategy in the United States, increasing the footprint of our full suite solution landing many blue chip clients.

In travel we experienced strong growth in terms of new clients signed most notably with tour operators and destination management companies.

In EMEA and APAC regions.

Mike Massaro: In B2B, we continue to sign large enterprise deals and see success in our partner strategy. In healthcare, we accelerated our partnership strategy, solidifying relationships with Cerner and FinThrive. We bolstered our global payment network with a focus on supporting our strategic payer markets like India and China, enhancing our relationships with WeChat Pay, as well as three of the largest banks in India. Lastly, we continued our strong track record of strategic M&A with the acquisition of StudyLink, and our sizable cash position allows us to pursue additional M&A that fits our core thesis. Now, let's look ahead to 2024.

In <unk>, we continue to sign large enterprise deals and see success in our partner strategy.

In health care, we accelerated our partnership strategy solidifying relationships with Cerner and fin thrive.

We bolstered our global payment network with a focus on supporting our strategic payer markets like India, and China, enhancing our relationships with wechat pay as well as three of the largest banks in India.

Lastly, we continued our strong track record of strategic M&A with the acquisition of study link in our sizable cash position allows us to pursue additional M&A that fits our core thesis.

Now, let's look ahead to 2024, Mike Ellis and Rabago will talk about full year 2024 guidance in detail, but our plan anticipates strong growth numbers in a complex macro environment further expansion of EBITA in alignment with our multi year expectations and delivering positive net income.

Mike Massaro: Mike Ellis and Rob Orgel will talk about full year 2024 guidance in detail, but our plan anticipates strong growth numbers in a complex macro environment, further expansion of EBITDA in alignment with our multi-year expectations, and delivering positive net income. We are truly excited for what is ahead for Flywire as we look at 2024. We remain focused on optimizing our go-to-market capabilities, expanding our Flywire advantage, and strengthening our Flymate community. We are continuously working to optimize and invest in our go-to-market efforts to sustain our growth. For example, in fiscal year 2023, we improved our sales ramp time from hire date to first deal close by more than 30 percent.

We're truly excited for what is ahead for fly wire as we look at 2024.

We remain focused on optimizing our go to market capabilities, expanding our flywheel advantage and strengthening our fly make community.

We are continuously working to optimize and invest in our go to market efforts to sustain our growth algorithm.

For example in fiscal year 2023, we improved our sales ramp time from higher data first deal close by more than 30%.

Mike Massaro: This year, we plan to increase our investment in sales and relationship managers by more than 15% in aggregate, spread across all verticals and geographies. As we continue to grow, we will do so in the context of a very disciplined hiring plan that focuses on key roles to meet our objectives. Another area of investment in our go-to-market strategy is our channel partnership strategy. We plan to grow our channel effectiveness and deepen partnerships by investing in channel sales, integration engineering resources, and building more certified integrations with our partners. Today, we have more than 90 partnerships and tech ERP integrations across our verticals that help us identify new clients, find clients faster, and accelerate our implementation.

This year, we plan to increase our investment in sales and relationship managers by more than 15% in aggregate spread across all verticals and geographies.

As we continue to grow we will do so in the context of a very disciplined hiring plan that focuses on key roles to meet our objectives.

Another area of investment and go to market is our channel partnership strategy.

We plan to grow our channel effectiveness deepen partnerships by investing in channel sales teams.

Integration engineering resources and building more certified integrations with our partners.

Today, we have more than 90 partnerships and tech ERP integrations across our verticals that help us identify new clients signed clients faster and accelerate our implementations.

Mike Massaro: We have seen significant success with partners like Ellucian and Bank of America, and we strongly believe further investment in channeled partners can be a significant driver of future revenue. As for expanding our Flywire advantage, we remain focused on product and payment innovation to power the vertical ecosystems in the industries that we serve. This year, we are focusing on our ability to embed payments into the existing software and workflow processes of clients, partners, and payers to add more value to our growing ecosystems. A cornerstone of us capitalizing on this opportunity is our API strategy to better serve our clients and partners and complement the Flywire software solutions they use today. In 2023, we began to invest in building a public API to expose the power of the entire Flywire payments platform.

<unk> seen significant success with partners like Lucien and Bank of America, and we strongly believe further investment in channel partners can be a significant driver of future revenue.

As for expanding our flywheel advantage, we remain focused on product and payment innovation power the vertical ecosystems in the industries that we serve this.

This year, we are focusing in our ability to embed payments into the existing software and workflow processes of clients partners and payors to add more value to our growing ecosystems are cornerstone of us capitalizing on this opportunity is our API strategy to better serve our clients and partners and complement the flu.

My wire software solutions they use today.

In 2023, we began to invest in building a public API to surface. The power of the entire fly why our payments platform. This allows our customers across all verticals to integrate our API into their existing erp's or software to leverage everything from our T Y C and AML processes all the way.

Mike Massaro: This allows our customers across all verticals to integrate our API into their existing ERPs or software to leverage everything from our KYC and AML processes all the way through our global payment processing, so they can control their workflows and user experience in a PCI compliant fashion. We believe Flywire will be even more unique in our ability to provide a ready-to-use platform for complex domestic and cross-border payments, along with optional flexibility to use components of our powerful API when clients seek deeper integrations into their workflows.

Through our global payment now.

So they can control their workflows and user experience in a PCI compliant fashion.

We believe fly wire will be even more unique and our ability to provide a ready to use platform for complex domestic and cross border payments, along with optional flexibility to use components of our powerful API when clients seek deeper integrations into their workflows.

Mike Massaro: Likewise, we'll be exposing our new payables platform as an API, which can be embedded into any AP process of an ERP. We have proven our ability to identify new use cases where software drives value, and we will continue to invest more to drive growth and value for our clients. One example is our investment in StudyLink, which we acquired in Q4, and whose software connects agents in Australian education institutions and powers the application and offer of admission and acceptance processes for their international students.

Likewise, we will be exposing our new payables platform as an API, which can embed into any AEP process of an ERP.

We have proven our ability to identify new use cases, where software drives value in payments and.

And we will continue to invest more to drive growth and value for our clients. One example is our investment in study link, which we acquired in Q4 and whose software connects agents in Australian education institutions empowers the application an offer of admission and acceptance process for their international students.

Mike Massaro: Embedding Flywire's payment technology into StudyLink's international admissions, application, and agent management software unlocks our opportunity to monetize the nearly $1 billion in deposit volume their platform is involved in today. Our vision is to extend the StudyLink platform beyond Australia, leveraging Flywire's global clients and teams. We will also focus on the strategic payables opportunity, particularly around commission payments in our travel and education verticals. As a reminder, we are applying our existing framework of using software in our global payment network to solve specific payable use cases for our clients. In travel, payable volumes, clients, and our network of beneficiaries continue to grow since we piloted the solution last year. For many European BMCs, Flywire is the only way they can both receive and pay out cross-border, high-value travel payments.

Embedding fly wires payment technology into study links international admissions application in Egypt management software unlocks our opportunity to monetize the nearly $1 billion in deposit volume their platform is involved in today. Our vision is to extend the study linked platform beyond Australia leveraging fly wire.

As global clients and team.

We will also focus on the strategic payables opportunity, particularly around commission payments in our travel and education verticals.

As a reminder, we are applying our existing framework of using software and our global payment network to solve specific payable use cases for our clients.

In travel payables volumes clients in our network of beneficiaries continues to grow since we piloted the solution last year for many European Dmc's flowers, the only way they can both receive and pay out cross border high value travel payments.

Mike Massaro: And in the education vertical, we are growing the number of clients who are using our solution to pay commissions to international education agents. We are also expanding our partner ecosystem of U.S. investment savings accounts. We're using Flywire's payable solution to digitally disperse 529 plan payments to U.S. colleges and institutions.

And in our education vertical we are growing the number of clients who are using our solution to pay commissions to international education agents. We are also expanding our partner ecosystem of U S investment savings accounts, who are using fly wires payable solution digitally dispersed 529 planned payments to U S College.

<unk> and institutions.

Mike Massaro: Finally, we also continue to be focused on strengthening and growing our Flymate community. As I've referenced in the past, our culture and Flymates are what make Flywire successful. We believe that our financial success enables us to give back to our communities and empowers our Flymates to build their careers of a lifetime. As we continue into 2024, we remain committed to building and maintaining high-performance teams, developing exceptional talent, and having a positive impact on the world around us. In closing, I could not be more proud of the progress we made in 2023. I am excited for the years ahead as we seek to continue to grow Flywire into one of the leading global payments companies of our generation. Before turning the call over to Rob, I wanted to officially welcome our incoming CFO, Cosmin Pidegoi, who will officially join Flywire on March 4th.

Finally, we also continue to be focused on strengthening and growing our fly make community.

As I referenced in the past our culture and fly mates what makes fly why are successful we believe that our financial success enables us to give back to our communities and empowers our fly mates to build their careers at a lifetime as we continue into 2024, we remain committed to building and maintaining high performance teams developing.

Exceptional talent and having a positive impact on the world around us.

In closing I could not be more proud of the progress we made in 2023 I'm excited for the years ahead as we seek to continue to grow fly wire into one of the leading global payments companies of our generation.

Before turning the call over to Rob wanted to officially welcome our incoming CFO <unk> <unk>, who will officially join fly wire on March 4th.

Mike Massaro: Most recently, a senior vice president in finance at PayPal, Cosmin brings decades of senior financial leadership and a proven track record of scaling organizations in complex global environments. He is the ideal CFO to help us achieve the next level of scale and solidify our leadership position in the global payments ecosystem. I also wanted to thank Mike Ellis for his many contributions to Flywire over the past nine years, including establishing many of our finance functions, taking the company public, and managing many strategic acquisitions.

Most recently as senior Vice President in finance at Paypal, Cosmen brings decades, senior financial leadership and a proven track record of scaling organizations in complex global environment is.

He is the ideal CFO to help us achieve the next level of scale and solidify our leadership position in the global payments ecosystem.

I wanted to also thank Mike <unk> for his many contributions to fly wire over the past nine years, including establishing many of our finance functions, taking the company public and managing many strategic acquisitions. He has been a trusted partner to me and we appreciate the seamless CFO transition that he is enabling.

Mike Massaro: He has been a trusted partner to me, and we appreciate the seamless CFO transition that he is enabling. I would now like to turn the call over to Rob Orgel, our President and COO, to review some operational highlights from the quarter.

I would now like to turn the call over to Rob <unk>, our president and CFO to review some operational highlights from the quarter Rob.

Rob Orgel: Thanks, Mike. Good afternoon, everyone. After another strong year as a public company, I'd like to start today by revisiting the algorithm we use to achieve sustained long-term growth. Our model includes, first, expansion with our existing clients, second, annualization of clients signed the prior year, and third, revenue from clients signed in the current year. We are also adding new payer and non-client services as a fourth component that feeds our annual growth. Our growth starts with expansion with existing clients, which is driven by our primary focus on delivering exceptional solutions and service for our clients across all of our verticals. For fiscal year 2023, we recorded net revenue retention of 125 percent, continuing in a favorable range denoted by the 123 percent three-year average between 2019 and 2021 we shared at our analyst day and the 124 percent we reported for 2022. Our technology and client service teams are obsessed with meeting our clients' needs.

Thanks, Mike Good afternoon, everyone.

After another strong year as a public company I'd like to start today by revisiting the algorithms, we use to achieve sustained long term growth.

Our model includes first expansion with our existing clients second and utilization of client signed the prior year and.

Third revenue from client signed in the current year.

We are also adding new payer and non client services as a fourth component that feeds our annual growth.

Our growth starts with expansion with existing clients, which is driven by our primary focus on delivering exceptional solutions and service for our clients across all of our verticals. Our fiscal year 2023, we recorded a net revenue retention of 125% continuing and a favorable range. They noted.

The 123% three year average between 2019 and 2021, we shared at our analyst day.

And the 124% we reported for 2022.

Our technology and client service teams are obsessed with meeting our clients' needs.

Rob Orgel: Their hard work and our new solutions allow us to earn clients' trust, deliver client retention that exceeds 95% per annum, grow clients effectively, and produce a net promoter score in the 60s. Next, in the growth algorithm, we benefit each year from the annualization and growth of clients signed in the prior year. As Mike mentioned, we signed over 700 clients in 2023, including over 170 in the fourth quarter.

Their hard work and our new solutions allow us to earn clients' trust.

Deliver client retention that exceeds 95% per annum CRO clients effectively and produce a net promoter score in the sixty's.

Next in the growth algorithm, we benefit each year from the annualized nation and growth of clients signed in the prior year.

As Mike mentioned, we signed over 700 clients in 2023, including over 170 in the fourth quarter.

Our expected revenue per clients signed in 2023 remains strong and as usual, we only realized a fraction of that revenue last year and.

Rob Orgel: Our expected revenue per client signed in 2023 remains strong, and, as usual, we only realized a fraction of that revenue last year. In 2024, based on our track record of positive client experiences, we expect to benefit from both a full year's revenue from these clients, as well as further penetration of our clients' payers. Third, we recognize a portion of the revenue from new clients in the year we sign them. We invest in our go-to-market capabilities to maintain our long-term growth. We estimate that our penetration of the total addressable market across our four verticals is in the low single-digit percentage range.

In 2024 based on our track record of positive client experiences.

Expect to benefit from both a full year's revenue from these clients as well as further penetration of our clients Payors.

Third in the algorithm, we recognize a portion of the revenue from new clients in the year, we signed that we.

We invest in our go to market capabilities to maintain our long term growth we.

We estimate that our penetration of the total addressable market across our or verticals within the low single digit percentage range.

We see opportunity everywhere and plan to continue to build go to market teams to capitalize on these opportunities and increase our market share.

Finally, as we address the needs of payers in our ecosystem, we have begun to generate meaningful revenue that is not associated with any particular clients.

Rob Orgel: We see opportunity everywhere and plan to continue to build go-to-market teams to capitalize on these opportunities and increase our market share. Finally, as we address the needs of payers in our ecosystem, we have begun to generate meaningful revenue that is not associated with any particular client. For example, as we grow our pay-any-school capabilities rapidly, we will recognize revenue from tuition paid to schools that are not Flywire clients. In other examples, we are helping students procure other needed services, such as student health insurance required in Australia and with moving money from India to cover living expenses outside of tuition.

For example, as we grow our pay any school capabilities rapidly we recognize revenue from tuition paid to schools that are not fly why our clients.

Other examples we are helping students procure other needed services, such as student health insurance required in Australia, and with moving money from India to cover living expenses outside of tuition.

We are excited to layer and payer services to our solution set and believe there can be a multiyear roadmap in this area.

Next I'd like to briefly discuss how we grew across our four verticals during the fourth quarter.

In our education vertical we estimate our tam to be about $660 billion.

This plan includes U S Cross border Education International Cross border Education, and domestic education, both in the U S and internationally.

Rob Orgel: We are excited to layer in payer services to our solution set and believe there can be a multi-year roadmap in this area. Next, I'd like to briefly discuss how we grew across our four verticals during the fourth quarter. For our education vertical, we estimate our TAM to be about $660 billion. This PAN includes U.S. cross-border education, international cross-border education, and domestic education, both in the U.S. and internationally.

Includes higher Ed <unk> hundred 12 trade school summer programs and more we.

We are penetrating our Tam through broad integrations with best in class enterprise systems, as well as deeper relationships with education agents prevalent and international education.

We are also expanding our Tam by offering new solutions to payers and schools during the fourth quarter, we signed several new clients in our U S Cross border and domestic sub segments as well as across Europe, Asia Pacific and Latin America.

Rob Orgel: It includes higher education, K-12, trade schools, summer programs, and more. We are penetrating our TAM through broad integrations with best-in-class enterprise systems, as well as deeper relationships with education agents prevalent in international education. We are also expanding our TAM by offering new solutions to payers and schools. During the fourth quarter, we signed several new clients in our U.S. cross-border and domestic sub-segments, as well as across Europe, Asia Pacific, and Latin America. Recently, we went live with our domestic solution at Adelphi University, a private university based in Long Island, New York, with over 7,500 students. Adelphi had been a cross-border education client of ours since 2013, representing another example of where we were able to leverage our trusted relationship that originated with our cross-border solution to expand into a much broader offering. For our U.S. cross-border segment, we went live with Florida State University and Oklahoma State University. Outside of the U.S., we went live with George Brown College.

Recently, we went live with our domestic solution at a Delphi University, a private University based in long Island in New York with over 7500 students.

Delphi had been a cross border education client of ours in 2013, representing another example of where we had been able to leverage our trusted relationship that originated with our cross border solution to expand into a much broader offering.

For our U S Cross border segment, we went live with Florida State University, and Oklahoma State University.

Outside of the U S. We went live with George Brown College, Georgia Brown College as a publicly accredited top 10 Research College in Canada with nearly 27000 full time students.

We are now live with both our cross border and domestic education solutions.

<unk> chose to work with <unk> to add more payment options enhanced functionality support education agent related payment flows and top notch customer support.

George Brown was one of the education clients that were signed in Q3, but went live after the peak season, all delayed education implementations that we referred to in our Q3 call have now gone live.

In healthcare, we estimate our Tam to be about $500 billion and we are serving many of the largest U S Hospital systems.

Rob Orgel: George Brown College is a publicly accredited top 10 research college in Canada with nearly 27,000 full-time students. We are now live with both our cross-border and domestic education. GBC chose to work with Flywire to add more payment options, enhanced functionality, support education agent-related payment flows, and top-notch customer support. George Brown was one of the education clients that was signed in Q3, but went live after the peak season. All the delayed education implementations that we referred to in our Q3 poll have now gone live.

We are expanding how we work with partners in this channel to provide deeper integrations and even more flexible affordability solutions.

We are also expanding into specialty sub segments. During the fourth quarter. We went live with ortho and Nebraska are specialty hospital based in Omaha, Nebraska focused on orthopedic care.

Since implementing <unk> payment solutions, both on Nebraska saw nearly 80% of all payments come through the patient self service portal.

Brian wire solution has helped us specialty provider significantly reduced staff hours spent on manually reconciling payments and has received high patient satisfaction scores.

Overall, we are seeing early traction in new sub segments of the health care market as our receivables software solution helps reduce outstanding patient balances and increased collection rates for specialty hospital providers.

Rob Orgel: In health care, we estimate our TAM to be about $500 billion, and we are serving many of the largest U.S. hospital systems. We are expanding how we work with partners in this channel to provide deeper integrations and even more flexible affordability solutions. We are also expanding into specialty subsets. During the fourth quarter, we went live with OrthoNebraska, a specialty hospital based in Omaha, Nebraska, focused on orthopedic care.

In travel we estimate our Tam to be about $530 billion we.

We have categorized our clients as destination management companies or Dmc's global travel operators and accommodations providers during the fourth quarter, we signed new clients in each of our existing sub segments. We.

We are also exploring new areas of focus such as ocean experiences and niche online travel agencies or otas.

Recently, we went live with Aqua expeditions of luxury travel company specializing in small ship cruises and remote and exotic destinations such as the Peruvian Amazon and Mekong Delta, Vietnam, and Cambodia, along with yachting experiences in Indonesia in the Galapagos Islands integrating.

Rob Orgel: In implementing Flywire's payment solutions, OrthoNebraska saw nearly 80% of all payments come through the patient self-service portal. Flywire's solution has helped the specialty providers significantly reduce staff hours spent on manually reconciling payments and has received high patient satisfaction scores. Overall, we are seeing early traction in new subsegments of the healthcare market as our receivable software solution helps reduce outstanding patient balances and increase collection rates for specialty hospital providers. For travel, we estimate our TAM to be about $530 billion. We have categorized our clients as destination management companies, or DMCs, global travel operators, and accommodation providers.

Integrating with <unk> has helped Aqua expedition streamline their accounts receivable payment reconciliation process, enabling faster payment notification and funds disbursement capabilities.

We are excited to tap into this new sub segment of travel and expand with ocean experience providers around the world.

Finally, our <unk> vertical covers upfront and estimated to be about 10 trillion.

Where we focus on providing mid market enterprise clients with a sophisticated integrated accounts receivable solution.

Although starting from a smaller base currently our <unk> business is our fastest growing vertical and we believe has a very promising future impact supply wire.

Rob Orgel: During the fourth quarter, we signed new clients in each of our existing subsegments. We are also exploring new areas of focus, such as ocean experiences and niche online travel agencies, or OTAs. Recently, we went live with Aqua Expeditions, a luxury travel company specializing in small ship cruises in remote and exotic destinations such as the Peruvian Amazon and the Mekong Delta of Vietnam and Cambodia, along with yachting experiences in Indonesia and the Galapagos Islands.

Within this massive <unk> Tam by wire is gaining traction in various sub segments of the market, including insurance software and tech manufacturing and distribution franchises and others that include the public sector.

We recently went live with the European Union Aviation Safety agency or <unk> for short, which is an agency of the European Union responsible for overseeing and coordinating aviation safety across its member countries.

<unk> is directly integrated into aces.

Rob Orgel: Integrating with Flywire has helped Aqua Expeditions streamline their accounts receivable payment reconciliation process, enabling faster payment notification and funds disbursement capabilities. We are excited to tap into this new sub-segment of travel and expand with ocean experience providers around the world. Finally, our B2B vertical covers a broad TAM estimated to be about $10 trillion, where we focus on providing mid-market enterprise clients with a sophisticated and integrated accounts receivable solution. Although starting from a smaller base currently, our B2B business is our fastest growing vertical and we believe it has a very promising future impact for Flywire. Within this massive B2B TAM, Flywire is gaining traction in various subsegments of the market, including insurance, software, and tech, manufacturing and distribution, franchises, and others that include the public sector. We recently went live with the European Union Aviation Safety Agency, or EASA for short, which is an agency of the European Union responsible for overseeing and coordinating aviation safety across its member countries.

To ensure a consistent billing and payment workflow with their existing ERP system.

A key benefit being automated payment reconciliation to remove manual processes around accounts receivable.

While on the topic of ERP integrations.

Also mentioned that we built out and or lie with an integration where kind of a cloud automation and integration platform for enterprises that seamlessly connects to widely used enterprise accounting systems such as SAP.

Page intact, Microsoft dynamics, 365 business Central Intuit, Quickbooks online and Oracle net suite.

We believe that further building out our integrations with leading ERP integrators and systems will help us further penetrate our large tam opportunity.

Stepping out of the vertical and moving to our efforts towards efficiency and scale I would highlight that in 2023, while we grew revenue less ancillary services by 43%, we reduced our hiring by almost 50% in terms of incremental run rate spend versus what we added in 2022.

Our pace of hiring in 2023 helps drive personnel expenses as a percentage of revenue less ancillary services down by over 530 basis points, when comparing 2023 to 2022.

We generate the scale efficiencies by working as a very collaborative team that is focused on careful pacing of hiring and managing of expenses.

Rob Orgel: Flywire is directly integrated into ASA's SAP instance to ensure a consistent billing and payment workflow with their existing ERP system, with a key benefit being automated payment reconciliation to remove manual processes around accounts receivable. While on the topic of ERP integrations, I'll also mention that we built out and are live with an integration with Workado, a cloud automation and integration platform for enterprises that seamlessly connects to widely used enterprise accounting systems such as SAP, Sage Intact, Microsoft Dynamics 365 Business Central, Intuit QuickBooks Online, and Oracle NetSuite. We believe that further building out our integrations with leading ERP integrators and systems will help us further penetrate our large TAM opportunities. Stepping out of the verticals and moving to our efforts towards efficiency and scale, I would highlight that in 2023, while we grew revenue excluding ancillary services by 43%, we reduced our hiring by almost 50% in terms of incremental run rate spend versus what we added in 2022. Our paced hiring in 2023 helps drive personnel expenses as a percentage of revenue-less ancillary services down by over 530 basis points when comparing 2023 to 2022. We generate these scale efficiencies by working as a very collaborative team that is focused on careful pacing of hiring and managing expenses.

We expect to continue this focusing on managing all expenses, including personnel expense in 2024 to produce additional improvement in run rate personnel expense relative to revenue and to improve adjusted EBITDA margin.

I will now turn the call over to Mike Ellis to go over our results for the quarter and year as well as provide guidance for 2024.

Nick.

Thank you Rob good afternoon, everyone today I'll provide an overview of our results for the fourth quarter, and then discuss our outlook for Q1 and the full year.

Revenue like the ancillary services was $96 1 million in Q4, representing a 43% growth rate compared to Q4 2022.

On a constant currency basis, our revenue less ancillary services growth rate for Q4, 2023 was 41% compared with Q4 2022.

Our revenue growth rate was driven by increases in total payment volume due to strong growth from our international cross border payment volumes in our education vertical, particularly with our U K higher education clients as well as growth from our travel clients.

FX rate changes represented a tailwind in comparison to Q4 of 2022 and a tailwind against the guidance. We provided for Q4 and full year on our last earnings call, which were based on prevailing rates on September 32023.

Purposes of comparing our Q4 2023 reported results against our most recent Q4 guidance, we had an FX tailwind that amounted to approximately 0.7 million on Q4 reported results.

Q4 revenue less ancillary services outperformance compared to our expectations was driven by stronger than expected volumes from new UK higher education clients strong monetization of payment volumes better than expected utilization of our payment plan capabilities in the United States and higher Canadian volume, which we believe was driven by student.

Mike Ellis: We expect to continue this focus on managing all expenses, including personnel expense, in 2024 to produce additional improvement in run rate and personnel expense relative to revenue and to improve adjusted EBITDA margin. I will now turn the call over to Mike Ellis to go over our results for the quarter and year, as well as provide guidance for 2024.

Accelerating some 2024 payments.

With respect to payment volumes, we processed $5 4 billion. During Q4, 2023, which represented an increase of 33% from the $4 1 billion processed during Q4 2022.

Mike Ellis: Thank you, Rob. Good afternoon, everyone. Today, I'll provide an overview of our results for the fourth quarter and then discuss our outlook for Q1 and the full year. Revenue Less Ancillary Services was $96.1 million in Q4, representing a 43% growth rate compared to Q4 2022. On a constant currency basis, our revenue excluding Ancillary Services growth rate for Q4 2023 was 41% compared with Q4 2022. Our revenue growth rate was driven by increases in total payment volume due to strong growth from our international cross-border payment volumes in our education vertical, particularly with our UK higher education clients, as well as growth from our travel clients. FX rate changes represented a tailwind in comparison to Q4 of 2022 and a tailwind against the guidance we provided for Q4 and full year on our last earnings call, which was based on prevailing rates on September 30, 2023. For purposes of comparing our Q4 2023 reported results against our most recent Q4 guidance, we had an FX tailwind that amounted to approximately $0.7 million in Q4 reported results.

Typically transaction revenue increased 45% compared to Q4 2022, driven by a 46% increase in transaction payment volume platform and usage based fee revenue increased 32% compared to Q4 2022, driven by a 5% increase in platform and usage based payment volume as well as from <unk>.

Form fees that do not carry any associated payments volumes, including revenue associated with the contributions of our payer services offerings and our recent acquisition of study length.

We generated $63 5 million in adjusted gross profit during the quarter, representing a 42% increase compared to the $44 5 million earned during Q4 2022.

Specifically, our adjusted gross margin was 56, 1% for Q4, 2023 up 10 basis points from 66.0% as adjusted for Q4 2022.

The year over year change in adjusted gross margin was driven primarily by monetization rates on transactions and improved economics with our payment partners. However, this was offset by strong growth of our transaction revenue versus our platform revenue, particularly from our travel vertical where credit cards are predominant.

Mike Ellis: Q4 revenue-less ancillary services outperformance compared to our expectations was driven by stronger-than-expected volumes from new UK higher education clients, strong monetization of payment volumes, better-than-expected utilization of our payment plan capabilities in the United States, and higher Canadian volumes, which we believe was driven by students accelerating some 2,024 payments. With respect to payment volumes, we processed $5.4 billion in Q4 2023, which represented an increase of 33% from the $4.1 billion processed during Q4 2022. Specifically, transaction revenue increased 45% compared to Q4 2022, driven by a 46% increase in transaction payment volume. Platform and usage-based revenue increased 32% compared to Q4 2022, driven by a 5% increase in platform and usage-based payment volume, as well as from platform fees that do not carry any associated payment volumes, including revenue associated with the contributions of our payer services offerings and our recent acquisition of study loans.

Adjusted EBITDA for the quarter was $7 7 million, an increase of $6 $7 million over the 1.0 million reported for Q4 2022.

With respect to capitalization as of December 31, 2023, we had $655 million in cash and cash equivalents no long term debt and $122 5 million shares of common stock outstanding. We also increased our borrowing capacity to $125 million through an updated credit facility with an expanded <unk>.

Five year term, while we're not planning to draw on this facility in the near term it provides financial flexibility for funding M&A and other strategic investments.

Moving onto guidance.

For full year 2024, which is based on foreign exchange rates as of December 31, 2023, we expect revenue less ancillary services to be in the range of 483 million to $509 million, representing a year over year growth rate of 30% at the midpoint.

This growth reflects continued confidence in our go to market and ongoing penetration of the Tam across our verticals. Our guidance reflects a net reduction of low teens millions of dollars to revenue related to recent announcements that the Canadian government will reduce applications for international study permits.

Mike Ellis: We generated $63.5 million in adjusted gross profit during the quarter, representing a 42% increase compared to the $44.5 million earned during Q4 2022. Specifically, our adjusted gross margin was 66.1% for Q4 2023, up 10 basis points from 66.0% as adjusted for Q4 2022. The year-over-year change in adjusted gross margin was driven primarily by monetization rates on transactions and improved economics with our payment partners. However, this was offset by strong growth of our transaction revenue versus our platform revenue, particularly from our travel vertical, where credit cards are predominant. Adjusted EBITDA for the quarter was $7.7 million, an increase of $6.7 million over the $1.0 million reported for Q4 2022. With respect to capitalization, as of December 31st, 2023, we had $655 million in cash and cash equivalents, no long-term debt, and $122.5 million shares of common stock outstanding.

We expect to deliver full year 2024, adjusted EBITDA in the range of $65 million to $76 million at the midpoint of our full year 2022 guidance range, we expect to generate approximately 320 basis point improvement in adjusted EBITDA as a percentage of revenue less ancillary services for the year.

We expect to achieve adjusted EBITDA margin expansion through strong revenue growth and disciplined spending offset in part by the adjusted gross margin impact from our ongoing shift in revenue mix.

In addition to the impact on our full year revenue guidance. The Canadian regulatory changes are expected to impact the seasonality of our business in 2024 ordinarily revenue from education customers in Canada is earned relatively evenly throughout the year.

In the new Canadian undergraduate student permit policies that were announced in late January provinces are not expected to allocate study permits at schools until late Q1 or early Q2. This is reducing applications admissions decisions and payments for many international students so far in Q1.

Mike Ellis: We also increased our borrowing capacity to $125 million through an updated credit facility with an expanded five-year term. While we're not planning to draw on the facility in the near term, it provides financial flexibility for funding M&A and other strategic investments. Moving on to guidance, the full year 2024, which is based on foreign exchange rates as of December 31st, 2023, we expect revenue less ancillary services to be in the range of $483 million to $509 million, representing a year-over-year growth rate of 30% at mid-pandemic. This growth reflects continued confidence in our go-to-market strategy and ongoing penetration of the TAM across Alberta. Our guidance reflects a net reduction of low-teens millions of dollars in revenue related to recent announcements that the Canadian government will reduce applications for international study permits.

The dynamics are expected to push some payments into subsequent quarters as permits are available in Canada or students seek alternative destinations.

With that context, Q1, 2024 revenue less ancillary services is expected to be in the range of $106 million to $111 million. This guidance reflects a reduction of Q1 revenue in the mid single digit million dollars due to changes in Canada.

Rounding out the guidance discussion, we expect Q1 adjusted EBITDA to be in the range of 9 million to $11 million.

Overall, we are excited about our strong 2024 and look forward to what we expect will be a strong year of revenue and adjusted EBITDA growth.

I want to finish by saying that it's been a great honor to be floodwaters CFO for the past nine years <unk> is well positioned for continued success and I will continue to cheer them on.

I'll now turn it back over to the operator for questions.

Mike Ellis: We expect to deliver full year 2024 Adjusted EBITDA in the range of $65 million to $76 million. At the midpoint of our full year 2022 guidance range, we expect to generate approximately a 320 basis point improvement in Adjusted EBITDA as a percentage of revenue-less ancillary services for the year. We expect to achieve adjusted EBITDA margin expansion through strong revenue growth and discipline spending, offset in part by the adjusted gross margin impact from our ongoing shift in revenue generation. In addition to the impact on our full-year revenue guidance, the Canadian regulatory changes are expected to impact the seasonality of our business in 2024. Ordinarily, revenue from education customers in Canada is earned relatively evenly throughout the year. However, under the new Canadian undergraduate student permit policies that were announced in late January, provinces are not expected to allocate study permits to schools until late Q1 or early Q2.

Later.

Thank you ladies and gentlemen at this time, we'll be conducting a question and answer session.

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In the interest of time, please limit yourself to one question and one follow up so we may get to everybody's questions.

Our first question comes from the line of Dan Perlin with RBC capital markets. Please proceed with your question.

Thanks, Good evening and a great quarter.

I wanted to ask about net revenue retention rate of 125% like it's accelerated from 22 and the average that we've seen from 19 to 21, which is pretty impressive and usually not necessarily the case and see this accelerate so I'm just trying to piece out a little bit how we're thinking about.

Where that's coming from specifically so is that is it mix within the new cohorts in verticals that youre, bringing on.

Or is it more or less kind of the revenue opportunities that you're talking about within those new cohorts, just being larger as they're coming on to the platform.

Mike Ellis: This is reducing applications, admissions decisions, and payments for many international students so far in Q1. These dynamics are expected to push some payments into subsequent quarters as permits are available in Canada or students seek alternative destinations. With that context, Q1 2024 revenue less Ancillary Services is expected to be in the range of $106 million to $111 million. This guidance reflects a reduction of Q1 revenue in the mid-single-digit millions due to changes in Canada.

So Dan it's Rob I'll jump in on this first one so we've always talked about the multiple levers that drive NR and the continuing.

Story for US is that all of those levers are continuing to work. So as you go across the verticals. What Youll see is we're always working to increase the footprint, we have inside the clients or whether it's more hospitals more schools in departments.

Or more of a businesses sort of operations and subsidiaries.

The first driver of us to continue to expand our footprint inside those clients second thing you see is we expand based on the products that we supply so whether it's going pre service on top of post service at a hospital, whether it's adding more of our product functionality from our domestic capability all of that is what's helping helping drive.

Operator: Rounding out the guidance discussion, we expect Q1 adjusted EBITDA to be in the range of $9,000,000 to $11,000,000. Overall, we are excited about a strong 2024 and look forward to what we expect will be a strong year of revenue and adjusted EBITDA growth. I want to finish by saying that it's been a great honor to be Flywire's CFO for the past nine years. Flywire is well positioned for continued success, and I will continue to cheer them on. I'll now turn it back over to the operator for questions. Thank you. Ladies and gentlemen, at this time, we will be conducting a question and answer session. If you'd like to ask a question, you may press star 1 on your telephone. A confirmation tone will indicate your line; press Star 2. It may be necessary to pick up your hands.

These things there are other additional benefits, where we do things like grow the payment network that allows us to capture more payments for more places around the world, but the first two that I mentioned are the main drivers there are sort of a healthy healthy set of drivers on NR that we feel really good about.

Okay. That's great and then just a quick follow up on the seasonality Mike.

Mike you were just kind of running through this quick but one of the things that you guys have kind of hammered.

Hammered into us as that kind of <unk> and <unk>, obviously being typical peak seasons for travel and all that.

It has changed some of the seasonality of the business and so I'm, just making sure that obviously <unk> I understand the Canadian argument, but if it spills into second quarter.

Dan Perlin: Time, please limit yourself to one, one follower. We'll get to everybody's. Our first question comes from the line of Dan Perlin with RBC Capital. Thank you. Thanks, good evening, and a great quarter! You know, I wanted to ask about the net revenue retention rate of 125%. Like, it's accelerated from 22 and the average that we've seen from 19 to 21, which is pretty impressive and usually not necessarily the case to see this accelerate. So, I'm just trying to piece out a little bit how we think about where that's coming from specifically. So, is that mix within the new cohorts and verticals that you're bringing on, or is it more or less the revenue opportunities that you're talking about within those new cohorts just being larger as they come? But Dan, it's Rob. I'll jump in on this first one.

Is it kind of like second quarter third quarter that were ramping or should we expect kind of the guide to be maybe slightly heavier on the margin side within second quarter relative to what we would have normally thought given the seasonality of travel.

Sure. Thanks for the question, it's Mike <unk>.

As you know, we guided to about 30% for the full year and as discussed the Canadian regulate regulation changes will impact that quarterly revenue and seasonality specifically impacts Q1.

And we do expect Q1 to be our slowest growth quarter, and I would expect that Q2 will be higher than the average in the second half will be right around the average annual growth rate hopefully that gives you enough context there.

Our next question comes from the line of will Nance with Goldman Sachs. Please proceed with your question.

Hey, guys I appreciate you taking the question nice quarter today.

I was wondering if you could maybe just kind of go through the Canada stuff again to make sure everyone's getting the moving pieces. There I thought I heard maybe two separate impacts one around the seasonality and the timing of payments and one around the regulatory changes overall then it sounded like there was a low teens impact in the numbers.

Rob Orgel: So we've always talked about the multiple levers that drive NRR, and the continuing story for us is that all those levers are continuing to work. So, as you go across the verticals, what you'll see is we're always working to increase the footprint we have inside the client. So, whether it's more hospitals, more schools and departments, or more of a businesses, sort of operations and subsidiaries, you know, the 1st driver is to continue to work and continue to expand our footprint inside those clients. 2nd, thing you see is we expand based on the products that we supply. So, whether it's going pre service on top of post service at a hospital, whether it's adding more of our product functionality from our domestic capability. All of that is what's helping to drive these things.

For the full year, so I just.

$5 million you called out in the first quarter is that overlapping with the low teens for the full year or is that a timing impact in the low teens are separate and just.

Bigger picture any color on just what kind of assumptions you guys are having to make in the forecasting around this issue and just how you think about the range of outcomes over the course of the year.

Yeah, Hey will this is Mike I'll start and I'll, probably just Rob is as we kind of go into how we modeled it in <unk>.

Sure.

Rob Orgel: There are other additional benefits where we do things like grow the payment network that allows us to capture more payments from more places around the world. But the 1st and 2 that I mentioned are the main drivers there of sort of a healthy, healthy set of drivers on NRR that we feel really good about. Okay, that's great. And then just a quick follow up on seasonality. Mike, you were just kind of running through this quick.

We've got a.

Our history of dealing with certain types of shifts like this in enrollment from different countries.

We had a large diverse client base, we're heavily connected to our clients and when we see something like Canada. We're talking to them. We have a massive network of educational agents that are also preparing those applications.

Throughout the year and so we get input from them.

As the year goes on and you can expect us to talk about the release of permits the study permits as they become more released.

Mike Ellis: But one of the things that you guys have kind of hammered into us is that 2Q and 4Q are obviously typical peak seasons for travel and how that's changed some of the seasonality of the business. And so I'm just making sure that obviously 1Q I understand the Canadian argument, and it, but if it spills into second quarter, is it kind of like second or third quarter that we're ramping up? Or should we expect the guide to be maybe slightly heavier on the margin side within the second quarter relative to what we would have normally thought given the seasonality of travel? Sure, thanks for the question. My name is Mike Ellis.

Updates from us throughout the year and also potentially different areas of study right of students.

Potentially can't get a permit in a place like Canada. They may end up in a different location and again <unk> benefits from that.

That diversity and so we did call out an impact in Q1 single digit millions and full year low teen millions and.

And I'll, let Rob talk about exactly how we structured that yes. So will let me just.

Clarify one thing that I thought it was in the middle of your question there.

Those two effects are essentially inclusive, meaning when we talked about Q1, having the low sorry, the mid single digit millions and then we talked about the full year as low teens.

Not add those that is cumulative or integrated in terms of just making you understand the effect on the two different periods. So the way we got to that measurement obviously, we.

Mike Ellis: So, as you know, we got it to about 30% for the full year, and as discussed, the Canadian regulatory changes will impact quarterly revenue and seasonality, specifically as it impacts Q1, and we do expect Q1 to be our slowest growth quarter, and I would expect that Q2 will be higher than the average, and the second half will be right around the average annual growth rate. Hopefully, that gives you enough context there. Our next question comes from the line of Will Nance with Goldman Sachs. Please receive your question. Hey guys, I appreciate you taking the time to answer the question. I had a nice quarter today.

I have gone and done our work to understand what we hear from our agent community from our client community and based on that we modeled out a series of scenarios. So a number that will be relevant for you. If you look at the business about 14% of the business is Canadian higher Ed and so we worked through scenarios about sort of the impact.

The recapture and as we went through those sort of inform scenarios, that's where we came out at the mid teen millions sorry, sorry at the low teens millions for the full year impact.

Got it Thats, all very clear and I appreciate the detailed answer there and then maybe.

Will Nance: I was wondering if you could maybe just kind of go through the Canada stuff again to make sure everyone's getting the moving pieces there. I thought I heard maybe two separate impacts, one around the seasonality and the timing of payments and one around just regulatory changes overall, that it sounded like there was a low team impact in the numbers for the full year. So I just, you know, the $5 million that you called out in the first quarter, is that overlapping with the low teams for the full year, or is that a timing impact, and the low teams are separate and just, you know, the bigger picture in any color on just what kind of assumptions you guys are having to make in the forecasting around this issue and just how you think about the range of outcomes over the course of the year. Thanks. Yeah, hey, Will, this is Mike.

I want to follow up on earlier question on some of the MLR dynamics I guess in particular looking at the cohort slide that you guys provided in the deck.

You guys are seeing kind of mid to high teens growth in cohorts from seven years ago, obviously super impressive.

Just wondering if you could talk about specifically, what's driving the continued strong growth amongst some of your back book cohorts I know you touched on.

On a lot of the levers that you guys have just in general but for such season vintages to be growing so strong.

Callouts on kind of what you guys are seeing success on over the past year. Thanks.

Yes, maybe the one extra dimension of granularity I can add from my prior comment is the way to understand this is to understand that we do see growth just based in the core volumes that we see from the cohorts meeting.

Increased student penetration and increased payment volume from the offerings that we have all of that is part of the hard work of our relationship managers instilling best practices at our clients our reputation our network all the things that help grow sort of that base, but you'll also see is that within obviously a subset of any given year's cohort, we manage to do that.

Mike Massaro: I'll start, and I'll probably toss it to Rob as we kind of go into how we modeled it. In short, you know, we've got a history of dealing with certain types of shifts like this and enrollment from different countries. You know, we have a large, diverse client base. We're heavily connected to our clients, and when we see something like Canada, we're talking to them.

Land and expand meaning a new product or service or going domestic.

As a as an obvious example, but it could be that or our collection management or our E store all of those will take some of those members of that older cohort and allow us to dramatically increase the revenue that Delphi as the example, we called out on this earnings call are at 2013 client.

Mike Massaro: We have a massive network of educational agents that are also preparing those applications throughout the year. And as the year goes on, you can expect us to talk about the release of permits, the study permits, as they become more available. You expect updates from us throughout the year and also potentially different areas of study. Right? If students, you know, potentially can't get a permit in a place like Canada, they may end up in a different location.

But went full domestic capabilities just now so all of that helps feed the NRI of that.

Longer longer.

Sure.

Our next question comes from the line of Jeff Cantwell with Wells Fargo. Please proceed with your question.

Hey, thanks, so much.

Andrea Chuck Kelly Seaport research I, just want to make sure on the.

Mike Massaro: And again, Flywire benefits from that diversity. And so we did call out an impact in Q1, single digit millions and full year, low teen millions. And I'll let Rob talk about exactly how we structured that. Yeah.

2020 for guidance.

Mike can you talk a little bit about to your revenue growth.

And show the research services $483 million to $509 million.

Rob Orgel: So, Will, let me just clarify one thing that I thought was in the middle of your question there. Those two effects are essentially inclusive, meaning when we talked about Q1 having the low, sorry, the mid single-digit millions. And then we talked about the full year as low teens. Do not add those.

Can you talk about the volume.

Oh incremental volume that you're expecting in 2024.

It's coming from education or your other three verticals.

And where specifically you're thinking about volume growth.

Rob Orgel: That is cumulative or integrated in terms of just making you understand the effect on the two different periods. So the way we got to that measurement, obviously, we have gone and done our work to understand what we hear from our agent community and from our client community. And based on that, we modeled out a series of scenarios. So a number that will be relevant for you, if you look at the business, about 14 percent of the business is Canadian higher education. And so we worked through scenarios about sort of the impact and the recapture. And as we went through those sort of informed scenarios, that's where we came out at the mid teen millions. Sorry, sorry, the low teens millions for the full year impact. Got it.

Domestic versus international just want to get a flavor for how you are.

<unk>, where your volumes would be growing in 2020 forward. Thanks very much.

Hi, Jeff It's Mike So first off the range that we provided was 483% to $509 million just to clarify the top end of that range listen the business and historically has always grown based off of payment volume improvement over time and Thats one of the things that we're really proud of the quality of our revenue growth has been <unk>.

<unk> since the beginning of our business.

And to your point, we do expect continued improvement with <unk> and travel to continue.

Will Nance: That's all very clear, and I appreciate the detailed answer there. And then, you know, maybe I want to follow up on an earlier question on some of the NRR dynamics. And I guess in particular, looking at the cohort slide that you guys provide in the deck, you guys are seeing kind of mid to high-segment growth in cohorts from seven years ago, obviously super impressive. Just wondering if you could talk about, you know, specifically what's driving the continued strong growth among some of your backbone cohorts? I know you touched on a lot of the levers that you guys have just in general, but, you know, for such seasoned Vintages to be growing so strong, any call outs on kind of what you guys are seeing success on over the past year?

Contributing to our overall growth rate in payment volumes as well as our education.

Business as you know the health care business is predominantly within our platform.

Business and less about transaction volumes in that vertical.

So we expect continued really good throughput based on all of the new client signs and again DNR are that we've talked about.

Okay, great. Thanks, so much and then Mike I just wanted to ask you one on your on your obviously, we've been very appreciative.

I appreciate all that you've contributed to you.

By buyer over time, so just wondering if they wanted to get your thoughts on there as you leave the company in the World.

What are your thoughts are understated company and going forward you know obviously, you've done a lot on the.

The focus on the margins and so forth. So just wanted to get your sense of how you are handing things over to <unk> for anything that cognex can contribute on this call as far as you know how are you thinking about going forward, we'd like to get a sense of what the transition like and then how we should think about margins and so forth.

Rob Orgel: Yeah, maybe the one extra dimension of granularity I could add from my prior comment is the way to understand this is to understand that we do see growth just based on the core volumes that we see from the cohorts, meaning increased student penetration, increased payment volume, from the offerings that we have all of that as part of the hard work of our relationship managers instilling best practices at our clients, our reputation, our network, all the things that help grow sort of that What you'll also see is that within, obviously, a subset of any given year's cohort, we managed to do the land and expand, meaning a new product or service or going domestic as an obvious example, but it could be that or our collection management or our e-store. All of these will take some of those members of that older cohort and allow us to dramatically increase revenue. Delphi is the example we called out on this earnings call, right? 2013 client, but we went full domestic capabilities just now.

Anything you guys can talk about would be great. Thanks, very much. So this is Mike lso two questions here with respect to your adjusted gross margin question. We do expect continued revenue mix shifts over 2024, and I would suggest similar to last year that the range of the AGM should be declining somewhat.

100, 200 basis points, but thats all built into the great adjusted EBITDA throughput that we've guided to at the midpoint for 2024, So again really good business, whether it be travel education and will continue to enjoy those those healthy adjusted gross margins with respect to my view of the business.

I've said it in my prepared remarks.

<unk> positioned it comes down to the fact that the team is focused on execution and that really cuts across every single why make that works for the business in to that.

Rob Orgel: So all of that helps feed the NRR of that longer, longer-term go cohort. Our next question comes from Jeff Cantwell with Wells Fargo. Please proceed with your question. Hey, thanks so much.

It's been an honor and a privilege to be part of that type of execution mindset and again, just given the addressable markets that the company has to go after is really astounding and lots of room to continue to grow and that's why we're confident with this 30% growth.

Jeff Cantwell: I'm the Jeff Cantwell support researcher. Just wanted to make sure on that. Mike, can you talk a little bit about the revenue growth Less Ancillary Services $483 to $509 million? Can you talk about the volume? incremental volume that you're expecting in 2024, whether that's coming from education or your other three verticals, and where specifically you're thinking about volume growth across, you know, domestic versus international. I just want to get a flavor for how you are considering where your volumes will be growing in 2024. Thanks very much. Hi Jeff, it's Mike.

Forecast in the guidance range finally, with respect to transitioning to cosmetic I welcome caused them into the flywheel of our team.

We will be available for him for as long as he needs me to get to understand the business and be able to transition all of the.

Institutional knowledge that I may retain but one thing good about <unk> is there really is no single point of failure. There is a lot of redundancy of knowledge across the organization. So I am 100% covenant that caused them to be able to go to get up and running very quickly.

Our next question comes from the line of Nathan <unk>.

And with Deutsche Bank. Please proceed with your question.

Mike Ellis: So first off, the range that we provided was $483 to $509 million, just to clarify the top end of that range. Listen, the business historically has always grown based on payment volume improvement over time, and that's one of the things that we're really proud of. The quality of our revenue growth has been exceptional since the beginning of our business. And to your point, we do expect continued improvement with B2B and travel to continue to contribute to our overall growth rate and payment volumes, as well as our education business. As you know, the healthcare business is predominantly within our platform business, and less about transaction volumes in that vertical. But so we expect continued really good throughput based on all of the new client signups and, again, the NRR that we've talked about. Okay, great. Thanks so much.

Hi, guys. Thanks for the question and Great results. So in your prepared remarks, you talked about a few drivers of revenue outperformance in the quarter that I was hoping we could dive a little deeper on so two things you specifically mentioned, we're one better monetization of payment volumes in the two better utilization of payment plans.

So maybe you can you give a little more color on what happened in the quarter that led to better monetization rates and then likewise, what drove that higher utilization of payment plans in the U S in the fourth quarter.

Hi, it's Rob I'll jump in and start here so.

Most part of it was a straightforward really strong performance across the business spread. So if you looked in education, which was I think the focus of your question performed really well.

<unk> was in the U D.

Okay, and the U S, notably in the U S around that payment plan usage, but lots of good revenue performance elsewhere as well I think in that payment plan utilization it's around.

Mike Ellis: And then, Mike Ellis, I wanted to ask you on your, obviously you've been very appreciative of all that you've contributed to Flywire over the time, so I just wanted to get your thoughts on, as you leave the company, what are your thoughts on the state of the company and going forward, you know, obviously you've done a lot on the focus on margins and so forth, so I just wanted to get your sense of how you are handing things over to Cosway, and is there anything that Cosway can contribute on this call as far as, you know, how he's thinking about going forward, just would like to get a sense of, you know, what the transition is like, and then, you know, how we should think about margins and so forth. Anything you guys can talk about would be great. Thanks very much.

Some enhancements, we've made and the user experience as well as just the expanding footprint for our domestic platform.

In terms of health care, we had quarterly revenue growth year over year, which was good after a few tough quarters traveling BTB performing exceptionally well really growing very nicely.

And in terms of the adjusted EBITDA. It was helped mostly by the extra revenue, but also by the strong gross margin.

Got it that's helpful color. So the follow up I had a few weeks ago, you announced the new partnership with the state Bank of India to help digitize payments in the country and I know so given some of the commentary from last quarter about FX volumes in India. There's obviously been a lot of focus on payment choice in that country, specifically, so I'm, hoping you could talk a little bit more about.

Mike Ellis: So this is Mike Ellis. So two questions here with respect to your adjusted gross margin question. You know, we do expect continued revenue mix shifts over 2024. And I would suggest, similar to last year, that the range of the adjusted gross margin should be declining somewhere between one and 200 basis points.

The new partnership and what it means with regards to your ability to capture FX FX volumes going forward in India, and I guess, maybe building on that can you talk maybe more about similar partnerships you're exploring in other geographies I know you had a few comments in your prepared remarks, there. So any color there would be very helpful.

Mike Ellis: But that's all built into the great adjusted EBITDA throughput that we've guided to at the midpoint for 2024. So, again, really good business, whether it's B2B, travel, or education. And with respect to my view of the business, I've said it in my prepared remarks. Flywire is well positioned.

Yes, so a couple of things so first of all Spi one of the very largest Indian banks, we haven't done similar partnerships with three of the top banks all part of our strategy for making sure that we deliver a great user experience in India, and we really are the easiest way to pay for folks overall.

That combined with the other aspects of our strategy, mostly focusing around agents in our servicing of the agent ecosystem. All contributed to a really strong quarter for India. So India overall for US performed very nicely growth rates sort of in line with the overall corporate average.

Mike Ellis: It comes down to the fact that the team is focused on execution, and that really cuts across every single flymate that works for the business. And for that, it's been an honor and a privilege to be a part of that type of execution mindset. And again, just given the addressable markets that the company has to go after are really astounding, and there is lots of room to continue to grow. And that's why we're confident with this 30 percent growth forecast in the guidance range. Finally, with respect to transitioning to Cosmin, I welcome Cosmin to the Flywire team. I will be available for him for as long as he needs me to get to understand the business and be able to transfer all of the institutional knowledge that I may retain. But one thing good about Flywire is that there really is no single point of failure.

And so we view that as a very good result, so all part of our strategy to continue.

Sort of growing that FX volume and continuing to drive.

<unk> growth out of India definitely one of our key markets, yes, the only thing I'd add to that is just obviously, we're looking for other ways in which we can go ahead and add more online banking connectivity. We believe there is huge potential in digitizing a lot of the flows where banking rails in the future.

Our next question comes from the line of Darrin Peller with Wolfe Research. Please proceed with your question.

Hey, maybe just start off with the strength you've been seeing in customer adds which obviously has been coming in I think it's around 170, 180 clients or customers per quarter. The last couple of quarters.

Mike Ellis: There's a lot of redundancy of knowledge across the organization, so I am 100 percent confident that Cosmin will be able to go up, get up and running very quickly. Our next question comes from the line of Nate from Deutsche Bank, and I would love to answer your questions. Hi guys, thanks for the question and great results. So in your prepared remarks, you talked about a few drivers of revenue outperformance in the quarter that I was hoping we could dive a little deeper on. So two things you specifically mentioned were one, better monetization of payment volumes, and two, better utilization of payment plans. So maybe you could give a little more color on what happened in the quarter that led to better monetization rates, and then, likewise, what drove that higher utilization? U.S. Hi, it's Rob.

Clearly higher than it was for.

Our quarter as well before that so just a bit more of an understanding as to the verticals around it and if some of them are smaller customers, perhaps in the travel side or.

Anything else that makes up that that strength.

And then if theres any also also just any changes in the sort of vintage analysis set another way if there's like a translation of revenue from those at a different piece. So you would be good to know thanks guys.

Hey, Dan and Rob here.

So this was another really strong quarter of 170 plus clients signed.

In this case education actually got the top of the table in terms of driving the most client wins. So just beat out travel by a little bit but in this case, a really strong quarter for the education team alongside a strong quarter for travel nice adds <unk> and healthcare as well.

Rob Orgel: I'll jump in and start here. So, you know, for the most part, it was a straightforward, really strong performance across the business, right? So if you looked at education, which was, I think, the focus of your question, performed really well. That strength was in the UK and the US, notably in the US around that payment plan usage, but lots of good revenue performance elsewhere as well. I think in that payment plan utilization, it's around some enhancements we've made to the user experience, as well as just the experience expanding footprint for our domestic platform. In terms of healthcare, we had quarterly revenue growth year over year, which was good after a few tough quarters. Travel and B2B are performing exceptionally well, really growing very nicely. And, you know, in terms of the adjusted EBITDA, it was helped mostly by the extra revenue but also by the strong gross margin. Got it; that's a hopeful color.

On the deal size that average deal size, just slightly lower than what you've seen across our sort of historical average, but only just slightly and again strong and in a very good range. So we're pretty happy with all of those results in terms of the numbers and the deal size lots of good sized deals in there too.

That's great to hear.

I don't think I would point out the final thing, Yes go ahead Rob.

I'll just make one other point.

We're also feeling really good about our investments in the go to market rates that youre seeing these numbers come in strong and the thing that we are very bullish on is that we are seeing very good efficiency as we invest in go to market. So when we look at the return on that investment in sales, we're seeing them get productive faster, we're seeing win rates be higher we have a very favorable ratio.

In terms of their contract value they get signed in the first year relative to their cost. So they are delivering well over there a nice multiple of their salary in terms of contract value wins in that first period than if you look over at the RM side, which is the other side of our investment in go to market where assai.

Mining out substantial.

Growth targets for RMS as they get assigned out into the field on our accounts and we feel really good about those results too.

Rob Orgel: So the follow-up question I had, so you know, a few weeks ago, you announced a new partnership with the State Bank of India to help digitize payments in the country. And I know, given some of the commentary from last quarter about FX volumes in India, there's obviously been a lot of focus on payment choice in that country. So I'm hoping you can talk a little bit more about the new partnership and what it means with regard to your ability to capture FX volumes going forward in India, and I guess maybe building on that, can you talk maybe more about similar partnerships you're exploring in other geographies? I know you had a few comments in your prepared remarks there. So any color would be very helpful.

That's great. That's good to hear then it's a diverse set of cross segments and then just a quick question on the CFO side or the financial side first Mike Congrats and all the best and then.

[noise] Cosmen congrats to you too and welcome but when we think about the guidance for <unk>. It's about 300 bps of margin expansion. This year I think it's closer to the low end of the 300 to 600 bps that you typically you've called out but I know last year. You also have kind of started off lower and ended up with over 500 bps margin expansion. So I'm just I guess, we're just trying to figure out if there is an element of just starting off the year the right way.

In providing for some upside or is this really something about the model that might might lead that to be the case this year.

Rob Orgel: Yeah, so a couple things. First of all, SBI, one of the very largest Indian banks, and we have done similar partnerships with three of the top banks, all part of our strategy for making sure that we deliver a great user experience in India, and we really are the easiest way to pay for folks. Overall, that combined with the other aspects of our strategy, mostly focusing on agents and our servicing of the agent ecosystem, all contributed to a really strong quarter for India. So India, overall, for us, performed very nicely, with a growth rate sort of in line with the overall corporate average. And so we view that as a very good result.

Yeah I'll take that one this is Mike. So you know what I would say is.

You've seen a bit of a track record for months.

As we look to set out for a year.

We want to look at how the year builds as we look into revenue. We also have control over our cost dynamics as we've proven I think over the last couple of years I think it is cosmine comes in you know I don't think youre going to see a significant shift in how we look at that Ah I think youre going to see US continue to look at every bit of spend we have interim.

The company and make sure we feel like we're good and on track when it comes to our top line numbers and we're going to invest in the business and in our.

I think in an efficient way as people have seen from us. So hopefully people are taken away. It looks very similar in that way, we may be a bit boring, but we think we are delivering great results.

Our next question comes from the line of Jason Kupferberg with Bank of America. Please proceed with your question.

Rob Orgel: So all part of our strategy to, you know, continue growing that FX volume and continuing to drive impressive growth out of India, definitely one of our key markets. Yeah, Nate, the only thing I'd add to that is just, obviously, we're looking for other ways in which we can go ahead and add more online banking connectivity. We believe there's huge potential for digitizing a lot of flows with banking rails in the future.

Hi, Good afternoon. This is Tyler Dupont on for Jason Thanks for taking the questions I wanted to start by asking about changes in the Canadian environment. It sounded like in your prepared remarks that some of the <unk> beat was due to a pull forward in Canadian payments can.

Can you maybe just quantify how much if any of the single digit millions that isn't going to be an <unk> was pulled forward into <unk> into <unk>.

Rob Orgel: Our next question comes from the line of Darren Peller with, with your questions. Guys, hey, maybe just start off with the strength you've been seeing in customer ads, which obviously has been coming in, I think it's around 170, 180, customers per quarter, clearly before that. So just a bit more of an understanding as to the verticals around it and if some of them are smaller customers perhaps in the travel side, you know, anything else that makes up that strength. And then if there's any, also, just any changes in the sort of vintage analysis, then another way, if there's like a translation of..., at a different pace. Hey, Darren. Rob here.

Versus move forward into later quarters, and then also just when looking on a go forward basis, how we should be thinking about the EBIT dollar impact to this movement. Thank you.

Sure Hey, Tyler, it's Mike Massaro.

I'd say you can you can think of that as a kind of single digits.

Sorry single million dollar kind of impact from a pull forward perspective, so definitely not kind of anywhere near the number for kind of full Q1 in Q4.

Really what it was a dynamic where students new regulations were changing and as they had the opportunity to already we're sitting on a permit they were sure to pull the trigger on that permit.

Where they may have had time in the first half of the year or two.

Make that decision as well so they were actually making their payments a bit early because they had access to a permit that had already been issued so that's really the dynamic we saw it wasn't a huge impact to Q4 wasn't a huge pull forward for Q1, but we did call it out.

Rob Orgel: So, you know, this was another really strong quarter, 170 plus clients signed. In this case, education actually got top of the table in terms of driving the most client wins. So, just beat out travel by a little bit, but in this case, a really strong quarter for the education team alongside a strong quarter for travel, nice ads, B2B, and healthcare as well on the deal size. The average deal size was just slightly lower than what you've seen across our sort of historical average, but only just slightly, and again, strong and in a very good range. So we're pretty happy with all of those results in terms of the numbers and the deal size. Lots of good-sized deals in there too.

Okay great.

Mike appreciate the color and then just as a follow up I wanted to ask briefly.

About potentially an update on the client implementation delays mentioned on the last call I know it was only about a half dozen or so.

But have you seen those contracts start yet and have you seen any incremental delays outside of those six I just sort of trying to level set what.

What we've seen last quarter versus what we expect between 24.

Yes, Rob here. So the vast majority of that revenue opportunity has gone live and so.

We had overall a great quarter in terms of deployments across all the verticals. If you look at the year, we will have gotten.

Rob Orgel: We're also feeling really good about our investments in go-to-market, right? So you're seeing these numbers come in strong, and the thing that we are very bullish on is that we are seeing very good efficiency as we invest in go-to-market. So when we look at the return on that investment in sales, we're seeing them get productive faster, we're seeing win rates be higher, and we have a very favorable ratio in terms of the contract value they get signed in the first year relative to their cost, so they are delivering well over their, you know, a nice multiple of their salary in terms of contract value wins in that first period. And if you look over at the RM side, which is the other side of our investment in go-to-market, you know, we're signing out substantial growth targets for RMs as they get assigned out into the field on our accounts, and we feel really good about those results too.

In the neighborhood of 700 clients live if you look at sort of the status of things right now feel very good about the status of projects that have gone live on time as expected through Q4.

Our next question comes from the line of Andrew Jeffrey with Shirley. Please proceed with your question.

Hi.

Pardon me I appreciate you taking the question.

I just wanted to be clear I don't need to belabor the point.

On the guidance.

By my math, it looks like the midpoint of the range is about two.

27% sort of organic somewhere in that neighborhood.

Recognizing sort of the puts and takes in Canada.

I guess does the.

Some of those payments that were pulled forward into <unk>.

Normalizing for that or.

Rob Orgel: It's good to hear that it's a diverse set of, you know, cross segments. And then just a quick question on the CFO side or the financial side. First, Mike, congrats and all the best. And then, Cosmin, congrats to you too, and welcome. But when we think about the guidance, it's about 300 bps of margin expansion this year. I think it's closer to the low end of 300 bps.

Is Canada.

Tired of the Delta between what otherwise would have been faster organic revenue growth and it sounds like you have some levers that could accelerate it namely.

Some of the performance in travel and better India payment monetization I just wanted to make sure I'm understanding that correctly and I've got a quick follow up.

Yes.

Ganic number is relatively right and if you look at it notwithstanding the Canadian impact we wouldn't be right about that 30%. So.

Pretty confident about the 30% growth rate.

Okay, that's really clear thank you.

Rob Orgel: I think it's closer to the low end of the 300 bps called out, but I know last year you also kind of started off lower and ended up with I just, I guess we're just trying to figure out if there's an element of just starting off the year the right way and providing for some upside, or is this really something about the model that might, might, Yeah, I'll take that one. This is Mike. So, you know, what I would say is, I think you've seen a bit of a track record from us. Like, as we look to set out for a year, you know, we want to look at how the year builds as we look into revenue. We also have control over our cost dynamics, as we've proven, I think, over the last couple of years. I think as Cosmin comes in, you know, I don't think you're going to see a significant shift in how we look at that.

Andrew you had a question thats kind of other areas I mean, obviously as we look to the year. It's early in the year, but we think we have lots of opportunity across all our vertical so.

You can imagine where we're putting our effort into to offset any impacts that Canada could have and.

I expect <unk> to continue to execute like to have the last many many years.

Okay. Thank you and then.

I appreciate the deep dive in education in the slides this quarter, particularly on slides 14, and 16 I Wonder if I can ask.

The capabilities on 16, you call out are really notable and soon to be client facing and then you discussed product expansion one of the levers as agent portal adoption and I know that.

The discussion of agent education has come up, especially as it relates to cross border payments can you elaborate a little bit on how much of sort of.

Tyler Dupont: I think you're going to see us continue to look at every bit of spend we have internally for the company, make sure we feel like we're good and on track when it comes to our top-line numbers, and we're going to invest in the business in, I think, an efficient way, as people have seen from us. So, hopefully, people are taking something away from this. It looks very similar, and that way, we may be a bit boring, but we think we're delivering great results. Our next question comes from the line, "Kupferberg with Bank of America." Please proceed with your question. Hi, good afternoon. This is Tyler Dupont, on behalf of Jason.

The growth in existing customers comes from sort of <unk>.

Education and how the agents.

Sort of help students get.

Progress through the workflows and as a result, maybe monetize some of those.

Expanding software solutions that question makes sense over the agent angle lever for growth and penetration of existing customers.

So it's Rob here. So agents are an important presence in a number of the outbound student markets right, So certainly India, China Vietnam.

Mike Massaro: Thanks for taking the questions. I wanted to start by asking about changes in the Canadian environment. It sounded like in your prepared remarks that some of the 4Q beat was due to a pull forward in Canadian payments. Can you maybe just quantify how much, if any, of the single-digit millions that isn't going to be in 1Q was pulled forward into 4Q versus moving forward into later quarters? And then also just when you look... to go with the forward basis on how we should be thinking about the EBITDA dollar impact. Sure. Hey Tyler, it's Mike Massaro.

They play a sizable role.

And for certain inbound markets, they playing a sizable roll Australia is most notable and we've mentioned before 75% of inbound students to Australia has benefited from the assistance of an education agent or an education counselor. So for our part the software that we're providing.

I'll start pre study link and then I'll add the study linked part.

Capabilities that we're providing.

To help them essentially facilitate that portion of their experience around making sure that all the payments work properly right. So the council there is doing a bunch of things and they are using the fly wire portal, which may be integrated into the rest of their software to facilitate those payments. So we really help provide value to the students and to the agent and everything around the payment and with <unk>.

Mike Massaro: I would say you can think of that as a kind of single digit, sorry, single million dollar kind of impact from a pull forward perspective, so definitely not kind of anywhere near the number for full Q1 in Q4. Really, what it was was a dynamic where students knew regulations were changing, and as they had the opportunity to already be sitting on a permit, they were sure to pull the trigger on that permit, where they may have had time in the first half of the year to make that decision as well. So they were actually making their payment a bit early because they had access to a permit that had already been issued.

<unk> link what we added as Mike mentioned in his comment was the ability for that agent to use essentially a fly wire platform.

Starting even earlier in the process with the submission of the application managing the admissions decision and then leading to the payments. So we are taking on more and more of that lifecycle.

Again on a global basis, it's still it's still not the majority of payments, it's still a smaller fraction than that but for us. It's a great opportunity to further penetrate these very large markets.

Our next question comes from the line of John Davis with Raymond James. Please proceed with your question.

Rob Orgel: So that's really the dynamic we saw. It wasn't a huge impact on Q4, wasn't a huge pull forward for Q1, but we did call it out. Okay, great. That's helpful, Mike. Appreciate the call.

Hey, good evening guys excellent follow up on <unk> question on new logo growth. So if you look at 2023 and <unk> 125, I think organic growth was about 39%. So 14 points from new logos 700, new clients, maybe talk a little bit about how you think about <unk> new logo growth going.

Rob Orgel: And then, just as a follow-up, I wanted to ask briefly about an update on the client implementation delays mentioned on the last call. I know it was only around a half dozen or so, but have you seen those contracts start yet, and have you seen any incremental delays outside of those six? I'm just sort of trying to level the playing field between what we saw last quarter versus what we expect for 2024. Yeah, Rob here.

Into 'twenty four and also how much growth you get in year, you signed up 700, new clients this year, how much growth in.

In the year, you sign up a client like what percentage of that revenue to get.

And year versus kind of the annual edition of the following year.

So when we've done our analysis into sort of those two elements of the growth algorithm.

Greetings J D.

When you look into the <unk>.

The allocation between those two are the split what you see is that it's relatively balanced to slightly on the larger side is the contribution of from full year effect of clients.

Rob Orgel: So the vast majority of that revenue opportunity has gone live, and so we had a great quarter in terms of deployments across all the verticals. If you look at the year, we will have gotten in the neighborhood of 700 clients live.

Client signed the prior year, so that's the slightly bigger half of that.

Rob Orgel: If you look at sort of the status of things right now, feel very good about the status of projects that have gone live on time, as expected through Q4. Our next question comes from the line of Andrew Jeffery with Truett, I, pardon me, appreciate you taking the question. I just wanted to be clear, and I don't need to belabor the point, on the guidance. By my math, it looks like the midpoint of the range is about... 27% sort of organic, somewhere in that neighborhood.

Portion the other piece being the client each year.

And so that's I think the allocation that youre looking for.

Okay, Great and then.

Maybe just on the health care, Mike healthcare down 1% like how do we think about the reacceleration of that business kind of thoughts just bigger picture on health care and what you're thinking that business can grow longer term.

So.

We're doing a bunch of things to try to accelerate revenue on the health care side. So we have great conviction in the platform we have great conviction in the team we're not satisfied with the results that we saw in 2023 and neither is the team. So in terms of things that we're focused on we've been really good about trying to be very clear about how we can target.

Andrew Jeffery: Recognizing sort of the puts and takes in Canada, I guess, does the... Was some of those payments that were pulled forward into 4Q kind of normalizing for that, or is Canada in the entirety of the delta between what otherwise would have been faster organic revenue growth? And it sounds like you have some levers that could accelerate it, namely some of the performance in gravel and better Indian payment monetization. I just want to make sure I'm understanding that correctly. And I've got a quick follow up. Yeah, your organic number is relatively correct.

The different segments at the hospital level, the large hospitals that have been the core of where we are making sure that we have clear strategies around each of the different ehr's and ways to bring a different set of solutions.

Based on the needs of that hospital and they are set up so it may be.

The fullest version of our capabilities. It has our full platform plus integrated financing that we provide via a partner that's a very compelling offering it may be the offering that we have installed in most of our base, which is sort of what you've heard us talk about in the past in terms of everything from pre service to post service.

Mike Ellis: And if you look at it, notwithstanding the Canadian impact, we would be right about that 30%. So we're pretty confident about the 30% growth rate. Okay, that's really clear, thank you.

And we have new capabilities that focus just on payment sort of a straightforward payment processing that are and even lighter lift that makes sense for some of our clients. So first thing is making sure we've got sort of that range of offerings and our traditional base. The second thing is the sub segments that we started talking about it. So today I mentioned ortho, Nebraska, but they are one of whole.

Andrew Jeffery: Andrew, you had a question about other areas. I mean, obviously, you know, as we look to the year, it's early in the year, but, you know, we think we have lots of opportunity across all our verticals. So you can imagine we're putting our effort into offset any impacts that Canada could have, and I expect Flymates to continue to execute like they have the last many, many years. Okay, thank you.

Sorry category.

Multiple categories of sub segments that are an opportunity for us to take sort of the full power of our software and take it into the sub segments and so thats, a very exciting opportunity for us we've allocated some of our sales team to that so between those two and continuing to expand with our existing clients. Those are the three elements that we are looking to see a.

Rob Orgel: And then I appreciate the deep dive into education in the slides this quarter, particularly slides 14 and 16. I wonder if I can ask, The capabilities on slide 16 that you call out are really notable and seem to be client-facing. And then you discuss product expansion. One of the levers is agent portal adoption, and I know that the discussion of agent education has come up, especially as it relates to cross-border payments. Can you elaborate a little bit on how much of the growth in existing customers comes from sort of agent education and how the agents help students progress through the workflows and, as a result, maybe monetize some of those expanding software solutions, if that question makes sense, or the agent angle lever for growth and penetration of existing customers? So, it's Rob here.

Return to better growth in 24 for the health care business.

Our next question comes from the line of Chris Kennedy with William Blair. Please proceed with your question.

Good afternoon, and thanks for taking the question can you give a little bit more color on the payer services initiative I've seen the deck over 10 million from the Australian insurance.

Opportunity can you talk about the other opportunities that you have and how big those can.

If they can move the needle.

Yeah, Hey, Chris Mike Massaro so.

Obviously, the payer service. This is something we talked about back at our Investor Analyst Day, a couple years ago and talked about expanding into these ecosystems that that are.

That our industry is really are surrounded our industries I would say when we got into payer services, we had a whole series of initiatives.

Rob Orgel: So agents are an important presence in a number of the outbound student markets, right? So certainly India, China, Vietnam; they play a sizable role. And for certain inbound markets, they play a sizable role. Australia is most notable, and as we've mentioned before, 75% of inbound students to Australia have benefited from the assistance of an education agent or an education counselor. So for our part, the software that we're providing, and I'll start with pre-StudyLink, and then I'll add the StudyLink part. The capabilities that we're providing are to help them essentially facilitate that portion of their experience around making sure that all the payments work properly, right? So the counselor is doing a bunch of things, and they're using the Flywire portal, which may be integrated into the rest of their software, to facilitate those payments.

Focused on what value add can we provide the payer in these instances and so you start to look at things like insurance, which can be bundled at the point of checkout for education, there's potential as we mentioned before publicly of bundling something in relation to travel around that same component.

If you look at how students acquire other services that they may need when studying abroad insurance is just one of the many things.

Our students or apparent potentially we'd like to have.

Canada, We've mentioned things are I think all the GIC, which as our actual deposit account that's required to get a permit in Canada to study.

And that has to be funded prior to the issuance of that permit and so again, that's something that as you would imagine we're at a critical point in the flow between the family potentially an educational agent and the University.

Rob Orgel: So we really help provide value to the student and to the agent and everything around the payment. And with StudyLink, what we added, as Mike mentioned in his comment, was the ability for that agent to use essentially a Flywire platform starting even earlier in the process with the submission of the application, managing the admissions decision, and then leading to the payment. So we're taking on more and more of that life cycle. But again, on a global basis, it's still not the majority of payments. It's still a smaller fraction than that,

And as you've seen the success in the insurance product.

Short period of time, we think we're at a unique position without any marketing dollars really to be spent to put great solutions in front of the payer that can make their experience great and so again, that's the strategy it's across multiple industries.

John Kimbrough Davis: But for us, it's a great opportunity to further penetrate these very large markets. Our next question comes from the line of John Davis with Raymond James. Please proceed with your question. Hey, good evening, guys.

And and we think we're just getting started when it comes to payer services.

Great. Thank you and then just real quickly to follow up can you just give us an update on the FX volume you had in India that was an issue that was called out in the September quarter did things kind of normalize then with December quarter. Thanks, a lot.

Rob Orgel: I actually want to follow up on Darren's question on new logo growth. So, if you look at 2023 NRR 125, I think organic growth was about 39%. So 14 points from new logos, 700 new clients. Maybe talk a little bit about how you think about NRR and new logo growth going into 24. And also how much growth you get in a year. I mean, you signed up 700 new clients this year. How much growth you get in a year you sign up a client, like what percentage of that revenue do you get, like kind of in a year versus kind of the annualization of the following So when we've done our analysis into sort of those two elements of the growth algorithm, sorry, greetings JD, when you look into the allocation between those two or the split, what you see is that it's relatively balanced. Slightly on the larger side is the contribution from the full year effect of clients signed the prior year, so that's the slightly bigger half of that portion, the other piece being the client signed in the year. And so that's, I think, the allocation that you're looking for. Okay, great.

Yeah, I think you used a good choice of words, there when you said normalized when you when you looked at Q4 versus Q3.

The FX.

FX percentage it was actually up just slightly so we view that as a sort of good healthy result, and.

Quite satisfied with the growth in India, and the FX percent.

Our last question comes from the line of Tien Tsin with Jensen Huang with Jpmorgan. Please proceed with your question.

Hey, good afternoon, everyone. Good to talk to you guys. Just one question I'll close out the call just with the guidance range it looks a little bit wider than.

Than usual any change there and the visibility to call out to get to the upper or the low end outlook for end of the guide the quarter. Obviously came in ahead. So I'm just trying to better understand.

The variance there that's all I had thanks, yes, Mike Ellis.

We did expand the revenue guidance represents basically 5% of the full year guide and given the growth of our revenue.

Amounts, we thought it would be reasonable given the uncertainty specifically around the Canadian regulatory challenges and as we kind of update over the course of the year.

Rob Orgel: And then, Rob, maybe just on the healthcare front, Mike, healthcare, you know, down 1%. Like, how do we think about the reacceleration of that business, kind of thoughts, just the bigger picture on healthcare and how do you think that business can grow longer? So, you know, we're doing a bunch of things to try to accelerate revenue on the health care side. So we have great conviction in the platform. We have great conviction in the team. We're not satisfied with the results that we saw in 2023, and neither is the team.

Course, we'll narrow that range as that becomes more clear.

No change with respect to how we guide.

Got it.

Alright, perfect. Thanks, guys.

That is all the time, we have for questions I'd like to hand, it back for management for closing remarks.

I appreciate everybody's time on the call. Thank you very much and document a decent.

Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation you may disconnect. Your lines at this time and have a wonderful day.

Rob Orgel: So, in terms of things that we're focused on, we've been really good about trying to be very clear about how we can target the different segments at the hospital level. The large hospitals that have been the core of where we are, making sure that we have clear strategies around each of the different EHRs and ways to bring a different set of solutions based on the needs of that hospital and its setup. So, it may be the fullest version of our capabilities that is our full platform plus integrated financing that we provide via a partner. That's a very compelling offering.

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Rob Orgel: It may be the offering that we have installed in most of our base, which is sort of what you've heard us talk about in the past in terms of everything from pre service to post service. And we have new capabilities that focus just on payment, sort of the straightforward payment processing that is an even lighter lift that makes sense for some of our clients. So, the 1st thing is making sure we've got sort of that range of offerings in our traditional base. The 2nd thing is the sub segments that we started talking about. So, today I mentioned ortho Nebraska, but they're 1 of a whole category.

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Rob Orgel: Sorry, multiple categories of sub segments that are an opportunity for us to take sort of the full power of our software and take it into these sub segments. And so that's a very exciting opportunity for us. We've allocated some of our sales team to that. So, between those 2 and continuing to expand with our existing clients, those are the 3 elements that we are looking to see a return to better growth in 24 for the healthcare business. Our next question... is about Chris Kennedy with William Blair.

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Chris Kennedy: Good afternoon. Thanks for taking the question. Can you give a little bit more color on the payer services initiative? I see in the deck over 10 million from the Australian insurance opportunity. Can you talk about the other opportunities that you have and how big those could be if they can move the needle? Yeah, hey, Chris, Mike Massaro.

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Mike Massaro: So, you know, obviously, payer services is something we talked about, you know, back at our Investor Analyst Day a couple years ago, and talked about expanding into these ecosystems that are, that are, that our industries really are surrounded by. I would say when we got into payer services, we had a whole series of initiatives focused on what value add we could provide the payer in these instances. And so you start to look at things like insurance, which can be bundled at the point of checkout for education. There's potential, as we mentioned before, publicly, of bundling something in relation to travel around that same component. If you look at how students acquire other services that they may need when studying abroad, insurance is just one of the many things that a student or a parent potentially would like to have. In Canada, we've mentioned something called the GIC, which is an actual deposit account that's required to get a permit in Canada to study.

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Chris Kennedy: And that has to be funded prior to the issuance of that permit. And so, again, that's something that, as you would imagine, we're at a critical point in the flow between the family, potentially an educational agent, and the university. And as you've seen the success of the insurance product in a very short period of time, we think we're in a unique position without any marketing dollars really being spent to put great solutions in front of the payer that can make their experience great. And so, again, that's the strategy.

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Mike Massaro: It's across multiple industries, and we think we're just getting started when it comes to payer services. Thank you. And then, just real quickly, the follow up. Can you just give us an update on the FX volume that you had in India? That was an issue that was called out in the September quarter. Did things kind of normalize in the December quarter? Thanks a lot. Yeah, I think you used a good choice of words there when you said normalized.

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Rob Orgel: When you looked at Q4 versus Q3, the FX percentage was actually up just slightly. So we view that as a sort of good, healthy result and are quite satisfied with the growth in India and the FX percent. Our last question comes from the line of Tien-Sin, rush. Hold on just a moment. I think I saw you drop the beeper. Do you mind? You're on mute, so we can't hear

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Operator: I brought the painkiller. Yeah, it's fine. I understand it. I'm an autopsy dog, so I'm fine until I see you.

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Operator: Now I need to check the temperature of your car. Okay. Are you sure? Okay. So, page four, ask a few questions because if you bump into my kids later and I don't know what happened, they may be intimidated and confused. Okay. Now, check your car and let me know how much the temperature has dropped.

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Operator: Okay. Count to three. You're good?

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Operator: Hey, good afternoon, everyone. It's good to talk to you guys. Just one question.

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Tien-Sin: I'll close out the call. Just with the guidance range, it looks a little bit wider than usual. Any change there in the visibility to call out to get to the upper or lower end of the guide? I know the court obviously came in ahead, so I'm just trying to better understand the... variance there.

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Mike Ellis: That's all I had. Thanks. Yeah, it's Mike Ellis. Yeah, we did expand the revenue guidance. It represents basically 5% of the full-year guide, and given the growth of our revenue amounts, we thought it'd be reasonable given the uncertainty, specifically around Canadian regulatory challenges. And as we kind of update over the course of the year, of course, we'll narrow that range as that becomes more clear. But no change with respect to how we got here.

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Mike Ellis: Perfect. Thanks. That is all the time we have for questions.

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Operator: I'd like to hand it back to management for closing. I appreciate everybody's time on the call. Thank you very much, and I will talk to many of you soon. Ladies and gentlemen, this does conclude today's teleconference. Parts. You may disconnect your lines, and have a wonderful day.

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Operator: Thank you. Music Greetings and welcome to Flywire Corporation. Quarter 2023 Earnings Confidence. This time all participants are on a listen-only basis. This question and answer session will follow the formal. If anyone should require operator assistance during a conference call, please call 1-866-422-9000. Express star zero on your teleph... As a reminder, this conference is being held. It is now my pleasure to introduce your host, Akeel Hollis, Vice President, Investor Relations. P and A. Thank you. You may begin. Thank you, and good afternoon.

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Greetings and welcome to fly wire corporations fourth quarter 2023 earnings conference call.

At this time all participants are in a listen only mode.

Akil Hollis: With me on today's call are Mike Massaro, Chief Executive Officer, Rob Borgo, President and Chief Operating Officer, and Mike Ellis, Chief Financial Officer. Our fourth quarter and fiscal year 2023 earnings press release, supplemented presentation, and, when filed, Quarantine K can be found at ir.flywire.com. During the call, we will be discussing certain forward-looking information. However, actual results could differ materially from those contemplated by these forward-looking statements.

A question and answer session will follow the formal presentation.

Anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.

As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host Keelhauling, Vice President Investor Relations and F. PNA. Thank you you may begin.

Thank you and good afternoon with.

With me on today's call are Mike Mcferran, Chief Executive Officer, Rob <unk>, President and Chief operating Officer, and Mike <unk> Chief Financial Officer.

Our fourth quarter and fiscal year 2023 earnings press release supplemental presentation and when filed 10-K can be found at IR <unk> com.

Akil Hollis: We will also be discussing certain non-GAAP financial measures. Please refer to our press release and SEC filings for more information on the risks regarding these forward-looking statements, which could cause actual results to differ materially, and the required disclosures and reconciliations related to non-GAAP financial measures.

During the call we will be discussing second quarter looking information.

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

I'll be discussing certain non-GAAP financial measures. Please refer to our press release and SEC filings for more information on the risks regarding these forward looking statements could cause actual results to differ materially and the required disclosures and reconciliations related to non-GAAP financial measures.

Mike Massaro: This call is being webcast live and will be available for replay on our website. I'd now like to turn the call over to Mike Mathuram. Thank you, Akil, and thank you to everyone that is joining us today. We are pleased to share our Q4 and fiscal 2023 results with you all, showing strong performance across the business. We are also eager to share our business priorities and financial outlook for 2024. In a few minutes, Rob Orgel, our President and COO, and Mike Ellis, our CFO, will go into greater detail about our results for Q4 2023. We will try to keep our prepared remarks short to leave more time for questions.

This call is being webcast live and will be available for replay on our website I'd now like to turn the call over to Mark Massaro.

Thank you <unk> and thank you to everyone that is joining us today, we're pleased to share our Q4 and fiscal 2023 results with you all showing strong performance across the business.

We're also eager to share our business priorities and financial outlook for 2024.

In a few minutes, Rob Oracle, our president and COO and Mike Ellis, Our CFO will go into greater detail about our results for Q4 2023, we will try to keep our prepared remarks short to leave more time for questions.

Mike Massaro: I will start with a few financial highlights from Q4 2023. Revenue less ancillary services was $96.1 million in Q4, an increase of 43% year-over-year. Adjusted gross profit for the quarter was $63.5 million, an increase of 42% year-over-year.

I will start with a few financial highlights from Q4 2023.

Revenue less ancillary services was $96 1 million in Q4, an increase of 43% year over year.

Adjusted gross profit for the quarter was $63 5 million, an increase of 42% year over year and adjusted EBITDA was $7 7 million for the quarter, increasing by $6 7 million year over year.

Mike Massaro: And adjusted EBITDA was $7.7 million for the quarter, increasing by $6.7 million year-over-year. These Q4 results now cap off another great year for Flywire. I will take a few moments to talk about some of the key achievements in fiscal year 2023. First, I will start with our fiscal year 2023 financial highlights. Flywire's revenue less ancillary services grew by 43% year on year, and our adjusted EBITDA increased to 42 million, or 11% of revenue less ancillary services. Both results were well above our targets discussed at the beginning of the year.

These Q4 results now cap off another great year for fly wire I will take a few moments to talk about some of the key achievements in fiscal year 2023.

First starting with our fiscal year 2023 financial highlights.

<unk> is revenue less ancillary services grew by 43% year on year.

Our adjusted EBITDA increased to $42 million or 11% of revenue less ancillary services bolt results were well above our targets discussed at the beginning of the year.

Mike Massaro: In FY 2023, we also added more than 700 new clients across all verticals and now serve more than 3,800 clients globally. Finally, we moved more than $24 billion through our Global Payment Network in 2023, a 33% increase year over year. We also achieved a number of business highlights across all verticals and geographies. In education, we continue to expand our higher education footprint globally, including notable growth in the United Kingdom and throughout Asia Pacific. We also continue to see success in our land and expand strategy in the United States, increasing the footprint of our full suite solution, landing many blue chip clients. In travel, we experienced strong growth in terms of new clients signed, most notably with tour operators and destination management companies, in the EMEA and APAC regions.

In FY 2023, we also added more than 700, new clients across all verticals and now serve more than 3800 clients globally.

Finally, we moved more than $24 billion through a global payment in 2023% to 33% increase year over year.

We also achieved a number of business highlights across all verticals and geographies.

In education, we continue to expand our higher education footprint globally, including notable growth in the United Kingdom and throughout Asia Pacific.

We also continue to see success in our land and expand strategy in the United States.

Increasing the footprint of our full suite solution landing many blue chip clients.

In travel we experienced strong growth in terms of new clients signed most notably with tour operators and destination management companies.

In EMEA and APAC regions.

Mike Massaro: In B2B, we continue to sign large enterprise deals and see success in our partner strategy. In healthcare, we accelerated our partnership strategy, solidifying relationships with Cerner and FinThrive. We bolstered our global payment network with a focus on supporting our strategic payer markets like India and China, enhancing our relationships with WeChat Pay as well as three of the largest banks in India. Lastly, we continued our strong track record of strategic M&A with the acquisition of StudyLink, and our sizable cash position allows us to pursue additional M&A that fits our core thesis. Now, let's look ahead to 2024.

In <unk>, we continue to sign large enterprise deals and see success in our partner strategy.

In healthcare, we accelerated our partnership strategy solidifying relationships with Cerner and fin thrive.

We bolstered our global payments network with a focus on supporting our strategic payer markets like India, and China, enhancing our relationships with wechat pay as well as three of the largest banks in India.

Lastly, we continued our strong track record of strategic M&A with the acquisition of steady link in our sizable cash position allows us to pursue additional M&A that fits our core thesis.

Now, let's look ahead to 2024, Mike Ellis and Rabago will talk about full year 2024 guidance in detail, but our plan anticipates strong growth numbers in a complex macro environment further expansion of EBITA in alignment with our multiyear expectations and delivering positive net income.

Mike Massaro: Mike Ellis and Rob Orgel will talk about full year 2024 guidance in detail, but our plan anticipates strong growth numbers in a complex macro environment, further expansion of EBITDA in alignment with our multi-year expectations, and delivering positive net income. We are truly excited for what is ahead for Flywire as we look at 2024. We remain focused on optimizing our go-to-market capabilities, expanding our Flywire advantage, and strengthening our Flymate community. We are continuously working to optimize and invest in our go-to-market efforts to sustain our growth. For example, in fiscal year 2023, we improved our sales ramp time from hire date to first deal close by more than 30 percent.

We're truly excited for what is ahead for fly wire as we look at 2024.

Main focused on optimizing our go to market capabilities, expanding our flywheel advantage and strengthening our <unk> community.

We are continuously working to optimize and invest in our go to market efforts to sustain our growth algorithm for.

For example in fiscal year 2023, we improved our sales ramp time from higher data first deal close by more than 30%.

Mike Massaro: This year, we plan to increase our investment in sales and relationship managers by more than 15% in aggregate, spread across all verticals and geographies. As we continue to grow, we will do so in the context of a very disciplined hiring plan that focuses on key roles to meet our objectives. Another area of investment in our go-to-market strategy is our channel partnership strategy. We plan to grow our channel effectiveness and deepen partnerships by investing in channel sales, integration engineering resources, and building more certified integrations with our partners. Today, we have more than 90 partnerships and tech ERP integrations across our verticals that help us identify new clients, find clients faster, and accelerate our implementation. We have seen significant success with partners like Ellucian and Bank of America, and we strongly believe further investment in channel partners can be a significant driver of future revenue.

This year, we plan to increase our investment in sales and relationship managers by more than 15% in aggregate spread across all verticals and geographies as.

As we continue to grow we will do so in the context of a very disciplined hiring plan that focuses on key roles to meet our objectives.

Another area of investment and go to market is our channel partnership strategy.

We plan to grow our channel effectiveness and deepen partnerships by investing in channel sales teams.

Integration engineering resources and building more certified integrations with our partners.

Today, we have more than 90 partnerships and tech ERP integrations across our verticals that help us identify new clients signed clients faster and accelerate our implementations.

We've seen significant success with partners like Lucien and Bank of America, and we strongly believe further investment in channel partners can be a significant driver of future revenue.

Mike Massaro: As for expanding our Flywire advantage, we remain focused on product and payment innovation to power the vertical ecosystems in the industries that we serve. This year, we are focusing on our ability to embed payments into the existing software and workflow processes of clients, partners, and payers to add more value to our growing ecosystems. A cornerstone of us capitalizing on this opportunity is our API strategy to better serve our clients and partners and complement the Flywire software solutions they use today. In 2023, we began to invest in building a public API to expose the power of the entire Flywire payments platform. This allows our customers across all verticals to integrate our API into their existing ERPs or software to leverage everything from our KYC and AML processes all the way through our global payment processing, so they can control their workflows and user experience in a PCI-compliant fashion.

As for expanding our flywheel advantage, we remain focused on product and payment innovation power the vertical ecosystems in the industries that we serve this.

This year, we are focusing in our ability to embed payments into the existing software and workflow processes of clients partners and payors to add more value to our growing ecosystems.

Cornerstone of us capitalizing on this opportunity is our API strategy to better serve our clients and partners and complement the fly wire software solutions they use today.

In 2023, we began to invest in building a public API to surface. The power of the entire fly why our payments platform. This allows our customers across all verticals to integrate our API into their existing ERP or software to leverage everything from our <unk> and AML processes all the way.

Through our global payment now.

So they can control their workflows and user experience in a PCI compliant fashion.

Mike Massaro: We believe Flywire will be even more unique in our ability to provide a ready-to-use platform for complex domestic and cross-border payments, along with optional flexibility to use components of our powerful API when clients seek deeper integrations into their workflows. Likewise, we will be exposing our new payables platform as an API, which can be embedded into any AP process of an ERP. We have proven our ability to identify new use cases where software drives value and will continue to invest more to drive growth and value for our clients. One example is our investment in StudyLink, which we acquired in Q4, and whose software connects agents in Australian education institutions and powers the application and offer of admission and acceptance process for their international students.

We believe <unk> will be even more unique and our ability to provide a ready to use platform for complex domestic and cross border payments, along with optional flexibility to use components of our powerful API when clients seek deeper integrations into their workflows.

Likewise, we will be exposing our new payables platform as an API, which can embed into any AEP process of an ERP.

We have proven our ability to identify new use cases, where software drives value in payments and.

And we will continue to invest more to drive growth and value for our clients. One example is our investment in study link, which we acquired in Q4 and whose software connects agents in Australian education institutions empowers the application an offer of admission and acceptance process for their international students.

Mike Massaro: Embedding Flywire's payment technology into StudyLink's international admissions, application, and agent management software unlocks our opportunity to monetize the nearly $1 billion in deposit volume their platform is involved in today. Our vision is to extend the StudyLink platform beyond Australia, leveraging Flywire's global clients and teams. We will also focus on the strategic payables opportunity, particularly around commission payments in our travel and education verticals. As a reminder, we are applying our existing framework of using software in our global payment network to solve specific payable use cases for our clients. In travel, payable volumes, clients, and our network of beneficiaries have continued to grow since we piloted the solution last year. For many European DMCs, Flywire is the only way they can both receive and pay out cross-border, high-value travel payments.

Embedding <unk> payment technology into steady links international admissions application and agent management software unlocks our opportunity to monetize the nearly $1 billion in deposit volume their platform is involved in today. Our vision is to extend the steady linked platform beyond Australia leveraging <unk>.

As global clients and team.

We will also focus on the strategic payables opportunity, particularly around commission payments in our travel and education verticals.

As a reminder, we are applying our existing framework of using software and our global payment network to solve specific payable use cases for our clients.

In travel payables volumes clients in our network of beneficiaries continues to grow since we piloted the solution last year for many European Bmc's <unk> is the only way they can both receive and pay out cross border high value travel payments.

Mike Massaro: And in the education vertical, we are growing the number of clients who are using our solution to pay commissions to international education agents. We are also expanding our partner ecosystem of U.S. investment savings accounts. We're using Flywire's payable solution to digitally disperse 529 plan payments to U.S. colleges and institutions.

And in our education vertical we are growing the number of clients who are using our solution to pay commissions to international education agents. We are also expanding our partner ecosystem of U S investment savings accounts, who are using fly wires payable solution to digitally dispersed 529 planned payments to U S College.

Mike Massaro: Finally, we also continue to be focused on strengthening and growing our Flymate community. As I've referenced in the past, our culture and Flymates are what make Flywire successful. We believe that our financial success enables us to give back to our communities and empowers our Flymates to build their careers of a lifetime. As we continue into 2024, we remain committed to building and maintaining high-performance teams, developing exceptional talent, and having a positive impact on the world around us. In closing, I could not be more proud of the progress we made in 2023. I am excited for the years ahead as we seek to continue to grow Flywire into one of the leading global payments companies of our generation. Before turning the call over to Rob, I wanted to officially welcome our incoming CFO, Cosmin Pidegoi, who will officially join Flywire on March 4th.

<unk> and institutions.

Finally, we also continue to be focused on strengthening and growing our <unk> community.

As I've referenced in the past our culture and fly mates are what makes YY are successful we believe that our financial success enables us to give back to our communities and empowers our fly mates to build their careers of a lifetime as we continue into 2024, we remain committed to building and maintaining high performance teams developing.

Exceptional talent and having a positive impact on the world around us.

In closing I could not be more proud of the progress we made in 2023 I'm excited for the years ahead as we seek to continue to grow fly wire into one of the leading global payments companies of our generation.

Before turning the call over to Rob wanted to officially welcome our incoming CFO <unk> <unk>, who will officially joined <unk> on March 4th.

Mike Massaro: Most recently, a senior vice president in finance at PayPal, Cosmin brings decades of senior financial leadership and a proven track record of scaling organizations in complex global environments. He is the ideal CFO to help us achieve the next level of scale and solidify our leadership position in the global payments ecosystem. I also wanted to thank Mike Ellis for his many contributions to Flywire over the past nine years, including establishing many of our finance functions, taking the company public, and managing many strategic acquisitions. He has been a trusted partner to me, and we appreciate the seamless CFO transition that he has enabled. I would now like to turn the call over to Rob Orgel, our President and COO, to review some operational highlights from the quarter. Rob?

Most recently as senior Vice President in finance at Paypal, Cosmen brings decades, senior financial leadership and a proven track record of scaling organizations in complex global environment is.

He is the ideal CFO to help us achieve the next level of scale and solidify our leadership position in the global payments ecosystem.

I wanted to also thank Mike Ellis for his many contributions to <unk> over the past nine years, including establishing many of our finance functions, taking the company public and managing many strategic acquisitions. He has been a trusted partner to me and we appreciate the seamless CFO transition that he is enabling.

I would now like to turn the call over to Rob <unk>, our president and CFO to review some operational highlights from the quarter Rob.

Rob Orgel: Thanks, Mike. Good afternoon, everyone. After another strong year as a public company, I'd like to start today by revisiting the algorithm we use to achieve sustained long-term growth. Our model includes, first, expansion with our existing clients, second, annualization of clients signed the prior year, and third, revenue from clients signed in the current year. We are also adding new payer and non-client services as a fourth component that feeds our annual growth. Our growth starts with expansion with existing clients, which is driven by our primary focus on delivering exceptional solutions and service for our clients across all of our verticals. For fiscal year 2023, we recorded net revenue retention of 125 percent, continuing in a favorable range denoted by the 123 percent three-year average between 2019 and 2021 we shared at our analyst day and the 124 percent we reported for 2022.

Thanks, Mike Good afternoon, everyone. After.

After another strong year as a public company I'd like to start today by revisiting the algorithm, we use to achieve sustained long term growth.

Our model includes first expansion with our existing clients.

And utilization of client signed the prior year and.

Third revenue from clients signed in the current year.

We are also adding new payer and non client services as a fourth component that feeds our annual growth.

Our growth starts with expansion with existing clients, which is driven by our primary focus on delivering exceptional solutions and service for our clients across all of our verticals for fiscal year 2023, we recorded net revenue retention of 125% continuing and a favorable range denoted.

The 123% three year average between 2019 and 2021, we shared at our analyst day.

And the 124% we reported for 2022.

Rob Orgel: Our technology and client service teams are obsessed with meeting our clients' needs. Their hard work and our new solutions allow us to earn clients' trust, deliver client retention that exceeds 95% per annum, grow clients effectively, and produce a net promoter score in the 60s. Next, in the growth algorithm, we benefit each year from the annualization and growth of clients signed in the prior year. As Mike mentioned, we signed over 700 clients in 2023, including over 170 in the fourth quarter. Our expected revenue per client signed in 2023 remains strong, and, as usual, we only realized a fraction of that revenue last year. In 2024, based on our track record of positive client experiences, we expect to benefit from both a full year's revenue from these clients, as well as further penetration of our clients' payers. Third, we recognize a portion of the revenue from new clients in the year we sign them. We invest in our go-to-market capabilities to maintain our long-term growth. We estimate that our penetration of the total addressable market across our four verticals is in the low single-digit percentage range.

Our technology and client service teams are obsessed with meeting our clients' needs.

Their hard work and our new solutions allow us to earn clients' trust.

Deliver client retention that exceeds 95% per annum grow clients effectively and produce a net promoter score in the sixty's.

Next in the growth algorithm, we benefit each year from the annualized <unk> and growth of clients signed in the prior year.

As Mike mentioned, we signed over 700 clients in 2023, including over 170 in the fourth quarter.

Our expected revenue per client signed in 2023 remains strong and as usual, we only realized a fraction of that revenue last year and.

In 2024 based on our track record of positive client experiences, we expect to benefit from both a full year's revenue from these clients as well as further penetration of our clients' payors.

Third in the algorithm, we recognize a portion of the revenue from new clients in the year, we signed that we.

We invest in our go to market capabilities to maintain our long term growth.

We estimate that our penetration of the total addressable market across our core verticals within the low single digit percentage range.

Rob Orgel: We see opportunity everywhere and plan to continue to build go-to-market teams to capitalize on these opportunities and increase our market share. Finally, as we address the needs of payers in our ecosystem, we have begun to generate meaningful revenue that is not associated with any particular client. For example, as we grow our pay-any-school capabilities rapidly, we will recognize revenue from tuition paid to schools that are not Flywire clients. In other examples, we are helping students procure other needed services, such as student health insurance required in Australia and with moving money from India to cover living expenses outside of tuition. We are excited to layer in payer services to our solution set and believe there can be a multi-year roadmap in this area. Next, I'd like to briefly discuss how we grew across our four verticals during the fourth quarter.

We see opportunity everywhere and plan to continue to build go to market teams to capitalize on these opportunities and increase our market share.

Finally, as we address the needs of payers in our ecosystem, we have begun to generate meaningful revenue that is not associated with any particular clients.

For example, as we.

We grow our pay any school capabilities rapidly we recognize revenue from tuition paid to schools that are not fly why our clients.

Other examples we are helping students procure other needed services, such as student health insurance required in Australia, and with moving money from India to cover living expenses outside of tuition.

We are excited to layer and payer services to our solution set and believe there can be a multiyear roadmap in this area.

Next I'd like to briefly discuss how we grew across our four verticals during the fourth quarter.

Rob Orgel: In our education vertical, we estimate our TAM to be about $660 billion. This TAN includes U.S. cross-border education, international cross-border education, and domestic education, both in the U.S. and internationally. It includes higher education, K-12, trade schools, summer programs, and more.

In our education vertical we estimate our tam to be about $660 billion.

This plan includes U S Cross border Education International Cross border Education, and domestic education, both in the U S and internationally. It includes higher Ed <unk> hundred 12 trade school summer programs and more.

Rob Orgel: We are penetrating our TAM through broad integrations with best-in-class enterprise systems, as well as deeper relationships with education agents prevalent in international education. We are also expanding our TAM by offering new solutions to payers and schools. During the fourth quarter, we signed several new clients in our U.S. cross-border and domestic subsegments, as well as across Europe, Asia-Pacific, and Latin America. Recently, we went live with our domestic solution at Adelphi University, a private university based in Long Island, New York, with over 7,500 students. Adelphi had been a cross-border education client of ours since 2013, representing another example of where we were able to leverage our trusted relationship that originated with our cross-border solution to expand into a much broader offering. For our U.S. cross-border segment, we went live with Florida State University and Oklahoma State University. Outside of the U.S., we went live with George Brown College, a publicly accredited top 10 research college in Canada with nearly 27,000 full-time students.

We're penetrating our Tam through broad integrations with best in class enterprise systems, as well as deeper relationships with education agents prevalent and international education.

We are also expanding our Tam by offering new solutions to payers in schools.

During the fourth quarter, we signed several new clients in our U S Cross border and domestic sub segments as well as across Europe, Asia Pacific and Latin America.

<unk>, we went live with our domestic solution at a Delphi University, a private University based in long Island in New York with over 7500 students.

Delphi had been across border education client of ours. Since 2013, representing another example of where we had been able to leverage our trusted relationship that originated with our cross border solution to expand into a much broader offering.

For our U S Cross border segment, we went live with Florida State University, and Oklahoma State University.

Outside of the U S. We went live with George Brown College, Georgia Brown College as a publicly accredited top 10 Research College in Canada with nearly 27000 full time students.

Rob Orgel: We are now live with both our cross-border and domestic education. JBC chose to work with Flywire to add more payment options, enhanced functionality, support education agent-related payment flows, and top-notch customer support. George Brown was one of the education clients that was signed in Q3, but went live after the peak season. All delayed education implementations that we referred to in our Q3 poll have now gone live.

We are now live with both our cross border and domestic education solutions.

<unk> chose to work with <unk> to add more payment options enhanced functionality support education agent related payment flows and top notch customer support.

George Brown was one of the education clients that were signed in Q3, but went live after the peak season.

All delayed education implementations that we referred to in our Q3 call have now gone live.

Rob Orgel: In healthcare, we estimate our TAM to be about $500 billion, and we are serving many of the largest U.S. hospital systems. We are expanding how we work with partners in this channel to provide deeper integrations and even more flexible affordability solutions. We are also expanding into specialty subsegments. During the fourth quarter, we went live with OrthoNebraska, a specialty hospital based in Omaha, Nebraska, focused on orthopedic care. In implementing Flywire's payment solutions, Northam, Nebraska, saw nearly 80% of all payments come through the patient self-service portal. Flywire's solution has helped the specialty providers significantly reduce staff hours spent on manually reconciling payments and has received high patient satisfaction scores. Overall, we are seeing early traction in new subsegments of the healthcare market as our receivables software solution helps reduce outstanding patient balances and increase collection rates for specialty hospital providers.

In healthcare, we estimate our Tam to be about $500 billion and we are serving many of the largest U S Hospital systems.

We are expanding how we work with partners in this channel to provide deeper integrations and even more flexible affordability solutions.

We are also expanding into specialty sub segments. During the fourth quarter. We went live with ortho and Nebraska are specialty hospital based in Omaha, Nebraska focused on orthopedic care.

Since implementing <unk> payment solutions, both on Nebraska saw nearly 80% of all payments come through the patient self service portal.

<unk> solution has helped us specialty provider significantly reduced staff hours spent on manually reconciling payments and has received high patient satisfaction scores.

Overall, we are seeing early traction in new sub segments of the health care market as our receivables software solution helps reduce outstanding patient balances and increased collection rates for specialty hospital providers.

Rob Orgel: In travel, we estimate our TAM to be about $530 billion. We have categorized our clients as destination management companies, or DMCs, global travel operators, and accommodation providers. During the fourth quarter, we signed new clients in each of our existing subsegments. We are also exploring new areas of focus, such as ocean experiences and niche online travel agencies, or OTAs. Recently, we went live with Aqua Expeditions, a luxury travel company specializing in small ship cruises in remote and exotic destinations such as the Peruvian Amazon and the Mekong Delta of Vietnam and Cambodia, along with yachting experiences in Indonesia and the Galapagos Islands. Integrating with Flywire has helped Aqua Expeditions streamline their accounts receivable payment reconciliation process, enabling faster payment notification and funds disbursement capabilities. We are excited to tap into this new sub-segment of travel and expand with ocean experience providers around the world. Finally, our B2B vertical covers a broad TAM estimated to be about $10 trillion, where we focus on providing mid-market enterprise clients with a sophisticated and integrated accounts receivable solution.

In travel, we estimate our Tam to be about $530 billion.

We have categorized our clients as destination management companies or Dmc's global travel operators and accommodations providers during the fourth quarter, we signed new clients in each of our existing sub segments.

We're also exploring new areas of focus such as ocean experiences and niche online travel agencies or otas.

<unk>, we went live with Aqua expeditions of luxury travel companies specializing in small ship cruises and remote and exotic destinations such as the Peruvian Amazon and Mekong Delta, Vietnam, and Cambodia, along with yachting experiences in Indonesia in the Galapagos Islands.

Integrating with <unk> has helped Aqua expedition streamline their accounts receivable payment reconciliation process, enabling faster payment notification and funds disbursement capabilities.

We are excited to tap into this new sub segment of travel and expand with ocean experience providers around the world.

Finally, our <unk> vertical covers a broad tam estimated to be about 10 trillion.

Where we focus on providing mid market enterprise clients with a sophisticated and integrated accounts receivable solution.