Flywire Corporation (Nasdaq: FLYW) (“Flywire” or the “Company”) a
global payments enablement and software company, today reported
financial results for its fourth quarter and fiscal-year ended
December 31, 2023.
“Our strong fourth quarter results, which included nearly 43%
year over year growth in revenue less ancillary services, capped
off an exceptional year for Flywire as we continue to show strong
performance across the business,” said Mike Massaro, CEO of
Flywire. “We are proud of all that we have accomplished in 2023,
and excited for what is ahead for Flywire, with a plan that puts up
strong growth numbers in a complex macro environment and further
expands EBITDA in alignment with our multi-year targets.”
Fourth Quarter 2023 Financial Highlights:
GAAP Results
- Revenue increased 37.5% to $100.5
million in the fourth quarter of 2023, compared to $73.1 million in
the fourth quarter of 2022.
- Gross Profit increased to $61.8 million, resulting in Gross
Margin of 61.5%, for the fourth quarter of 2023, compared to Gross
Profit of $41.5 million and Gross Margin of 56.8% in the fourth
quarter of 2022.
- Net income was $1.3 million in the fourth quarter of 2023,
compared to net loss of $1.1 million in the fourth quarter of
2022.
Key Operating Metrics and Non-GAAP Results
- Total Payment Volume increased 33.2% to $5.4 billion in the
fourth quarter of 2023, compared to $4.1 billion in the fourth
quarter of 2022.
- Revenue Less Ancillary Services increased 42.6% to $96.1
million in the fourth quarter of 2023, compared to $67.4 million in
the fourth quarter of 2022. Revenue Less Ancillary Services in the
fourth quarter of 2023 was estimated to be favorably impacted by
changes in foreign exchange rates between September 30, 2023 and
December 31, 2023 by approximately $0.7 million.
- Adjusted Gross Profit increased to $63.5 million, resulting in
Adjusted Gross Margin of 66.1% in the fourth quarter of 2023,
compared to Adjusted Gross Profit of $44.5 million and Adjusted
Gross Margin of 66.0% in the fourth quarter of 2022. Prior year
Adjusted Gross Profit and Adjusted Gross Margin have been recast to
align with the updated methodology as described in the Key
Operating Metrics and Non-GAAP Financial Measures section
below.
- Adjusted EBITDA increased to $7.7 million in the fourth quarter
of 2023, compared to $1.0 million in the fourth quarter of
2022.
Fiscal-Year 2023 Financial Highlights:
GAAP Results
- Revenue increased 39.3% to $403.1
million in fiscal-year 2023, compared to $289.4 million in
fiscal-year 2022.
- Gross Profit increased to $247.4 million, resulting in Gross
Margin of 61.4%, for fiscal-year 2023, compared to Gross Profit of
$174.9 million and Gross Margin of 60.4% in fiscal-year 2022.
- Net loss was $8.6 million in fiscal-year 2023, compared to net
loss of $39.3 million in fiscal-year 2022.
Key Operating Metrics and Non-GAAP Results
- Total Payment Volume increased 32.9% to $24.0 billion in
fiscal-year 2023, compared to $18.1 billion in fiscal-year
2022.
- Revenue Less Ancillary Services increased 42.8% to $381.5
million in fiscal-year 2023, compared to $267.1 million in
fiscal-year 2022.
- Adjusted Gross Profit increased to $254.1 million, resulting in
Adjusted Gross Margin of 66.6% in fiscal-year 2023, compared to
Adjusted Gross Profit of $181.9 million and Adjusted Gross Margin
of 68.1% in fiscal-year 2022. Fiscal-year 2022 Adjusted Gross
Profit and Adjusted Gross Margin have been recast to align with the
updated methodology as described in the Key Operating Metrics and
Non-GAAP Financial Measures section below.
- Adjusted EBITDA increased to $42.0 million in fiscal-year 2023,
compared to $14.9 million in fiscal-year 2022, a 546 basis point
expansion of our Adjusted EBITDA as a percentage of revenue less
ancillary services.
Fiscal-Year 2023 Business Highlights:
- In education, the Company continued to expand
its higher education footprint globally including notable growth in
the United Kingdom and throughout Asia-Pacific.
- The Company also continued to see success in its land and
expand strategy in the U.S., increasing the
footprint of its full-suite solution, and landing many blue-chip
clients.
- In travel, the Company experienced a
significant increase in terms of clients signed and revenue
realization from existing clients.
- In B2B, the Company continued to sign larger
enterprise deals and drive utilization among existing clients.
- In healthcare, the Company accelerated our
partnership strategy, solidifying relationships with Cerner
and FinThrive.
- The Company bolstered its global payment network with a focus
on supporting its strategic payer markets like India and
China, enhancing its relationships with WeChat
Pay as well as three of the largest banks in India.
- The Company continued its strong track record of strategic
M&A with the acquisition of
StudyLink.
First Quarter and Fiscal-Year 2024 Outlook:
“For Fiscal-Year 2024 we expect revenue less ancillary services
to grow 30% at the midpoint of our guidance. We also expect to
generate an approximately 320 basis point improvement in adjusted
EBITDA as a percentage of revenue less ancillary services at the
midpoint of our guidance,” said Mike Ellis, CFO of Flywire. “Our
seasonality across the fiscal year, and our results for Q1, are
expected to be impacted by Canadian regulatory changes, which will
reduce the number of international study permit applications and
delay some Canadian applications until later in the year. The
changes may also lead some students to study in other
countries.”
Based on information available as of February 27, 2024, Flywire
anticipates the following results for the first quarter and
fiscal-year 2024.
|
Fiscal-Year 2024* |
Revenue |
$501 to $535 million |
Revenue Less Ancillary Services |
$483 to $509 million |
Adjusted EBITDA** |
$65 to $76 million |
|
First Quarter 2024* |
Revenue |
$110 to $117 million |
Revenue Less Ancillary Services |
$106 to $111 million |
Adjusted EBITDA** |
$9 to $11 million |
*The Company has assumed foreign exchange rates prevailing as of
December 31, 2023.
**Flywire has not provided a quantitative reconciliation of
forecasted Adjusted EBITDA to forecasted GAAP net income (loss) or
to forecasted GAAP income (loss) before income taxes within this
earnings release because Flywire is unable, without making
unreasonable efforts, to calculate certain reconciling items with
confidence. These items include, but are not limited to income
taxes which are directly impacted by unpredictable fluctuations in
the market price of Flywire's stock.
These statements are forward-looking and actual results may
differ materially. Refer to the “Safe Harbor Statement” below for
information on the factors that could cause Flywire’s actual
results to differ materially from these forward-looking
statements.
Conference Call
The Company will host a conference call to discuss fourth
quarter and fiscal-year 2023 financial results today at 5:00 pm ET.
Hosting the call will be Mike Massaro, CEO, Rob Orgel, President
and COO, and Mike Ellis, CFO. The conference call can be accessed
live via webcast from the Company's investor relations website at
https://ir.flywire.com/. A replay will be available on the investor
relations website following the call.
Key Operating Metrics and Non-GAAP Financial
Measures
Flywire uses non-GAAP financial measures to supplement financial
information presented on a GAAP basis. The Company believes that
excluding certain items from its GAAP results allows management to
better understand its consolidated financial performance from
period to period and better project its future consolidated
financial performance as forecasts are developed at a level of
detail different from that used to prepare GAAP-based financial
measures. Moreover, Flywire believes these non-GAAP financial
measures provide its stakeholders with useful information to help
them evaluate the Company’s operating results by facilitating an
enhanced understanding of the Company’s operating performance and
enabling them to make more meaningful period to period comparisons.
There are limitations to the use of the non-GAAP financial measures
presented here. Flywire’s non-GAAP financial measures may not be
comparable to similarly titled measures of other companies. Other
companies, including companies in Flywire’s industry, may calculate
non-GAAP financial measures differently, limiting the usefulness of
those measures for comparative purposes.
Flywire uses supplemental measures of its performance which are
derived from its consolidated financial information, but which are
not presented in its consolidated financial statements prepared in
accordance with GAAP. These non-GAAP financial measures include the
following:
- Revenue Less Ancillary Services. Revenue Less Ancillary
Services represents the Company’s consolidated revenue in
accordance with GAAP after excluding (i) pass-through cost for
printing and mailing services and (ii) marketing fees. The Company
excludes these amounts to arrive at this supplemental non-GAAP
financial measure as it views these services as ancillary to the
primary services it provides to its clients.
- Adjusted Gross
Profit and Adjusted Gross Margin. Adjusted gross profit represents
Revenue Less Ancillary Services less cost of revenue adjusted to
(i) exclude pass-through cost for printing services, (ii) offset
marketing fees against costs incurred and (iii) exclude
depreciation and amortization, including accelerated amortization
on the impairment of customer set-up costs tied to technology
integration. Adjusted Gross Margin represents Adjusted Gross Profit
divided by Revenue Less Ancillary Services. Management believes
this presentation supplements the GAAP presentation of Gross Margin
with a useful measure of the gross margin of the Company’s
payment-related services, which are the primary services it
provides to its clients. Beginning with the quarter ended December
31, 2022, Flywire has excluded depreciation and amortization from
the calculation of its adjusted Gross Profit, which it believes
enhances the understanding of the Company’s operating performance
and enables more meaningful period to period comparisons. The
Company’s previously reported Adjusted Gross Profit and Adjusted
Gross Margin for the three months and twelve months ended December
31, 2022 were recast to conform to the updated methodology and are
reflected herein for comparison purposes.
- Adjusted EBITDA. Adjusted EBITDA represents EBITDA further
adjusted by excluding (i) stock-based compensation expense and
related payroll taxes, (ii) the impact from the change in fair
value measurement for contingent consideration associated with
acquisitions,(iii) gain (loss) from the remeasurement of foreign
currency, (iv) indirect taxes related to intercompany activity, (v)
acquisition related transaction costs, if applicable, and (vi)
employee retention costs, such as incentive compensation,
associated with acquisition activities. Management believes that
the exclusion of these amounts to calculate Adjusted EBITDA
provides useful measures for period-to-period comparisons of the
Company’s business.
- Revenue Less Ancillary Services at Constant Currency. Revenue
Less Ancillary Services at Constant Currency represents Revenue
Less Ancillary Services adjusted to show presentation on a constant
currency basis. The constant currency information presented is
calculated by translating current period results using prior period
weighted average foreign currency exchange rates. Flywire analyzes
Revenue Less Ancillary Services on a constant currency basis to
provide a comparable framework for assessing how the business
performed excluding the effect of foreign currency
fluctuations.
These non-GAAP financial measures are not meant to be considered
as indicators of performance in isolation from or as a substitute
for the Company’s revenue, gross profit, gross margin or net income
(loss) prepared in accordance with GAAP and should be read only in
conjunction with financial information presented on a GAAP basis.
Reconciliations of Revenue Less Ancillary Services, Revenue Less
Ancillary Services at Constant Currency, Adjusted Gross Profit,
Adjusted Gross Margin and Adjusted EBITDA to the most directly
comparable GAAP financial measure are presented below. Flywire
encourages you to review these reconciliations in conjunction with
the presentation of the non-GAAP financial measures for each of the
periods presented. In future fiscal periods, Flywire may exclude
such items and may incur income and expenses similar to these
excluded items. Flywire has not provided a quantitative
reconciliation of forecasted Adjusted EBITDA to forecasted GAAP net
income (loss) or to forecasted GAAP income (loss) before income
taxes within this earnings release because it is unable, without
making unreasonable efforts, to calculate certain reconciling items
with confidence. These items include but are not limited to income
taxes which are directly impacted by unpredictable fluctuations in
the market price of Flywire's stock.
About Flywire
Flywire is a global payments enablement and software company.
Flywire combines its proprietary global payments network, next-gen
payments platform and vertical-specific software to deliver the
most important and complex payments for its clients and their
customers.
Flywire leverages its vertical-specific software and payments
technology to deeply embed within the existing A/R workflows for
its clients across the education, healthcare and travel vertical
markets, as well as in key B2B industries. Flywire also integrates
with leading ERP systems, so organizations can optimize the payment
experience for their customers while eliminating operational
challenges.
Flywire supports more than 3,800 clients with diverse payment
methods in more than 140 currencies across 240 countries and
territories around the world. Flywire is headquartered in Boston,
MA, USA with additional offices around the globe. For more
information, visit www.flywire.com. Follow
Flywire on X (formerly known as
Twitter), LinkedIn and
Facebook.
Safe Harbor Statement
This release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
including, but not limited to, statements regarding Flywire’s
future operating results and financial position, Flywire’s business
strategy and plans, market growth, and Flywire’s objectives for
future operations. Flywire intends such forward-looking statements
to be covered by the safe harbor provisions for forward-looking
statements contained in Section 21E of the Securities Exchange Act
of 1934 and the Private Securities Litigation Reform Act of 1995.
In some cases, you can identify forward-looking statements by terms
such as, but not limited to, “believe,” “may,” “will,”
“potentially,” “estimate,” “continue,” “anticipate,” “intend,”
“could,” “would,” “project,” “target,” “plan,” “expect,” or the
negative of these terms, and similar expressions intended to
identify forward-looking statements. Such forward-looking
statements are based upon current expectations that involve risks,
changes in circumstances, assumptions, and uncertainties. Important
factors that could cause actual results to differ materially from
those reflected in Flywire's forward-looking statements include,
among others, Flywire’s future financial performance, including its
expectations regarding Revenue, Revenue Less Ancillary Services,
and Adjusted EBITDA and foreign exchange rates. Risks that may
cause actual results to differ materially from these forward
looking statements include, but are not limited to: Flywire’s
ability to execute its business plan and effectively manage its
growth; Flywire’s cross-border expansion plans and ability to
expand internationally; anticipated trends, growth rates, and
challenges in Flywire’s business and in the markets in which
Flywire operates; the sufficiency of Flywire’s cash and cash
equivalents to meet its liquidity needs; political, economic,
foreign currency exchange rate, inflation, legal, social and health
risks, that may affect Flywire’s business or the global economy;
Flywire’s beliefs and objectives for future operations; Flywire’s
ability to develop and protect its brand; Flywire’s ability to
maintain and grow the payment volume that it processes; Flywire’s
ability to further attract, retain, and expand its client base;
Flywire’s ability to develop new solutions and services and bring
them to market in a timely manner; Flywire’s expectations
concerning relationships with third parties, including financial
institutions and strategic partners; the effects of increased
competition in Flywire’s markets and its ability to compete
effectively; recent and future acquisitions or investments in
complementary companies, products, services, or technologies;
Flywire’s ability to enter new client verticals, including its
relatively new business-to-business sector; Flywire’s expectations
regarding anticipated technology needs and developments and its
ability to address those needs and developments with its solutions;
Flywire’s expectations regarding litigation and legal and
regulatory matters; Flywire’s expectations regarding its ability to
meet existing performance obligations and maintain the operability
of its solutions; Flywire’s expectations regarding the effects of
existing and developing laws and regulations, including with
respect to payments and financial services, taxation, privacy and
data protection; economic and industry trends, projected growth, or
trend analysis; Flywire’s ability to adapt to changes in U.S.
federal income or other tax laws or the interpretation of tax laws,
including the Inflation Reduction Act of 2022; Flywire’s ability to
attract and retain qualified employees; Flywire’s ability to
maintain, protect, and enhance its intellectual property; Flywire’s
ability to maintain the security and availability of its solutions;
the increased expenses associated with being a public company; the
future market price of Flywire’s common stock; and other factors
that are described in the "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" sections of Flywire's Annual Report on Form 10-K for
the year ended December 31, 2022 and Quarterly Report on Form 10-Q
for the quarter ended September 30, 2023, which are on file
with the Securities and Exchange Commission (SEC) and available on
the SEC's website at https://www.sec.gov/. Additional factors
may be described in those sections of Flywire’s Annual Report on
Form 10-K for the year ended December 31, 2023, expected to be
filed with the SEC in the first quarter of 2024. The information in
this release is provided only as of the date of this release, and
Flywire undertakes no obligation to update any forward-looking
statements contained in this release on account of new information,
future events, or otherwise, except as required by law.
Contacts
Investor Relations:Akil
Hollisir@Flywire.com
Media:Sarah
KingSarah.King@Flywire.com
Walker
Sandsflywirepr@walkersands.com
Condensed Consolidated Statements of Operations and
Comprehensive Income (Loss) |
(Unaudited) (Amounts in thousands, except share and per
share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
|
Year Ended December 31, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Revenue |
|
$ |
100,545 |
|
|
$ |
73,053 |
|
|
$ |
403,094 |
|
|
$ |
289,375 |
|
Costs and operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Payment processing services costs |
|
36,780 |
|
|
29,585 |
|
|
147,339 |
|
|
107,933 |
|
Technology and development |
|
16,898 |
|
|
12,692 |
|
|
62,028 |
|
|
50,257 |
|
Selling and marketing |
|
28,830 |
|
|
20,287 |
|
|
107,621 |
|
|
78,456 |
|
General and administrative |
|
28,065 |
|
|
19,860 |
|
|
107,624 |
|
|
82,949 |
|
Total costs and operating expenses |
|
110,573 |
|
|
82,424 |
|
|
424,612 |
|
|
319,595 |
|
Loss from operations |
|
$ |
(10,028 |
) |
|
$ |
(9,371 |
) |
|
$ |
(21,518 |
) |
|
$ |
(30,220 |
) |
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
(92 |
) |
|
(327 |
) |
|
(372 |
) |
|
(1,211 |
) |
Interest income |
|
5,638 |
|
|
1,787 |
|
|
13,349 |
|
|
3,244 |
|
Gain (loss) from remeasurement of foreign currency |
|
7,707 |
|
|
5,915 |
|
|
4,189 |
|
|
(9,172 |
) |
Total other income (expense), net |
|
13,253 |
|
|
7,375 |
|
|
17,166 |
|
|
(7,139 |
) |
Income (loss) before provision for income taxes |
|
3,225 |
|
|
(1,996 |
) |
|
(4,352 |
) |
|
(37,359 |
) |
Provision for (benefit from) income taxes |
|
1,938 |
|
|
(867 |
) |
|
4,214 |
|
|
1,988 |
|
Net income (loss) |
|
$ |
1,287 |
|
|
$ |
(1,129 |
) |
|
$ |
(8,566 |
) |
|
$ |
(39,347 |
) |
Foreign currency translation adjustment |
|
3,731 |
|
|
(1,105 |
) |
|
3,232 |
|
|
(1,513 |
) |
Comprehensive income (loss) |
|
$ |
5,018 |
|
|
$ |
(2,234 |
) |
|
$ |
(5,334 |
) |
|
$ |
(40,860 |
) |
Net income (loss) attributable to common stockholders - basic and
diluted |
|
$ |
1,287 |
|
|
$ |
(1,129 |
) |
|
$ |
(8,566 |
) |
|
$ |
(39,347 |
) |
Net income (loss) per share attributable to common stockholders -
basic |
|
$ |
0.01 |
|
|
$ |
(0.01 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.36 |
) |
Net income (loss) per share attributable to common stockholders -
diluted |
|
$ |
0.01 |
|
|
$ |
(0.01 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.36 |
) |
Weighted average common shares outstanding - basic |
|
121,690,938 |
|
|
107,925,637 |
|
|
114,828,494 |
|
|
107,935,514 |
|
Weighted average common shares outstanding - diluted |
|
128,877,877 |
|
|
107,925,637 |
|
|
114,828,494 |
|
|
107,935,514 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Balance Sheets |
|
(Unaudited) (Amounts in thousands, except share
amounts) |
|
|
|
|
|
|
|
|
|
December 31, |
|
December 31, |
|
|
|
|
2023 |
|
|
|
2022 |
|
|
Assets |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
654,608 |
|
|
$ |
349,177 |
|
|
Restricted cash |
|
|
— |
|
|
|
2,000 |
|
|
Accounts receivable, net |
|
|
18,215 |
|
|
|
13,697 |
|
|
Unbilled receivables, net |
|
|
10,689 |
|
|
|
5,268 |
|
|
Funds receivable from payment partners |
|
|
113,945 |
|
|
|
62,970 |
|
|
Prepaid expenses and other current assets |
|
|
18,227 |
|
|
|
17,531 |
|
|
Total current assets |
|
|
815,684 |
|
|
|
450,643 |
|
|
Property and equipment, net |
|
|
15,134 |
|
|
|
13,317 |
|
|
Intangible assets, net |
|
|
108,178 |
|
|
|
97,616 |
|
|
Goodwill |
|
|
121,646 |
|
|
|
97,766 |
|
|
Other assets |
|
|
19,089 |
|
|
|
14,945 |
|
|
Total assets |
|
$ |
1,079,731 |
|
|
$ |
674,287 |
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Accounts payable |
|
$ |
12,587 |
|
|
$ |
13,325 |
|
|
Funds payable to clients |
|
|
210,922 |
|
|
|
124,305 |
|
|
Accrued expenses and other current liabilities |
|
|
43,315 |
|
|
|
34,423 |
|
|
Deferred revenue |
|
|
6,968 |
|
|
|
5,223 |
|
|
Total current liabilities |
|
|
273,792 |
|
|
|
177,276 |
|
|
Deferred tax liabilities |
|
|
15,391 |
|
|
|
12,149 |
|
|
Other liabilities |
|
|
4,431 |
|
|
|
2,959 |
|
|
Total liabilities |
|
|
293,614 |
|
|
|
192,384 |
|
|
Commitments and contingencies (Note 16) |
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
Preferred stock, $0.0001 par value; 10,000,000 shares authorized as
of December 31, 2023 and 2022; and no shares issued and outstanding
as of December 31, 2023 and 2022 |
|
|
— |
|
|
|
— |
|
|
Voting common stock, $0.0001 par value; 2,000,000,000 shares
authorized as of December 31, 2023 and 2022; 123,010,207 shares
issued and 120,695,162 shares outstanding as of December 31, 2023;
109,790,702 shares issued and 107,472,980 shares outstanding as of
December 31, 2022 |
|
|
11 |
|
|
|
10 |
|
|
Non-voting common stock, $0.0001 par value; 10,000,000 shares
authorized as of December 31, 2023 and 2022; 1,873,320 shares
issued and outstanding as of December 31, 2023 and 2022 |
|
|
1 |
|
|
|
1 |
|
|
Treasury voting common stock, 2,315,045 and 2,317,722 shares as of
December 31, 2023 and 2022, respectively, held at cost |
|
|
(747 |
) |
|
|
(748 |
) |
|
Additional paid-in capital |
|
|
959,302 |
|
|
|
649,756 |
|
|
Accumulated other comprehensive income (loss) |
|
|
1,320 |
|
|
|
(1,912 |
) |
|
Accumulated deficit |
|
|
(173,770 |
) |
|
|
(165,204 |
) |
|
Total stockholders’ equity |
|
|
786,117 |
|
|
|
481,903 |
|
|
Total liabilities and stockholders’ equity |
|
$ |
1,079,731 |
|
|
$ |
674,287 |
|
|
|
|
|
|
|
|
Condensed Consolidated Statement of Cash
Flows |
|
(Unaudited)
(Amounts in thousands) |
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
|
2023 |
|
|
2022 |
|
|
Cash
flows from operating activities: |
|
|
|
|
|
|
|
Net loss |
|
$ |
(8,566 |
) |
|
$ |
(39,347 |
) |
|
Adjustments
to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
|
|
Depreciation
and amortization |
|
15,764 |
|
|
12,304 |
|
|
Stock-based
compensation expense |
|
43,726 |
|
|
30,259 |
|
|
Amortization
of deferred contract costs |
|
1,789 |
|
|
1,799 |
|
|
Change in
fair value of contingent consideration |
|
380 |
|
|
(2,805 |
) |
|
Deferred tax
provision (benefit) |
|
72 |
|
|
(1,708 |
) |
|
Provision
for uncollectible accounts |
|
326 |
|
|
152 |
|
|
Non-cash
interest expense |
|
298 |
|
|
348 |
|
|
Changes in
operating assets and liabilities, net of acquisitions: |
|
|
|
|
|
|
|
Accounts
receivable |
|
(2,082 |
) |
|
(323 |
) |
|
Unbilled
receivables |
|
(5,394 |
) |
|
(1,928 |
) |
|
Funds
receivable from payment partners |
|
(50,975 |
) |
|
(30,917 |
) |
|
Prepaid
expenses, other current assets and other assets |
|
(4,279 |
) |
|
(11,318 |
) |
|
Funds
payable to clients |
|
86,616 |
|
|
48,932 |
|
|
Accounts
payable, accrued expenses and other current liabilities |
|
5,548 |
|
|
6,761 |
|
|
Contingent
consideration |
|
(467 |
) |
|
(4,510 |
) |
|
Other
liabilities |
|
(1,260 |
) |
|
(1,872 |
) |
|
Deferred
revenue |
|
(871 |
) |
|
(400 |
) |
|
Net cash
provided by operating activities |
|
80,625 |
|
|
5,427 |
|
|
|
|
|
|
|
|
|
|
Cash
flows from investing activities: |
|
|
|
|
|
|
|
Capitalization of internally developed software |
|
(5,004 |
) |
|
(5,717 |
) |
|
Purchases of
property and equipment |
|
(1,009 |
) |
|
(1,353 |
) |
|
Business
acquisition, net of cash acquired |
|
(32,764 |
) |
|
(17,140 |
) |
|
Contingent
consideration paid for acquisitions |
|
— |
|
|
(453 |
) |
|
Net cash
used in investing activities |
|
(38,777 |
) |
|
(24,663 |
) |
|
Cash
flows from financing activities: |
|
|
|
|
|
|
|
Proceeds
from issuance of common stock under public offering, net of
underwriter discounts and commissions |
|
261,119 |
|
|
— |
|
|
Payments of
costs related to public offering |
|
(1,062 |
) |
|
— |
|
|
Payment of
long-term debt |
|
— |
|
|
(25,939 |
) |
|
Contingent
consideration paid for acquisitions |
|
(1,207 |
) |
|
(3,701 |
) |
|
Payments of
tax withholdings for net settled option exercises |
|
(8,483 |
) |
|
(2,564 |
) |
|
Proceeds
from the issuance of stock under Employee Stock Purchase Plan |
|
2,691 |
|
|
1,271 |
|
|
Proceeds
from exercise of stock options |
|
10,360 |
|
|
6,963 |
|
|
Net cash
provided by (used in) financing activities |
|
263,418 |
|
|
(23,970 |
) |
|
Effect of
exchange rates changes on cash and cash equivalents |
|
(1,835 |
) |
|
5,023 |
|
|
Net
increase (decrease) in cash, cash equivalents and restricted
cash |
|
303,431 |
|
|
(38,183 |
) |
|
Cash, cash equivalents and restricted cash, beginning of
year |
|
$ |
351,177 |
|
|
$ |
389,360 |
|
|
Cash, cash equivalents and restricted cash, end of
year |
|
$ |
654,608 |
|
|
$ |
351,177 |
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Financial Measures |
|
(Amounts in millions, except percentages) |
|
Modified Methodology |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
Revenue |
|
$ |
100.5 |
|
|
$ |
73.1 |
|
|
$ |
403.1 |
|
|
$ |
289.4 |
|
|
Adjusted to exclude gross up for: |
|
|
|
|
|
|
|
|
|
Pass-through cost for printing and mailing |
|
|
(4.0 |
) |
|
|
(5.3 |
) |
|
|
(19.4 |
) |
|
|
(20.4 |
) |
|
Marketing fees |
|
|
(0.4 |
) |
|
|
(0.4 |
) |
|
|
(2.2 |
) |
|
|
(1.9 |
) |
|
Revenue Less Ancillary Services |
|
$ |
96.1 |
|
|
$ |
67.4 |
|
|
$ |
381.5 |
|
|
$ |
267.1 |
|
|
Payment processing services costs |
|
|
36.8 |
|
|
|
29.6 |
|
|
|
147.3 |
|
|
|
107.9 |
|
|
Hosting and amortization costs within technology and development
expenses |
|
|
1.9 |
|
|
|
2.0 |
|
|
|
8.4 |
|
|
|
6.6 |
|
|
Cost of Revenue |
|
$ |
38.7 |
|
|
$ |
31.6 |
|
|
$ |
155.7 |
|
|
$ |
114.5 |
|
|
Adjusted to: |
|
|
|
|
|
|
|
|
|
Exclude printing and mailing costs |
|
|
(4.0 |
) |
|
|
(5.3 |
) |
|
|
(19.4 |
) |
|
|
(20.4 |
) |
|
Offset marketing fees against related costs |
|
|
(0.4 |
) |
|
|
(0.4 |
) |
|
|
(2.2 |
) |
|
|
(1.9 |
) |
|
Exclude depreciation and amortization |
|
|
(1.7 |
) |
|
|
(3.0 |
) |
|
|
(6.7 |
) |
|
|
(7.0 |
) |
|
Adjusted Cost of Revenue |
|
$ |
32.6 |
|
|
$ |
22.9 |
|
|
$ |
127.4 |
|
|
$ |
85.2 |
|
|
Gross Profit |
|
$ |
61.8 |
|
|
$ |
41.5 |
|
|
$ |
247.4 |
|
|
$ |
174.9 |
|
|
Gross Margin |
|
|
61.5 |
% |
|
|
56.8 |
% |
|
|
61.4 |
% |
|
|
60.4 |
% |
|
Adjusted Gross Profit |
|
$ |
63.5 |
|
|
$ |
44.5 |
|
|
$ |
254.1 |
|
|
$ |
181.9 |
|
|
Adjusted Gross Margin |
|
|
66.1 |
% |
|
|
66.0 |
% |
|
|
66.6 |
% |
|
|
68.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
Previous Methodology |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
Revenue |
|
$ |
100.5 |
|
|
$ |
73.1 |
|
|
$ |
403.1 |
|
|
$ |
289.4 |
|
|
Adjusted to exclude gross up for: |
|
|
|
|
|
|
|
|
|
Pass-through cost for printing and mailing |
|
|
(4.0 |
) |
|
|
(5.3 |
) |
|
|
(19.4 |
) |
|
|
(20.4 |
) |
|
Marketing fees |
|
|
(0.4 |
) |
|
|
(0.4 |
) |
|
|
(2.2 |
) |
|
|
(1.9 |
) |
|
Revenue Less Ancillary Services |
|
$ |
96.1 |
|
|
$ |
67.4 |
|
|
$ |
381.5 |
|
|
$ |
267.1 |
|
|
Payment processing services costs |
|
|
36.8 |
|
|
|
29.6 |
|
|
|
147.3 |
|
|
|
107.9 |
|
|
Hosting and amortization costs within technology and development
expenses |
|
|
1.9 |
|
|
|
2.0 |
|
|
|
8.4 |
|
|
|
6.6 |
|
|
Cost of Revenue |
|
$ |
38.7 |
|
|
$ |
31.6 |
|
|
$ |
155.7 |
|
|
$ |
114.5 |
|
|
Adjusted to: |
|
|
|
|
|
|
|
|
|
Exclude printing and mailing costs |
|
|
(4.0 |
) |
|
|
(5.3 |
) |
|
|
(19.4 |
) |
|
|
(20.4 |
) |
|
Offset marketing fees against related costs |
|
|
(0.4 |
) |
|
|
(0.4 |
) |
|
|
(2.2 |
) |
|
|
(1.9 |
) |
|
Adjusted Cost of Revenue |
|
$ |
34.3 |
|
|
$ |
25.9 |
|
|
$ |
134.1 |
|
|
$ |
92.2 |
|
|
Gross Profit |
|
$ |
61.8 |
|
|
$ |
41.5 |
|
|
$ |
247.4 |
|
|
$ |
174.9 |
|
|
Gross Margin |
|
|
61.5 |
% |
|
|
56.8 |
% |
|
|
61.4 |
% |
|
|
60.4 |
% |
|
Adjusted Gross Profit |
|
$ |
61.8 |
|
|
$ |
41.5 |
|
|
$ |
247.4 |
|
|
$ |
174.9 |
|
|
Adjusted Gross Margin |
|
|
64.3 |
% |
|
|
61.6 |
% |
|
|
64.8 |
% |
|
|
65.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
EBITDA and Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
Net income (loss) |
|
$ |
1.3 |
|
|
$ |
(1.1 |
) |
|
$ |
(8.6 |
) |
|
$ |
(39.3 |
) |
|
Interest expense |
|
|
0.1 |
|
|
|
0.3 |
|
|
|
0.4 |
|
|
|
1.2 |
|
|
Interest income |
|
|
(5.6 |
) |
|
|
(1.7 |
) |
|
|
(13.3 |
) |
|
|
(3.2 |
) |
|
Provision for income taxes |
|
|
1.9 |
|
|
|
(0.9 |
) |
|
|
4.2 |
|
|
|
2.0 |
|
|
Depreciation and amortization |
|
|
4.3 |
|
|
|
4.9 |
|
|
|
16.4 |
|
|
|
14.1 |
|
|
EBITDA |
|
|
2.0 |
|
|
|
1.5 |
|
|
|
(0.9 |
) |
|
|
(25.2 |
) |
|
Stock-based compensation expense and related taxes |
|
|
12.9 |
|
|
|
7.9 |
|
|
|
45.2 |
|
|
|
31.2 |
|
|
Change in fair value of contingent consideration |
|
|
0.0 |
|
|
|
(3.1 |
) |
|
|
0.4 |
|
|
|
(2.8 |
) |
|
(Gain) loss from remeasurement of foreign currency |
|
|
(7.7 |
) |
|
|
(6.0 |
) |
|
|
(4.2 |
) |
|
|
9.1 |
|
|
Indirect taxes related to intercompany activity |
|
|
— |
|
|
|
0.1 |
|
|
|
0.2 |
|
|
|
0.4 |
|
|
Acquisition related transaction costs |
|
|
0.4 |
|
|
|
0.4 |
|
|
|
0.4 |
|
|
|
0.8 |
|
|
Acquisition related employee retention costs |
|
|
0.1 |
|
|
|
0.2 |
|
|
|
0.9 |
|
|
|
1.4 |
|
|
Adjusted EBITDA |
|
$ |
7.7 |
|
|
$ |
1.0 |
|
|
$ |
42.0 |
|
|
$ |
14.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, 2023 |
|
Year Ended December 31, 2023 |
|
|
|
Transaction |
|
Platform and Usage-Based Fee |
|
Revenue |
|
Transaction |
|
Platform and Usage-Based Fee |
|
Revenue |
|
Revenue |
|
$ |
81.9 |
|
|
$ |
18.6 |
|
|
$ |
100.5 |
|
|
$ |
329.7 |
|
|
$ |
73.4 |
|
|
$ |
403.1 |
|
|
Adjusted to exclude gross up for: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass-through cost for printing and mailing |
|
|
— |
|
|
|
(4.0 |
) |
|
|
(4.0 |
) |
|
|
— |
|
|
|
(19.4 |
) |
|
|
(19.4 |
) |
|
Marketing fees |
|
|
(0.4 |
) |
|
|
— |
|
|
|
(0.4 |
) |
|
|
(2.2 |
) |
|
|
— |
|
|
|
(2.2 |
) |
|
Revenue Less Ancillary Services |
|
$ |
81.5 |
|
|
$ |
14.6 |
|
|
$ |
96.1 |
|
|
$ |
327.5 |
|
|
$ |
54.0 |
|
|
$ |
381.5 |
|
|
Percentage of Revenue |
|
|
81.5 |
% |
|
|
18.5 |
% |
|
|
100.0 |
% |
|
|
81.8 |
% |
|
|
18.2 |
% |
|
|
100.0 |
% |
|
Percentage of Revenue Less Ancillary Services |
|
|
84.8 |
% |
|
|
15.2 |
% |
|
|
100.0 |
% |
|
|
85.8 |
% |
|
|
14.2 |
% |
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, 2022 |
|
Year Ended December 31, 2022 |
|
|
|
Transaction |
|
Platform and Usage-Based Fee |
|
Revenue |
|
Transaction |
|
Platform and Usage-Based Fee |
|
Revenue |
|
Revenue |
|
$ |
56.7 |
|
|
$ |
16.4 |
|
|
$ |
73.1 |
|
|
$ |
224.2 |
|
|
$ |
65.2 |
|
|
$ |
289.4 |
|
|
Adjusted to exclude gross up for: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass-through cost for printing and mailing |
|
|
— |
|
|
|
(5.3 |
) |
|
|
(5.3 |
) |
|
|
— |
|
|
|
(20.4 |
) |
|
|
(20.4 |
) |
|
Marketing fees |
|
|
(0.4 |
) |
|
|
— |
|
|
|
(0.4 |
) |
|
|
(1.9 |
) |
|
|
— |
|
|
|
(1.9 |
) |
|
Revenue Less Ancillary Services |
|
$ |
56.3 |
|
|
$ |
11.1 |
|
|
$ |
67.4 |
|
|
$ |
222.3 |
|
|
$ |
44.8 |
|
|
$ |
267.1 |
|
|
Percentage of Revenue |
|
|
77.6 |
% |
|
|
22.4 |
% |
|
|
100.0 |
% |
|
|
77.5 |
% |
|
|
22.5 |
% |
|
|
100.0 |
% |
|
Percentage of Revenue Less Ancillary Services |
|
|
83.5 |
% |
|
|
16.5 |
% |
|
|
100.0 |
% |
|
|
83.2 |
% |
|
|
16.8 |
% |
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Margin |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
Revenue (A) |
|
$ |
100.5 |
|
|
$ |
73.1 |
|
|
$ |
403.1 |
|
|
$ |
289.4 |
|
|
Revenue less ancillary services (B) |
|
|
96.1 |
|
|
|
67.4 |
|
|
|
381.5 |
|
|
|
267.1 |
|
|
EBITDA (C) |
|
|
2.0 |
|
|
|
1.5 |
|
|
|
(0.9 |
) |
|
|
(25.2 |
) |
|
Adjusted EBITDA (D) |
|
|
7.7 |
|
|
|
1.0 |
|
|
|
42.0 |
|
|
|
14.9 |
|
|
EBITDA Margin (C/A) |
|
|
2.0% |
|
|
|
2.0% |
|
|
|
-0.2% |
|
|
|
-8.7% |
|
|
Adjusted EBITDA Margin (D/A) |
|
|
7.6% |
|
|
|
1.3% |
|
|
|
10.4% |
|
|
|
5.1% |
|
|
EBITDA Margin using RLAS (C/B) |
|
|
2.1% |
|
|
|
2.2% |
|
|
|
-0.2% |
|
|
|
-9.5% |
|
|
Adjusted EBITDA Margin using RLAS (D/B) |
|
|
8.0% |
|
|
|
1.4% |
|
|
|
11.0% |
|
|
|
5.6% |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue Less Ancillary Services at Constant
Currency: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
|
|
Year Ended December 31, |
|
|
|
|
|
|
2023 |
|
|
|
2022 |
|
|
Growth |
|
|
2023 |
|
|
|
2022 |
|
|
Growth |
|
Revenue |
|
$ |
100.5 |
|
|
$ |
73.1 |
|
|
|
37.5 |
% |
|
$ |
403.1 |
|
|
$ |
289.4 |
|
|
|
39.3 |
% |
|
Ancillary services |
|
|
(4.4 |
) |
|
|
(5.7 |
) |
|
|
|
|
(21.6 |
) |
|
|
(22.3 |
) |
|
|
|
Revenue Less Ancillary Services |
|
|
96.1 |
|
|
|
67.4 |
|
|
|
42.6 |
% |
|
|
381.5 |
|
|
|
267.1 |
|
|
|
42.8 |
% |
|
Effects of foreign currency rate fluctuations |
|
|
(1.5 |
) |
|
|
— |
|
|
|
|
|
1.4 |
|
|
|
— |
|
|
|
|
Revenue Less Ancillary Services at Constant Currency |
|
$ |
94.6 |
|
|
$ |
67.4 |
|
|
|
40.4 |
% |
|
$ |
382.9 |
|
|
$ |
267.1 |
|
|
|
43.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guidance |
|
|
|
Three Months Ended March 31, 2024 |
|
Year Ended December 31, 2024 |
|
|
Low |
|
High |
|
Low |
|
High |
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
109.9 |
|
|
$ |
117.1 |
|
|
$ |
500.6 |
|
|
$ |
534.6 |
|
|
Adjusted to exclude gross up for: |
|
|
|
|
|
|
|
|
Pass through cost for printing and mailing |
|
(3.6 |
) |
|
|
(5.6 |
) |
|
|
(16.4 |
) |
|
|
(21.4 |
) |
|
Marketing fees |
|
(0.3 |
) |
|
|
(0.5 |
) |
|
|
(1.2 |
) |
|
|
(4.2 |
) |
|
Revenue Less Ancillary Services |
$ |
106.0 |
|
|
$ |
111.0 |
|
|
$ |
483.0 |
|
|
$ |
509.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
9.0 |
|
|
$ |
11.0 |
|
|
$ |
65.0 |
|
|
$ |
76.0 |
|
|
|
|
|
|
|
|
|
|
|
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