Flywire Corp at Goldman Sachs Communacopia & Technology Conference Transcript

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

Question: Will Nance - Goldman Sachs Group, Inc. - Analyst : Well, Cosmin, you joined the company earlier this year. I know Mike's goal and search for my understanding was to find a CFO who could help take Flywire to be a $1 billion revenue company. Now, that you're settled in, what have your impressions been of the business so far? And when can we pencil you in for $1 billion of revenue.

Question: Will Nance - Goldman Sachs Group, Inc. - Analyst : Great. It's all right.

Question: Will Nance - Goldman Sachs Group, Inc. - Analyst : So coming to see about six months now, what changes do you expect to make in terms of communications with the street, guidance philosophy, disclosures, et cetera?

Question: Will Nance - Goldman Sachs Group, Inc. - Analyst : So obviously, very tricky timing this year. I think the company had to give guidance for the year when one of your largest markets had not yet finalized, sweeping changes to its student visa program, talking about Canada, obviously. So that's led to elevated uncertainty this year. Some adjustments to your guidance as you learn more about that over the course of the year. As we sit here today, do you feel like the guidance is appropriately capturing the dynamics in Canada? And then second, I know it's a bit early in the tuition season, but do you have any preliminary thoughts around how the high season for the education business this quarter is shaking out? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 11, 2024 / 10:05PM, FLYW.OQ - Flywire Corp at Goldman Sachs Communacopia & Technology Conference

Question: Will Nance - Goldman Sachs Group, Inc. - Analyst : And then there's also been a lot of headlines in other parts of the market. It feels like we had a bit of a head fake in the UK, but as you mentioned, they clarified most of those rules. It seems like a lot of policies are actually going to be relatively unchanged. Correct me if I'm wrong. I think Australia is the one that has been getting a lot of focus over the summer has been making some noise recently about changes to their program. Could you compare the situation in Australia to the one that you face in Canada this year? And I think that issue here is maybe around vocational school. Any color on maybe how big that is or how important that is to Flywire in Australia?

Question: Will Nance - Goldman Sachs Group, Inc. - Analyst : So 2025, I know is forever away right now. One of the thing that's been really striking to me or somebody in our statistics that you shared at earnings about how the business is performing, excluding the disruption in Canada and a very consistent remaining in excess of 120%. You just talked about another wrinkle that I just at least have in the back of our minds, although it sounds like the exposure is much more manageable. But I guess putting that aside, just can you talk broadly the sustainability of the RRS and that 120%-plus range? How are you thinking about that as you lap some of the impacts that you face this year?

Question: Will Nance - Goldman Sachs Group, Inc. - Analyst : That makes a lot of sense. So it's the exit run rate. What do you think happens to Australia? What do you think happens NRR. That's a good framework.

Question: Will Nance - Goldman Sachs Group, Inc. - Analyst : Okay. All right. Maybe we can dig into the segments a little bit starting with education, largest vertical. Could you walk through how the competitive environment has evolved over time. How do you frame Flywire strategy to gain share of foreign students at your university? And then how do you retain those students as they continue to study over a number of years?

Question: Will Nance - Goldman Sachs Group, Inc. - Analyst : Makes sense. I guess what's the -- story there on domestic payments. You mentioned it's underappreciated by investors. Where are you today and what is the process like and getting that additional piece of the puzzle?

Question: Will Nance - Goldman Sachs Group, Inc. - Analyst : Right. Makes sense. And can you talk about share dynamics in education, how much shares left to go in the US specifically, you talked about having roughly 25% of universities. But when you think about share opportunity within the universes that you have, what does that look like from a competitive perspective?

Question: Will Nance - Goldman Sachs Group, Inc. - Analyst : Yes, got it. Okay. And so the strength in customer acquisition across the business has continued to be impressive. Education has remained a big part of the client signing story. And I know you've often talked about the healthy competition between the different verticals. And so it's been great to see. What are you seeing from a go-to-market perspective and then universities willingness to implement new processes this year?

Question: Will Nance - Goldman Sachs Group, Inc. - Analyst : Yes. Maybe on that note a couple of years ago, the company highlighted several opportunities outside of the more schools, higher student retention, and more domestic payments, more share of the university. Agents was a big part of that and I think non-client receivables, payer services. How would you frame these initiatives? What inning are we in? And how do you think about these as ways to augment the growth in education?

Question: Will Nance - Goldman Sachs Group, Inc. - Analyst : So education is a great story. It's not that the only story and I think in our travel in particular has been a clear area of strength over the past couple of years. Could you help the audience understand how Flywire differentiates itself in this market and you're coming off some years of really, really strong growth here. What do you think the growth outlook looks like from here?

Question: Will Nance - Goldman Sachs Group, Inc. - Analyst : Healthcare is another business. I think, Canada's had some challenges over the last couple of years, certainly had a bit of a hangover post COVID. Some of the fallout from that. You've mentioned some churn or client restructurings that have occurred. You have sound a little bit more positive on that business at the prospect of returning to growth in the second half of this year about continued progress on client signing. So how are you thinking about what that can contribute to the overall growth algorithm?

Question: Will Nance - Goldman Sachs Group, Inc. - Analyst : And then you're clearly doing a lot in your four primary verticals. If you look outside of the key verticals today, (technical difficulty) opportunity to provide our solutions and other verticals?

Question: Will Nance - Goldman Sachs Group, Inc. - Analyst : Makes sense. So let's turn over to the financial side. Despite all the issues going on in Canada and the high incremental and decremental margins of the business. You're still delivering really solid operating leverage this year you took that up this quarter despite some of the movement from the top line. Could you talk about the scalability of the cost base from here, how you're thinking about balancing investing in the business versus delivering on margin expansion? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 11, 2024 / 10:05PM, FLYW.OQ - Flywire Corp at Goldman Sachs Communacopia & Technology Conference

Question: Will Nance - Goldman Sachs Group, Inc. - Analyst : Yeah. And just like that, avoidance of doubt, we've got the question a little bit. You took out the margin expansion despite taking down the expectations around Canada and like the incremental margin on those revenues? Or is it I would guess is probably pretty high. So the question is, were the levers that were pulled to sustain the trajectory of EBITDA this year. Is that a pull forward of future margin expansion? Or do you think that you can still remain in the targets that you've set out on margin expansion from here?

Question: Will Nance - Goldman Sachs Group, Inc. - Analyst : That's really great. Okay. Prior to joining the company, the company did a capital raise for growth related M&A since then done a couple of deals studied link in invoice. This past quarter, you also instituted $100 million share repurchase authorization as well. So how are you thinking about the balance between M&A and capital returns?

Question: Will Nance - Goldman Sachs Group, Inc. - Analyst : So I think that's just about as much time as you had any final thoughts that you'd leave us with before we end it. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 11, 2024 / 10:05PM, FLYW.OQ - Flywire Corp at Goldman Sachs Communacopia & Technology Conference

Question: Will Nance - Goldman Sachs Group, Inc. - Analyst : So awesome. Well, I think with that, we're out of time, Cosmin. Thanks for joining us today. Really enjoyed the conversation.