UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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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 February 28, 2023, Flywire Corporation (“Flywire” or the “Company”) issued a press release (the “Press Release”) and is holding a conference call regarding its preliminary and unaudited financial results for the quarter and year ended December 31, 2022. 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, 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 its revenue, cost and operating expenses, including changes in technology and development, selling and marketing and general administrative expenses (including any components of the foregoing), gross profit and its ability to achieve, and maintain, future profitability. 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, including the ongoing effects of the 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 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 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 recently enacted 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, 2021, and Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, 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, 2022, expected to be filed with the SEC in the first quarter of 2023. 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 February 28, 2023, 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.
This information in this Item 7.01 of this Current Report on Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in any such filing.
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits
| Exhibit No. |
Description | |
| 99.1 | Flywire Corporation Press Release dated February 28, 2023. | |
| 99.2 | Flywire Corporation Investor Presentation dated February 28, 2023. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |
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 February 28, 2023
Exhibit 99.1
Flywire Reports Fourth Quarter and Fiscal-Year 2022 Financial Results
Fourth Quarter Revenue Increased 42% Year-over-Year
Fourth Quarter Revenue Less Ancillary Services Increased 47% Year-over-Year
Fourth Quarter Revenue Less Ancillary Services at Constant Currency Increased 57% Year-Over-Year
Fourth Quarter Gross Profit Increased 35% and Adjusted Gross Profit Increased 40% Year-over-Year
Company Provides First Quarter and Fiscal-Year 2023 Outlook
Boston, MA – February 28, 2023: 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, 2022.
“Our excellent results in the fourth quarter capped off a tremendous year for Flywire. We continued to execute against our growth strategies, combined with increased demand for our solutions across our education, healthcare, travel and B2B verticals,” said Mike Massaro, CEO of Flywire. “After a significant investment year in 2022 that delivered exceptional results, we feel more confident than ever that we can scale our business efficiently as we head into 2023. With a focus on driving growth in core markets and industries, we plan to continue to execute against our winning strategy, including optimizing our Go-To-Market capabilities, deepening our Flywire Advantage, and strengthening our FlyMate community. We look forward to capitalizing on the momentum behind us to keep penetrating the substantial TAMs in the industries that we serve, and deliver even more value for our clients, payers, and partners.”
Fourth Quarter 2022 Financial Highlights1:
GAAP Results
| • | Revenue increased 42% to $73.1 million in the fourth quarter of 2022, compared to $51.4 million in the fourth quarter of 2021. |
| • | Gross Profit increased to $41.5 million, resulting in Gross Margin of 56.8%, for the fourth quarter of 2022, compared to Gross Profit of $30.7 million and Gross Margin of 59.7% in the fourth quarter of 2021. |
| 1 | See “Financial Disclosure Advisory” below. |
| • | Net loss was $1.1 million in the fourth quarter of 2022, compared to net loss of $11.2 million in the fourth quarter of 2021. |
Key Operating Metrics and Non-GAAP Results
| • | Total Payment Volume increased 29% to $4.1 billion in the fourth quarter of 2022, compared to $3.1 billion in the fourth quarter of 2021. |
| • | Revenue Less Ancillary Services increased 47% to $67.4 million in the fourth quarter of 2022, compared to $45.9 million in the fourth quarter of 2021. |
| • | Revenue Less Ancillary Services was unfavorably impacted by foreign currency exchange rates year-over-year by $4.6 million |
| • | Revenue Less Ancillary Services at Constant Currency was 57% |
| • | Adjusted Gross Profit increased to $44.5 million, resulting in Adjusted Gross Margin of 66.0% in the fourth quarter of 2022, compared to Adjusted Gross Profit of $31.8 million and Adjusted Gross Margin of 69.3% in the fourth quarter of 2021. 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 table below. |
| • | Adjusted EBITDA was $1.0 million in the fourth quarter of 2022, compared to $(1.7) million in the fourth quarter of 2021. |
Fiscal-Year 2022 Financial Highlights1:
GAAP Results
| • | Revenue increased 44% to $289.4 million in fiscal-year 2022, compared to $201.1 million in fiscal-year 2021. |
| • | Gross Profit increased to $174.9 million, resulting in Gross Margin of 60.4% in fiscal-year 2022, compared to Gross Profit of $125.2 million and Gross Margin of 62.3% in fiscal-year 2021. |
| • | Net loss was $39.3 million in fiscal-year 2022, compared to net loss of $28.1 million in fiscal-year 2021. |
Key Operating Metrics and Non-GAAP Results:
| • | Total Payment Volume increased 37% to $18.1 billion in fiscal-year 2022, compared to $13.2 billion in fiscal-year 2021. |
| • | Revenue Less Ancillary Services increased 47% to $267.1 million in fiscal-year 2022, compared to $181.1 million in fiscal-year 2021. |
| • | Revenue Less Ancillary Services was unfavorably impacted by foreign currency exchange rates year-over-year by approximately $14.2 million |
| • | Revenue Less Ancillary Services at Constant Currency was 55% |
| • | Adjusted Gross Profit of $181.9 million, resulting in Adjusted Gross Margin of 68.1% in 2022, compared to Adjusted Gross Profit of $129.7 million and Adjusted Gross Margin of 71.6% in fiscal-year 2021. As noted above, prior year Adjusted Gross Profit and Adjusted Gross Margin have been recast to align with the updated methodology for calculating these non-GAAP measures. |
| • | Adjusted EBITDA was $14.9 million in fiscal-year 2022, compared to $22.8 million in fiscal-year 2021. |
Fiscal-Year 2022 Business Highlights:
| • | Signed more than 590 new clients in 2022 and now serve over 3,100 clients globally |
| • | Recorded strong average annual dollar-based net revenue retention (NRR) in fiscal-year 2022 of 124% |
| • | Accelerated product and payment innovation with new 529 disbursement solution, connecting more than 600 institutions through Flywire’s Ascensus partnership |
| • | Strengthened its ecosystem of global strategic partners in education and announced partnerships with Adapt IT, Tribal Group, and Universitas XXI |
| • | Successfully integrated the WPM business and signed more than 40 clients for the combined solution |
| • | More than tripled revenues of the travel vertical in response to market demand for Flywire’s solution as highlighted in Flywire’s annual luxury travel report for destination management companies, accommodations providers and tour operators |
| • | Completed the acquisition of Cohort Go and efficiently integrated it into the education vertical, enhancing Flywire’s Educational Agent solution and adding unique capabilities to the Flywire offering |
| • | Signed more than 15 new clients in healthcare and expanded services with 22 existing ones, with growth underpinned by a 269% ROI of Flywire’s solution for hospitals and health systems |
| • | Enhanced its proprietary global payment network through the partnership with HDFC Bank in India, providing an open banking experience to India payers and further enhancing one of Flywire’s strategic competitive barriers |
| • | Strengthened its channel partnership strategy in the B2B vertical with a partnership with Huntington Bank, the 15th largest bank in the US |
| • | Gained recognition for its award-winning global culture, including being certified as a Great Place to Work®, being named to Inc. Magazine’s Best Workplaces of 2022, and Fortune Magazine’s Best Workplaces in Financial Services 2022 |
| • | Released the company’s inaugural Environmental, Social, and Governance (ESG) report, outlining the company’s first comprehensive summary about how it integrates social good initiatives into its business strategy |
First Quarter and Fiscal-Year 2023 Outlook:
Based on information available as of February 28, 2023, Flywire anticipates the following for the first quarter and fiscal-year 2023:
| First Quarter 2023 | ||||
| Revenue |
$85 to $91 million | |||
| Revenue Less Ancillary Services |
$81 to $85 million | |||
| Adjusted EBITDA* |
$3 to $5 million | |||
| Fiscal-Year 2023 | ||||
| Revenue* |
$373 to $392 million | |||
| Revenue Less Ancillary Services |
$353 to $364 million | |||
| Adjusted EBITDA** |
$28 to $34 million | |||
| * | Fiscal year 2023 expectations reflect the Company’s organic revenue expectations and annualization of the Cohort Go business. The Company has assumed Foreign exchange rates prevailing as of December 31, 2022. |
| ** | Flywire has relied upon the exception in item 10(e)(1)(i)(B) of Regulation S-K and 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 our 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 2022 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.
Financial Disclosure Advisory
The Company reports its financial results in accordance with U.S. generally accepted accounting principles (“GAAP”). The expected financial results discussed in this press release are preliminary and unaudited and represent the most current information available to the company’s management, as financial closing and audit procedures for the year ended December 31, 2022 are not yet complete. These estimates are not a comprehensive statement of the Company’s financial results for the fourth quarter and fiscal year ended December 31, 2022, and actual results may differ materially from these estimates as a result of the completion of year-end financial reporting process, finalization of the processes and procedures required by Section 404(b) of the the Sarbanes-Oxley Act of 2002, completion of the procedures relating to management’s assessment of the effectiveness of the Company’s internal controls, the completion of the external audit by the Company’s independent registered public accounting firm, and the subsequent occurrence or identification of events prior to the formal issuance of the audited financial statements for fiscal year 2022. In addition, results presented in this press release or on the conference call do not present all information necessary for an understanding of the Company’s financial condition and results of operations as of and for the quarter and year ended December 31, 2022.
Key Operating Metrics and Non-GAAP Financial Measures table
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, we have excluded depreciation and amortization from the calculation of our adjusted gross profit, which we believe enhances the understanding of the Company’s operating performance and enables more meaningful period to period comparisons. Our adjusted gross profit and adjusted gross profit margin for the three and twelve months ended December 31, 2021 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) the impact from the change in fair value measurement of the Company’s preferred stock warrants, (iv) other income (expense), net, (v) indirect taxes related to intercompany activity, (vi) acquisition related transaction costs, and (vii) 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. We analyze 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 the Company’s revenue, 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 relied upon the exception in item 10(e)(1)(i)(B) of Regulation S-K and 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 3,000 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 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. 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, including the ongoing effects of the COVID-19 pandemic and subsequent public health measures 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 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 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 recently enacted 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, 2021 and Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, 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, 2022, expected to be filed with the SEC in the first quarter of 2023. 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:
flywireir@icrinc.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, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Revenue |
$ | 73,053 | $ | 51,394 | $ | 289,375 | $ | 201,149 | ||||||||
| Costs and operating expenses: |
||||||||||||||||
| Payment processing services costs |
29,585 | 19,254 | 107,933 | 70,191 | ||||||||||||
| Technology and development |
12,692 | 9,092 | 50,257 | 31,295 | ||||||||||||
| Selling and marketing |
20,287 | 15,897 | 78,456 | 51,297 | ||||||||||||
| General and administrative |
19,860 | 17,478 | 82,949 | 61,623 | ||||||||||||
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|
|
|
|
|
|
|
|
|||||||||
| Total costs and operating expenses |
82,424 | 61,721 | 319,595 | 214,406 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Loss from operations |
$ | (9,371 | ) | $ | (10,327 | ) | $ | (30,220 | ) | $ | (13,257 | ) | ||||
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|
|
|
|
|
|||||||||
| Other income (expense): |
||||||||||||||||
| Interest expense |
(327 | ) | (217 | ) | (1,211 | ) | (2,021 | ) | ||||||||
| Change in fair value of preferred stock warrant liability |
— | — | — | (10,758 | ) | |||||||||||
| Other income (expense), net |
7,702 | 603 | (5,928 | ) | 109 | |||||||||||
|
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|
|
|
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|
|||||||||
| Total other expenses, net |
7,375 | 386 | (7,139 | ) | (12,670 | ) | ||||||||||
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|
|
|
|
|
|
|||||||||
| Loss before provision for (benefit from) income taxes |
(1,996 | ) | (9,941 | ) | (37,359 | ) | (25,927 | ) | ||||||||
| Provision for (benefit from) income taxes |
(867 | ) | 1,214 | 1,988 | 2,158 | |||||||||||
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|
|
|
|
|
|
|||||||||
| Net loss |
$ | (1,129 | ) | $ | (11,155 | ) | $ | (39,347 | ) | $ | (28,085 | ) | ||||
| Foreign currency translation adjustment |
(1,105 | ) | (105 | ) | (1,513 | ) | (185 | ) | ||||||||
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|
|
|
|
|
|
|
|
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| Comprehensive loss |
$ | (2,234 | ) | $ | (11,260 | ) | $ | (40,860 | ) | $ | (28,270 | ) | ||||
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| Net loss attributable to common stockholders - basic and |
$ | (1,129 | ) | $ | (11,260 | ) | $ | (39,347 | ) | $ | (28,098 | ) | ||||
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| Net loss per share attributable to common stockholders - basic |
$ | (0.01 | ) | $ | (0.11 | ) | $ | (0.36 | ) | $ | (0.39 | ) | ||||
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|||||||||
| Weighted average common shares outstanding - basic and |
108,086,018 | 105,294,894 | 107,935,514 | 71,168,054 | ||||||||||||
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Condensed Consolidated Balance Sheets
(Unaudited) (Amounts in thousands, except share amounts)
| December 31, | ||||||||
| 2022 | 2021 | |||||||
| Assets |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 349,177 | $ | 385,360 | ||||
| Restricted cash |
2,000 | 4,000 | ||||||
| Accounts receivable, net of allowance for credit losses of $212 |
13,697 | 12,968 | ||||||
| Unbilled receivables |
5,268 | 3,340 | ||||||
| Funds receivable from payment partners |
62,970 | 28,286 | ||||||
| Prepaid expenses and other current assets |
17,531 | 9,834 | ||||||
|
|
|
|
|
|||||
| Total current assets |
450,643 | 443,788 | ||||||
| Property and equipment, net |
13,317 | 9,442 | ||||||
| Intangible assets, net |
97,616 | 93,598 | ||||||
| Goodwill |
97,766 | 85,841 | ||||||
| Other assets |
14,945 | 7,176 | ||||||
|
|
|
|
|
|||||
| Total assets |
$ | 674,287 | $ | 639,845 | ||||
|
|
|
|
|
|||||
| Liabilities and Stockholders’ Equity |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 13,325 | $ | 10,242 | ||||
| Funds payable to clients |
124,305 | 71,302 | ||||||
| Accrued expenses and other current liabilities |
33,109 | 22,726 | ||||||
| Deferred revenue |
5,223 | 5,488 | ||||||
| Contingent consideration |
1,314 | 7,719 | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
177,276 | 117,477 | ||||||
| Deferred tax liabilities |
12,149 | 8,401 | ||||||
| Contingent consideration, net of current portion |
18 | 3,590 | ||||||
| Long-term debt |
— | 25,939 | ||||||
| Other liabilities |
2,941 | 2,237 | ||||||
|
|
|
|
|
|||||
| Total liabilities |
192,384 | 157,644 | ||||||
|
|
|
|
|
|||||
| Commitments and contingencies (Note 16) |
||||||||
| Stockholders’ equity: |
||||||||
| Preferred stock, $0.0001 par value; 10,000,000 shares authorized as of |
— | — | ||||||
| Voting common stock, $0.0001 par value; 2,000,000,000 shares authorized as |
10 | 10 | ||||||
| Non-voting common stock, $0.0001 par value; 10,000,000
shares authorized as |
1 | 1 | ||||||
| Treasury voting common stock, 2,317,722 shares as of December 31, 2022 and |
(748 | ) | (748 | ) | ||||
| Additional paid-in capital |
649,756 | 609,194 | ||||||
| Accumulated other comprehensive loss |
(1,912 | ) | (399 | ) | ||||
| Accumulated deficit |
(165,204 | ) | (125,857 | ) | ||||
|
|
|
|
|
|||||
| Total stockholders’ equity |
481,903 | 482,201 | ||||||
|
|
|
|
|
|||||
| Total liabilities and stockholders’ equity |
$ | 674,287 | $ | 639,845 | ||||
|
|
|
|
|
|||||
Condensed Consolidated Statement of Cash Flows
(Unaudited) (Amounts in thousands)
| Year Ended December 31, | ||||||||
| 2022 | 2021 | |||||||
| Cash flows from operating activities: |
||||||||
| Net loss |
$ | (39,347 | ) | $ | (28,085 | ) | ||
| Adjustments to reconcile net loss to net cash provided by (used in) |
||||||||
| Depreciation and amortization |
12,304 | 8,998 | ||||||
| Stock-based compensation expense |
30,259 | 18,928 | ||||||
| Amortization of deferred contract costs |
1,799 | 245 | ||||||
| Change in fair value of preferred stock warrant liability |
— | 10,758 | ||||||
| Change in fair value of contingent consideration |
(2,805 | ) | 2,263 | |||||
| Deferred tax provision |
(1,708 | ) | 146 | |||||
| Bad debt expense |
152 | 165 | ||||||
| Non-cash interest expense |
348 | 252 | ||||||
| Other |
— | — | ||||||
| Changes in operating assets and liabilities, net of acquisitions: |
||||||||
| Accounts receivable |
(323 | ) | (587 | ) | ||||
| Unbilled receivables |
(1,928 | ) | (1,642 | ) | ||||
| Funds receivable from payment partners |
(30,917 | ) | (5,805 | ) | ||||
| Prepaid expenses, other current assets and other assets |
(11,031 | ) | (7,854 | ) | ||||
| Funds payable to clients |
48,932 | 11,316 | ||||||
| Accounts payable, accrued expenses and other current liabilities |
6,570 | 11,230 | ||||||
| Contingent consideration |
(4,510 | ) | (3,212 | ) | ||||
| Other liabilities |
(2,515 | ) | 174 | |||||
| Deferred revenue |
(400 | ) | (159 | ) | ||||
|
|
|
|
|
|||||
| Net cash provided by (used in) operating activities |
4,880 | 17,131 | ||||||
|
|
|
|
|
|||||
| Cash flows from investing activities: |
||||||||
| Purchases of property and equipment |
(7,092 | ) | (6,684 | ) | ||||
| Acquisitions of businesses, net of cash acquired |
(17,140 | ) | (56,111 | ) | ||||
| Asset acquisition, net of cash acquired |
— | (119 | ) | |||||
| Contingent consideration paid for acquisitions |
(453 | ) | — | |||||
|
|
|
|
|
|||||
| Net cash used in investing activities |
(24,685 | ) | (62,914 | ) | ||||
|
|
|
|
|
|||||
| Cash flows from financing activities: |
||||||||
| Proceeds from initial public offering, net of underwriting discount and |
— | 268,694 | ||||||
| Payment of deferred offering costs related to initial public offering |
— | (4,860 | ) | |||||
| Proceeds from issuance of long-term debt |
— | 25,939 | ||||||
| Payment of long-term debt issuance costs |
— | (418 | ) | |||||
| Repayment of long-term debt |
(25,939 | ) | (25,000 | ) | ||||
| Proceeds from issuance of redeemable convertible preferred stock, |
— | 59,735 | ||||||
| Proceeds from exercise of warrants |
— | 294 | ||||||
| Contingent consideration paid for acquisitions |
(3,701 | ) | (3,800 | ) | ||||
| Payments of tax withholdings for net settled option exercises |
(2,564 | ) | — | |||||
| Proceeds from the issuance of stock under Employee Stock |
1,271 | — | ||||||
| Proceeds from exercise of stock options |
6,963 | 6,928 | ||||||
|
|
|
|
|
|||||
| Net cash provided by (used in) financing activities |
(23,970 | ) | 327,512 | |||||
|
|
|
|
|
|||||
| Effect of exchange rates changes on cash and cash equivalents |
5,592 | (1,421 | ) | |||||
|
|
|
|
|
|||||
| Net increase (decrease) in cash, cash equivalents and restricted |
(38,183 | ) | 280,308 | |||||
| Cash, cash equivalents and restricted cash, beginning of year |
$ | 389,360 | $ | 109,052 | ||||
|
|
|
|
|
|||||
| Cash, cash equivalents and restricted cash, end of year |
$ | 351,177 | $ | 389,360 | ||||
|
|
|
|
|
|||||
Reconciliation of Non-GAAP Financial Measures
(Amounts in millions)
Modified Methodology
| Three Months Ended December 31, |
Year Ended December 31, |
|||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Revenue |
$ | 73.1 | $ | 51.4 | $ | 289.4 | $ | 201.1 | ||||||||
| Adjusted to exclude gross up for: |
||||||||||||||||
| Pass-through cost for printing and mailing |
(5.3 | ) | (4.9 | ) | (20.4 | ) | (18.2 | ) | ||||||||
| Marketing fees |
(0.4 | ) | (0.6 | ) | (1.9 | ) | (1.8 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Revenue Less Ancillary Services |
$ | 67.4 | $ | 45.9 | $ | 267.1 | $ | 181.1 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Payment processing services costs |
29.6 | 19.2 | 107.9 | 70.2 | ||||||||||||
| Hosting and amortization costs within technology and development |
2.0 | 1.5 | 6.6 | 5.7 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Cost of Revenue |
$ | 31.6 | $ | 20.7 | $ | 114.5 | $ | 75.9 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted to: |
||||||||||||||||
| Exclude printing and mailing costs |
(5.3 | ) | (4.9 | ) | (20.4 | ) | (18.2 | ) | ||||||||
| Offset marketing fees against related costs |
(0.4 | ) | (0.6 | ) | (1.9 | ) | (1.8 | ) | ||||||||
| Exclude depreciation and amortization |
(3.0 | ) | (1.1 | ) | (7.0 | ) | (4.5 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted Cost of Revenue |
$ | 22.9 | $ | 14.1 | $ | 85.2 | $ | 51.4 | ||||||||
| Gross Profit |
$ | 41.5 | $ | 30.7 | $ | 174.9 | $ | 125.2 | ||||||||
| Gross Margin |
56.8 | % | 59.7 | % | 60.4 | % | 62.3 | % | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted Gross Profit |
$ | 44.5 | $ | 31.8 | $ | 181.9 | $ | 129.7 | ||||||||
| Adjusted Gross Margin |
66.0 | % | 69.3 | % | 68.1 | % | 71.6 | % | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Previous Methodology |
||||||||||||||||
| Three Months Ended December 31, |
Year Ended December 31, |
|||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Revenue |
$ | 73.1 | $ | 51.4 | $ | 289.4 | $ | 201.1 | ||||||||
| Adjusted to exclude gross up for: |
||||||||||||||||
| Pass-through cost for printing and mailing |
(5.3 | ) | (4.9 | ) | (20.4 | ) | (18.2 | ) | ||||||||
| Marketing fees |
(0.4 | ) | (0.6 | ) | (1.9 | ) | (1.8 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Revenue Less Ancillary Services |
$ | 67.4 | $ | 45.9 | $ | 267.1 | $ | 181.1 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Payment processing services costs |
29.6 | 19.2 | 107.9 | 70.2 | ||||||||||||
| Hosting and amortization costs within technology and development |
2.0 | 1.5 | 6.6 | 5.7 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Cost of Revenue |
$ | 31.6 | $ | 20.7 | $ | 114.5 | $ | 75.9 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted to: |
||||||||||||||||
| Exclude printing and mailing costs |
(5.3 | ) | (4.9 | ) | (20.4 | ) | (18.2 | ) | ||||||||
| Offset marketing fees against related costs |
(0.4 | ) | (0.6 | ) | (1.9 | ) | (1.8 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted Cost of Revenue |
$ | 25.9 | $ | 15.2 | $ | 92.2 | $ | 55.9 | ||||||||
| Gross Profit |
$ | 41.5 | $ | 30.7 | $ | 174.9 | $ | 125.2 | ||||||||
| Gross Margin |
56.8 | % | 59.7 | % | 60.4 | % | 62.3 | % | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted Gross Profit |
$ | 41.5 | $ | 30.7 | $ | 174.9 | $ | 125.2 | ||||||||
| Adjusted Gross Margin |
61.6 | % | 66.9 | % | 65.5 | % | 69.1 | % | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Three Months Ended December 31, |
Year Ended December 31, |
|||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Net loss |
$ | (1.1 | ) | $ | (11.2 | ) | $ | (39.3 | ) | $ | (28.1 | ) | ||||
| Interest expense |
0.3 | 0.2 | 1.2 | 2.0 | ||||||||||||
| Provision for income taxes |
(0.9 | ) | 1.4 | 2.0 | 2.2 | |||||||||||
| Depreciation and amortization |
4.9 | 2.4 | 14.1 | 9.0 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| EBITDA |
3.2 | (7.2 | ) | (22.0 | ) | (14.9 | ) | |||||||||
| Stock-based compensation expense and related taxes |
7.9 | 3.3 | 31.2 | 18.9 | ||||||||||||
| Change in fair value of contingent consideration |
(3.1 | ) | 0.2 | (2.8 | ) | 2.3 | ||||||||||
| Change in fair value of preferred stock warrant liability |
— | — | — | 10.8 | ||||||||||||
| Other (income) expense, net |
(7.7 | ) | (0.7 | ) | 5.9 | (0.1 | ) | |||||||||
| Indirect taxes related to intercompany activity |
0.1 | 0.9 | 0.4 | 0.9 | ||||||||||||
| Acquisition related transaction costs |
0.4 | 0.7 | 0.8 | 0.7 | ||||||||||||
| Acquisition related employee retention costs |
0.2 | 1.1 | 1.4 | 4.2 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted EBITDA |
$ | 1.0 | $ | (1.7 | ) | $ | 14.9 | $ | 22.8 | |||||||
|
|
|
|
|
|
|
|
|
|||||||||
| 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 | % | ||||||||||||
| Three Months Ended December 31, 2021 |
Year Ended December 31, 2021 |
|||||||||||||||||||||||
| Transaction | Platform and Usage-Based Fee |
Revenue | Transaction | Platform and Usage-Based Fee |
Revenue | |||||||||||||||||||
| Revenue |
$ | 38.3 | $ | 13.0 | $ | 51.3 | $ | 148.0 | $ | 53.1 | $ | 201.1 | ||||||||||||
| Adjusted to exclude gross up for: |
||||||||||||||||||||||||
| Pass-through cost for printing and mailing |
— | (4.8 | ) | (4.8 | ) | — | (18.2 | ) | (18.2 | ) | ||||||||||||||
| Marketing fees |
(0.6 | ) | — | (0.6 | ) | (1.8 | ) | — | (1.8 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Revenue Less Ancillary Services |
$ | 37.7 | $ | 8.2 | $ | 45.9 | $ | 146.2 | $ | 34.9 | $ | 181.1 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Percentage of Revenue |
73.6 | % | 26.4 | % | 100.0 | % | 73.6 | % | 26.4 | % | 100.0 | % | ||||||||||||
| Percentage of Revenue Less Ancillary Services |
82.1 | % | 17.9 | % | 100.0 | % | 80.7 | % | 19.3 | % | 100.0 | % | ||||||||||||
| Three Months Ended | Year Ended | |||||||||||||||||||||||
| December 31, 2022 |
December 31, 2021 |
Growth Rates |
December 31, 2022 |
December 31, 2021 |
Growth Rates |
|||||||||||||||||||
| GAAP revenue |
$ | 73.10 | $ | 51.40 | 42 | % | $ | 289.40 | $ | 201.10 | 44 | % | ||||||||||||
| Ancillary services |
$ | 5.70 | $ | 5.50 | $ | 22.30 | $ | 20.00 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Revenue less ancillary services |
$ | 67.40 | $ | 45.90 | 47 | % | $ | 267.10 | $ | 181.10 | 47 | % | ||||||||||||
| Effects of foreign currency rate fluctuations |
$ | 4.60 | $ | 14.20 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Revenue less ancillary services at constant currency |
$ | 72.00 | $ | 45.90 | 57 | % | $ | 281.30 | $ | 181.10 | 55 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Guidance | ||||||||||||||||
| ($ in millions) | ||||||||||||||||
| Three Months Ended March 31, 2023 |
Year Ended December 31, 2023 |
|||||||||||||||
| Low | High | Low | High | |||||||||||||
| Revenue |
$ | 85.0 | $ | 91.0 | $ | 373.0 | $ | 392.0 | ||||||||
| Adjusted to exclude gross up for: |
||||||||||||||||
| Pass through cost for printing and mailing |
-3.8 | -5.7 | - 18.4 | -25.7 | ||||||||||||
| Marketing fees |
-0.2 | -0.3 | -1.6 | -2.3 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Revenue Less Ancillary Services |
$ | 81.0 | $ | 85.0 | $ | 353.0 | $ | 364.0 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted EBITDA |
$ | 3 | $ | 5 | $ | 28 | $ | 34 | ||||||||
Exhibit 99.2 Q4 & FY 2022 Earnings Supplement February 28, 2023
Disclosures 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 Annual Report on Form 10-K for the year ended December 31, 2021 and Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, which are 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 Annual Report on Form 10-K for the year ended December 31, 2022, expected to be filed with the SEC in the first quarter of 2023. 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 February 28, 2023, 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 has relied upon the exception in item 10(e)(1)(i)(B) of Regulation S-K and has not provided a quantitative reconciliation from forecasted adjusted EBITDA to forecasted GAAP net income (loss) or to forecasted GAAP income (loss) before income taxes, 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 the company's stock. 2
Financial Disclosure Advisory The Company reports its financial results in accordance with U.S. generally accepted accounting principles (“GAAP”). The expected financial results discussed in this press release are preliminary and unaudited and represent the most current information available to the company’s management, as financial closing and audit procedures for the year ended December 31, 2022 are not yet complete. These estimates are not a comprehensive statement of the Company’s financial results for the fourth quarter and fiscal year ended December 31, 2022, and actual results may differ materially from these estimates as a result of the completion of year-end financial reporting process, finalization of the processes and procedures required by Section 404(b) of the the Sarbanes-Oxley Act of 2002, completion of the procedures relating to management's assessment of the effectiveness of the Company’s internal controls, the completion of the external audit by the Company’s independent registered public accounting firm, and the subsequent occurrence or identification of events prior to the formal issuance of the audited financial statements for fiscal year 2022. In addition, results presented in this press release or on the conference call do not present all information necessary for an understanding of the Company’s financial condition and results of operations as of and for the quarter and year ended December 31, 2022. 3
Execution Fulfillment Our mission is to deliver the most important and complex payments 4
Q4 2022 Performance 5
GAAP Financial Highlights 1 Q4 2022 $73.1 M 56.8% $(1.1)M Revenue Gross Margin Net Loss 1 See “Disclosures: Financial Disclosure Advisory” 6
Key Operating Metrics (Non-GAAP) Q4 2022 $4.1B $67.4M 66.0% $1.0M 1 1 1,2 +29% +47% (330) bps Total Revenue Less Adjusted Adjusted Payment Ancillary Gross EBITDA Volume Services Margin 1. Represents Y-o-Y Growth as compared to Q4 2021 2. Prior year Adjusted Gross Profit and Adjusted Gross Margin have been recast to align with the updated methodology as described in the Appendix. See appendix for reconciliation to GAAP amounts 7
FY 2022 Performance 8
GAAP Financial Highlights 1 FY 2022 $289.4M 60.4% $(39.3)M Revenue Gross Margin Net Loss 1 See “Disclosures: Financial Disclosure Advisory” 9
Key Operating Metrics (Non-GAAP) FY 2022 $18.1B $267.1M 68.1% $14.9M 1 1 1, 2 +37% +47% (340) bps Total Revenue Less Adjusted Adjusted Payment Ancillary Gross EBITDA Volume Services Margin 1. Represents Y-o-Y Growth as compared to FY 2021 2. Prior year Adjusted Gross Profit and Adjusted Gross Margin have been recast to align with the updated methodology as described in the Appendix. See appendix for reconciliation to GAAP amounts 10
Growth strategies Expand our Expand to Pursue strategic ecosystem new industries, & value- Grow with Grow with through channel geographies & enhancing existing new partnerships products acquisitions clients clients 124% 145+ 570+ 2022 average New clients in Q4 Travel & B2B annual dollar-based 2022 Clients net retention rate 11
1, 2, 3 Our Existing Clients Drive Revenue Growth 2022 NRR exceeds three-year corporate average New and legacy clients expand over time to drive long-term strong NRR Returning to healthy run rate post COVID recovery
NRR Drivers Illustrative Example Expanded relationship with CommonSpirit Health, with first go-live with a Functional / Departmental Dignity Health facility (a recent acquisition of CSH). CommonSpirit operates Expansion 140 hospitals and more than 1,500 care sites across 21 states. Expand from Nordic Visitor subsidiary into Travel Connect. Travel Connect Geographic Expansion owns six luxury travel brands, which includes five destination management companies and one accommodation provider. Expanding with full-suite Comprehensive Receivable Solution, after previously New Product Adoption using cross-border payment solutions Adopted 529 disbursement processing solution, helping the university reduce Ecosystem Expansion time and resources spent on paper check processing. Payment Network Expansion Added payments processing corridors connecting Mexico & Nepal Global Mobility Secular tailwinds of rising education tuitions & globalization
Increasingly global and diversified revenue Travel vertical performance post- COVID was stronger than anticipated at our 2022 Analyst Day Cohort Go acquisition adds to International Cross- Border and Domestic Education Note: Represents share of total Flywire Revenue Less Ancillary Services in respective periods. In 2022, emerging verticals includes B2B and Travel. Cohort cross-border transaction revenue included in international cross-border education CohortGo domestic platform revenue included in domestic education for 2022 WPM domestic platform revenue included in domestic education for 2022
2022 Spreads on Transaction Volume Remain Stable Monetization rate is the quotient of Revenue Less Ancillary Services divided by Total Payment Volume. Spread is difference between monetization rate and cost of sales.
Financial Outlook 16
Q1 2023 Outlook $81 – $85 M $3 - $5M 1 Revenue Less Adjusted EBITDA Ancillary Services 1. Flywire has relied upon the exception in item 10(e)(1)(i)(B) of Regulation S-K and 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 presentation 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 17 which are directly impacted by unpredictable fluctuations in the market price of Flywire's stock.
FY 2023 Outlook $353 - $364M $28 - 34M 1 Revenue Less Adjusted EBITDA Ancillary Services 1. Flywire has relied upon the exception in item 10(e)(1)(i)(B) of Regulation S-K and 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 presentation 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 18 which are directly impacted by unpredictable fluctuations in the market price of Flywire's stock.
Appendix 19
Revenue Details
Revenue Less Ancillary Services & Adjusted Gross Margin Reconciliations * *Beginning with the quarter ended December 31, 2022, we have excluded depreciation and amortization from the calculation of our adjusted gross profit, which we believe enhances the understanding of the Company’s operating performance and enables more meaningful period to period 21 comparisons. $USD in Millions
Revenue Disaggregation by Revenue Type 22 $USD in Millions
Net Loss to Adjusted EBITDA Reconciliation $USD in Millions 23
Reconciliation of Revenue to Revenue Less Ancillary Services Guidance $USD in Millions 24