Flywire Corp at Bank of America Electronic Payments Symposium (Virtual) Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Jason Alan Kupferberg - BofA Securities - Analyst : So yes, if you want to just lead us off, Rob, let's just talk about the high-level value prop and kind of really the problems that you help various businesses solve. So I think it's a pretty unique model.

Question: Jason Alan Kupferberg - BofA Securities - Analyst : Yes. Yes. No, I mean, the combination of the domain expertise along with the verticalized software and obviously, the payments network is a pretty powerful combination. So thanks for outlining that. without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. MARCH 19, 2024 / 5:30PM, FLYW.OQ - Flywire Corp at Bank of America Electronic Payments Symposium (Virtual) Just thinking back to your Analyst Day in the spring of 2022, you had talked about a medium-term outlook for, I think, roughly 30% revenue growth. And your initial guidance for 2024 is calling for that 30% top line growth. How would you encourage us to think about the building blocks of that 30%?

Question: Jason Alan Kupferberg - BofA Securities - Analyst : Yes. A nice kind of algorithm for a new CFO to be inheriting, and you guys did just name a new CFO who's starting soon. I guess, anything you may want to flag in terms of initial thoughts on areas of focus that Cosmin may have? And if you wanted to say maybe a word about his background for those who might not have seen the announcement?

Question: Jason Alan Kupferberg - BofA Securities - Analyst : Yes. Yes. Absolutely, and that's definitely good to hear. Why don't we dive into the verticals a bit because this is kind of what makes Flywire special, is this verticalized software and domain expertise. And I'll start with education, obviously, by far, your largest segment. Even though it is the largest, the growth, still solid. I mean I think on the U.S. side, education was up 19% last year, non-U.S. up north of 50%. So why don't you walk us through the evolution of the growth strategy in education, and what your main targets are in terms of initiatives for 2024 in this vertical?

Question: Jason Alan Kupferberg - BofA Securities - Analyst : Okay. Good stuff. I know you guys called out during the last earnings, some regulatory changes in Canada. Maybe you can just touch on what has actually transpired there. I know you guys were pretty transparent about what you were factoring into your outlook in terms of a headwind there. But why don't we just walk through the pieces so that everyone is on the same page? without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. MARCH 19, 2024 / 5:30PM, FLYW.OQ - Flywire Corp at Bank of America Electronic Payments Symposium (Virtual)

Question: Jason Alan Kupferberg - BofA Securities - Analyst : So just to pick up that last piece in the last few weeks, I guess, to the extent the scope has maybe widened a little bit, you alluded to, which I think was more to encompass K-12 potentially instead of just higher ed. But it sounds like despite that, you still feel okay with what you talked about on

Question: Jason Alan Kupferberg - BofA Securities - Analyst : Okay. I just want to make sure we got all the pieces there because I know these regulatory changes can come out of nowhere and...

Question: Jason Alan Kupferberg - BofA Securities - Analyst : Okay. All right. No, that's very clear. Tell us about another facet that I think we've observed in terms of the education strategy. And some of the success there was originally, the model was really focused on those cross-border payments, the international students traveling. It seems like you've had a lot of traction, particularly in the last, I'll call it, a couple of years within attaching domestic tuition payments to some of those customers that started with you on the international and cross-border side. Where are we kind of in that journey and understanding the economics -- like, we aren't the same for domestic versus international, but still it's incremental volume, and it seems like it's part of land and expand? So I would love to just hear about how that's gone. And what the pipeline for more of those opportunities look like?

Question: Jason Alan Kupferberg - BofA Securities - Analyst : For sure. Well, let's pivot over to travel and to B2B. And travel has been remarkable. I mean, coming out of the pandemic, obviously, you've seen some really explosive growth there. But just to start, walk us through because I think you've kind of have an interesting travel story, right? It's kind of some specialized niches within travel. So kind of lay that out for us. Where are we in kind of from Flywire's perspective, kind of normalization, right? There was a surge of travel post-COVID, and it seems like that's lasted a lot longer than pretty much anyone thought it would. But are you seeing signs of normalization? Maybe we can start there.

Question: Jason Alan Kupferberg - BofA Securities - Analyst : And on the B2B side, maybe you can unpack that a little bit for us. I've always felt like that vertical -- I know it's relatively small in the scheme of things, but you guys have a lot of long-term optimism there. Maybe it's been a little bit opaque to the Street. But if you can unpack that maybe with a couple of examples of what you're doing in that vertical and where the growth opportunities are, that would be great.

Question: Jason Alan Kupferberg - BofA Securities - Analyst : Okay. So it sounds like you've got a lot of different vectors of potential growth there. You're addressing a pretty big TAM across multiple verticals, and there's arguably a lot of corporates that sit in that kind of $100 million to low single-digit billions of revenue.

Question: Jason Alan Kupferberg - BofA Securities - Analyst : Yes. Yes, for sure. Well, let's cover health care, too, because we're going to run out of time, and health care is important also. But I know the growth there was a bit softer last year than it has been in the past and then relative to the other verticals. Maybe just give a quick recap on what drove that last year, what's the outlook for 2024 for health care? How do you plan on kind of reaccelerating things?

Question: Jason Alan Kupferberg - BofA Securities - Analyst : Well said. Let's just spend a minute on the balance sheet, which is very strong, debt-free and the $650 million or more in cash. Just take us through the capital deployment priorities.

Question: Jason Alan Kupferberg - BofA Securities - Analyst : Yes, you've got a good track record there. I think you guys have been pretty consistent since day 1 in terms of articulating really what kinds of targets you're looking for... without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. MARCH 19, 2024 / 5:30PM, FLYW.OQ - Flywire Corp at Bank of America Electronic Payments Symposium (Virtual)

Question: Jason Alan Kupferberg - BofA Securities - Analyst : Yes. Yes and speaking of financial targets, I mean you talked about the EBITDA outperformance in 2023 earlier. When I harken back to the Analyst Day in 2022, you talked about get into EBITDA margins of 10% to 20% in 2 to 4 years, you've obviously fulfilled that early. And then you talked about kind of longer term, the potential to get to -- I think, mid-20s plus was the figure that was articulated. So you've made a lot of progress. I guess, where is your confidence level in kind of getting to that longer-term target? And is there any rough time line you would encourage investors to think about for that target? I'm not sure if your guys thinking has evolved on that since Analyst Day.

Question: Jason Alan Kupferberg - BofA Securities - Analyst : Yes. Yes, and the operating leverage just comes even more so over time as you as you reach towards that $1 billion revenue target that you mentioned in the future. Well, on that note, I think we just ran out of time. A great conversation, I really appreciate all the insights. As always, Rob, thanks for doing this. Thanks, everyone, who joined in. And our next session will be starting in 15 minutes with privately held FedEx. So thank you, everybody.