Greetings and welcome to Flywire Corporation’s Fourth Quarter 2023 Earnings Conference Call. All participants are currently in a listen-only mode. A question-and-answer session will follow the formal presentation. This conference is being recorded. It is now my pleasure to introduce your host, Akil Hollis, Vice-President of Investor Relations and FP&A. Thank you. You may begin.

Thank you, and good afternoon. With me on today's call are Mike Massaro, Chief Executive Officer; Rob Orgel, President and Chief Operating Officer; and Mike Ellis, Chief Financial Officer. Our fourth quarter 2023 earnings press release, supplemental presentation, and when filed, Form 10-Q can be found at ir.flywire.com. During the call, we will be discussing certain forward-looking information. Actual results could differ materially from those contemplated by these forward-looking statements. We will also be discussing certain non-GAAP financial measures. Please refer to our press release and SEC filings for more information on the risks regarding these forward-looking statements that could cause actual results to differ materially and the required disclosures and reconciliations related to non-GAAP financial measures. This call is being webcast live and will be available for replay on our website. I would now like to turn the call over to Mike Massaro.

Thank you, Akil, and thank you to everyone that is joining us today. We are pleased to share our Q4 and fiscal 2023 results with you all, showing strong performance across the business. We are also eager to share our business priorities and financial outlook for 2024. In a few minutes, Rob Orgel, our President and COO, and Mike Ellis, our CFO, will go into greater detail about our results for Q4 2023. We will try to keep our prepared remarks short to leave more time for questions. I will start with a few financial highlights from Q4 2023. Revenue less ancillary services was $96.1 million in Q4, an increase of 43% year-over-year. Adjusted gross profit for the quarter was $63.5 million, an increase of 42% year-over-year. And adjusted EBITDA was $7.7 million for the quarter, increasing by $6.7 million year-over-year. These Q4 results now cap off another great year for Flywire. I will take a few moments to talk about some of the key achievements in fiscal year 2023. First, starting with our fiscal year 2023 financial highlights. Flywire's revenue less ancillary services grew by 43% year-on-year, and our adjusted EBITDA increased to $42 million, or 11% of revenue less ancillary services. Both results were well above our targets discussed at the beginning of the year. In FY 2023, we also added more than 700 new clients across all verticals, and now serve more than 3,800 clients globally. Finally, we moved more than $24 billion through our global payment network in 2023, a 33% increase year-over-year. We also achieved a number of business highlights across all verticals and geographies. In education, we continue to expand our higher education footprint globally, including notable growth in the United Kingdom and throughout Asia Pacific. We also continue to see success in our land-and-expand strategy in the United States, increasing the footprint of our full suite solution, landing many blue-chip clients. In travel, we experienced strong growth in terms of new clients signed, most notably with tour operators and destination management companies in the EMEA and APAC regions. In B2B, we continue to sign large enterprise deals and see success in our partner strategy. In healthcare, we accelerated our partnership strategy, solidifying relationships with Cerner and FinThrive. We bolstered our global payment network with a focus on supporting our strategic payer markets like India and China, enhancing our relationships with WeChat Pay, as well as three of the largest banks in India. Lastly, we continued our strong track record of strategic M&A with the acquisition of StudyLink, and our sizable cash position allows us to pursue additional M&A that fits our core thesis. Now let's look ahead to 2024. Mike Ellis and Rob Orgel will talk about full year 2024 guidance in detail, but our plan anticipates strong growth numbers in a complex macro environment, further expansion of EBITDA in alignment with our multi-year expectations, and delivering positive net income. We are truly excited for what is ahead for Flywire. As we look at 2024, we remain focused on optimizing our go-to-market capabilities, expanding our Flywire advantage, and strengthening our FlyMate community. We are continuously working to optimize and invest in our go-to-market efforts to sustain our growth algorithm. For example, in fiscal year 2023, we improved our sales ramp time from hire date to first deal close by more than 30%. This year, we plan to increase our investment in sales and relationship managers by more than 15% in aggregate, spread across all verticals and geographies. As we continue to grow, we will do so in the context of a very disciplined hiring plan that focuses on key roles to meet our objectives. Another area of investment in go-to-market is our channel partnership strategy. We plan to grow our channel effectiveness and deepen partnerships by investing in channel sales teams, integration engineering resources, and building more certified integrations with our partners. Today, we have more than 90 partnerships and tech ERP integrations across our verticals that help us identify new clients, find clients faster, and accelerate our implementations. We have seen significant success with partners like Ellucian and Bank of America, and we strongly believe further investment in channel partners can be a significant driver of future revenue. As for expanding our Flywire advantage, we remain focused on product and payment innovation to power the vertical ecosystems in the industries that we serve. This year, we are focusing on our ability to embed payments into the existing software and workflow processes of clients, partners, and payers to add more value to our growing ecosystems. A cornerstone of us capitalizing on this opportunity is our API strategy to better serve our clients and partners and complement the Flywire software solutions they use today. In 2023, we began to invest in building a public API to surface the power of the entire Flywire payments platform. This allows our customers across all verticals to integrate our API into their existing ERPs or software to leverage everything from our KYC and AML processes all the way through our global payment net so they can control their workflows and user experience in a PCI-compliant fashion. We believe Flywire will be even more unique in our ability to provide a ready-to-use platform for complex domestic and cross-border payments, along with optional flexibility to use components of our powerful API when clients seek deeper integrations into their workflows. Likewise, we will be exposing our new payables platform as an API, which can embed into any AP process of an ERP. We have proven our ability to identify new use cases where software drives value and payment, and we'll continue to invest more to drive growth and value for our clients. One example is our investment in StudyLink, which we acquired in Q4, and whose software connects agents in Australian education institutions and powers the application and offer of admission and acceptance process for their international students. Embedding Flywire's payment technology into StudyLink's international admissions application and agent management software unlocks our opportunity to monetize the nearly $1 billion in deposit volume their platform is involved in today. Our vision is to extend the StudyLink platform beyond Australia, leveraging Flywire's global clients and team. We will also focus on the strategic payables opportunity, particularly around commission payments in our travel and education verticals. As a reminder, we are applying our existing framework of using software in our global payment network to solve specific payable use cases for our clients. In travel, payables volumes, clients, and our network of beneficiaries continues to grow since we piloted the solution last year. For many European DMCs, Flywire is the only way they can both receive and pay out cross-border high-value travel payments. And in our education vertical, we are growing the number of clients who are using our solution to pay commissions to international education agents. We are also expanding our partner ecosystem of U.S. investment savings accounts. We're using Flywire's payable solution to digitally disperse 529 plan payments to U.S. colleges and institutions. Finally, we also continue to be focused on strengthening and growing our FlyMate community. As I've referenced in the past, our culture and FlyMates are what makes Flywire successful. We believe that our financial success enables us to give back to our communities and empowers our FlyMates to build their careers of a lifetime. As we continue into 2024, we remain committed to building and maintaining high-performance teams, developing exceptional talent, and having a positive impact on the world around us. In closing, I could not be more proud of the progress we made in 2023. I am excited for the years ahead as we seek to continue to grow Flywire into one of the leading global payments companies of our generation. Before turning the call over to Rob, I wanted to officially welcome our incoming CFO, Cosmin Pitigoi, who will officially join Flywire on March 4. Most recently, as Senior Vice President in Finance at PayPal, Cosmin brings decades of senior financial leadership and a proven track record of scaling organizations in complex global environments. He is the ideal CFO to help us achieve the next level of scale and solidify our leadership position in the global payment ecosystem. I wanted to also thank Mike Ellis for his many contributions to Flywire over the past nine years, including establishing many of our finance functions, taking the company public, and managing many strategic acquisitions. He has been a trusted partner to me, and we appreciate the seamless CFO transition that he is enabling. I would now like to turn the call over to Rob Orgel, our President and COO, to review some operational highlights from the quarter.

Thanks, Mike. Good afternoon, everyone. After another strong year as a public company, I'd like to start today by revisiting the algorithm we use to achieve sustained long-term growth. Our model includes, first, expansion with our existing clients, second, annualization of clients signed the prior year, and third, revenue from clients signed in the current year. We are also adding new payer and non-client services as a fourth component that feeds our annual growth. Our growth starts with expansion with existing clients, which is driven by our primary focus on delivering exceptional solutions and service for our clients across all of our verticals. For fiscal year 2023, we recorded net revenue retention of 125%, continuing in a favorable range denoted by the 123% three-year average between 2019 and 2021 we shared at our Analyst Day, and the 124% we reported for 2022. Our technology and client service teams are obsessed with meeting our clients' needs. Their hard work and our new solutions allow us to earn clients' trust, deliver client retention that exceeds 95% per annum, grow clients effectively, and produce a net promoter score in the 60s. Next in the growth algorithm, we benefit each year from the annualization and growth of clients signed in the prior year. As Mike mentioned, we signed over 700 clients in 2023, including over 170 in the fourth quarter. Our expected revenue per client signed in 2023 remains strong, and as usual, we only realized a fraction of that revenue last year. In 2024, based on our track record of positive client experiences, we expect to benefit from both a full year's revenue from these clients, as well as further penetration of our clients' payers. Third in the algorithm, we recognize a portion of the revenue from new clients in the year we sign them. We invest in our go-to-market capabilities to maintain our long-term growth. We estimate that our penetration of the total addressable market across our four verticals is in the low single-digit percentage range. We see opportunity everywhere and plan to continue to build go-to-market teams to capitalize on these opportunities and increase our market share. Finally, as we address the needs of payers in our ecosystem, we have begun to generate meaningful revenue that is not associated with any particular client. For example, as we grow our pay-any-school capabilities rapidly, we recognize revenue from tuition paid to schools that are not Flywire clients. In other examples, we are helping students procure other needed services, such as student health insurance required in Australia, and with moving money from India to cover living expenses outside of tuition. We are excited to layer in payer services to our solution set and believe there can be a multi-year roadmap in this area. Next, I'd like to briefly discuss how we grew across our four verticals during the fourth quarter. In our education vertical, we estimate our TAM to be about $660 billion. This TAM includes U.S. cross-border education, international cross-border education, and domestic education both in the U.S. and internationally. It includes higher ed, K-12, trade schools, summer programs, and more. We are penetrating our TAM through broad integrations with best-in-class enterprise systems, as well as deeper relationships with education agents prevalent in international education. We are also expanding our TAM by offering new solutions to payers and schools. During the fourth quarter, we signed several new clients in our U.S. cross-border and domestic subsegments, as well as across Europe, Asia Pacific, and Latin America. Recently, we went live with our domestic solution at Adelphi University, a private university based in Long Island, New York, with over 7,500 students. Adelphi had been a cross-border education client of ours since 2013, representing another example of where we had been able to leverage our trusted relationship that originated with our cross-border solution to expand into a much broader offering. For our U.S. cross-border segment, we went live with Florida State University and Oklahoma State University. Outside of the U.S., we went live with George Brown College. George Brown College is a publicly accredited top 10 research college in Canada with nearly 27,000 full-time students. We are now live with both our cross-border and domestic education solutions. GBC chose to work with Flywire to add more payment options, enhanced functionality to support education agent-related payment flows, and top-notch customer support. George Brown was one of the education clients that were signed in Q3 but went live after the peak season. All delayed education implementations that we referred to in our Q3 call have now gone live. In healthcare, we estimate our TAM to be about $500 billion, and we are serving many of the largest U.S. hospital systems. We are expanding how we work with partners in this channel to provide deeper integrations and even more flexible affordability solutions. We are also expanding into specialty subsegments. During the fourth quarter, we went live with OrthoNebraska, a specialty hospital based in Omaha, Nebraska, focused on orthopedic care. In implementing Flywire's payment solutions, OrthoNebraska saw nearly 80% of all payments come through the patient self-service portal. Flywire's solution has helped specialty providers significantly reduce staff hours spent on manually reconciling payments and has received high patient satisfaction scores. Overall, we are seeing early traction in new subsegments of the healthcare market as our receivable software solution helps reduce outstanding patient balances and increase collection rates for specialty hospital providers. In travel, we estimate our TAM to be about $530 billion. We have categorized our clients as destination management companies, or DMCs, global travel operators, and accommodations providers. During the fourth quarter, we signed new clients in each of our existing subsegments. We are also exploring new areas of focus, such as ocean experiences and niche online travel agencies, or OTAs. Recently, we went live with Aqua Expeditions, a luxury travel company specializing in small-ship cruises in remote and exotic destinations, such as the Peruvian Amazon and Mekong Delta of Vietnam and Cambodia, along with yachting experiences in Indonesia and the Galápagos Islands. Integrating with Flywire has helped Aqua Expeditions streamline their accounts receivable payment reconciliation process, enabling faster payment notification and funds disbursement capabilities. We are excited to tap into this new subsegment of travel and expand with ocean experience providers around the world. Finally, our B2B vertical covers a broad TAM estimated to be about $10 trillion, where we focus on providing mid-market enterprise clients with a sophisticated and integrated accounts receivable solution. Although starting from a smaller base currently, our B2B business is our fastest growing vertical, and we believe has a very promising future impact for Flywire. Within this massive B2B TAM, Flywire is gaining traction in various subsegments of the market, including insurance, software and tech, manufacturing and distribution, franchises, and others that include the public sector. We recently went live with the European Union Aviation Safety Agency, or EASA for short, which is an agency of the European Union responsible for overseeing and coordinating aviation safety across its member countries. Flywire is directly integrated into EASA's SAP instance to ensure a consistent billing and payment workflow with their existing ERP system, with a key benefit being automated payment reconciliation to remove manual processes around accounts receivable. While on the topic of ERP integrations, I'll also mention that we built out and are live with an integration with Workado, a cloud automation and integration platform for enterprises that seamlessly connects to widely used enterprise accounting systems such as SAP, Sage Intact, Microsoft Dynamics 365 Business Central, Intuit QuickBooks Online, and Oracle NetSuite. We believe that further building out our integrations with leading ERP integrators and systems will help us further penetrate our large TAM opportunity. Stepping out of the verticals and moving to our efforts towards efficiency and scale, I would highlight that in 2023, while we grew revenue less ancillary services by 43%, we reduced our hiring by almost 50% in terms of incremental run rate spend versus what we added in 2022. Our paced hiring in 2023 helps drive personnel expenses as a percentage of revenue less ancillary services down by over 530 basis points when comparing 2023 to 2022. We generate these scale efficiencies by working as a very collaborative team that is focused on careful pacing of hiring and managing expenses. We expect to continue this focus on managing all expenses, including personnel expense, in 2024 to produce additional improvement in run rate and personnel expense relative to revenue and to improve adjusted EBITDA margin. I will now turn the call over to Mike Ellis to go over our results for the quarter and year as well as provide guidance for 2024.

Thank you, Rob. Good afternoon, everyone. Today I will provide an overview of our results for the fourth quarter and then discuss our outlook for Q1 and the full year. Revenue less ancillary services was $96.1 million in Q4, representing a 43% growth rate compared to Q4 2022. On a constant currency basis, our revenue less ancillary services growth rate for Q4 2023 was 41% compared with Q4 2022. Our revenue growth rate was driven by increases in total payment volume due to strong growth from our international cross-border payment volumes in our education vertical, particularly with our U.K. higher education clients as well as growth from our travel clients. FX rate changes represented a tailwind in comparison to Q4 of 2022 and a tailwind against the guidance we provided for Q4 and full year on our last earnings call, which were based on prevailing rates on September 30, 2023. For purposes of comparing our Q4 2023 reported results against our most recent Q4 guidance, we had an FX tailwind that amounted to approximately $0.7 million on Q4 reported results. Q4 revenue less ancillary services outperformance compared to our expectations was driven by stronger-than-expected volumes from new U.K. higher education clients, strong monetization of payment volumes, better-than-expected utilization of our payment plan capabilities in the United States and higher Canadian volume, which we believe was driven by students accelerating some 2024 payments. With respect to payment volumes, we processed $5.4 billion during Q4 2023, which represented an increase of 33% from the $4.1 billion processed during Q4 2022. Specifically, transaction revenue increased 45% compared to Q4 2022 driven by a 46% increase in transaction payment volume. Platform and usage-based revenue increased 32% compared to Q4 2022 driven by a 5% increase in platform and usage-based payment volume, as well as from platform fees that do not carry any associated payment volumes, including revenue associated with the contributions of our payer services offerings and our recent acquisition of StudyLink. We generated $63.5 million in adjusted gross profit during the quarter, representing a 42% increase compared to the $44.5 million earned during Q4 2022. Specifically, our adjusted gross margin was 66.1% for Q4 2023, up 10 basis points from 66.0% as adjusted for Q4 2022. The year-over-year change in adjusted gross margin was driven primarily by monetization rates on transactions and improved economics with our payment partners. However, this was offset by strong growth of our transaction revenue versus our platform revenue, particularly from our travel vertical where credit cards are predominant. Adjusted EBITDA for the quarter was $7.7 million, an increase of $6.7 million over the $1.0 million reported for Q4 2022. With respect to capitalization as of December 31, 2023, we had $655 million in cash and equivalents, no long-term debt, and 122.5 million shares of common stock outstanding. We also increased our borrowing capacity to $125 million through an updated credit facility with an expanded five-year term. While we're not planning to draw on the facility in the near term, it provides financial flexibility for funding M&A and other strategic investments. Moving on to guidance. The full year 2024, which is based on foreign exchange rates as of December 31, 2023, we expect revenue less ancillary services to be in the range of $483 million to $509 million, representing a year-over-year growth rate of 30% at the midpoint. This growth reflects continued confidence in our go-to-market and ongoing penetration of the TAM across our verticals. Our guidance reflects a net reduction of low-teens millions of dollars to revenue related to recent announcements that the Canadian government will reduce applications for international study permits. We expect to deliver full year 2024 adjusted EBITDA in the range of $65 million to $76 million. At the midpoint of our full year 2024 guidance range, we expect to generate approximately 320 basis point improvement in adjusted EBITDA as a percentage of revenue less ancillary services for the year. We expect to achieve adjusted EBITDA margin expansion through strong revenue growth in disciplined spending offset in part by the adjusted gross margin impact from our ongoing shift in revenue mix. In addition to the impact on our full year revenue guidance, the Canadian regulatory changes are expected to impact the seasonality of our business in 2024. Ordinarily, revenue from education customers in Canada is earned relatively evenly throughout the year. Under the new Canadian undergraduate student permit policies that were announced in late January, provinces are not expected to allocate study permits to schools until late Q1 or early Q2. This is reducing applications, admissions decisions, and payments for many international students so far in Q1. These dynamics are expected to push some payments in subsequent quarters as permits are available in Canada or students seek alternative destinations. With that context, Q1 2024 revenue less ancillary services is expected to be in the range of $106 million to $111 million. This guidance reflects a reduction of Q1 revenue in the mid-single-digit millions due to changes in Canada. Rounding out the guidance discussion, we expect Q1 adjusted EBITDA to be in the range of $9 million to $11 million. Overall, we are excited about a strong 2024 and look forward to what we expect will be a strong year of revenue and adjusted EBITDA growth. I want to finish by saying that it's been a great honor to be Flywire's CFO for the past nine years. Flywire is well positioned for continued success and I will continue to cheer them on. I'll now turn it back over to the operator for questions.

Thank you. Our first question comes from Dan Perlin with RBC Capital Markets. Please proceed with your question.

Thanks. Good evening and great quarter. I wanted to ask about the net revenue retention rate of 125%. It's accelerated from 2022, and the average that we've seen from 2019 to 2021, which is pretty impressive and usually not necessarily the case to see this accelerate. I'm just trying to piece out a little bit how we're thinking about where that's coming from specifically. So, is that mix within the new cohorts and verticals that you're bringing on or is it more or less the revenue opportunities that you're talking about within those new cohorts just being larger as they're coming onto the platform?

So, Dan, it's Rob. I'll jump in on this first one. So, we've always talked about the multiple levers that drive NRR and the continuing story for us is that all those levers are continuing to work. So, as you go across the verticals, what you'll see is we're always working to increase the footprint we have inside the client. So, whether it's more hospitals, more schools and departments, or more of a business's sort of operations and subsidiaries, the first driver is to continue to expand our footprint inside those clients. Second thing you see is we expand based on the products that we supply. So, whether it's going pre-service on top of post-service at a hospital, whether it's adding more of our product functionality from our domestic capability, all of that is what's helping drive these things. There are other additional benefits where we do things like grow the payment network that allows us to capture more payments from more places around the world. But the first two that I mentioned are the main drivers there of sort of a healthy set of drivers on NRR that we feel really good about.

Okay. That's great. And then just a quick follow-up on seasonality. Mike, you were just kind of running through this quick, but one of the things that you guys have kind of hammered into us is that kind of Q2 and Q4 obviously being typical peak seasons for travel and how that's changed some of the seasonality of the business. And so, I'm just making sure that obviously Q1, I understand the Canadian argument, but if it spills into second quarter, is it kind of like second quarter, third quarter that we're ramping or should we expect kind of the guide to be maybe slightly heavier on the margin side within second quarter relative to what we would have normally thought given the seasonality of travel? Thanks.

Sure. Thanks for the question. It's Mike Ellis. So, as you know, we got into about 30% for the full year. And as discussed, the Canadian regulation changes will impact that quarterly revenue and seasonality specifically as it impacts Q1. And we do expect Q1 to be our slowest growth quarter. And I would expect that Q2 will be higher than the average. And the second half will be right around the average annual growth rate. Hopefully that gives you enough context there.

Our next question comes from the line of Will Nance with Goldman Sachs. Please proceed with your question.

Hey, guys. Appreciate you taking the question. Nice quarter today. Yes, I was wondering if you could maybe just kind of go through the Canada stuff again to make sure everyone's getting the moving pieces there. I thought I heard maybe two separate impacts, one around the seasonality and the timing of payments and one around just regulatory changes overall, that it sounded like there was a low-teens impact in the numbers for the full year. So, I just, the $5 million that you called out in the first quarter, is that overlapping with the low-teens for the full year? Or is that a timing impact and the low-teens is separate and just bigger picture in any color on just what kind of assumptions you guys are having to make in the forecasting around this issue and just how you think about the range of outcomes over the course of the year? Thanks.

Yes. Hey, Will. This is Mike. I'll start and I'll probably toss it to Rob as we kind of go into how we modeled it. In short, we've got a history of dealing with certain types of shifts like this and enrollment from different countries. We have a large, diverse client base. We're heavily connected to our clients. And when we see something like Canada, we're talking to them. We have a massive network of educational agents that are also preparing those applications throughout the year. And so we get input from them. And as the year goes on, you can expect us to talk about the release of permits, the study permits as they become more released. You expect updates from us throughout the year and also potentially different areas of study, right? If students, potentially can't get a permit in a place like Canada, they may end up in a different location. And again, Flywire benefits from that diversity. And so we did call out an impact in Q1, single-digit millions and full year, low-teen millions. And I'll let Rob talk about exactly how we structured that.

Yes. So, Will, let me just clarify for one thing that I thought was in the middle of your question there. Those two effects are essentially inclusive, meaning when we talked about Q1 having the low, sorry, the mid-single digit millions, and then we talked about the full year as low teens. Do not add those. That is cumulative or integrated in terms of just making you understand the effect on the two different periods. So the way we got to that measurement, obviously we have gone and done our work to understand what we hear from our agent community, from our client community. And based on that, we modeled out a series of scenarios. So a number that will be relevant for you if you look at the business, about 14% of the business is Canadian higher ed. And so we worked through scenarios about sort of the impact and the recapture. And as we went through those sort of informed scenarios, that's where we came out at the mid-teen millions, sorry, the low teens millions for the full year impact.

Got it. That's all very clear, and I appreciate the detailed answer. I want to follow up on an earlier question regarding some of the NRR dynamics. Specifically, looking at the cohort slide you provided in the deck, you are experiencing mid to high teens growth in cohorts from seven years ago, which is certainly impressive. I am curious if you could discuss what is driving the continued strong growth among some of your older cohorts. You've mentioned many of the factors at play, but I would like to hear any specifics on what you have seen succeed over the past year. Thank you.

Yes, maybe the one extra dimension of granularity I could add from my prior comment is the way to understand this is to understand that we do see growth just based in the core volumes that we see from the cohorts, meaning increased student penetration, increased payment volume from the offerings that we have. All of that is part of the hard work of our relationship managers instilling best practices at our clients, our reputation, our network, all the things that help grow sort of that base. What you'll also see is that within obviously a subset of any given year's cohort, we manage to do the land and expand, meaning a new product or service or going domestic as an obvious example, but it could be that or our collection management or our e-store. All of those will take some of those members of that older cohort and allow us to dramatically increase the revenue. Adelphi is the example we called out on this earnings call, right? 2013 client, but went full domestic capabilities just now. So all of that helps feed the NRR of that longer go cohort.

Our next question comes from the line of Jeff Cantwell with Wells Fargo. Please proceed with your question.

Hey, thanks so much. I'm Jeff Cantwell support research. I just want to make sure on the 2024 guidance, Mike, can you talk a little bit about do your revenue growth less ancillary services, $483 million to $509 million? Can you talk about the volume, incremental volume that you're expecting in 2024, whether that's coming from education or your other three verticals and where specifically you're thinking about volume growth across domestic versus international? I just want to get a flavor of how you are considering where your volumes will be growing in 2024. Thanks very much.

Hi, Jeff, it's Mike. So first off, the range that we provided was $483 million to $509 million, just to clarify the top end of that range. Listen, the business and historically has always grown based off of payment volume improvement over time. And that's one of the things that we're really proud of. The quality of our revenue growth has been exceptional since the beginning of our business. And to your point, we do expect continued improvement with B2B and travel to continue to contribute to our overall growth rate and payment volumes, as well as our education business. As you know, the healthcare business is predominantly within our platform business and less about transaction volumes in that vertical. But so we expect continued really good throughput based on all of the new client signs and again, the NRR that we've talked about.

Okay, great. Thanks so much. And then Mike, I just wanted to ask you on your, obviously, we've been very appreciative that you've contributed to Flywire over time. So I just wanted to get your thoughts on as you leave the company, what are your thoughts on the state of the company and going forward? Obviously, you've done a lot on the focus on margins and so forth. So I just wanted to get your sense of how you are handing things over to Cosmin and for anything that Cosmin can contribute on this call as far as how he's thinking about going forward, I would like to get a sense of what the transition is like and then how we should think about margins and so forth. Anything else you can talk about would be great. Thanks very much.

This is Mike Ellis. So two questions here. With respect to your adjusted gross margin question, we do expect continued revenue mix shifts over 2024. And I would suggest similar to last year that the range of the AGM should be declining somewhere between 100 and 200 basis points. But that's all built into the great adjusted EBITDA throughput that we've guided to at midpoint for 2024. So again, really good business, whether it's B2B, travel, education, and we'll continue to enjoy those healthy adjusted gross margins. With respect to my view of the business, I've said it in my prepared remarks, Flywire is well positioned. It comes down to the fact that the team is focused on execution, and that really cuts across every single FlyMate that works for the business. And for that, it's been an honor and a privilege to be a part of that type of execution mindset. And again, just given the addressable markets that the company has to go after is really astounding and lots of room to continue to grow. And that's why we're confident with this 30% growth forecast in the guidance range. Finally, with respect to transitioning to Cosmin, I welcome Cosmin to the Flywire team. I will be available for him for as long as he needs me to get to understand the business and be able to transition all of the institutional knowledge that I may retain. But one thing good about Flywire is there really is no single point of failure. There's a lot of redundancy of knowledge across the organization. So I am 100% confident that Cosmin will be able to get up and running very quickly.

Our next question comes from the line of Nate Svensson with Deutsche Bank. Please proceed with your question.

Hi, guys. Thanks for the question and great results. So in your prepared remarks, you talked about a few drivers of revenue hour performance in the quarter that I was hoping we could dive a little deeper on. So two things you specifically mentioned were, one, better monetization of payment volumes, and two, better utilization of payment plans. So maybe can you give a little more color on what happened in the quarter that led to better monetization rates? And then likewise, what drove that higher utilization of payment plans in the U.S. in the fourth quarter?

Hi, it's Rob. I'll jump in and start here. So for the most part, it was straightforward, really strong performance across the business. So if you looked in education, which was, I think, the focus of your question, performed really well. That strength was in the U.K. and the U.S., notably in the U.S. around that payment plan usage, but lots of good revenue performance elsewhere as well. I think in that payment plan utilization, it's around some enhancements we've made in the user experience as well as just the expanding footprint for our domestic platform. In terms of healthcare, we had quarterly revenue growth year-over-year, which was good after a few tough quarters. Travel and B2B performing exceptionally well, really growing very nicely. And in terms of the adjusted EBITDA, it was helped mostly by the extra revenue, but also by the strong gross margin.

Got it. That's helpful color. So the follow-up I had, so a few weeks ago, you announced the new partnership with the State Bank of India to help digitize payments in the country. And I know, so given some of the commentary from last quarter about FX volumes in India, there's obviously been a lot of focus on payment choice in that country specifically. So I'm hoping you can talk a little bit more about the new partnership and what it means with regards to your ability to capture FX volumes going forward in India. And I guess maybe building on that, can you talk maybe more about similar partnerships you're exploring in other geographies? I know you had a few comments in your prepared remarks there. So any color that would be very helpful.

Yes. So a couple of things. So, first of all, SBI, one of the very largest Indian banks, we have done similar partnerships with three of the top banks, all part of our strategy for making sure that we deliver a great user experience in India. And we really are the easiest way to pay for folks. Overall, that combined with the other aspects of our strategy, mostly focusing around agents and our servicing of the agent ecosystem, all contributed to a really strong quarter for India. So India overall for us performed very nicely, growth rate sort of in line with the overall corporate average. And so we view that as a very good result. So all part of our strategy to continue growing that FX volume and continuing to drive impressive growth out of India, definitely one of our key markets.

Yes, Nate, the only thing I'd add to that is just obviously we're looking for other ways in which we can go ahead and add more online banking connectivity. We believe there's huge potential in digitizing a lot of the flows over banking rails in the future.

Our next question comes from the line of Darrin Peller with Wolfe Research. Please proceed with your question.

Guys, hey, maybe just start off with the strength you've been seeing in customer ads, which obviously has been coming in. I think it's around 170, 180 clients or customers per quarter the last couple of quarters, clearly higher than it was for quarters well before that. So just a bit more of an understanding as to the verticals around it and if some of them are smaller customers, perhaps in the travel side or anything else that makes up that strength. And then if there's any also just any changes in the sort of vintage analysis, then another way if there's like a translation of revenue from those at a different pace, it'd be good to know. Thanks, guys.

Hey, Darrin, Rob here. So this was another really strong quarter, 170 plus clients signed. In this case, education actually got the top of the table in terms of driving the most client wins, so just beat out travel by a little bit. But in this case, a really strong quarter for the education team alongside a strong quarter for travel. Nice ads and B2B in healthcare as well. On the deal size, the average deal size just slightly lower than what you've seen across our sort of historical average, but only just slightly. And again, strong and in a very good range. So we're pretty happy with all of those results in terms of the numbers and the deal size. Lots of good-sized deals in there, too. Final thing I’d point out…

Yes, go ahead, Rob.

Sorry, I was just going to make one other point. We're also feeling really good about our investments in the go to market. Right. So you're seeing these numbers come in strong. And the thing that we are very bullish on is that we are seeing very good efficiency as we invest and go to market. So when we look at the return on that investment in sales, we're seeing them get productive faster. We're seeing win rates be higher. We have a very favorable ratio in terms of their contract value. They get signed in the first year relative to their costs. So they are delivering well over their a nice multiple of their salary in terms of contract value wins in that first period. And if you look over at the RM side, which is the other side of our investment and go to market, we're signing out substantial growth targets for RMs as they get assigned out into the field on our accounts. And we feel really good about those results, too.

Our next question comes from the line of Michael Ellis with Bank of America. Please proceed with your question.

Hi, good afternoon. This is Tyler DuPont On for Jason. Thanks for taking the questions. I wanted to start by asking about changes in the Canadian environment. It sounded like in your prepared remarks that some of the 4Q beat was due to a pull forward in Canadian payments. Can you maybe just quantify how much, if any, of the single-digit millions that isn't going to be in Q1 was pulled forward into Q4 versus move forward into later quarters? And then also just when looking on a go-forward basis, how we should be thinking about the EBITDA dollar impact due to this movement? Thank you.

Sure. Hey, Tyler, it's Mike Massaro. I would say you can think of that as a kind of single-digit, sorry, single million-dollar kind of impact from a pull forward perspective. So definitely not kind of anywhere near the number for kind of full Q1 in Q4. Really what it was a dynamic where students knew regulations were changing. And as they had the opportunity to already were sitting on a permit, they were sure to pull the trigger on that permit where they may have had time in the first half of the year to make that decision as well. So they were actually making their payment a bit early because they had access to a permit that had already been issued. So that's really the dynamic we saw. It wasn't a huge impact to Q4, wasn't a huge pull forward for Q1, but we did call it out.

Our next question comes from the line of Andrew Jeffrey with Truist. Please proceed with your question.

Hi. Pardon me. Appreciate you taking the question. I just wanted to be clear, and I don't need to belabor the point. On the guidance, by my math, it looks like the midpoint of the range is about 27% sort of organic, somewhere in that neighborhood. Recognizing sort of the puts and takes in Canada, I guess, was some of those payments that were pulled forward into Q4 kind of normalizing for that? Or is Canada in the entirety of the delta between what otherwise would have been fast organic revenue growth? And it sounds like you have some levers that could accelerate it, namely, some of the performance in travel and better India payment monetization. I just want to make sure I'm understanding that correctly, and I've got a quick follow-up.

Yes, your organic number is relatively right. And if you look at it, notwithstanding the Canadian impact, we would be right about that 30%. So we're pretty confident about the 30% growth rate.

Andrew, you had a question on kind of other areas. I mean, obviously, as we look to the year, it's early in the year, but we think we have lots of opportunity across all our verticals. So you can imagine we're putting our effort in to offset any impacts that Canada could have. And I expect FlyMates to continue to execute like they have the last many, many years.

Our next question comes from the line of Chris Kennedy with William Blair. Please proceed with your question.

Good afternoon. Thanks for taking the question. Can you give a little bit more color on the payer services initiative? I see in the deck over $10 million from the Australian insurance opportunity. Can you talk about the other opportunities that you have and how big those can, if they can move the needle?

Yes. Hey, Chris, Mike to start off. So obviously the payer services is something we talked about back at our investor analyst day a couple of years ago and talked about expanding into these ecosystems that our industries really are surrounded our industries. I would say when we got into payer services, we had a whole series of initiatives focused on what value add can we provide the payer in these instances? And so you start to look at things like insurance, which can be bundled at the point of checkout for education. There's potential, as we mentioned before, publicly of bundling something in relation to travel around that same component. If you look at how students acquire other services that they may need when studying abroad, insurance is just one of the many things that a student or a parent potentially would like to have. In Canada, we've mentioned things, a thing called the GIC, which is a actual deposit account that's required to get a permit in Canada to study. And that has to be funded prior to the issuance of that permit. And so, again, that's something that, as you'd imagine, we're at a critical point in the flow between the family, potentially an educational agent, and the university. And as you've seen the success in the insurance product, in a very short period of time, we think we're at a unique position without any marketing dollars really to be spent to put great solutions in front of the payer that can make their experience great. And so, again, that's the strategy. It's across multiple industries. And we think we're just getting started when it comes to payer services.

Great. Thank you. And then just real quickly, the follow-up. Can you just give us an update on the FX volume that you had in India? That was an issue that was called out in the September quarter. Did things kind of normalize in the December quarter? Thanks a lot.

Yes, I think you used a good choice of words there when you said normalized. And when you looked at Q4 versus Q3, the FX percentage was actually up just slightly. So we view that as a sort of good, healthy result and quite satisfied with the growth in India and the FX percent.

Our last question comes from the line of Tien-tsin Huang with JPMorgan. Please proceed with your question.

Hey, good afternoon, everyone. Good to talk to you guys. It's just one question. I'll close out the call. Just with the guidance range, it looks a little bit wider than usual. Any change there in the visibility call-out to get to the upper or the lower end of the guide? I know the quarter obviously came in ahead. So I'm just trying to better understand the variance there. That's all I had. Thanks.

Yes, it's Mike Ellis. Yes, we did expand the revenue guidance. It represents basically 5% of the full-year guide. And given the growth of our revenue amounts, we thought it'd be reasonable given the uncertainty specifically around the Canadian regulatory challenges. And as we kind of update over the course of the year, of course, we'll narrow that range as that becomes more clear. No change with respect to how we guide.

Appreciate everybody's time on the call. Thank you very much and talk to many of you soon.

Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time and have a wonderful day.