Yahoo Finance Flywire Corp (FLYW) Q1 2024 Earnings Call Transcript Highlights: Robust Growth Amidst Market ...
Revenue: $110.2 million, up 24% year-over-year.
Adjusted Gross Profit: $71.9 million, up 20% year-over-year.
Adjusted EBITDA: $13.2 million, increased by $6.2 million year-over-year.
Adjusted Gross Margin: 65.2%, down 200 basis points from 67.2% in Q1 2023.
Transaction Payment Volume: $7 billion, up 23% compared to Q1 2023.
Cash and Cash Equivalents: $619 million as of March 31, 2024.
Long-term Debt: None reported.
Shares Outstanding: 122.3 million as of March 31, 2024.
Full Year 2024 Revenue Guidance: $478 million to $498 million.
Full Year 2024 Adjusted EBITDA Guidance: $64 million to $75 million.
Release Date: May 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Flywire Corp (NASDAQ:FLYW) reported a strong Q1 FY24 with revenue of $110.2 million, marking a 24% year-over-year increase.
Adjusted gross profit for Q1 FY24 reached $71.9 million, a 20% increase year-over-year.
Adjusted EBITDA for the quarter was $13.2 million, nearly doubling from $7 million in Q1 2023.
Flywire Corp (NASDAQ:FLYW) has expanded its client base to over 4,000, nearly doubling since its IPO in 2021, and now serves clients in over 50 countries.
The company demonstrated strong global diversification, with the ability to process payments in over 140 currencies from more than 240 countries and territories.
Negative Points
Flywire Corp (NASDAQ:FLYW) faces challenges due to tightening student visa policies in key education markets, which could impact its education business segment.
The company noted a high single-digit percentage headwind related to its Canadian higher-education business due to external factors.
FX rates posed a $1.2 million headwind against the guidance provided for Q1, impacting financial performance.
Adjusted gross margin for Q1 FY24 was down 200 basis points from Q1 2023, primarily due to the growth of transaction revenue versus platform revenue.
There is ongoing uncertainty in the macro environment, which could affect future performance and growth rates.
Q & A Highlights
Q: Can you discuss the impact of the Canadian market issue on your guidance and how comfortable you are with the trends there? A: (Robert Orgel - President, Chief Operating Officer) We have more clarity now on the situation in Canada, which allows schools to proceed with a normal set of activities. We've modeled our guidance based on a school-by-school perspective, taking into account their applications and allocations. This detailed approach gives us confidence in our projections for the Canadian market.
Q: How are you adjusting your financial guidance in light of foreign exchange rate changes, and have you considered providing FX-neutral guidance? A: (Cosmin Pitigoi - Chief Financial Officer, Principal Accounting Officer) We are considering moving towards providing FX-neutral growth rates in our guidance to better reflect the true growth of the business, as more than half of our revenue is from outside the US. This approach will help neutralize the impact of foreign exchange fluctuations on our reported numbers.
Q: Can you provide more details on the expected growth in international students and how it impacts your net revenue retention rate in the education business? A: (Michael Massaro - CEO) The growth of international students has historically been in the low to mid-single digits, excluding the COVID period. This growth, combined with tuition increases and our land-and-expand strategy, contributes significantly to our TAM expansion and net revenue retention rate.
Q: What are the drivers behind the acceleration in growth rates from the first half to the second half of the year? A: (Cosmin Pitigoi - CFO) The acceleration is primarily due to the ramping up of enrollments in Canada, recovery in the healthcare business, and strength in other fast-growing verticals. We have incorporated these factors into our guidance, providing a range that captures various scenarios.
Q: How is the regulatory environment affecting international student numbers, and what is your long-term view on this market? A: (Michael Massaro - CEO) Changes in government policies regarding international students are not uncommon. Our diverse and global business model allows us to navigate these changes effectively. We remain optimistic about the long-term growth of the international student market, as education continues to be a priority for students and countries alike.
Q: Can you discuss the impact of potential legislation in the UK and Australia on international students and how it might affect your business? A: (Robert Orgel - President, COO) Despite regulatory discussions, our business in the UK and Australia has shown strong growth. Our focus on high-quality institutions helps mitigate the impact of potential legislative changes. We continue to see robust performance in these regions, reflecting the strength and resilience of our business model.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
