UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 10, 2021
FLYWIRE CORPORATION
(Exact name of Registrant as specified in its charter)
| Delaware | 001-40430 | 27-0690799 | ||
| (State or other jurisdiction of incorporation) |
(Commission File No.) |
(IRS Employer Identification No.) |
141 Tremont St #10
Boston, MA 02111
(Address of principal executive offices and zip code)
Registrant’s telephone number, including area code: (617) 329-4524
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
| Voting Common Stock, $0.0001 par value per share | FLYW | The Nasdaq Stock Market LLC (Nasdaq Global Select Market) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02. | Results of Operations and Financial Condition. |
On August 10, 2021, Flywire Corporation (“Flywire”) issued a press release and is holding a conference call regarding its financial results for the quarter ended June 30, 2021. The press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein.
Various statements to be made during the conference call are “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, 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. Risks that may cause actual results to differ materially from these forward looking statements include, but are not limited to: political, economic, legal, social and health risks, including the recent COVID-19 pandemic and subsequent public health measures that may affect Flywire’s business or the global economy; 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 strategic partners; the effects of increased competition in Flywire’s markets and its ability to compete effectively; future acquisitions or investments in complementary companies, products, services, or technologies; Flywire’s ability to enter new client verticals, including its relatively new B2B 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 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 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 Prospectus dated May 25, 2021, which is 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 Quarterly Report on Form 10-Q for the quarter ended June 30, 2021, expected to be filed with the SEC in the third quarter of 2021. The information conveyed on the conference call is provided only as of the date of the conference call, and Flywire undertakes no obligation to update any forward-looking statements presented on the conference call on account of new information, future events, or otherwise, except as required by law.
| Item 7.01. | Regulation FD Disclosure. |
On August 10, 2021, the Company provided an investor presentation that will be made available on the investor relations section of the Company’s website at https://ir.flywire.com/. The investor presentation is furnished as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated by reference herein.
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits
| Exhibit No. |
Description | |
| 99.1 | Flywire Corporation Press Release dated August 10, 2021. | |
| 99.2 | Flywire Corporation Investor Presentation dated August 10, 2021 | |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| FLYWIRE CORPORATION | ||
| By: | /s/ Michael Ellis | |
| Name: Michael Ellis | ||
| Title: Chief Financial Officer | ||
Dated August 10, 2021
Exhibit 99.1
Flywire Reports Second Quarter 2021 Financial Results
Revenue Increased 56% Year-over-Year
Revenue Less Ancillary Services Increased 77% Year-over-Year
Total Payment Volume was $1.9 Billion, up 85% Year-over-Year
Company Provides Fiscal-Year 2021 Outlook
Boston, MA - August 10, 2021: Flywire Corporation (Nasdaq: FLYW) (“the Company”) a global payments enablement and software company, today reported financial results for its second quarter of 2021.
“I am pleased to report that we generated strong second quarter results, our first in our journey as a publicly traded company,” said Mike Massaro, CEO of Flywire. “We believe our performance, as highlighted by our revenue growth, continues to demonstrate the demand for digital payments solutions and our ability to help our clients get paid and help their customers pay with ease from anywhere in the world. Additionally, in Q2 we saw positive growth trends with new client acquisition across our key verticals of education, healthcare, travel and B2B, as well as increased adoption of our solutions with current clients.”
Second Quarter 2021 Financial Highlights:
GAAP Results
| • | Revenue increased 56% to $37.0 million in the second quarter of 2021, compared to $23.8 million in the second quarter of 2020. |
| • | Gross margin increased 11.6% in absolute terms to 60.8% in the second quarter of 2021, compared to 49.2%in the second quarter of 2020. |
| • | Net loss was $18.1 million in the second quarter of 2021, compared to $16.0 million in the second quarter of 2020. The increase in the Company’s net loss was primarily due to the revaluation of our preferred stock warrants resulting in a non-cash charge of $9.8 million during the second quarter of 2021 due to the initial public offering in May 2021. |
Key Operating Metrics and Non-GAAP Results
| • | Total Payment Volume increased 85% to $1.9 billion in the second quarter of 2021, compared to $1.0 billion in the second quarter of 2020. |
| • | Revenue Less Ancillary Services increased 77% to $33.0 million in the second quarter of 2021, compared to $18.6 million in the second quarter of 2020. |
| • | Adjusted Gross Margin increased 5.3% in absolute terms to 68.2% in the second quarter of 2021, compared to 62.9% in the second quarter of 2020. |
| • | Adjusted EBITDA was $(0.1) in the second quarter of 2021, compared to $(7.0) million in the second quarter of 2020. |
Fiscal-Year 2021 Outlook:
Based on information available as of August 10, 2021, for fiscal year 2021 Flywire expects the following:
| • | Revenue of $173 to $178 million |
| • | Revenue Less Ancillary Services of $158 to $161 million |
| • | Adjusted EBITDA of $4 to $6 million* |
*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 the company 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 the company’s stock.
Conference Call
The Company will host a conference call to discuss second quarter 2021 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 table
We use non-GAAP financial measures to supplement financial information presented on a GAAP basis. We believe that excluding certain items from our GAAP results allows management to better understand our consolidated financial performance from period to period and better project our future consolidated financial performance as forecasts are developed at a level of detail different from that used to prepare GAAP-based financial measures. Moreover, we believe these non-GAAP financial measures provide our stakeholders with useful information to help them evaluate our operating results by facilitating an enhanced understanding of our 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. Our non-GAAP financial measures may not be comparable to similarly titled measures of other companies. Other companies, including companies in our industry, may calculate non-GAAP financial measures differently than we do, limiting the usefulness of those measures for comparative purposes.
We use supplemental measures of our performance which are derived from our consolidated financial information, but which are not presented in our 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 our consolidated revenue in accordance with GAAP after excluding (i) pass-through cost for printing and mailing services and (ii) marketing fees. We exclude these amounts to arrive at this supplemental non-GAAP financial measure as we view these services as ancillary to the primary services we provide to our clients. |
| • | Adjusted Gross Margin. Adjusted gross margin represents adjusted gross profit divided by Revenue Less Ancillary Services. Adjusted gross profit represents Revenue Less Ancillary Services less cost of revenue adjusted to (i) exclude pass-through cost for printing services and (ii) offset marketing fees against costs incurred. Management believes this presentation supplements the GAAP presentation of gross margin with a useful measure of the gross margin of our payment-related services, which are the primary services we provide to our clients. |
| • | Adjusted EBITDA. Adjusted EBITDA represents EBITDA further adjusted by excluding (i) stock-based compensation expense, (ii) the impact from the change in fair value measurement for contingent consideration associated with acquisitions, (iii) the impact from the change in fair value measurement of our preferred stock warrants, (iv) other income (expense), net, (v) acquisition related transaction costs, 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 our business. |
These non-GAAP financial measures are not meant to be considered as indicators of performance in isolation from or as a substitute for revenue, gross margin or net 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, Adjusted Gross Margin and Adjusted EBITDA to the most directly comparable GAAP financial measure are presented below. We encourage 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, we may exclude such items and may incur income and expenses similar to these excluded items. We have 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 the company 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 the company’s stock.
About Flywire
Flywire Corporation (Nasdaq: FLYW) 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 over 2,400 clients with diverse payment methods in more than 130 currencies across 240 countries and territories around the world. The company is headquartered in Boston, MA, USA with global offices. For more information, visit www.flywire.com. Follow Flywire on 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 our future operating results and financial position, our business strategy and plans, market growth, and our 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. Risks that may cause actual results to differ materially from these forward looking statements include, but are not limited to: political, economic, legal, social and health risks, including the recent COVID-19 pandemic and subsequent public health measures that may affect Flywire’s business or the global economy; 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 strategic partners; the effects of increased competition in Flywire’s markets and its ability to compete effectively; future acquisitions or investments in complementary companies, products, services, or technologies; Flywire’s ability to enter new client verticals, including its relatively new B2B 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 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 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 Prospectus dated May 25, 2021, which is 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 Quarterly Report on Form 10-Q for the quarter ended June 30, 2021, expected to be filed with the SEC in the third quarter of 2021. 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
Media:
Sarah King
Sarah.King@Flywire.com
Prosek Partners
pro-flywire@prosek.com
Investor Relations:
ICR
flywireir@icrinc.com
Unaudited Condensed Consolidated Statement of Operations
(Amounts in thousands, except share and per share amounts)
| Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Revenue |
$ | 36,976 | $ | 23,757 | $ | 81,967 | $ | 56,466 | ||||||||
| Costs and operating expenses: |
||||||||||||||||
| Payment processing services costs |
13,122 | 10,868 | 29,213 | 22,477 | ||||||||||||
| Technology and development |
6,929 | 6,378 | 14,451 | 11,726 | ||||||||||||
| Selling and marketing |
10,906 | 8,125 | 22,837 | 16,702 | ||||||||||||
| General and administrative |
13,578 | 13,548 | 29,491 | 23,813 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total costs and operating expenses |
44,535 | 38,919 | 95,992 | 74,718 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Loss from operations |
(7,559 | ) | (15,162 | ) | (14,025 | ) | (18,252 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Other income (expense): |
||||||||||||||||
| Interest expense |
(629 | ) | (679 | ) | (1,250 | ) | (1,276 | ) | ||||||||
| Change in fair value of preferred stock warrant liability |
(9,803 | ) | 9 | (10,758 | ) | (254 | ) | |||||||||
| Other income (expense), net |
118 | 107 | (294 | ) | 76 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total other expenses, net |
(10,314 | ) | (563 | ) | (12,302 | ) | (1,454 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Loss before provision for income taxes |
(17,873 | ) | (15,725 | ) | (26,327 | ) | (19,706 | ) | ||||||||
| (Benefit from) provision for income taxes |
273 | 272 | 471 | (7,409 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net loss |
(18,146 | ) | (15,997 | ) | (26,798 | ) | (12,297 | ) | ||||||||
| Foreign currency translation adjustment |
(76 | ) | (173 | ) | 263 | (273 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Comprehensive loss |
$ | (18,222 | ) | $ | (16,170 | ) | $ | (26,535 | ) | $ | (12,570 | ) | ||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net loss attributable to common stockholders – basic and diluted |
$ | (18,154 | ) | $ | (16,001 | ) | $ | (26,811 | ) | $ | (12,303 | ) | ||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net loss per share attributable to common stockholders – basic and diluted |
$ | (0.35 | ) | $ | (0.87 | ) | $ | (0.73 | ) | $ | (0.69 | ) | ||||
|
|
|
|
|
|
|
|
|
|||||||||
| Weighted average common shares outstanding – basic and diluted |
52,496,862 | 18,327,639 | 36,886,657 | 17,919,721 | ||||||||||||
|
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|
|
|
|
|
|
|||||||||
Unaudited Condensed Consolidated Balance Sheets
(Amounts in thousands, except share amounts)
| June 30, 2021 |
December 31, 2020 |
|||||||
| Assets |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 412,026 | $ | 104,052 | ||||
| Restricted cash |
5,000 | 5,000 | ||||||
| Accounts receivable, net of allowance for doubtful accounts of $167 and $496, respectively |
11,621 | 11,573 | ||||||
| Unbilled receivables |
1,006 | 1,698 | ||||||
| Funds receivable from payment partners |
17,025 | 22,481 | ||||||
| Prepaid expenses and other current assets |
10,821 | 3,754 | ||||||
|
|
|
|
|
|||||
| Total current assets |
457,499 | 148,558 | ||||||
| Property and equipment, net |
7,536 | 5,101 | ||||||
| Intangible assets, net |
65,033 | 68,211 | ||||||
| Goodwill |
44,656 | 44,650 | ||||||
| Other assets |
5,365 | 4,922 | ||||||
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|
|
|
|||||
| Total assets |
$ | 580,089 | $ | 271,442 | ||||
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|
|||||
| Liabilities, Convertible Preferred Stock, Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 10,454 | $ | 5,436 | ||||
| Funds payable to clients |
45,511 | 59,986 | ||||||
| Accrued expenses and other current liabilities |
14,084 | 14,991 | ||||||
| Deferred revenue |
836 | 1,227 | ||||||
| Contingent consideration |
7,079 | 6,740 | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
77,964 | 88,380 | ||||||
| Deferred tax liabilities |
663 | 481 | ||||||
| Contingent consideration, net of current portion |
— | 5,760 | ||||||
| Preferred stock warrant liability |
— | 1,932 | ||||||
| Long-term debt |
24,447 | 24,352 | ||||||
| Other liabilities |
2,037 | 2,129 | ||||||
|
|
|
|
|
|||||
| Total liabilities |
105,111 | 123,034 | ||||||
|
|
|
|
|
|||||
| Commitments and contingencies (Note 14) |
||||||||
| Convertible preferred stock (Series A, B, B1, B1-NV, C and D), $0.0001 par value; 0 and 62,915,394 shares authorized at June 30, 2021 and December 31, 2020, respectively; 0 and 54,208,461 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively; liquidation preference of $0 and $110,716 at June 30, 2021 and December 31, 2020, respectively |
— | 110,401 | ||||||
| Redeemable convertible preferred stock (Series E-1, E-2, F-1 and F-2), $0.0001 par value; 0 and 16,023,132 shares authorized at June 30, 2021 and December 31, 2020, respectively; 0 and 11,239,920 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively; liquidation preference of $0 and $150,000, respectively at June 30, 2021 and December 31, 2020 |
— | 119,769 | ||||||
|
|
|
|
|
|||||
| Stockholders’ (deficit) equity: |
||||||||
| Preferred stock, $0.0001 par value; 0 and 10,000,000 shares authorized as of June 30, 2021 and December 31, 2020, respectively; and none issued and outstanding as of June 30, 2021 and December 31, 2020, respectively |
— | — | ||||||
| Voting common stock, $0.0001 par value; 2,000,000,000 and 146,898,270 shares authorized as of June 30, 2021 and December 31, 2020, respectively, 100,995,903 shares issued and 98,678,181 shares outstanding as of June 30, 2021; 22,240,872 shares issued and 19,923,150 shares outstanding as of December 31, 2020 |
10 | 2 | ||||||
| Non-voting common stock, $0.0001 par value;10,000,000 and 0 shares authorized as of June 30, 2021 and December 31, 2020, respectively; 5,988,378 and 0 issued and outstanding as of June 30, 2021 and December 31, 2020, respectively |
1 | — | ||||||
| Treasury Stock, 2,317,722 shares as of June 30, 2021 and December 31, 2020, held at cost |
(748 | ) | (748 | ) | ||||
| Additional paid-in capital |
600,236 | 16,970 | ||||||
| Accumulated other comprehensive income (loss) |
49 | (214 | ) | |||||
| Accumulated (deficit) |
(124,570 | ) | (97,772 | ) | ||||
|
|
|
|
|
|||||
| Total stockholders’ equity (deficit) |
474,978 | (81,762 | ) | |||||
|
|
|
|
|
|||||
| Total liabilities, convertible preferred stock, redeemable convertible preferred stock and stockholders’ (deficit) equity |
$ | 580,089 | $ | 271,442 | ||||
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|
|
|
|||||
Unaudited Condensed Consolidated Statement of Cash Flows
(Amounts in thousands)
| Six Months Ended June 30, | ||||||||
| 2021 | 2020 | |||||||
| Cash flows from operating activities: |
||||||||
| Net loss |
$ | (26,798 | ) | $ | (12,297 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
| Depreciation and amortization |
4,305 | 3,263 | ||||||
| Stock-based compensation expense |
12,760 | 1,824 | ||||||
| Amortization of deferred contract costs |
105 | 105 | ||||||
| Change in fair value of preferred stock warrant liability |
10,758 | 254 | ||||||
| Change in fair value of contingent consideration |
1,591 | 3,702 | ||||||
| Deferred tax provision |
137 | (8,538 | ) | |||||
| Bad debt expense |
80 | 237 | ||||||
| Non-cash interest expense |
100 | 145 | ||||||
| Other |
97 | — | ||||||
| Changes in operating assets and liabilities, net of acquisition: |
||||||||
| Accounts receivable |
(128 | ) | (1,971 | ) | ||||
| Unbilled receivables |
692 | 780 | ||||||
| Funds receivable from payment partners |
5,456 | 5,648 | ||||||
| Prepaid expenses and other assets |
(7,817 | ) | (3,210 | ) | ||||
| Funds payable to customers |
(14,475 | ) | (29,990 | ) | ||||
| Accounts payable, accrued expenses and other current liabilities |
3,097 | 650 | ||||||
| Contingent consideration |
(3,212 | ) | (693 | ) | ||||
| Other liabilities |
135 | (133 | ) | |||||
| Deferred revenue |
(436 | ) | (385 | ) | ||||
|
|
|
|
|
|||||
| Net cash used in operating activities |
(13,553 | ) | (40,609 | ) | ||||
|
|
|
|
|
|||||
| Cash flows from investing activities: |
||||||||
| Purchases of property and equipment |
(3,463 | ) | (1,261 | ) | ||||
| Asset acquisition, net of cash acquired |
(119 | ) | — | |||||
| Acquisition of businesses, net of cash acquired |
— | (79,401 | ) | |||||
|
|
|
|
|
|||||
| Net cash used in investing activities |
(3,582 | ) | (80,662 | ) | ||||
|
|
|
|
|
|||||
| Cash flows from financing activities: |
||||||||
| Proceeds from initial public offering, net of underwriting discounts and commissions |
268,694 | — | ||||||
| Payment of costs related to initial public offering |
(3,845 | ) | — | |||||
| Proceeds from issuance of long-term debt |
— | 4,167 | ||||||
| Payment of long-term debt issuance costs |
— | (172 | ) | |||||
| Payment of long-term debt |
— | (4,167 | ) | |||||
| Proceeds from issuance of redeemable convertible preferred stock, net of issuance costs |
59,735 | 119,755 | ||||||
| Proceeds from exercise of warrants |
294 | — | ||||||
| Contingent consideration paid for acquisitions |
(3,800 | ) | (1,307 | ) | ||||
| Proceeds from exercise of stock options |
3,792 | 520 | ||||||
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|
|
|
|
|||||
| Net cash provided by financing activities |
324,870 | 118,796 | ||||||
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|
|
|
|||||
| Effect of exchange rates changes on cash and cash equivalents |
239 | (428 | ) | |||||
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|
|
|
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| Net (decrease) increase in cash, cash equivalents and restricted cash |
307,974 | (2,903 | ) | |||||
| Cash, cash equivalents and restricted cash, beginning of period |
109,052 | 86,027 | ||||||
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|
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| Cash, cash equivalents and restricted cash, end of period |
$ | 417,026 | $ | 83,124 | ||||
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Reconciliation of Non-GAAP Financial Measures
(Amounts in millions)
| Three Months Ended June 30, |
Six Months Ended June 30, |
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| (In Millions, Except for Gross Margin and Adjusted Gross Margin) |
2021 | 2020 | 2021 | 2020 | ||||||||||||
| Revenue |
$ | 37.0 | $ | 23.8 | $ | 82.0 | $ | 56.5 | ||||||||
| Adjusted to exclude gross up for: |
||||||||||||||||
| Pass-through cost for printing and mailing |
(3.9 | ) | (5.2 | ) | (8.4 | ) | (8.1 | ) | ||||||||
| Marketing fees |
(0.1 | ) | — | (0.4 | ) | (0.4 | ) | |||||||||
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| Revenue Less Ancillary Services |
$ | 33.0 | $ | 18.6 | 73.2 | $ | 48.0 | |||||||||
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| Payment processing services costs |
13.1 | 10.9 | 29.2 | 22.5 | ||||||||||||
| Hosting and amortization costs within technology and development expenses |
1.4 | 1.2 | 2.7 | 2.2 | ||||||||||||
| Adjusted to: |
||||||||||||||||
| Exclude printing and mailing costs |
(3.9 | ) | (5.2 | ) | (8.4 | ) | (8.1 | ) | ||||||||
| Offset marketing fees against related costs |
(0.1 | ) | — | (0.4 | ) | (0.4 | ) | |||||||||
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| Costs of revenue less ancillary services |
$ | 10.5 | $ | 6.9 | $ | 23.1 | $ | 16.2 | ||||||||
| Gross Profit |
$ | 22.5 | $ | 11.7 | $ | 50.1 | $ | 31.8 | ||||||||
| Gross Margin |
60.8 | % | 49.2 | % | 61.1 | % | 56.3 | % | ||||||||
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| Adjusted Gross Profit |
$ | 22.5 | $ | 11.7 | $ | 50.1 | $ | 31.8 | ||||||||
| Adjusted Gross Margin |
68.2 | % | 62.9 | % | 68.4 | % | 66.3 | % | ||||||||
| Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
| (In Millions) |
2021 | 2020 | 2021 | 2020 | ||||||||||||
| Net (loss) |
$ | (18.1 | ) | $ | (16.0 | ) | $ | (26.8 | ) | $ | (12.3 | ) | ||||
| Interest expense |
0.7 | 0.7 | 1.3 | 1.3 | ||||||||||||
| Provision for (benefit from) income taxes |
0.3 | 0.3 | 0.5 | (7.4 | ) | |||||||||||
| Depreciation and amortization |
2.2 | 1.7 | 4.3 | 3.2 | ||||||||||||
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| EBITDA |
(14.9 | ) | (13.3 | ) | (20.7 | ) | (15.2 | ) | ||||||||
| Stock-based compensation expense |
2.4 | 1.0 | 12.8 | 1.8 | ||||||||||||
| Change in fair value of contingent consideration |
1.6 | 4.0 | 1.6 | 3.7 | ||||||||||||
| Change in fair value of preferred stock warrant liability |
9.8 | — | 10.8 | 0.3 | ||||||||||||
| Other (income) expense, net |
(0.1 | ) | (0.1 | ) | 0.3 | (0.1 | ) | |||||||||
| Acquisition related transaction costs |
— | — | — | 1.3 | ||||||||||||
| Acquisition related employee retention costs |
1.1 | 1.4 | 2.1 | 2.1 | ||||||||||||
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| Adjusted EBITDA |
$ | (0.1 | ) | $ | (7.0 | ) | $ | 6.9 | $ | (6.1 | ) | |||||
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Reconciliation of Revenue to Revenue less Ancillary Services Guidance
(Amounts in millions)
| Full year 2021 Guidance | ||||||||
| Low | High | |||||||
| Revenue |
$ | 173.0 | $ | 178.0 | ||||
| Adjusted to exclude gross up for: |
||||||||
| Pass-through cost for printing and mailing |
(14.0 | ) | (16.0 | ) | ||||
| Marketing fees |
(1.0 | ) | (1.0 | ) | ||||
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| Revenue Less Ancillary Services |
$ | 158.0 | $ | 161.0 | ||||
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Q2 2021 Earnings Supplement August 2021 Exhibit 99.2
This presentation includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts contained in this presentation, including statements regarding Flywire’s ability to successfully implement Flywire’s business plan, future results of operations and financial position, business strategy and plans and Flywire’s objectives for future operations, are forward -looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “plans,” “potential,” “seeks,” “projects,” “should,” “could” and “would” and similar expressions are intended to identify forward -looking statements, although not all forward -looking statements contain these identifying words. Flywire has based these forward-looking statements largely on Flywire’s current expectations and projections about future events and financial trends that Flywire believes may affect Flywire’s financial condition, results of operations, business strategy, short -term and long-term business operations and objectives, and financial needs. These forward -looking statements are subject to a number of risks, uncertainties and assumptions that are described in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of Flywire's Final Prospectus for its initial public offering, which is on file with the Securities and Exchange Commission (SEC) and available on the SEC's website at www.sec.gov. Additional factors may be described in those sections of Flywire's Quarterly Report on Form 10-Q for the quarter ended June 30, 2021, expected to be filed with the SEC in the third quarter of 2021. In light of these risks, uncertainties and assumptions, the forward -looking events and circumstances discussed in this presentation may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward -looking statements. You should not rely upon forward -looking statements as predictions of future events or performance. In addition, projections, assumptions and estimates of the future performance of the industries in which Flywire operates and the markets it serves are inherently imprecise and subject to a high degree of uncertainty and risk. All financial projections contained in this presentation are forward -looking statements and are based on Flywire’s management’s assessment of such matters. It is unlikely, however, that the assumptions on which Flywire has based its projections will prove to be fully correct or that the projected figures will be attained. Flywire’s actual future results may differ materially from Flywire’s projections, and it makes no express or implied representation or warranty as to attainability of the results reflected in these projections. Investments in Flywire’s securities involve a high degree of risk and should be regarded as speculative. Certain information contained in this presentation relates to or is based on studies, publications, surveys and other data obtained from third-party sources and Flywire’s own internal estimates and research. While Flywire believes these third-party sources to be reliable as of the date of this presentation, it has not independently verified, and makes no representation as to the adequacy, fairness, accuracy or completeness of any information obtained from third-party sources. In addition, all of the market data included in this presentation involves a number of assumptions and limitations, and there can be no guarantee as to the accuracy or reliability of such assumptions. Finally, while Flywire believes its own internal research is reliable, such research has not been verified by any independent source. The information in this presentation is provided only as of August 10, 2021, and Flywire undertakes no obligation to update any forward-looking statements contained in this presentation on account of new information, future events, or otherwise, except as required by law. This presentation contains certain non-GAAP financial measures as defined by SEC rules. Flywire has provided a reconciliation of those measures to the most directly comparable GAAP measures, which is available in the Appendix. The company is unable to provide a reconciliation from forecasted adjusted EBITDA to forecasted GAAP net income (loss) or to forecasted GAAP income (loss) before income taxes, 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 the company's stock. Disclosures
Execution Fulfillment Our mission is to deliver the most important and complex payments
…and their customers pay with ease from anywhere in the world We help our clients get paid…
Software drives value in payments Next Gen Platform + Global Payment Network
240+ Countries & Territories 2,400+ Clients Worldwide 10+ Years to Build Payment Network 550+ Global FlyMates 64 NPS score 130+ Currencies Supported As of June 30, 2021
High-stakes, high-value payments in large markets Education $660B TAM1 >2,000 global institutions >1.6M students globally B2B Payments $10T TAM4 Unique network of assets to support B2B Travel ~$530B TAM3 Large travel operators/ accommodations Healthcare $500B TAM2 >80 healthcare systems 4/top 10 US health systems ranked by hospital size 1.OECD & EY Parthenon report (Education); 2. Centers for Medicare & Medicaid Services and Patients Without Borders (Healthcare); 3. IBISWorld and management’s estimates (Travel); and 4. Juniper and management’s estimates (B2B).
Our Flywire Advantage & Opportunity
$4.3 TRILLION $1.7 TRILLION $10 TRILLION B2B We believe our runway for growth is substantial 2,3,4 5 Education Healthcare Travel vs. Global E-commerce1 Flywire Market Opportunity 1.eMarketer, 2020 Global Online Sales 2. OECD & Parthenon report (Education); 3. Centers for Medicare & Medicaid Services and Patients Without Borders (Healthcare); 4. IBISWorld and management’s estimates (Travel); and 5. Juniper and management’s estimates (B2B).
Our proven Flywire Advantage
Fueling a powerful & accelerating flywheel Improved Experience Larger Ecosystem More Products Broader Footprint
Strong tailwinds across our verticals The digitization of payments is inevitable In education, colleges and universities are seeing a return to “normal” The COVID pandemic has accelerated the digitization and consumerism of healthcare There is significant pent-up demand for travel, and borders are starting to open up The COVID pandemic has accelerated the need for finance automation and digitization in B2B
Growth strategies Grow with new clients 200+ New clients added 1H 2021 Grow with existing clients 118% Three year average annual dollar-based net retention rate Expand our ecosystem through channel partnerships Expand to new industries, geographies & products Pursue strategic & value-enhancing acquisitions 300+ Travel & B2B Clients Long-term strategy; opportunistic
Q2 2021 Performance
GAAP Financial Highlights Q2 2021 1. Represents Y-o-Y Growth as compared to Q2 2020 $37M (+56%)1 Revenue 60.8% (+1160 bps)1 Gross Margin $18.1M ($16.0M) in Q2 20 Net Loss 5
Key Operating Metrics (Non-GAAP) Q2 2021 $1.9B (+85%)1 Total Payment Volume $33M (+77%)1 Revenue Less Ancillary Services 68.2% (+530 bps)1 Adjusted Gross Margin ($0.1M) ($7.0M) in Q2 20 Adjusted EBITDA 1. Represents Y-o-Y Growth as compared to Q2 2020 See appendix for reconciliation to GAAP amounts 16
Financial Outlook
FY 2021 Outlook $158-161M Revenue Less Ancillary Services $4-6M Adjusted EBITDA The company is unable to provide a reconciliation from forecasted adjusted EBITDA to forecasted GAAP net income (loss) or to forecasted GAAP income (loss) before income taxes, 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 the company's stock.
Appendix
$USD in Millions Revenue Less Ancillary Services & Adjusted Gross Margin Reconciliations Three Months EndedJune 30, Six Months EndedJune 30, (In Millions, Except for Gross Margin and AdjustedGross Margin) 2021 2020 2021 2020 Revenue$ 37.0 $23.8 $ 82.0$ 56.5Adjusted to exclude gross up for: Pass-through cost for printing and mailing(3.9)(5.2) (8.4)(8.1)Marketing fees (0.1) -(0.4)(0.4) Revenue Less Ancillary Services$33.0$18.673.2$48.0 Payment processing services costs 13.110.9 29.2 22.5Hosting and amortization costs within technology and development expenses 1.4 1.2 2.7 2.2Adjusted to: Exclude printing and mailing costs (3.9) (5.2) (8.4) (8.1)Offset marketing fees against related costs (0.1)-(0.4)(0.4) Costs of revenue less ancillary services$10.5$6.9$23.1$16.2Gross Profit$22.5$11.7$50.1$31.8Gross Margin 60.8% 49.2%61.1%56.3% Adjusted Gross Profit$22.5$11.7$50.1$31.8Adjusted Gross Margin68.2% 62.9%68.4%66.3%
$USD in Millions Net Loss to Adjusted EBITDA Reconciliation
$USD in Millions Reconciliation of Revenue to Revenue Less Ancillary Services Guidance Full year 2021 Guidance Low HighRevenue$ 173.0 $ 178.0 Adjusted to exclude gross up for: Pass-through cost for printing and mailing (14.0) (16.0)Marketing fees (1.0) (1.0)Revenue Less Ancillary Services$ 158.0$ 161.0