Flywire Corporation (NASDAQ:FLYW) Q3 2023 Earnings Call Transcript

Flywire Corporation (NASDAQ:FLYW) Q3 2023 Earnings Call Transcript November 7, 2023

Operator: Greetings, and welcome to the Flywire Corporation, Third Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions]. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Akil Hollis, VP, Financial Planning and Analysis. Thank you, Mr. Hollis. You may begin.

Akil Hollis: 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 third 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.

Michael Massaro: Thank you, Akil and thank you to everyone that is joining us this afternoon. We are excited to share our Q3 2023 results, which show continued strong performance and momentum across the business. We are also pleased to announce the acquisition of StudyLink, an Australian company that specializes in international student application software. I will provide more details on this acquisition in a few minutes. Following my comments, Rob Orgel, our President and COO, as well as Mike Ellis, Our CFO will go into greater detail about our results for the quarter, but I will first share some highlights from Q3. Revenue less ancillary services was $116.8 million during the quarter, representing year-over-year growth of 31%.

This represents our highest quarter of revenue less ancillary services ever, and in dollars, approximately $28 million in growth. Adjusted gross profit for the quarter was $80.1 million, an increase of 28% year-over-year, a quarterly record for the company. Adjusted EBITDA was $27.5 million for the quarter, representing a 9.3 million increased in our adjusted EBITDA versus Q3 2022. And this was also a record for the company. This puts revenue less ancillary services year-to-date at 285.3 million, a growth rate of 43% year over year reflecting the strength of our business and effectiveness of our go-to-market strategies in the underlying markets. As a result of this success, we are raising our full year outlook for revenue less ancillary services and adjusted EBITDA on a constant dollar basis.

We are once again in an environment where the U.S. dollar has strengthened significantly and this generated a headwind relative to the rates incorporated in our prior guidance, impacting Q3 reported results by approximately $1.4 million. In addition, there were a few other puts and takes for the quarter that Mike Ellis will cover later in the call, but overall it was a very strong Q3 which we believe demonstrated the strength and breadth of our business. Looking forward, we are also making progress against our three key investment areas which include optimizing our go-to-market efforts, expanding our Flywire Advantage with products and payment innovation, and strengthening and growing our FlyMate community. First, I will dive deeper into our go-to-market efforts.

We are pleased to share that we generated our highest quarter to date in terms of new projected revenue signed. This is the result of the optimization of our go-to-market strategy globally where our sales and marketing teams continue to deliver new client wins and expansion with current clients across all verticals. Thanks to ongoing success with vertical specific events and targeted digital campaigns, by the end of Q3, we calculated our marketing returns to be greater than 10:1 based on pipeline generated to marketing spend which far exceeds the industry standard of 5:1. And in travel specifically, we broke yet another record for bringing in the highest number of net new clients signed and more than doubled travel Q3 revenue year-over-year.

Our efficient client acquisition engine helped drive quick sales cycle and increased win rates in the travel vertical. We believe our successful M&A track record complements our strong organic growth. As you know, we announced the acquisition of StudyLink, an application and enrollment software for agents and universities deeply penetrated in the Australian higher ed market. Importantly, we are thrilled to be welcoming a talented group of 60 plus FlyMates our global team. This deal enhances the StudyLink and Flywire value proposition to our shared stakeholders in the higher ed ecosystem universities, students, and agents gives us a great opportunity to expand on each company’s existing and successful track records of providing top tier solutions in Australia.

StudyLink provides a cloud based interface for universities and education agents to structure, streamline, and integrate international applications and enrollment into their admissions process. With StudyLink, we gained the software involved empowering the offer and acceptance in a top four core market for us as well as accelerating our opportunity to monetize the nearly $1 billion in deposit volume Their platform is involved in today which we will work to grow. The combination of StudyLink and Flywire can capture the entire student payment journey from the 1st enrollment deposit through the ongoing tuition payments, StudyLink’s extensive roster of blue chip clients present meaningful growth opportunities for Flywire, and their network of 20,000 agents can help us accelerate growth among education agents and help advance our strategic payables initiative focused on agent commissions.

We believe the efficiency and benefits StudyLink brings to universities and education agent ecosystem has the potential to resonate in so many more countries beyond Australia and look forward to helping to accelerate the expansion of the platform around the world leveraging Flywire’s clients, partners, and our global team. We are very excited to share the news today and have added some more details on the acquisition in our earnings supplement posted on our Investor Relations website. As we have said before, we are confident in our track record of strategic and value-add acquisitions and will continue to pursue acquisitions that can help us accelerate our penetration of existing verticals. During Q3, we also continued to expand our Flywire Advantage, our long term vision to power the ecosystems in our core industries of education, healthcare, B2B, and travel.

As a reminder, the Flywire Advantage consist of our next generation payments platform, our vertical specific software, and our proprietary global payment network which combined enable us to deliver product and payment innovation for our clients and payers. Given our ongoing success in the travel industry, we decided to do a deeper dive this quarter and included a few additional slides in the supplement. In travel, we focus on three primary sub-segments. Destination management companies, accommodation providers, and tour operators. We estimate that these sub-segments represent a large total addressable the market of $530 billion. And these subsectors have been historically underinvested in from a software and payments perspective. Before Flywire, our travel clients were typically sending static unsecured PDFs for invoices through disparate and legacy billing, invoicing, in CRM systems.

With Flywire, our clients can consolidate their backend infrastructure while upgrading the entire payment experience. We signed more travel clients than ever in the quarter and continued to get our clients live faster, thanks to our software and payments capabilities as well as our industry knowledge. This quarter in particular many clients acknowledge switching to Flywire from a major payment processor not only because of our ability to lower their payment costs, and simplify reconciliation and to deliver superior transaction security but also because of our first class customer support. One destination management company told us that they switched to Flywire because we understand the industry much better. The trust our team builds is critical to the success of our long-term client relationships and helps us further integrate into their payment ecosystem.

Our split group payment capability capitalizes on the rising trend of group travel and enables our clients to offer group payment experiences itemized each traveler safely and securely through our dashboard. We also hear from our DMC clients their need help paying out agents, other suppliers, and vendors. Because we solved the hard challenges with their receivables, they’ve entrusted us to solve these outgoing payment challenges, and many of them are now in beta with our payables solution. During the incredible growth over the past few years, gross profit spreads on our travel transaction volumes have been healthy and comparable to our overall Flywire gross profit spread and improving over time. We are continuing to explore capabilities that add even more value via software and can drive even more gross profit across this sector.

With our winning strategy in travel and our healthy financial profile, we are confidently exploring TAM expansion opportunities in the vertical and present meaningful growth for us. And finally, in the quarter, we continued to strengthen and grow our FlyMate community. Last quarter I referenced a renewed 5-year vision that we recently laid out for our FlyMates which details how our financial success will empower us to commit to social impact, learning and growth, and FlyMate engagement. We believe we are on an exciting path to achieving the goals that we’ve set out for ourselves in these areas. Recently, we rolled out a reimagined management training program, a 3-month immersive experience for first time people managers. Based on FlyMate feedback, we bolstered the program to include more practical workshops, and more executive involvement.

I personally lead a session within the training and am always fulfilled and inspired by the FlyMates taking part in this program. Committed to providing our FlyMates their career of a lifetime, we also expanded our internal hiring programs to provide FlyMates new development opportunities. Many FlyMates are benefiting from both our global mobility program which enables them work on a specific project outside their home country for a temporary period as well as our one Flywire program where FlyMates have a first line of sight on new roles within the company, and the full support of their people managers to explore these roles in different departments. These programs empower us to build dynamic, multifaceted teams that can quickly assemble to help our clients and payers.

The investments we’re making in our FlyMates are important and reflect our view that culture is a strategic asset and a key differentiator for Flywire. This is validated by the recognition we have received. We were most recently named among the Top 20 Most Loved Workplaces in the United States in Newsweek Magazine. Before I hand off to Rob, I wanted to take a moment to acknowledge the tragic loss of life and suffering in Israel and Gaza as a result of the Israel-Hamas conflict. We have a team of FlyMates in Israel and our ongoing focus has been on their safety and well-being. We continue to be in constant contact with them and deeply respect their commitment to each other, to their communities, and to continued service to Flywire and our clients despite very challenging circumstances.

I would now like to turn the call over to Rob Orgel, our President and COO to review our operational highlights from the quarter. Rob?

Rob Orgel: Thanks, Mike. Good afternoon everyone. It was another quarter of substantial growth for the company. Our sales, client service and delivery teams delivered great results during the quarter. Here are just a few of the highlights. We added over 185 new clients, a new record for the company in the quarter. Those wins reflected the most projected deal value we have ever signed in a quarter. And for the year, we are ahead of our internal plans. We added to our pipeline and significantly increased our new business win rate while decreasing our average sales cycle. The quarter’s strong growth was driven by the continued execution of our 5 strategic growth pillars. As a reminder, those pillars include growing with existing clients, adding new clients, expanding our ecosystem through channel partnerships, expanding to new industries, geographies, and products, And finally, strategic value enhancing acquisitions.

Starting with growth from existing clients, we went live with our domestic collection management solution at Penn State, a top ranked global university with over 90,000 students at 24 campuses including the online Penn State World Campus. Penn State has used our cross border solution since 2012. Within just a few months of being live with our domestic collection management solution, Penn State has collected millions of dollars of past due receivables and has seen over 1,500 activations of student payment plans. As we mentioned with Wellesley last quarter, we continue to see many schools interested in our collection management solution reflecting their interest in a streamlined process for collecting overdue student tuition bills. We also signed a handful of education clients onto our student financial software in the United States who are all recognized and sizable universities originally using our cross border solution, now taking advantage of our student financial software for their domestic and international students.

As a reminder, these are complex enterprise sales motions. And while Q3 isn’t a typical buying season, our teams and our solution were compelling such that we were able to close deals with these institutions. This underscores our ability to land and expand key accounts in education and we remain confident in our ability to capture more domestic payments in the U.S., a market which we estimate to include $240 billion in domestic tuition volume annually. We also had many new clients go live across the verticals. In education, we went live with the University College London or UCL which is consistently ranked as one of the Top 10 Universities in the World for QS World University Rankings. Founded in 1826, UCL has over 39,000 students from across 150 countries.

UCL implemented our one door solution which includes implementing our full domestic and cross border offering concurrently. We won UCL through a competitive RFP process independently of any preexisting WPM relationship. Flywire was selected due in part to our proven integration capabilities with vertically focused cloud based ERP systems serving the broader education vertical. For example, we are integrated with StarRez, a cloud-based resident and property management platform used by colleges and universities like UCL to run their online housing systems. Our investments in expanding our integration capabilities with market leading ERP systems are paying off and continue to differentiate us versus most payment providers. We had a strong quarter of travel in terms of new client wins including Le Collectionist, a luxury villa accommodations provider founded in 2009 with the villa rentals across 30 destinations and over 1800 properties around the world.

The client is Flywire’s solution to manage security deposits and collecting the balance due payments for their biller rentals. Carrying forward one of our key themes, our competitive differentiation and value add in the travel sector stems from our innovative software capabilities and integrations with leading vertical specific ERP systems which provides us with the competitive edge to win new business against much larger companies providing standardized payments processing capabilities without the deep vertical software integrations. We recently completed an integration with SION, a software platform that tracks and manages commissions for travel agencies. With the SION integration we were able to sign with one of the largest host travel agencies in the U.S. market.

Within our B2B vertical, we are seeing momentum within the insurance sub-vertical in addition to Best Doctors Insurance or BDI that we highlighted on our prior earnings call, we’re pleased to announce that we went live with Clifford Allen Associates or CAA which is a division of Global Benefits Group or GBG, a global insurance administration company. Flywire is a innovative payment option offer by CAA with over 200 private secondary school clients across 35 states in the U.S. They chose to work with us given our robust software and payments capabilities to track and reconcile complex international payments flows. We look forward to continuing to build the relationship. Within our healthcare vertical, we went live with Centra Health, a regional healthcare system based in Virginia serving population of over 500,000 residents.

Centra Health has 4 hospitals and a large medical group in Central Virginia. We’re helping Centra and their patients by consolidating billings between their physicians and hospitals. We have so far created nearly 2,000 payment plans for Centra and for the payment planned collections during the quarter, about 75% of those have been self-service in nature. Robert Boos, Vice President of Revenue Cycle Management at Centra had this to say about working with Flywire. This has been the most successful revenue cycle management project I’ve done over the course of my 30 years in the business. While presenting the Flywire Solution and early results to my Board of Directors, I actually received a standing ovation. I seek regularly of my conviction that we are delivering great results for our healthcare clients.

And Centra is a great example. We also continue to grow via channel partnerships. We entered into a number of strategic partnerships in healthcare. We partnered with one of the top 5 banks in the U.S., whose healthcare financial services division is one of the largest resources for nonprofit healthcare providers. This bank selected Flywire to replace their incumbent patient payment solution and will act as a reseller of Flywire’s suite of software and payment solutions to their healthcare clients throughout the U.S. market. We’re excited to offer their healthcare clients enhanced product functionality over their prior solution including our payment plan affordability product. We also partnered with FinThrive and end to end revenue cycle management company with more than 3,000 healthcare system clients throughout the U.S. For FinThrive, we will integrate with their patient access technology who enabled payments and payment plans pre service and FinThrive will resell Flywire’s full suite of services for post service to bundle with their end to end RCM offerings.

Our partnership with TRUE North in education helped us sign multiple new clients including West Vancouver Schools or WVS, a top performing K-12 public school district comprising 14 elementary and 3 secondary schools in British Columbia. WVS was previously using a competitor’s offering to switch to Flywire’s cross border domestic and outgoing payment solutions. Our partnership with TRUE North continues to see strong action in the Canadian non higher education segment and we expect more wins over the coming quarters. Another strategic lever of growth is expansion to new industries, geographies and products. We’re excited to announce our recent growth within the European public sector higher ed sub vertical. We currently count several public educational institutions across Spain, Finland, Lithuania, and France as clients can see several more coming on board throughout the next year.

We are primarily working to help these public universities solve their cross border payment needs. For example within France, we signed an exclusive agreement with a public research university which has over 80,000 students of which around 10,000 are international. The university is using our cross border payments offering. We’re excited by the progress with some of Europe’s most just public sector educational institutions which will continue to expand beyond our initial activity concentrated in the private sector language schools and other markets. Additionally, we continue to add new payment methods. Previously, we announced our acceptance of payments made through real time payment or RTP networks such as PIX in Brazil and UPI in India. This quarter we enabled iDEAL, the most popular RTP network in the Netherlands with the highest market share of online transactions.

Current the payments team that operates iDEAL and supported by all major Dutch banks allows consumers to complete transactions online using their bank credentials in a safe secure way. As we grow, we remain mindful of our spending and desire to scale. As a company whose costs are primarily personnel, we are thoughtful of who and where we hire new FlyMates. Compared to Q3 2022, we’ve seen our salaries and related expenses drop over 500 basis points as a percentage of our revenue less ancillary services. In doing that, we continue to invest in go-to-market to support future growth while also driving efficiency through paced hiring in all our internal operational functions. This contributed to our adjusted EBITDA over performance in Q3 and we continue to look for ways to drive greater operating leverage in our business.

With that, I would like now to hand the call over to Mike Ellis, our CFO. Mike?

Michael Ellis: Thank you, Rob. Good afternoon, everyone. Today, I’ll provide an overview of our results for the third quarter, and then I will discuss our outlook for Q4 and the full year. Revenue less ancillary services was $116.8 million in Q3, representing a 31.4% growth rate compared to Q3 2022, our largest revenue quarter in Flywire’s history. On a constant currency basis, our revenue less ancillary services growth rate for Q3 2023 compared with Q3 2022 was 28.8%. Our revenue growth rate was driven by increases in total payment volume due to strong growth from our international across border payment volumes in our education vertical, particularly with our UK clients. FX rate changes represented a tailwind comparison to Q3 of 2022, but a headwind against the guidance we provided for Q3 and full year on our last earnings call, which was based on prevailing rates as of June 30, 2023.

For purposes of comparing our Q3 ’23 reported results against our most recent in Q3 guidance. We had an FX headwind that amounted to approximately 1.4 million on Q3 reported results. There were a number of puts and takes related to our revenue less ancillary services during the quarter. On the plus side, we saw continued strength across many parts of the business, including strength in China FX volume trends for our education vertical, positive results from our education clients in the UK and continued strong growth in our travel and B2B businesses. On the negative side, we were impacted by the FX headwind previously mentioned. We also experienced delayed deployments of our solution in both our education and health care vertical. Lastly, while we still saw growth in outbound foreign exchange volume from India, it was lower than expected for our education vertical in the quarter.

With respect to payment volumes, we processed $8.9 billion during Q3 2023, which represented an increase of 26% from the $7.0 billion processed during Q3 2022. Specifically, transaction revenue less ancillary services increased 36% compared to Q3 2022, driven by a 36% increase in transaction payment volume. Platform and usage based fee revenue increased 6% compared to Q3 2022, driven by a 4% increase in platform and usage based payment volume as well as from platform fees that do not carry any associated payment volumes, predominantly from student health insurance referral payer services in Australia. Our platform volume growth reflected modest volume growth in our health care and domestic in education verticals. We generated $80.1 million in adjusted gross profit during the quarter, representing a 28.0% increase compared to the $62.6 million earned during Q3 2022.

Specifically, our adjusted gross margin was 68.6% for Q3 2023 down 180 basis points from the 70.4% as adjusted for Q3 2022. The year-over-year change in adjusted gross margin was driven primarily by strong growth of our transaction revenue versus our platform revenue, particularly from our travel vertical where credit cards are predominant. However, this was offset more than expected by lower transaction costs as we drive scale through our payment network through increased transaction volumes and improved economics with our payment partners. Moving on to operating expenses, technology and development expenses were $14.6 million for Q3 2023, an increase of 9% over the $13.4 million incurred during Q3 2022. The increase was primarily the result of adding FlyMates to engineering and technology team, which drove increases in employee-related costs, including stock-based compensation, consistent with our investment plan.

In addition, we incurred more amortization associated with capitalized project costs. Selling and marketing expenses were $27.1 million Q3 2023, an increase of 25% over the $21.7 million incurred during Q3 of 2022. This increase was mainly driven by investments in go-to-market resources, which drove increases in employee related costs, including commissions and stock based compensation. General and administrative expenses were 26.9 million during Q3 2023, an increase of 11% over the 24.2 million incurred during Q3 2022. This year-over-year increase was predominantly due to adding FlyMate support, our general and administrative teams, which drove increases in employee related costs, including stock-based compensation. In addition, we also encountered more public company costs associated with global compliance and tax.

Our GAAP expenses are growing slower than our revenue, which reflects our efforts to grow our business profitably through targeted go-to-market investment while showing scale in our administrative costs. Adjusted EBITDA for the quarter was 27.5 million, an increase of 9.3 million or 51% over the 18.2 million reported for Q3 2022. With respect to capitalization as of September 30, 2023, we had 638.2 million in cash and cash equivalents following our public offering, no long-term debt, 121.3 million shares of common stock outstanding, which is slightly different from the weighted average shares outstanding used to calculate net loss per share due to timing of shares issued during the quarter. Moving on to guidance, which is based on foreign exchange rates as of September 30, 2023.

For full year 2023, based on our results for the third quarter and our outlook for the fourth quarter, we expect revenue less ancillary services fee in the range of $372 million to $376 million, representing a year-over-year growth rate of 40% at the midpoint. This reflects the addition of $1.0 million attributable to the StudyLink acquisition and another $1.6 million in Q4 from underlying organic strength in our business, but offset by an estimated $3.8 million in FX headwind impact from less favorable FX, when compared to our full year guidance provided in audit, which is based on June 30th rates. As you will recall, a strong dollar results in a reduction in reported revenue less ancillary services from translating our international operations on a local currency basis to a U.S. dollar basis for financial reporting purposes.

We expect to deliver full year 2023 adjusted EBITDA in the range of $35 million to $39 million. This represents an increase of $1.0 million at the midpoint of our previously provided guidance. We are not increasing our full year adjusted EBITDA guidance by the full amount of our Q3 outperformance due to the anticipated impact of FX conditions on Q4 as just mentioned. This fiscal year guidance reflect a larger increase in adjusted EBITDA on a constant currency basis and the $1 million increase at the midpoint of the range given the anticipated FX impact on revenue less ancillary services that also will impact adjusted EBITDA. At the midpoint of our full year 2023 guidance range, we expect to generate an over 430 basis point improvement in adjusted EBITDA as a percentage of revenue less ancillary services for the year, higher than the improvement detailed in our guidance last quarter.

For Q4 2023, revenue less ancillary services is expected to be in the range of $86.5 million to $90.5 million which represents a year-over-year revenue growth rate of 30% at the midpoint, which incorporates factors I mentioned with respect to our full year guidance. Specifically, this reflects adding $1.0 million attributable to the StudyLink acquisition and adding another $1.6 million to Q4 due to underlying organic strength in our business, offset by $2.5 million of estimated FX headwind impact when using September 30th rate versus June 30th. We now expect Q4 adjusted EBITDA to be in the range of $1.0 million to $4.0 million which at the midpoint represents a $1.5 million year-over-year improvement compared to our reported adjusted EBITDA for Q4 2022.

We were very pleased with how the business performed during the third quarter. I’ll now turn it back over to the operator for questions. Operator?

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Q&A Session

Operator: [Operator Instructions] The first question comes from the line of Rob Napoli with William Blair.

Rob Napoli: I guess — and first — I know it’s early, we’re just going into the fourth quarter. But as we think about your long-term guidance for revenue growth and EBITDA margin expansion, is there anything in the macro or in your business or competitively that has changed that outlook as we think about early 2024?

Michael Massaro: Hey, Bob, thanks for the question this is Mike. Obviously, we’re not guiding full year ’24 today, but we continue to be very excited about the path forward. I mean, it all starts with of growth algorithm that we’ve talked about before, NRR plus growth from prior client deployments plus new wins for the year with that net new revenue added. And we continue to be very confident in the long-term financial targets that we set, revenue growth, EBITDA margin expansion. This is an interesting macro climate. It’s clearly turbulent times. But we believe we have a business that has historically been focused on defensive sectors. It’s a very well diversified business, geographies, industries. And we continue to think we’re very well positioned for the future. So, feel really good.

Rob Napoli: And then maybe can we get a little more of color on the StudyLink acquisition? I guess, you kind of gave a $1 million. I’m not sure if that — so we should think about like $4 million or $5 million of annualized revenue? Just what made that attractive to you, Mike?

Michael Massaro: Yes, sure. Happy to start and then I’ll hand it over to Mike Ellis to cover some of the numbers. So, first, I would say when we talk About M&A strategy, we go back to those 3 pillars, the first being accelerate an industry or a vertical that we’re in, the second of being adding capability that we believe we can upsell to drive additional NRR of our clients. And the third one being a new geography or new industry. This deal, the StudyLink deal fits within number 1 and number 2. So obviously, we’re in the Australian market. We think this is a great way in which we continue to expand in the education industry in that region. And then from second pillar perspective gives us additional software that we believe actually can become a global standard for helping streamline the application process for universities all over the world.

And so there is every deal we have done and we think we’ve got a good track record of this also has a clear synergy. This deal fits having multiple clear synergies, first of which is unmonetized volume that you heard us talk about in the announcement. This software sits next to unmonetized volume, nearly $1 billion, as we’ve said. And we think that number grow significantly. And as I mentioned, we think this software has an opportunity to do a lot more outside of the Australia market. If you think of Flywire’s footprint across the UK, the U.S., Canada as being the other 3 largest markets for international education. This Software is not in those markets yet. And so that’s really the combination of synergies that we see. We’ve known the team for years and have partnered with them in various ways.

And we think between our client base, between our team, and our payment network, we’re going to see similar results to the synergies we’ve already seen in the other 2 deals we pursued. Mike, I’ll let you double click, if you want to double a bit on the numbers, which was part of Bob’s question too.

Michael Ellis: Sure. No problem. So I just saw Bob is about $1 million incremental revenue hitting Q4 and full year 2023 relatively slightly neutral to positive on the adjusted EBITDA line. It’s about a $6 million to $7 million revenue business for the full year.

Operator: Next question comes from the line of John Davis with Raymond James.

John Davis: Mike Ellis, just wanted to know if you could comment on the platform revs. We saw a pretty big deceleration there from, I think, 27% to 6% this quarter. Maybe some of it’s or go from last year. But just kind of any thoughts there on how we should think about platform revenue going forward?

Michael Ellis: So platform revenue is really a function of our healthcare business, which we’ve disclosed in the past as it relates to some of the slowdown that we’ve seen, it’s predominantly driven by this quarter, the late deployments that I highlighted in my previous remarks. But essentially, healthcare is turning the corner for us. We’re pretty bullish about the opportunities in the future. But we do have some delayed deployments that really impacted the revenue growth rate for this quarter.

John Davis: Can you help size us for us, the delays or push outs at all?

Michael Ellis: Some of those deployments are subject to the IT infrastructure of our clients. The good news is that our pipeline and our ARR signs are strong. We’ve seen good momentum across all of our verticals, including healthcare. But just some of the deployment requirements based on major large hospital systems can sometimes be outside of our control. I will pass it over to Rob to see if he would like to add something.

Rob Orgel: Yes. Two points I would make. First of all, you asked specifically about sort of the impact of the delayed deployment. I mean, that’s a 7 figure sum in terms of the impact of those deployments. The second point is just want to make sure people have a sense that as they understand our domestic business, our domestic business as it evolves has contributions both in platform and in the transactional growth line. And so what you’d want to understand is that, that domestic business, as we take on more transactions inside it, and that’s true around across our verticals and around the world, some of that growth is showing up in transactional even though it reflects our success with domestic clients.

John Davis: And then just one more if I could. You have the 185 new clients, obviously very impressive. Mike, wonder if you could just give us some high-level commentary on how that breaks out by vertical? And also what from a kind of expected annual revenue contribution per client what you’re seeing is that continuing to grow as you grow the number of clients?