Flywire Corporation (NASDAQ:FLYW) Q1 2024 Earnings Call Transcript

Nate Svensson: Got it. I appreciate that. The follow-up question I had was on your 2Q growth outlook. So, you talked about the impact of FX in Canada, so that’s the reason why Q2 is a little lower than you had thought maybe three months ago. But I guess just thinking about even the growth range, it looks like by my math, there is about a 10-point range from the low end or the high end of guide, and that’s wider than you have been guiding typically, which is more around – call it 6 points the past few quarters. So, just wondering what you are seeing across the business, I guess maybe beyond FX in Canada that’s maybe giving you a little more trepidation as you look to forecast out, I guess the remaining two months in the quarter. Thanks.

Cosmin Pitigoi: So, thanks for that question. So, it’s Cosmin. Obviously, there is a number of puts and takes in Q2. And so what we wanted to make sure is that we capture some of that. I think part of that too is, as you have heard Rob talk about is Canada is a rolling ramp back. So, we want to capture that as we think about the potential kind of range of scenarios. But in general, it’s still – I think in terms of the midpoint here, we feel relatively good. And we have – obviously, we are a third way through the quarter. And so we are watching all of these trends, but still more to go, so we wanted to make sure that we capture the scenarios as we look into the rest of the quarter.

Mike Massaro: Yes. Nate, this is Mike. The only thing I would add is just making sure that if we had seen a snapback or something in Canada, which we didn’t see, right. We hinted very clearly that we are seeing this kind of return, this rolling return back to a normal cadence of admission process. And so that’s what we are trying to cover in our guide.

Nate Svensson: Thanks. Appreciate all the color.

Operator: Thank you. Next question comes from the line of Jeff Cantwell with Seaport Research. Please go ahead.

Jeff Cantwell: Hey. Thanks so much. I want to see if I am understanding your commentary and then if you can clarify anything that needs clarification. You updated us back in March about Canada. And then since then, things got slightly worse in Q1 than was initially expected, but the situation is now stabilizing and there is some un-bonding [ph] there. So, now you are saying on a full year basis, mid-teens revenue impact in Canada, and that’s partly offset by some recapture in other countries and you call that mid-single digits, is that right? Thanks.

Mike Massaro: That’s spot on, Jeff.

Cosmin Pitigoi: Yes, exactly.

Jeff Cantwell: Okay. Great. And then my follow-up on that is, how do you come up with a mid-single recapture? And underneath that, are you seeing any areas right now where situations like Canada are also developing, or is the situation globally more stable, in your opinion, not only in Canada? And would you be able to say that overall, as you think ahead you expect to see international student numbers going up over the medium to longer term? Thanks.

Cosmin Pitigoi: Let me start with the modeling question. So, in general, obviously, we have – we talk to our agents and others to understand how they are planning to help their students find another country if they cannot go to their original sort of destination. So, we feel like that’s sort of at a macro level, that’s a trend that continues. So, given that, obviously, it’s sort of if – it’s an estimate, I would say, it’s based on our experience and conversations with our sort of people on the ground and agents. So, that feels like, again, it’s well captured within the range of guidance for the year. So, we feel good about that we have sort of captured that. But it’s based on our experience. Obviously, it’s difficult to estimate exactly what students and behavior patterns and many other sort of impacts, but we feel like we have well captured that in our range of expectations for the year.

Mike Massaro: Yes. And I would just say, Jeff, I mean when we look at other markets, I mean I made some commentary earlier around just the UK strength as an example. And so again, we see other markets. We know there is headlines out there, but again, we have continued to see really good strength. Canada was a pretty unique situation just with the way in which the permit allocations were not known, and it kind of put a delay in that admissions process for the year that obviously impacted Q1, we still outperformed in even with that mid to high-single digit impact in millions in Q1 and the $1 million plus FX headwind in Q1. And so again, we are looking at the full year with strength and confidence knowing that it is a unique macro environment for us.

Jeff Cantwell: Okay. Great. Thanks very much.

Operator: Thank you. Next question comes from the line of Chris Kennedy with William Blair. Please go ahead.

Chris Kennedy: Good afternoon. Thanks for taking the questions. Rob, you talked about the pipeline in healthcare is up 100% year-over-year. Can you just talk about the changes in go-to-market strategy that’s driving that type of growth in healthcare?

Rob Orgel: Yes, happy to. Thanks for the question. So, we outlined a couple of quarters ago that we were doing a bunch of things to address the performance in that business. So, first and foremost, we did some work inside the team, elected a very strong – sorry, appointed a very strong new Head of Sales in that business. And I think we are seeing some of the benefits of that. So, the most obvious effect of that shows up in the pipeline having done the significant growth that we saw over the past period. So, that’s probably the number one thing. I think all of that, and you can see in the supplement materials that we provided, that we have also done quite a bit around the positioning of the business. We were able to show great returns based on the performance of our existing clients.

We have got innovation around the integrated financing offering. All of that, I am sure is helping the sales team in their efforts to drive that pipeline. But I would point first, I guess I would point to the combination of all those things as being what’s helping drive the pipeline growth.

Chris Kennedy: Thanks for taking the questions.

Operator: Thank you. Next question comes from the line of Andrew Bauch with Wells Fargo. Please go ahead.