• Revenue: $151.4 million, an increase of 29.6% year over year.
• Adjusted Gross Profit: $101.9 million, up 27.2% year over year.
• Adjusted EBITDA: $42.2 million, increasing by $14.7 million year over year.
• Adjusted EBITDA Margin: Expanded by nearly 429 basis points year over year.
• Total Payment Volume: $11 billion, nearly double the average of the prior two quarters, growing 24% year over year.
• GAAP Net Income: $38.9 million, improving by approximately $28.3 million year over year.
• Cash and Investments: $721.5 million with no outstanding debt.
• Share Repurchase: 1.3 million shares repurchased for roughly $23 million.
• Full Year Revenue Guidance: $479 million to $485 million, representing approximately 26% growth at the midpoint.
• Full Year Adjusted EBITDA Guidance: $76 million to $80 million, with a 520 basis points margin improvement expected.

• Warning! GuruFocus has detected 7 Warning Signs with JUSHF.

Release Date: November 07, 2024

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

Positive Points

• Flywire Corp (NASDAQ:FLYW) reported a 29.6% year-over-year increase in revenue, reaching $151.4 million for Q3 2024.
• The company achieved an adjusted EBITDA of $42.2 million, marking a $14.7 million increase year over year.
• Flywire Corp (NASDAQ:FLYW) has successfully expanded its client base, adding over 200 new clients across various verticals.
• The company has a strong global presence with 4,000+ clients in 50 countries, supported by a robust global payments infrastructure.
• Flywire Corp (NASDAQ:FLYW) continues to see strong growth in its travel and B2B verticals, with healthcare returning to modest revenue growth.

Negative Points

• Flywire Corp (NASDAQ:FLYW) faces macroeconomic challenges in its education business due to restrictive immigration policies in Canada and potential future actions in Australia.
• The company's adjusted gross profit margin declined by about 130 basis points compared to Q3 2023.
• Revenue growth in the Canadian education market is expected to be flat in 2025 due to ongoing political and immigration challenges.
• The Australian education market, while smaller, is experiencing early moderation in revenue growth rates.
• Flywire Corp (NASDAQ:FLYW) anticipates continued pressure on revenue growth rates due to external macro headwinds, particularly in the education sector.

Q & A Highlights

Q: Can you break down the 200-plus customer additions by subcategory verticals and explain what's driving these new additions? A: Robert Orgel, President and COO, explained that travel slightly outpaced education in customer additions this quarter. Both verticals showed diversity across subsegments and geographies. Healthcare had fewer deals but positive additions, and B2B wins were notably up compared to the previous year. The average ARR per deal was slightly down, but overall progress remains strong.

Q: How are you managing the regulatory landscape risks, particularly in Canada and Australia? A: Robert Orgel noted that Canada faces political stress and restrictive immigration policies, leading to demand destruction. Flywire continues to expand its client base in Canada despite these challenges. In Australia, the situation is less severe, with expected moderation in growth rates but continued overall growth.

Q: Can you provide insights into Flywire's capital allocation strategy, particularly regarding M&A versus buybacks? A: Michael Massaro, CEO, stated that Flywire is in a strong position to invest in its business, evaluate M&A opportunities, and execute buybacks. The focus is on accelerating existing solutions, expanding into new industries or geographies, and ensuring any acquisition aligns with Flywire's technology vision and growth trajectory.

Q: What are the growth prospects in the education sector beyond Canada and Australia? A: Robert Orgel highlighted opportunities in Europe, Latin America, and APAC regions. Flywire is well-positioned to grow in these markets with its cross-border and domestic capabilities, as well as emerging products.

Q: How is Flywire progressing with the WPM acquisition and its impact on the UK education market? A: Robert Orgel explained that WPM helped establish relationships with more institutions, but growth has come from implementing Flywire capabilities. The focus is on expanding domestic payment solutions and increasing the payment volume for each school, with significant growth potential within the existing client base.

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