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All right. We are going to kick off the next session. Up next, we have CFO of Flywire, Cosmin. Cosmin, you've been here for the last couple of years. We're very happy to have you back.

Awesome. Thanks, Will. Glad to be here.

So I thought we would open this up high level kind of the headline from the Q2 call. You laid out the ambition for $1 billion of revenue and 30% adjusted EBITDA margins over the next few years. Starting with the revenue number, when you build up to that number of bottoms up, what are the 2 or 3 largest building blocks? And maybe just talk about the decision to put those targets out at this time, given all the volatility we've seen in some of your largest verticals.

Awesome, 2-part question, my favorite kind. So let me start with the first one. So first, in terms of the building blocks, and how we thought about it. Listen, the $1 billion and 30%, that's an organic target, and it's our usual approach to being prudent. And data-dependent overall. So as you think about the building blocks, I would start with the enterprise client and the fact that a large majority of our both education and travel clients are those clients that we call enterprise, which is above $100,000 in revenue per year.

And those clients stay with us. They see the high ROI of kind of our software and the combination of capabilities that we provide. And as you've heard us they're lower than 1% churn. So very high retention of those clients. So that creates a sustainable base on which to build. And so that's sort of part one. And then you go to our sort of biggest -- our biggest vertical, education, strong growth there, but increasingly diversified components of that growth and the growth algorithm as we'll talk about it later.

And so seeing that cross-sell on the domestic side, that's driving a lot of the growth there too. So that's the second piece. Now look, travel is now in its own right, sort of bigger than the U.S., nearing the size of the U.K. kind of education business. And it is a big TAM the clients see the ROI there and we have sort of the breadth of clients now with smaller and larger and also just the depth of product, which we didn't have before the Sertifi acquisition. So that's great.

And then lastly, B2B, health care, both big sort of growth drivers this year and continuing to deliver. So kind of firing on all engines. So figured that -- so those are the building blocks. And to your second point, why now? Look, it's sort of aligned with my -- sort of in our guidance principles, which is you start with transparency. And so as we're doing our normal sort of medium-term kind of planning. This is starting -- those numbers are trying to come into focus, and they don't require macro to get better. We actually assumed in that a very prudent kind of macro environment from our perspective. So as we think about that $1 billion and the 30%, I felt that it's coming into focus. So helping folks kind of plan around that.

Second, it's data dependent. We'll see how things play out, and we'll let you all know. But third, I think I noticed the balance between -- we've always talked about revenue. Revenue is still obviously a huge focus for us in growth. But now we have free cash flow, we have margins, and certainly, GAAP profitability as we're pivoting this year. So those are also important balancing aspects. I wanted to bring that in.

But listen, I'll just finish with, this financial framework was built to withstand a tough macro, it was not built to assume it gets better. And so we've tried to kind of balance that expectation externally.

Great. And the other half of that equation is the expense base. You said transformation investment will peak in 2027. And beyond that, you expect operating costs to stay relatively flat while still funding a lot of your strategic priorities, how do you get the confidence to manage OpEx for a company that's still growing in that way?

So I would think of it as sort of structural. It's not cost-cutting exercise, and it's already happening. So actually, if you look back -- so if I start -- sort of just go back a few years, as you know, we've grown and scaled. We've invested -- we've kind of gone through a large investment scale, kind of, cycle and so, since IPO, that's both organically and inorganically.

Now if you look, then zoom in sort of the last couple of years, even in 2025 and '26, if you were to -- obviously Sertifi was a big acquisition last year. But if you adjust for that, to some extent, to organic OpEx is actually not growing that much. It's probably single-digit growth. So we're already -- even before kind of doing the transformation, we're already growing at scale on a much smaller, kind of, OpEx level of growth because of that early investment.

So now we're sort of today, we're in the middle of the transformation that we announced, which has become, kind of, a mindset internally at the company. Then that allows us to drive growth, so growth at lower cost to some extent. So the way to think about the drivers there are across a few different areas. One, it's the G&A or functions that we talked about, is about 1/3 of the costs. Those are opportunities for us to simplify a lot of the systems, and we'll talk about kind of the transformation project itself, so able to simplify that to reduce a lot of those manual costs.

Second, you have kind of the R&D and engineering areas, which, again, we can do a lot more in those areas with a lot less.

And third, one that we sort of talked about it, but not as much as the enterprise versus nonenterprise client approach. So how you tier support and how you look at kind of enterprise clients given that we're so focused on that, and that's 1 of the big drivers of growth even in the future. You can obviously change your client support models internally. So that makes your sales and marketing and kind of the other component also pretty manageable.

So as we look ahead, we feel pretty comfortable that OpEx, as I said, will be kind of growing a little bit into next year as you kind of peak through this transformation investment phase but then managing the growth, again, in line with the organic, kind of, assumptions on the revenue side, which have been, again, pretty prudent.

So talk a little bit more about the digital transformation initiative, Project ADAPT, you talked about kind of bottoms-up redesign of processes, systems, data, structure. Where are you in that journey today? And what have you found to be some of the biggest unlocks so far?

So I would think of us as being sort of in the, right in the middle of it. We still have about 18 months ahead of us, so we're not sort of done per se. But we -- if I look back, we sort of started a little bit last year. And I think the important part is to think about, when you do one of these large transformations, you can say you're replacing systems and things like that, but that's not the hardest part. The hardest part is org and process changes. And that's kind of where we started, brought in the right talent, a lot of folks with a transformational mindset having seen it at scale.

Again, one of the reasons even I joined is to bring that scale mindset and how do you scale. And so brought in a lot of the talent, and you've seen us do some of the org changes that we've done, but then also just redesigned processes, which is usually the hardest part of any transformation if you talk through. And so that's been kind of the journey so far.

Now we've started to -- we're in the middle of sort of the systems, consolidations are the same as many of our clients, we're looking at how do you consolidate 20, 30, 40 different systems into a lot fewer, that reduces cost, reduces complexity, reduces, kind of, handoffs between different departments. And so that is kind of where we are.

The data side of it is the other aspect where, again, the opportunity to do so much more with data. We all talk about AI, but at the end of the day, I'm a data person. I'm a machine learning guy as we talk about it. And so for me, it's easy to put a wrapper of AI on top, it's the substance underneath that then gives you more value out of any kind of AI capability. So that's where we're spending a lot of time now. So you'll see us obviously continue to get benefits from this. But I would say over the next 18 months, you'll see more of it. And so it will be kind of showing up in all these different areas.

The way to think about productivity from this and just in general is in sort of 3 tiers. AI is a big component of it. And so if you were to do nothing and you just handed everyone, some of the most recent AI models, the most advanced models, I think, I know I'm certainly a lot more productive than I was to, I think, the disappointment of my team who is now realizing that every time they send me something, it comes back in about 5 seconds later with an answer. And so you start to skip levels in terms of how you make decisions and how fast you can move through things that you never thought were possible. So that was just a sort of individual level of productivity but then you have function level and enterprise level productivity.

For those you actually do need to invest in transformation. So if you're going to make the IR function more productive, it does need a bit more work or and so forth. So that's what we're working on. But anyone sort of wondering, can you be more -- should you aim to be 20%, 30% more productive as an organization? I think it is with the tools and capabilities that if you're working on the substance and underneath the foundational area like we are, I think that should be definitely achievable.

Yes. That makes sense. Let's talk about business diversification. You mentioned it in the upfront question. 5 years ago, Flywire was largely a cross-border education story. Today, you've got a large domestic education business. Travel, as you mentioned, is now a very large business in its own right and B2B, health care, still smaller, but still growing. How would you frame the growth rates across the different verticals? And where do you think that mix settles out as you approach the $1 billion milestone?

Yes. So if you look back at IPO, yes, I think most still thought of us as a cross-border, probably mostly kind of in the large Big 4 markets, kind of, player. And now I think hopefully, everyone is seeing that this is quite a very different business certainly this year and going forward. And a lot of it has just been diversification into the other verticals of travel, B2B, health care now kind of adding.

But even within education, you now have the domestic SFS cross-sell, which is driving growth that is above the company average. So as I think about where we are today and where -- how to think about the $1 billion even in the future, it's growth from these other verticals. So it's growth from travel; it's growth from, again, B2B; but also domestic EDU growing faster. So those will become a larger share of the business and key growth drivers.

And so that, to us, is kind of obviously good. Still cross-border will still be an important component. We still see that as a key underlying sort of feature of the platform that enables you to cross-sell into some of these other areas. But the others are, in their own right, strong contributors. So I would say those would become -- so those assume they grow faster than the company average, which, by definition, if you look at the mix last year, it will shift towards -- if you just look at cross-border, which is mostly basically portion of the U.S. mostly outside the U.S., then that becomes a smaller portion while the rest becomes a much larger portion over time.

Yes. Makes sense. Maybe sticking with the cross-border business. We're sitting here in August, right in the heart of U.S. enrollment peak. What are you seeing in your own data? Maybe help clear out all these headlines on the status of getting visas in any given market, what are you seeing on the ground?

Yes. So we are now pretty much past the, U.S. peak of getting into September. We've seen most of it. And so far, it played out sort of okay for us. I would summarize it, but to give you some components. Look, we look at external and internal data, as you know, externally, the data, we've gotten our data through February and sort of trending more negative, but we've assumed 30% already negative in our numbers. And we're not seeing that level of decline in our own first payer data.

And some of that is just -- if you look at a couple of things. One is the selective institutions. So those schools that are sort of higher ranked or able to be more selective or able to do quite well. So the headline usually is student can't make it into whatever the school may be. I think if you double-click into that, usually, it's a graduate student. And sometimes it's a less selective institutions. So we've seen that mix of quality for us and more selective institutions along with kind of where tend to lean more undergraduate those are still doing pretty well. So if you look at a 30% decline, we still feel pretty good that we've captured that.

Now the channel that remains negative. We talked about it. You see it in the Visa data is coming from India in particular. But even with that, again, we've taken a pretty prudent approach. So if I was to then step back and summarize what we've seen so far for the U.S. As you know, we guided the full year U.S. growing the low single digits with the assumption of sort of a 30% decline in visas. And so far, for the peak, at least, we have done sort of in line or better than that, modestly better than that, so we're comfortable as far as kind of the U.S. performance within that for peak. And again, more to go in the year, but feel pretty good so far about the U.S.

Yes, no. Great. Okay. And then the other 1 was the U.K. I think this quarter, you flagged higher rejection rates on visas. And I think you took a more conservative stance on that market. What do you think is causing that? And how do you think about the range of outcomes in the U.K?

Yes. I think there's similarities there, too. So the headlines tend to be a bit more negative than the reality on the ground is certainly for us. And so if I was to separate the headlines versus what we see. So in the headlines, again, the more -- there's very specific corridors where compliance is forcing some higher rejection rates. So we're seeing that. And again, when you look at it, it's mostly kind of the graduate, the 1-year sort of these specific programs, it is not our sort of higher-quality undergraduate kind of programs that we tend to be in the U.K. So again, a little bit different.

Then even if you look at the external data, what we're seeing there is very choppy, right? I think it was in the first quarter, it was something like 30% plus down. But then in July, I think it was down maybe 11%. Now we're not going to take -- again, my approach is, I'm not going to take 1 data point and say, oh, now it's gotten better or something. So we're sort of remaining prudent as you saw, and as you pointed out, we've taken a usual prudent approach, assumed second half decelerates, in the U.K. that's baked in.

And so we're going to continue watching. We're early in the U.K. cycle. The U.K. kind of goes from through the end of this quarter and into October. It's 1 of the things we talked about on the earnings call just around that timing where you can have just even before a holiday season or a holiday timing and China can sort of move 1 or 2 points around because of that. But that aside, which, again, we've tried to capture quite clearly well. We'll continue watching it.

And it's less -- listen, we've been very prudent around this on purpose, and it is for this -- with the view to this year. And these things tend to play out over academic years. We tend -- everyone tends to look at what did this month do, what did the other months to do, these things tend to play out over academic years. What we're seeing in the U.K. is political change but the general kind of focus remains on high-quality students kind of being something that they -- every sort of large market will want to try to remain continued attractive.

Yes. That makes sense. So sticking with the U.K., how do you think about the growth algorithm there? And specifically in SFS, so how much of the U.K. growth outlook is now SFS driven versus being more cross-border?

Yes, I mean, the U.K. has gotten itself through an evolution, I would say, as we -- and I think the SFS definition is important because if we define SFS is just the latest integration that we started piloting last year, that's not a huge driver. But what we've seen in the U.K. is transform itself from -- I think if you look several years back, it was again mostly cross-border, it's kind of transaction based.

And then what has shifted to is a combination of new logos but integration based cross-sell on the domestic side. So whether that was the -- you saw the WPM acquisition enabled Unit4 type integrations. Now we've got -- sorry, Tribal and then we got Unit4 Agresso as part of SFS, so as we expand the number of integrations that are available that captures more of the market, we're able to increase utilization. So then the growth algo of the U.K. becomes less of just new logos, which now are quite penetrated, and it's more about utilization. And there we've kind of giving you this metric, our aim is to process at least 90% of student payment volumes.

And we -- I think we gave a number last year, it was around 12, this year is about 20, that we do that for. But there's a number of schools where we can continue to grow that level of penetration and utilization. And so the way we do that is through those, having more of those integrations, which then embed us deeper into the school's ecosystem. And so and that's where we have that stability of long-term kind of client retention from that. So again, much more diversified in terms of the growth algo for the U.K., it's more growing that utilization. So the cross-sell internally, you still have some new logo growth, but I would say that's a lower component of the growth, it's more of just the utilization that's driving it.

Got it. Okay. So sticking with domestic education and SFS, in Q2, you signed 3 new U.S. SFS deals. You said it was double the ARR of the same quarter in '25. And I think the attach rate is still only 10%. So -- like has there been a change on the competitive side that's allowing you to accelerate the momentum there? Is it just getting the word out? What's leading to the acceleration in domestic wins in the U.S.? And then how are you thinking about the trajectory from here?

Yes. I mean in general, we're seeing win rates go up. And I think there's a few things happening. One, I think, yes, the perception of us as just cross-border is shifted to, okay, well, we are actually domestic and cross-border, so we can help you with all your sort of back office and operational complexity issues, especially as schools now are struggling financially in many cases, one of the ways -- as I talked to you and about ourselves is how do you consolidate vendors and simplify your back office.

And so we bring those capabilities through the software that we sell. So that is 1 part of it. And then you have reference clients. So to some extent, Penn State and others and many other names that you've heard us talk about become those reference clients for us that others look to. So again, most mostly now we talk to the CFO usually and not just the back office bursar folks, but now we're talking at a different level. And that's because you have enterprise sales folks. That's the other component that we've talked about with the U.S. SFS is just having the right enterprise sales talent enables you to have those relationships that are different -- and those conversations at a different level.

And then the last thing within actually, maybe the most important 1 is that we increasingly do full suite sales. So it's not just you go in and you sell just the collections capability or just the payment plans or something. It is now full suites, you have collections, you have payment plans, you have payment, the actual domestic tuition payment processing. And so 529, again, all the innovation that we build into our product suite now, and so that becomes a much larger kind of dollar value that then is built behind that sort of increase in ARR.

So again, really excited, obviously, durable growth and that consistency of some of these larger deals and the sustainability over the long term is quite exciting. So we see that domestic part of the -- sort of about 1/3 or so of the U.S. business that should continue to grow above sort of company average for a while.

That's great. Maybe we could talk about just the student life cycle that uses Flywire, it's a question we've gotten asked a lot. I think when a student pays year 1, they're often [ gotten ] before they have local connectivity, local bank accounts. utilization tends to be higher. How does retention trend thereafter? And how has that trend of seeing lower retention in subsequent years changed or improved over time? Multi dimensional question.

Yes, we're going to start. So I think maybe just framing it for those who don't know us, our U.S. education business, I think of it as sort of 3 different components, all about 1/3 each, which is 1/3 is sort of the domestic business that we talk about now that it's growing faster than we just talked about. And then the other 2/3 is about half and half. So about 1/3 of it is first years and about 1/3 of it is existing kind of the rest of the cohorts of students.

And so if you look at that first year, kind of, first year payers dynamic, what we see there is, think of it as international student comes to the U.S., usually the parents are paying we provide convenience, trust, and just the knowledge that you can pay with your own known sort of instrument and funding instrument, connected into your bank and many times also just the documents that are required to move over $10,000 out of certain markets. There's actually a number of things, which, by the way, we've automated with AI, is to make it easier to make those payments because people think, oh, you're just -- it's easy to send $10,000 out of 1 of these countries and it's usually, that's actually not. And it's 1 of the reasons it's complex.

And so we provide that safety and comfort. Now, so that makes it easy and then we have a high percent of those first year payers that use us. And then I think the opportunity in sort of the other 1/3 and the existing. Once they go into second, third year, yes, some of them opened up local bank accounts and then they shift to those payment methods. But I don't see that as leakage and especially coming from my background, I look at payers, there's a huge opportunity for us in that side of the equation we have -- we talk always about clients, we don't talk quite as much about the payer side of this equation.

So here, I think it's a few -- 3 things, which you've heard us talk about is how do you improve that retention in the second, third, fourth year and so on. And first, it's SFS or the more SFS you have, the more we then capture even the domestic if they will become a domestic payer. So you have that second and third year kind of effect. So you have -- we see cross-border go up also as SFS comes in.

Second is the checkout experience once you -- you can improve that to make sure that parents see the value of, oh, I can keep using that bank account or I can keep using the instruments that I've used before.

And then third is from a -- it's that local partnership in the countries, the source markets where we are unique in those partnerships. You hear us talk about all the time being connected into the top banks in India, the banks in China and other areas, that is a unique aspect of our business and the payment platform we provide which enables us to then give comfort to a parent or anybody paying that then there's an opportunity for them.

And listen, and then stepping back, not even in our algorithm is the opportunity to engage all of our payers, in a much more direct way, and some of that is data. So again, as the data guy, I'm very much looking at that as an opportunity to better understand payer behavior and how we can -- and that's not just the students actually, travel, same thing. There's a lot of value in understanding the traveler behavior in helping and connecting the dots between your payers and the clients that they're paying, I think, is a unique opportunity, right?

Okay. Another 1 -- another theme recently in the education business has been an increasing amount of new logos coming from outside of your Big 4 markets. Where do -- how do you frame where you are in that diversification process? And how large do you think that opportunity is relative to some of the top markets?

Yes. I mean we talk a lot about the Big 4 where, again, we still -- there's visa challenges and those kind of choppy markets there and yet, we still are growing even in the Big 4, and we're gaining share. I think 1 of the things that if you look at all of the visa trends, we do better than those whether you look on a revenue basis or a volume basis because we -- again, different mix and the levers that we have.

So even in the Big 4, we have growth outside the Big 4, you could say some of the negatives there are actually helping us expand our global footprint even faster. So in a way, not that it's great to look at it necessarily that way, maybe it's a glass half full kind of approach. But it is accelerating, our agents are telling us that students are applying to more destinations. So what you're seeing outside the Big 4 is a lot of these countries are now digitizing their institutions, education institutions, they are having to digitize for the first time because maybe they had 2 or 3 international students formerly, now they have 20 or 30.

So if you had 1 person in the back office who was trying to reconcile all these wires or whatever method of payment, suddenly, I think it makes sense to digitize your accounts receivable, and we are -- and the second thing outside the Big 4 and EDU is competition is kind of fragmented. So we are the scaled player and so it's -- we're unique in that perspective. And so that's the other component that's helping drive that.

So again, in terms of numbers, we've said the non-Big 4 EDU is sort of share of total revenues around low teens last year, expect to continue to grow its share because I expect that to continue growing kind of faster than the company average. I think in the first half, we said it was growing over 30%. And again, it works well in favor as students diversify their destinations.

Yes. No, diversification, certainly a theme here. And speaking of -- maybe we can talk about the travel vertical. It's been basically your second largest vertical now. It's balanced between kind of luxury and experiential travel and hospitality, which was augmented by the Sertifi acquisition, where do you see yourself being most penetrated today across those different subverticals? And where do you think you have more room to push ahead on penetration and drive durable growth?

Yes. So on the experiential or kind of our legacy travel business, think of it as a multi-day bespoke travel, which nowadays, I think it's fortunately an area of growth that we've seen and interest. So we started with destination management companies and tour operators, things like safaris started there. But now, as you said, we've sort of expanded both geographically but also in sub-verticals. So geographically, we see a lot of growth in Asia and Europe increasingly, in parts of Asia, so Indonesia, Thailand or Japan. So seeing a lot of growth there.

And then in sub verticals, I think, think of it as high, kind of, high touch on high -- or high-cost type of without saying luxury, but it's sort of high cost and those kind of more extended opportunities for -- when you take kind of a curated experience.

And so a lot of those can be hiking experience, cycling, biking, all sorts of fun activities that I think increasingly require somebody to help you manage that trip. And so we, of course, have the ROI that is well proven with these clients. And now again, we have the name that's kind of getting out there. So it's easier for us to make those cross-sell and those guys all talk to each other. If you get one heli skiing company there, the others are going to follow. So same thing we're seeing elsewhere.

Yes. So maybe you can touch on Sertifi a bit, largest deal ever in the company's history. I think you've consistently said that, that deal is running ahead of plan. Where is that outperformance coming from? And then where does the focus sit over the next 12 to 18 months?

Yes. So initially, I think -- so we talked about Sertifi as the opportunity being on the -- to, again, expand into larger clients as we started to smaller clients, allowing us to go to larger clients. And then depth of product. The payment monetization is the biggest outperformance we've seen and that's one of the reasons we've talked about it kind of ties into the gross margin story a little bit for this year into next year.

But -- and we see that as continuing to be a big opportunity. So we said $3 billion of payment monetization at acquisition. And at the time, I think we said the mix, it was about 70% software, 30% payments. We still have -- we've made some dent into that and still have about $2.5 billion to go. So we see that as continuing to be a big driver of growth in the future but increasingly going global is a big component of that.

I think we've seen about sort of 42 or so, I think, international locations for us with Sertifi. So we're starting to kind of pick up more on the international side. And then -- and again, I think it's an opportunity for us to cross-sell this kind of capability.

And then lastly, I think, is once you integrate the 2 platforms, as you can imagine, the strength of kind of what we provided before, which was that cross-border capability in these international markets with the kind of the document signing and workflow digitization that Sertifi brings in. So we see a lot of opportunity in that cross-sell. But that's sort of the third piece of over the next 12 to 18 months. And as part of the $1 billion, we see that opportunity kind of -- we see, again, sort of travel growing faster overall between those.

Yes. Okay. We've got a minute or 2 left here. I want to maybe squeeze in 1 on health care. So Cleveland Clinic with just the marquee win reinvigorated the health care business this past year. I think you made a comment, like there's only so many Cleveland Clinics out there, and you'll be lapping that next year. How do you think about the organic growth rate of that business, kind of, ex Cleveland. And then what is the pipeline? And what kind of opportunities does a large win open up for that business?

Yes. I mean Cleveland Clinic was certainly and it is a marquee name that has opened up a lot of conversations with larger enterprise-sized kind of clients. I would say, though, keep in mind that as we talked about Cleveland Clinic was kind of ramps this year as we get into second half, you kind of sense that, that ramps as you get into next year, I would think of just again, to take a prudent approach, I would take -- think of health care is growing below the company average over time. But it can be very choppy because if you do get another large enterprise, that changed the trajectory.

But these are long enterprise sales, as you can imagine, if you think education is slow, health care is even slower in terms of making these big decisions. But once you're in, again, you're in for the long haul. So we feel good at least health care is now back to -- return to growth, scalable with a great marquee client behind us.

Got it. Well, in the last couple of seconds here. Any final thoughts you'd leave the group with?

Look, I think we're going to continue growing the top line as you've seen us lean into that, but also don't forget the free cash flow profitability and the durability of the model in terms of the consistent cash flow per share and the focus on dilution and the other parts of the P&L that matter to kind of the balanced valuation. And the things that we control, and that's what we're going to focus on the stuff we can control and execute and I think that's what we've done and we'll continue doing it.

Great. All right. Well, Cosmin, thanks for joining us. Glad to have you again.

Thanks, Will.

Good day, and thank you for standing by. Welcome to the Flywire Corporation Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I'd now like to hand the conference over to Masha Kahn, Vice President of Investor Relations. Please go ahead.

Thank you, and good afternoon. With us today are Mike Massaro, Chief Executive Officer; Rob Orgel, President and Chief Operating Officer; and Cosmin Pitigoi, Chief Financial Officer. Our second quarter 2026 earnings press release, supplemental presentation and, when filed, Form 10-Q are available at ir.flywire.com.

Today's call is being recorded and will be available for replay on our website. During the call, we'll be discussing certain forward-looking information. Actual results could differ materially from those contemplated by these statements.

In addition, unless otherwise indicated, all financial measures discussed on this conference call are non-GAAP financial measures. Please refer to our press release and SEC filings for more information on the risks related to forward-looking statements and the required reconciliations of non-GAAP financial measures. With that, I'll turn the call over to Mike Massaro.

Thank you, Masha, and thank you to those joining us today. We are excited to announce yet another quarter of strong revenue and EBITDA growth as well as momentum in the business continuing to build. Signed deals are getting bigger and clients are replacing legacy providers and point solutions to consolidate on to Flywire. We will take you through the quarter in much more detail.

But first, I want to step back because I want stakeholders to see Flywire the way we do. We continue to deliver solid growth and the quality of that growth is improving. We are converting incremental dollars of gross profit into durable earnings, expanding our free cash flow, and we believe we are well positioned to continue gaining market share.

Let me explain why Flywire's moats and financial model don't just coexist. They compound, each getting stronger as we scale. You know the Flywire model. We go where others are unwilling or unable to go, embedding into complex mission-critical workflows and solving payment challenges that are larger, more international and far more difficult than simple checkout transactions.

That complexity is our moat, and it deepens on its own. Rising regulation, expanding global flows and deeper integration requirements are headwinds for simpler competitors and tailwinds for Flywire. Once deployed, we become critical infrastructure with revenue churn across enterprise clients in education and travel below 1% as of 2025. So today, I also want to put our model into financial terms, what it means for revenue, margins and cash flow over the next few years.

As CEO, I am focused on three core metrics. First, revenue and gross profit dollar growth. On this foundation, we are aiming to achieve $1 billion of annual organic revenue within the next few years. Given the free cash flow this business is expected to generate, acquisitions remain an additional powerful lever. Our diversification engine underpins the path.

Growth outside our traditional Big 4 education markets continues to outpace the overall business. Differentiated software offerings like SFS, driving domestic growth above and beyond visa trends. Travel continues to perform well, and the payments monetization in our hospitality business is outperforming our expectations. And our smaller verticals, B2B and health care, are gaining scale and becoming growth contributors on their own.

Second, EBITDA margin progression. We believe a 30% adjusted EBITDA margin is achievable over the next few years, with most of the expansion coming from operating leverage we can already see in our expense base. The productivity gains from our transformation are real. They are improving both LTV to CAC and our cost to serve, proving that operating expenses can grow well below gross profit growth for longer.

Scaling fast organically and through acquisitions naturally adds costs and friction across systems, vendors and processes. We are consolidating that into a leaner foundation purpose-built for the next phase of growth and scale. At the center of this is our payment platform investment. We are unifying systems onto a single modern payment architecture.

And our digital transformation is rearchitecting our internal operating system so that our people and AI agents can seamlessly work side by side to structurally lower our cost to scale. Because these investments fundamentally change how work gets done, the operating leverage they create is durable.

And third, multiyear free cash flow and GAAP earnings growth. Free cash flow generation and capital efficiency are central to long-term shareholder value. We remain highly committed to strong free cash flow conversion alongside continued discipline on stock-based compensation and dilution. Combined with a strong balance sheet, this cash flow generation is a powerful source of strategic flexibility. We can invest organically, repurchase shares and stay opportunistic on M&A, all from a position of strength and all while growing free cash flow per share.

Durable gross profit growth, compounding earnings and expanding free cash flow. That is how we intend to build shareholder value. But reaching our $1 billion annual organic revenue target requires high conviction and concentrated investment. Today, we are directing our capital into three core areas. First, gaining share and expanding our software moat. We are actively investing to expand our software and workflow capabilities across all verticals, such as investing in more functionality and integrations for SFS and taking our hospitality software from a historically U.S.-focused business into a global hospitality platform.

Second, expanding our payments platform. As our volume scales, we are driving operational discipline to improve unit economics and strengthen our value proposition, better corridor economics, deeper local banking relationships and a cost per transaction that is expected to decline as we grow. Third, our digital transformation, a major priority in strengthening internal operations through data architecture investments, AI integration and systems consolidation. This is designed to drive productivity and long-term operating leverage across the business.

Cosmin will walk you through the rigorous financial framework we use to evaluate these organic investments alongside our broader capital allocation and share repurchase strategy. Our ability to confidently execute this capital strategy stems directly from our resilience in the market. Our team continues to deliver in an uncertain macro environment. What matters most is that clients are seeing ROI from consolidating their payment flows on Flywire.

Some clients need help to grow while others are automating to reduce costs. Across all market conditions, the value Flywire delivers speaks for itself and interest in our solutions continues to grow, both in markets that are under pressure and those that benefit from higher numbers of international students.

Let me be direct about the current environment. The macro backdrop remains challenging. We see recent negative trends in U.K. visas. Australia has raised visa fees again, and regulations in both the U.S. and the U.K. have become more stringent. Enterprise sales cycles are long and large health care deals like Cleveland Clinic can boost growth 1 year and create a tough comp the next.

But here's what really matters. The Flywire business is vertically diverse, geographically diverse and has multiple product growth levers. This means we can navigate challenging macro conditions while hitting the framework I just described. We don't need conditions to improve to build a business with $1 billion in annual organic revenue with 30% margins.

And in some ways, the industry pressure works in our favor. When institutions face cost and volume pressure, the case for automating manual payment flows gets stronger, not weaker. When they consider choosing a partner for the future, they look to companies that are innovating, growing and financially strong. Ultimately, Flywire is succeeding on the strength of our business, not because of easy market conditions.

Let me now shift to AI and how it is becoming an enabler for Flywire. AI increases the value of whoever owns the workflow and the data, and we own both. This quarter, I want to show you how this thesis is playing out in delivering real results, not projections. About 45% of customer inquiries now resolve automatically without human intervention. And with the support platform adopting generative AI across chat, e-mail and phone, we are targeting over 50% auto resolution rate by the end of the year.

More broadly, AI is embedded across Flywire's engineering and product teams with frontier models, shared best practices, strong governance and autonomous agents handling tasks like code retirement, conflict resolution, bug fixing and test maintenance. This allows our teams to focus on building new products, making digital transformation a fundamental shift in how work gets done, not just a cost-saving initiative.

And AI is transforming our go-to-market as well. Enablement is now always on. AI captures winning tactics from live client conversations and delivers them as continuous coaching, cutting new hire ramp times and scaling the Flywire way without additional management overhead.

In closing, none of this happens without our Flymates. We recently completed our company-wide engagement survey called Flyover, and the results were strongly positive. Our teams are embracing AI and the productivity it unlocks. And they tell us they feel more creative and more energized in their work.

Ultimately, transformations succeed when people lean into them. Flymates are doing this. And that kind of organizational momentum is rare. Flywire is a great business with a powerful financial model and an exceptional team, and we are built to keep getting stronger.

With that, I will hand it over to Rob to take you through more details on the execution from the quarter. Rob?

Thanks, Mike. Q2 results continue to reinforce the fact that our modern product portfolio is widening our competitive moat, and we are systematically taking share from traditional payment processors and point solution providers across every vertical we serve. We signed over 200 new clients across 45 countries and all verticals, the second consecutive quarter at that level.

Signed ARR continues to benefit from existing client land and expand as well as larger average deal sizes. Travel led the new client count followed by education, and we are very excited about the pace of signings even as we deliberately move towards larger, more strategic engagements.

Last quarter, I laid out three themes defining our business: strategic vendor consolidation, geographic diversification and software-led monetization. Those weren't one quarter observations. They're structural growth drivers. So today, I want to walk you through how each of these three themes is driving consistent results.

Starting with strategic vendor consolidation. Our client conversations typically start in the same place. We hear about too many vendors, too many manual workflows, too much payment complexity and a great many of those conversations end in the same great place, consolidation on to Flywire.

As an example, the University of Liverpool has signed for our SFS platform in the U.K., a win that showcases the full value of the suite. Liverpool has everything that makes student finance hard, a large international enrollment paying from dozens of countries, domestic students on plans, parent access requirements, refunds, hardship cases and more, all running through manual processes and a patchwork of systems. We're consolidating that onto one platform.

For students and families, a modern portal with real-time balances, authorized parent access and self-service payment plans. For the university, a real-time integration with their Unit4 ERP that will eliminate many hours of manual posting work, reduce merchant fees and give their finance team a unified automated view of student financial activity. We continue to see strong interest in SFS in the U.K.

In the U.S., we signed three new SFS deals this quarter, with an ARR value double the signings in the same quarter of 2025, and our pipeline continues to build. When an institution is genuinely ready to switch providers, we believe we win those opportunities with SFS far more than our competitors.

What's driving these wins is ROI institutions can measure. SFS pays for itself across three dimensions. First, operational efficiency. Automating billing, payment plans and past due outreach has reduced inbound student contact volume, in some cases, by 40%, letting school student finance teams run leaner, even as enrollment complexity grows.

Second, cash flow. Self-service payment plans have driven roughly 50% higher plan enrollment with default rates falling from as high as 34% to below 2%. And third, revenue recovery, a solution we pioneered. Our clients have now collected more than $360 million in past due tuition in-house, saving over $70 million in agency fees.

And for many institutions, the ROI is highly attractive compared to the license fees they pay Flywire. That is the essence of consolidation, one billing to collection platform replacing a billing vendor, a payment plan vendor and a collection agency and paying for itself in the process.

Shifting to experiential travel. Our deal sizes are rising as travel groups merge and migrate more of their entities onto Flywire rails. Again, consolidation working in our favor. Win rates continue to improve. Our brand carries real weight in this market and the TAM remains largely unpenetrated across golf, hiking, cycling and many other luxury experiences.

The second theme is geographic diversification, and we drove strong growth outside our traditional Big 4 markets of the U.S., U.K., Canada and Australia. We saw education revenue grow outside those markets by over 30% year-over-year in Q2 and approximately 2/3 of the new education clients we signed were in growth markets outside the Big 4.

In Europe, international students continue to diversify destination markets, and European universities are responding. Some are introducing more English language programs and some are charging higher fees. We are particularly happy to see strong share gains in Spain and Switzerland and continued strong momentum in the private K-12 segment. We are positioning Flywire to benefit from trends favoring student and tuition growth in Continental Europe.

In Asia, we are executing well in markets that are opening up to international students. South Korea and Japan are actively courting international enrollment to help address shrinking domestic workforces. We are winning there. This quarter, we went live with a number of prestigious universities in both countries, and our regional pipeline continues to build.

Wrapping up my comments on why we win in global education. In Canada and Australia, where the broader markets remain under policy pressure, our growth is powered by share gains. This quarter, we started processing payments for Sheridan, a major Canadian college where international students make up over 8,000 of roughly 20,000 enrolled; and for Bond University, Australia's first private nonprofit university, a prestigious Gold Coast institution with one of the highest international student ratios in the country. Wins like these in constrained markets are the clearest evidence of our share gains.

Finally, speaking to our software-led monetization, our software-led approach has been a key catalyst for capturing and monetizing payment volume. It's at the heart of Flywire doing what others can't. Our hospitality software, which is used across over 20,000 properties, streamlines workflows and where it's combined with our payments offerings, replaces costly and insecure manual card processing with customer-initiated payments such as ACH, card surcharging and local methods, along with providing enhanced security from capabilities like 3D Secure. The results are striking.

Payment fees dropped meaningfully, in some cases, by more than half and win rates on disputed transactions more than double. Our ideal hospitality customers are luxury resorts and properties managing high-value stays and complex events. Notable recent wins include contracts with large hotel management groups such as Peregrine Hospitality, Avion Hospitality and Marcus Hotels & Resorts, each of which owns or manages a portfolio of hotels and resorts great for our hospitality solutions.

Having proven the model in the U.S., we've signed more than 40 locations across Europe and Asia year-to-date, and we believe we are just getting started. In Education, as we deepen the software layer around our payments platform, clients are renewing for longer terms and on economics increasingly favorable to us because the software has become embedded in how they operate. We see this dynamic of longer and better terms compounding over time as we continue to deliver for our clients.

We're seeing software-led monetization work across our other verticals, too. In health care, the patient financial experience platform is now live with payment processing across multiple clients, including additional go-lives in Q2, a good example of software attaching to payment processing. In B2B, we replaced the legacy pattern, invoicing out of the ERP, payments through the bank and heavily manual workflows with a single invoice to cash platform from Flywire.

What is most exciting right now is our velocity and depth of capture. Increasingly, new B2B clients are adopting both our invoice software and payments from day 1. This quarter's wins show the breadth of demand. a digital asset management company automating its AR operations, a wealth management firm signing for the full suite of invoice plus payments, and an international insurer collecting premiums globally.

All serving finance teams drowning in manual work for whom a unified AR and payments platform is an immediate measurable efficiency gain. Those three themes, consolidation, diversification, software-led monetization, aren't just how Q2 played out. They're how we expect this business to build for years.

Cosmin will now take you through the strong financial performance this quarter and future outlook. Cosmin?

Thank you, Rob. I will cover our financial performance for Q2 2026, discuss our capital allocation philosophy and provide our updated full year outlook and additional details behind the longer-term ambitions.

Q2 performance strength underscores the resilience of our diversified portfolio with results coming in ahead of expectations. Total revenue less ancillary services reached $164 million, up over 28% on a spot basis and 27% FX-neutral growth. Our outperformance versus the midpoint of our guide on an FX-neutral basis was largely driven by our travel segment, which continues to pace ahead of our expectations. This strength was specifically fueled by hospitality payments being a strong ramp.

Our education revenues were also ahead of expectations. The stronger-than-expected payment processing volumes from health care alongside our B2B invoice migration drove an approximately 7-point growth tailwind to payment processing in Q2, ahead of the mid-single-digit impact we guided to. We expect this payment ramp to decelerate in the second half as we annualize these revenue streams go live.

Transaction revenue was $135.9 million, up 35% year-over-year. This was driven by 43% growth in transaction payment volume with continued contribution from education, both cross-border and domestic as well as travel. As a reminder, quarter-to-quarter blended yield can vary with mix, especially as domestic payments ramp up. Higher domestic volumes and greater credit card penetration carry different economics than cross-border flows.

On a like-for-like basis, pricing remains stable and competitive behavior continues to be disciplined. Our spreads reflect the value we deliver, compliance, reconciliation, ERP integrations and enterprise-grade infrastructure, not commodity payment processing.

Platform and other revenues were $28 million, up 3% year-over-year, primarily driven by growth in hospitality. Adjusted gross profit reached $93 million, increasing 19% year-over-year at spot. Importantly, this 19% gross profit dollar growth is successfully converting into adjusted EBITDA margin expansion, demonstrating real operating leverage.

Adjusted EBITDA was $24 million, resulting in a 14.6% margin and expanding approximately 160 bps year-over-year, which was above the upper end of our guide. The strength in adjusted EBITDA reflects gross profit growth and continued operating leverage across every expense category.

Our adjusted gross margin of 56.6% was down by approximately 450 basis points. Margin dynamics are driven by three factors: mix, FX and temporary large payment processing ramps, not competitive pressure.

This quarter, the margin change was primarily driven by approximately 300 basis points from the mix contribution of higher payment processing revenues from health care and B2B that began ramping in the second half of 2025. The balance of the margin change was due to continued vertical mix shifts.

FX on settlement impact in Q2 was $0.7 million on an absolute basis, but we did benefit from a favorable year-over-year comparison given the headwind we experienced in Q2 2025. Excluding the approximately 300 basis points from this ramp activity, our normalized gross margin decline would have been around 150 basis points, which is squarely within our expected normal annual range of 100 to 200 basis point decline. We emphasize that these current ramp dynamics are temporary and will be largely complete by the end of 2026.

In Q2, we had a GAAP net loss of $8 million, improving versus a $12 million loss a year ago. The second quarter is our smallest revenue quarter with net income and free cash flow generation seasonally depressed and expected to reverse in Q3 and both be strongly positive for the full year.

Turning to capital allocation. We are disciplined allocators. Every dollar competes on expected return through an IRR framework that weighs organic investment, share repurchases and M&A against one another. That is why we repurchased shares aggressively into dislocation and why organic investment is concentrated in our highest conviction areas, and why we remain patient on M&A.

Our balance sheet remains strong with approximately $167 million in corporate cash, giving us significant financial flexibility to remain opportunistic, manage dilution, pursue acquisitions while continuing to invest in the business.

Moving to guidance. We are raising both revenue and EBITDA guidance for the full year 2026. We now expect 21% to 27% FX-neutral revenue growth with approximately 3 to 4 points from payment processing ramps in B2B and health care, and roughly 1.5 points of inorganic contribution as we lap Sertifi.

Full year 2026 adjusted gross profit is expected to grow at high teens year-over-year at spot. We expect approximately 200 to 400 basis points of full year EBITDA margin expansion, reaching approximately 23% at the midpoint. Stock-based compensation remains targeted at approximately 10% of revenue, and we are aiming to reduce our new stock issuance in dollar terms every year.

Alongside this, we continue managing gross and net dilution in a disciplined manner, targeting less than 2% dilution this year and less than 3% on an ongoing basis. Furthermore, we maintain our expectations of free cash flow conversion of 70% to 75% of adjusted EBITDA and upgrade our expectations for GAAP net income to grow fourfold this year to over $50 million.

Our Q2 performance, combined with more upside from payment-related product ramps through the remainder of the year leads to upgraded full year 2026 guidance despite our more cautious assumptions around education revenues.

Before I walk through the details, let me flag the shape of the growth from here. Several of our newer revenue streams are ramping faster than we planned this year, payment processing in both B2B and health care and Sertifi is domestic payment processing, which is accelerating ahead of our expectations.

That's a good problem. These investments are converting sooner than we modeled. This has two consequences worth setting upfront. First, this accelerated ramp makes 2026 a stronger revenue base, which creates a tougher comparison as we move through the second half and into next year. Separately, and as we assumed coming into the year, we expect U.K. education revenue growth to slow. That's already baked into our outlook.

Second, because these streams carry lower gross margins than our blended average, full year gross margin decline would be higher than the range we previously discussed, closer to 350 basis points on a reported basis and closer to 200 if normalized for the current payment ramps in health care and B2B.

Let me be clear on that second point because it matters. These ramps pressure gross margin, but not EBITDA. The pressure is pure mix. Processing volume carries a lower gross margin rate, but very little incremental OpEx because it runs over infrastructure and relationships we already have. So every gross profit dollar converts to EBITDA at a high rate.

Q3 2026 guidance. Our approach to guidance hasn't changed, prudent, transparent and data dependent. Visibility into the peak is always relatively limited at this point in the year. So we've talked to agents and to our clients. But we don't take that input at face value.

In the U.S., they expect declines, but are more optimistic on average than our assumptions, and we've held to a 30% visa decline. In the U.K., we are seeing higher visa rejection rates in Q1, and we've baked that in. In both cases, we weigh what we hear against what we're seeing in our own data, and we've set our assumptions from there.

For Q3 2026, we expect FX-neutral revenue growth of 16% to 22% year-over-year. At current spot rates, we anticipate almost no FX tailwind. Gross profit dollar growth is expected in the low teens range at spot rates, including an estimated 1 point headwind from FX on settlement year-over-year dynamics.

Adjusted EBITDA margin is expected to expand by approximately 200 basis points year-over-year at the midpoint of our guidance. One timing dynamic on the Q3 versus Q4 split. A meaningful share of our education volume settles around U.K. deadlines in early October, right as the Chinese national holidays fall in late September and early October. Payers heading off for the holiday may settle ahead of that deadline, pulling volume that would land in Q4 forward into Q3.

That moved roughly 2 points of growth from Q4 to Q3 last year. That cuts both ways in this year's comparisons. Q3 is lapping a quarter elevated by that pull forward, while Q4 is lapping a base reduced by it. So Q4's year-over-year growth rate will look better than the underlying trend and Q3 is worse, assuming no repeat of the Chinese payer behavior this year. Holiday timing differs slightly this year and payer behavior is hard to predict. Either way, the cleaner read is to look at our performance for the second half as a whole.

In closing, as we scale towards our $1 billion in revenue and 30% adjusted EBITDA margin goal over the next few years, we're focused on structural operating leverage. Transformation investment peaks in 2027, with material savings expected to come through thereafter. So we expect operating costs to stay roughly flat beyond that whilst continuing to invest in strategic priorities.

Investments in consolidating platforms, scaling data, AI, systems and automation are already boosting engineering and sales output, letting us streamline R&D, optimize sales and marketing, and redeploy savings into growth priorities and AI-enabling architecture. Even through this planned peak investment period, we have contained OpEx growth, and we are now targeting approximately 25% adjusted EBITDA margin by 2027.

In closing, Q2 demonstrated the durability of our diversified platform and the scalability of our operating model. We are managing for a specific outcome, durable, profitable growth in an environment where top line growth is normalizing. And here's what gives us confidence. Operating leverage compounds independent of the top line cycle. So even as revenue growth moderates, and we do expect it to, the algorithm holds.

The combination of growth and profitability we deliver stays firmly in the range this business has always targeted. That is the promise of our digital transformation, margin expansion that holds at scale through the cycle quarter after quarter. Along with our Flymates embracing our vision, I am very excited about what we're building and how far it lets us scale.

I'll now turn it back to the operator for questions. Operator?

[Operator Instructions] Our first question comes from Nate Svensson with Deutsche Bank.

Nice results. I think I'll start off just asking about the international visa situation in the U.S. I know there's been a lot of proposals and news articles written on potential new regulations. So wondering from your perspective, probability of any of these proposals going through and sort of any, I guess, concerns that this could create some demand destruction similar to what we saw in other geographies.

And then I think more broadly speaking, it still feels like the 30% visa reduction looks conservative, but I know we're kind of right in the heart of the most important months here for F-1 visa issuances. So wondering if you could give any color that you have either from your end clients or some of the third parties that you work with on what's going on in the U.S.

Nate, it's Mike. Yes, I mean, as you mentioned -- I'll start and I'll let Cosmin talk to a little more of the specifics around what's in the guide. Obviously, you're seeing various headlines around the world continue. And again, I think that's part of the reason coming off last year, we've kind of taken a prudent approach to how we look at this and looking at it by region and by market.

And so again, a lot of these are exactly what you said. They're statements, they're proposed policies. They're not kind of approved policies, they're not in place. And historically, we've seen the headlines oftentimes be a lot worse than the actual end results. And so again, we're being prudent. Cosmin, I think, has taken that into account in the way in which he looks at different regions in the guide, and I'll let him comment on that.

Yes. So I think as you said, Nate, we've always looked at it taking a prudent approach to that 30% decline. And we have -- we're about a month into the quarter. So we do have some visibility into the overall trends. As you know, usually, U.S. peaks around August. And so we do have some visibility into that, but we feel pretty good that we've taken that -- the right prudent approach. And look, it's a multiyear thing that we look at. So I feel good that we've taken a pretty good approach here in terms of being prudent around the U.S. assumptions.

Yes, agreed. And I appreciate the color. For a follow-up, I wanted to ask on the three new U.S. SFS signings, specifically on the commentary that they came in at double the ARR of the prior year quarter. So I wonder if you could talk about the ARR portion of that specifically and what's kind of driving the strong year-over-year expansion.

I assume a lot of it is kind of the land and expand strategy that you've talked about before. Anything on pricing? And then maybe beyond the recent deal signings, kind of how sustainable do you think the growth in ARR with these SFS wins is going forward?

Yes. This is Rob. I'll jump in here. Obviously, we're excited about the progress we've made here. You called it out right in what we called out in the comments with the doubling of ARR for those U.S. deals. It's all part of the strategy, right? We are focused on full suite deals. We are focused on enterprise. We are doing what we think is the right things to do to make sure we are putting a very skilled and expert sales team in the field to deliver this kind of enterprise quality deal.

And further, I think our name is getting better and better in the market, right, as we've delivered for some of the logos and institutions that you heard us talk about on previous calls. It's a very connected industry where people talk to each other, and our name is very good out there.

So in terms of confidence going forward, we feel very good about sort of the second half quality of the pipeline and what we expect to see for the rest of the year.

Our next question comes from Dan Perlin with RBC Capital Markets.

Good results here. I just wanted to ask, Mike, about kind of the mix of what you envision this $1 billion of organic revenue to look like as you think about education, travel, B2B, health care. Like how do you think that will change through the course of this, I guess, multiyear strategy? And obviously, Cosmin gave some financial implications for this, but I was just wondering how you think that might look.

Dan, thanks for the question. I would say think of the things that have driven our growth so far, right? I mean you've seen great growth and we called it out in travel and in B2B, like we expect those trends to continue. At the same time, the education business continues to perform well. We continue to layer in software there. And I would say that kind of fits into where we kind of expect it to go, right?

Think of more software and education, continued growth in the travel and B2B segments in particular. And I'd really say it goes there. Obviously, the hospitality expansion internationally is a key part of that, that we expect to have a multiyear effect. And so I would say those are the kind of the organic levers that we expect to kind of play out. And you may see a slight mix shift, but I would say it's pretty consistent with what you've seen in the last few years.

Okay. That's great. And then just going back to the geographic diversification here again. The education markets that are outside the Big 4 grew 30% this quarter. I think it was 40% last quarter. It's 30% before that. So it's continuing to materially outpace everything. And then I heard like Japan and South Korea, like actively looking for students.

So I'm just trying to get a sense of how big that market is today in terms of its overall mix. And obviously, that's a positive mix shift in terms of incremental growth if you're not having to deal with so much of the regulatory issues. So just anything around that would be helpful.

Dan, I can jump in, Rob here. So I think we've called out previously that sort of that way of segmenting that we're talking about the business is sort of low teens percentage of 2025 revenue. As you called out, we saw 30% growth in that beyond the Big 4 education in this most recent quarter.

I made a trip to the region just a little bit ago, and you really feel sort of the opportunity that we have there. I got to visit a number of institutions, got to hear from them the manner in which Flywire really can solve problems that are front and center for them. And so you see them adapting to the interest in those regions of international students to come to them and you see them adapting our solutions to be able to serve them well.

Our next question comes from Madison Suhr with Raymond James.

I wanted to start on the U.K. Obviously, it's a key market for you guys, comprises about 1/4 of revenue. I know visa trends have been challenged, but can you maybe touch on where you see the most opportunity in the region, whether that's domestic cross-sell, SFS penetration? And do you think the region could still grow kind of above company growth rates for the year despite some of these visa headwinds?

So maybe I'll start just on the assumptions in the guide, and I'll pass it to Rob to talk a bit more. So yes, U.K., the macro backdrop clearly softened. So we thought it was obviously prudent to adjust our visa assumptions. And so we're assuming that -- if you think about it roughly in the last couple of years, we've seen U.K. visa declines in the mid-teens. And so we're assuming roughly a bigger decline than that.

However, with that, we're still assuming that U.K. remains an important growth driver for us, even though we're assuming deceleration into the second half from the U.K. because of, again, some of the -- many of the levers that we've talked about before, also because, again, the visa declines are -- right now, the quarter-to-date that you've seen is a small sample size. So feel good from what we've heard from -- on the ground, but we're taking a prudent approach. So maybe I'll let Rob talk a little bit about the drivers and the levers we have in the market.

In terms of the market opportunity, we feel really good about our positioning in the U.K. If you remember from some of my comments on prior calls, we've talked about the desire to sort of move all the money on behalf of our clients and having two main mechanisms or levers that we can use to accomplish that result.

So one of the ways we talk about it is the number of clients where we see ourselves moving 90% or more of their money using sort of our internal method, our internal methodology for all that. We previously shared we had approximately 12 in that category. We've continued to grow that number. We call that number about 20 now.

Second big dimension is growth in SFS footprint inside the country. Obviously, our attach rate is still very low, and we're working to build that. And one of the main things we're doing and making very good progress with is increasing the number of integrations that we have into what are the core systems that serve the university community there.

And so you've heard us call out progress with Unit4, with Oracle. We certainly talked about our work with Tribal. All of that is part of the ability to expand there. And as the U.K. schools see us being successful with their peers, they are that much more inclined to work with us.

Okay. Great. And then I want to follow up on the non-Big 4 region as well. Obviously, it sounds like the near-term focus is more on winning clients that have a healthy level of international student enrollment. But just as we think about the longer-term opportunity there, do you think you have the similar ability to cross-sell adjacent products into that region? And I'm really just trying to get a sense of for the non-Big 4 specifically, what can drive NRR growth in that region over time?

Madison, this is Mike. I think if you look at our other offerings in the education suite, we've always had global aspirations for those, and I think we continue to have them. I think what we see in a lot of international markets is part of a readiness question, right, is you'll see whether it's the student information systems, whether it's the partnerships, the integrations needed.

Oftentimes, we're digitizing that payment experience, and that is significant for them. And when they think of like a full student account portal and like the software you would see here in the United States or in a major market, they're not quite ready for that yet.

So we'll be opportunistic whenever we see those opportunities. But also, it's a huge opportunity in the top 4 markets. So our focus is on that. It's on executing there, but we see opportunity for a lot of our product suite outside of the top 4 as well, just over that kind of longer-term horizon.

Our next question comes from Michael Infante with Morgan Stanley.

I wanted to ask a bigger question to contextualize the multiyear SFS opportunity and how you expect the unit economics to evolve. You've obviously spoken in the past about SFS being a real multiplier effect to both revenue and gross profit. But at the same time, the mix is obviously shifting more towards domestic volumes, carry structurally lower yields than cross-border.

So I'm just curious how you think about the offsets to that mix shift on a relative basis and how much incremental volume you really think you can capture with SFS and really what it looks like over the next few years as you march towards that $1 billion revenue target?

Michael, it's Mike, and then I'll hand it over to Cosmin to double-click on the numbers. So think of it at the level of the kind of gross margin mix being a positive, right? It is a mix, like you said, of software and domestic, but it still blends to something that is very good for Flywire and helpful in kind of maintaining strong gross margins.

I would also say, think through the dynamic that we mentioned on the call as well around over time, we're seeing our economics actually improve in SFS over time, right? And so you're seeing average deal size go up. You're seeing renewals be strong. Those are both things that to us are very, very strong positives.

And ultimately, when you get SFS, you get all the volume, right? You are dealing with all the domestic, all the cross-border volume going through one platform. So that is a core part of the strategy. That is how we think we're maximizing value for our clients. And I'll let Cosmin double-click on the financial profile.

So in terms of the numbers, just one disclosure we have around the size of the business. That's -- the domestic business in the U.S. is about 1/3 overall, is what we've said. And think of that as, in terms of revenue growth, as above company average in general. It's been there. Given what you heard from Rob as far as SFS success, we expect that 1/3 of the U.S. business to continue growing faster.

And that's one of the reasons why we're able to see and guide U.S. education revenue to grow in the low single digits this year, given the pressure on the cross-border side. So really strong growth there from the domestic side.

And yes, in terms of -- the gross margin is still very positive. And again, once you move from cross-border to domestic, you get more of the payment plans, you get software, as Mike said. So there's a good -- still a solid 2 to 3x kind of gross profit dollar increase, which -- and again, runs over the same kind of cost rails for us. So as you heard me talk about, that's a strong EBITDA dollar flow-through from that because it is on existing clients and existing relationships.

That makes a ton of sense. And just a quick housekeeping follow-up on Madison's question just on the U.K. revenue growth. I think you guys remove that commentary in the presentation about the U.K. and EMEA growing at or above company average. So I guess, should we be assuming that U.K. revenue growth is dilutive to the aggregate business this year?

And if so, by how much, right? Like the visa expectation was obviously reduced marginally, but that's obviously your deepest SFS and domestic payments market. So I'm just trying to contextualize that dynamic.

So at least the way I think about the U.K. is decelerates in the second half given these assumptions. And again, this is us taking a prudent view, still a lot of the quarter to go, and we'll update you there. But yes, it is assumed that U.K. would at least exit at a lower rate than the overall company.

And then I would just, again, remind you, we're taking a prudent approach. And second, that we have SFS and other levers there that give us confidence that long term, we will continue to gain share. And again, you heard some of the stats from Rob around our ability to gain more of those types of 90% clients. So again, it is -- but it's all in the guide. And again, that's overall taking a prudent approach to the overall guide given that view.

Our next question comes from Cris Kennedy with William Blair.

Cosmin, you mentioned the stronger revenue guidance this year may create a more difficult comp as we get into 2027. I know you're not going to give official guidance, but any way to think about some of the growth dynamics as we get into 2027?

I think generally, as always around this time of halfway through the year, you can look at exit rate. I think given some of the dynamics I talked about in terms of timing, I think looking at second half. And so that is sort of a high teens kind of FX-neutral growth rate. But then if you kind of take out the sort of, call it, 2 to 3 points, or call it, closer to 3 points or so of payment processing ramps that I talked about in the second half, you get closer to a kind of normalized for payment ramps of roughly in the mid-teens.

And that's kind of how you tie back also kind of a normalized gross margin decline comment into next year. And then the only thing I would add to that is just remember that last -- this year, Q1 was extremely strong. We had not -- obviously, we have organic and inorganic piece, but then we had a mid-single-digit tailwind and really strong performance from EDU in Q1. So that's the other component to think about.

So hopefully, those help. Again, still early, and we're not yet guiding into next year, but those comments should help kind of directionally start you for next year.

Great. And then any -- can you give any more color on your K-12 business and kind of compare and contrast that relative to higher ed?

Cris, Rob here. So K-12 has been a long-term segment for us. It's not a new thing that we talk about pursuing. What has been interesting is that around the world, there are interesting pockets, interesting markets where we may not previously have pursued that, and we are now going ahead and doing that. It's all part of what you would call under the umbrella of sort of diversifying international mobility, and we are making sure that our sales team is looking out for those opportunities, and we're seeing ourselves winning good ones.

Our next question comes from Tien-Tsin Huang with JPMorgan.

You went through a lot here. Just wanted to ask on just thinking about your expense base and visibility there, given what you talked about, for example, in your prepared remarks on AI and then you have the scaling efforts beyond the Big 4, you're scaling SFS. I'm just curious, is there any change in your visibility on expenses, especially given AI inference costs, maybe some productivity of people, that kind of thing?

We -- I think we've obviously gained quite a bit of better visibility into our OpEx as we've dug deeper in the last -- over the last few years, as we've gone through a lot of transformation. I think -- think of the improvements from the transformation investments as benefiting sort of three different components of the business. One is just the individual Flymate. Once you hand them a lot of these AI tools, I think everyone is individually more productive and then functions and enterprise.

So functions are becoming more productive. We give you examples all the time around client service, but sales and marketing, risk, operations, payments, I mean certainly, the engineering team all have access to the latest kind of LLMs and most of the codes being written through that. So it's a good share of that.

And then obviously, G&A, we're watching the opportunity to reduce manual work. So all those things are benefiting along the way. And so we haven't had any surprises as far as OpEx. And so we feel pretty good that we -- again, this year is up kind of in the mid- to low single digits next year, as you kind of look at the implied, it will be in the low to mid-single-digit growth.

And then again, based on what you heard from my prepared remarks, expect it to be relatively flat, and we feel quite good about that, just given the visibility into the cost base and the improvements on the transformation side, which really hit on the enterprise level opportunities for us to be more efficient across the whole enterprise, which is quite unique, I think, for us in terms of the approach to transformation.

That's great, Cosmin. And I think you said -- real quick, just on the M&A front, it sounds like you're still being patient there. I'm just curious if that's an appetite thing or resourcing or maybe a valuation-driven patience. Any additional color?

Tien-Tsin, it's Mike. I think we continue to like to see the organic investment opportunities we have in front of us. I would say, from a capital allocation perspective, if there's a chance to buy back our stock, we still think there's some dislocation there. And so think of us as being very active, but also knowing we have two deals that we're continuing to integrate and want to make sure they go well.

So our team is still paying attention quite well to what's out there in the market, and we have to find the right balance of something that fits our strategy, something that is, we believe, good for shareholders and also something that we think is priced at a reasonable rate that makes it interesting and exciting for us. And I think you still see some of that private public dislocation valuation. So being patient, but again, I don't think we're missing out on anything right now.

Our next question comes from Jeff Cantwell with Seaport Research.

I wanted to ask you about the future $1 billion in revenue and 30% adjusted EBITDA margins. Those numbers both are positive here. As you think ahead, can you maybe help us out on the timing? Do you see that happening perhaps in 2 or maybe 3 years, for example? Just trying to get a feel for that because if current trends hold, it seems like those potentially can happen sooner rather than later.

And just to underline what Dan asked about, are there any particular callouts from a vertical standpoint as you think about the $1 billion target in particular? It seems like Sertifi and core travel have been doing well for a decent amount of time. So curious if that's the reason for the confidence in this $1 billion target. Are you able to talk more about that?

Thanks, Jeff. So we're obviously very excited about this milestone and since it's coming closer into our sight as part of our normal sort of planning cycle, think of it as our normal 3-year planning cycle. We didn't want to put a date out there, a specific fiscal year. Think of it less as a kind of point in time, more of a milestone and moving through it.

But I think one way to think about it is -- listen, we've given you also roughly 25% EBITDA margins into next year. That gives you some level of a stepping stone. And so I think in terms of the mix, we may get to a sustainable annualized run rate of the revenue or the margin at different points in time, around that sort of the 3-year planning, whether that's 12 months around that.

We're not too stressed about that. We feel good about this overall number. And again, remember, we've taken the same approach with this, which is prudent, and it is all organic. So it gives us, I think, optionality in the future. And you do the math on the free cash flow, I think it's quite an exciting view from a free cash flow and share count perspective, given the dilution targets that we've also kind of set out.

And Jeff, I'll just add, this is Mike. I would say we expect all our verticals to contribute to getting to that milestone. But if you look at really some of the stuff we're seeing adding more software and geographic growth in non-top core and education being notable. If you look at travel, the combination of the luxury experiential and hospitality businesses, both are seeing really good metrics, right?

Deal size being increased, sales cycles trending faster, I feel really good about our ability to layer in additional products, different geographies, subsegments into that business. So we feel really good about the path to get there, and we have lots of different growth levers to help us.

Okay. And then my other one was the announcement about Driftwood that you guys highlighted during the quarter, they have brands like Marriott and Hyatt and Hilton under their umbrella. So I'm curious if you could tell us anything on how that came about since I thought that was an interesting call out by you guys to talk about it within the hospitality vertical.

It also sounded like a land and expand opportunity you guys executed on. So I just want to get more details and hear you guys talk about that? And maybe anything on what the ramping is that we should be aware of there as far as revenue and volume and so forth.

So this is Rob speaking. Just a quick reminder of sort of the structure of the industry. You have the major brands. You have hospitality management companies that tend to either own or operate a whole series of hotels. They may operate them under multiple different brand marquees. And then you've got the properties themselves.

So Driftwood is a great example of a hospitality management company with a great portfolio of clients. They have worked with us across a whole bunch. And as you saw in the press release, we're doing sign and pay authorization and payment across a whole range of their properties.

We'll conclude today's question-and-answer session. This concludes today's conference call. Thank you for participating. You may now disconnect.

All right. Terrific. Thanks, everyone, for joining. Good morning. My name is Tien-Tsin Huang. I cover the payments and IT services sector at JPMorgan. Really happy to have the Flywire team back at it, back here with us. They've been a great supporter of the conference over the years. So thank you for being here with us. Mike Massaro, CEO. Great to see you. Thanks again for being here.

Thanks for having me.

We've got Cosmin and Masha also in the audience. So we'll go through a quick fireside chat. I've taken a lot of questions from the investment community, and hopefully, we'll get through this mic. And yes, is there anything else you want to talk about just be sure to flag it. But again, thanks for being here.

So I thought I'd kick it off just asking because we talked about it last year, even, thinking about the strategic review that you went through, and it does seem like it's yielded some very good results. I think with the remix and the performance being better, the team seems quite happy, we can actually feel that. So give you a chance here to talk about what's worked and what's left to do at this point?

Yes, sure. So obviously, as we kind of saw some changes in some of our industries, we went to really, it was a kind of 3-pronged approach. So first, you're looking at streamlining an organization, right? I think any company that's not looking at that in this kind of day and age is probably missing a turn.

We also look to kind of optimize, right? So you could see organizational changes we made. You can see ways in which we were cutting different geography, performance, product performance, just getting better data to our team, transforming back-end systems, all of those things that just put us in a better position and then reinvesting. And so some of the reinvestment went into doubling down on certain regions, certain products, expansion of our team in some areas, reorganization of our team. And you could see a whole series of those changes, and I think you saw them play out in the start of the year, right, in some of the results that we put up there.

And so we're really excited about it. I don't know that anyone's ever done reviewing their organizational structure or their processes in this day and age, but we feel really good about the work we did and I think we're in a great position to scale.

No, hats off. I know it's not easy to do and the execution has been great.

So a big theme, Mike, I know you've been paying attention to the group. You've always been a student of the industry. There's always been a remix, a push towards value-added services. There's sometimes a push towards breadth, sometimes a push towards depth. You've got a really interesting collection of verticals that you're in, right, education, travel, health care, of course, B2B as well. Can you just share with us what the synergies are right across the 4? I feel like it's important, especially in this environment. And then the mix, how do you see that evolving? We've seen a lot of change already. Where do you see it going?

Yes. I mean, obviously, for us, we have a series of verticals. They all center around this complexity narrative. So if you think of us, we like to run in towards complexity as a team. So we're using software to help our clients get paid. And it's typically clients that have some type of complexity in their payment volume. It's either a billing process that has multiple iterations, some level of international flows that, again, make it more challenging to get paid.

And so we use software that's industry-focused across those industries and tailored for the systems of record in those industries. And then we have a shared set of platform and payment infrastructure that gets leveraged across those industries. And so as we identify new complex use cases in our existing industries, we'll add them and go after them and build new solutions. And as we look at other potential industries, we'll even consider expanding into those if, again, they're focused on something challenging, where most payment processors are trying to find a simple credit card capture e-commerce experience to solve.

We're typically looking for something that is much more complex. Those companies would kind of run away from that type of complexity. We're running towards it. And I think time and time again, you're seeing it in our business, whether it's winning a big educational institution like Cornell or Penn State, whether it's the Cleveland Clinic deal we've talked about numerous times. Those are great examples of the kind of problems we solve for our customers.

Yes. So complex payments is the common theme. So let's dig in on some of the pieces here. I thought we'd leave with travel, [ sure it ] has been a big topic at the conference. There's some worry, especially around cross-border travel, Mike, given the Iran conflict, higher oil prices, airline capacity is changing. I know I asked about the main call, how exposed is Flywire travel to that?

Yes. So we have 2 parts of our travel business. We have a hospitality business, which is really heavily U.S. centric with international expansion kind of planned for the end of this year into next year. Part of the core strategy when we acquired the Sertifi business was to take that product global.

And so again, that's focused on typically hospitality back-end flows. So you're maybe hosting a wedding, you're hosting a corporate event, you're holding a conference like this at a hotel. There's a whole series of paperwork and documentation that goes with that and payment processing. That is kind of all back office inside the hotel. And so that's one area of our business, relatively insulated, I think, from some of the international conflict right now.

And then we have a luxury and experiential business. And they're about equal in size, both growing quite well inside Flywire. And so that luxury experiential business, we never really brought it to the Middle East. It was always a regional expansion opportunity for us. Obviously, not a focus area for us right now given the conflict. But you definitely have to keep an eye on the international flows, right, especially when you start hearing jet fuel. We've tried to be very prudent in how we looked at the year and how we guided the year, especially after kind of Q1. But again, we haven't seen actually any impact yet.

We've heard various anecdotal stories. I actually heard of a family friend who got moved up, their flight got canceled for an African Safari that was a 10-day trip, and they had to reroute 2 days earlier. And again, in the luxury experiential space, this is a trip you planned for maybe a year. If you get that heads up, you're going to go ahead and try and find another alternative way to get there. The payers, the people were processing payments from typically have some level of affluence. They're going on these kind of luxury trips. And so if they can kind of make it there, they're going to come up with creative ways to get there.

So we haven't seen any impact yet watching it closely, obviously, hoping the resolution comes as quick as possible in the Middle East. And eventually, we think it turns into a growth region for us, both in education and in travel business payments, it's a huge geographic expansion opportunity in the future for us.

Yes, that market makes sense should be more resilient, less cyclical. So thanks for going through that. So maybe just remind us then, you talked about Sertifi, I do want to dig into that. Just the growth algorithm around travel. I know same-store is probably not a big part. You're expanding to a lot of geos. There's a lot of bookings with new clients. What's the growth algorithm?

Yes. So a couple of things. On the luxury experiential side, it's geographic expansion and its subsector expansion and it's software level expansion. Those are kind of 3 ways in which we can grow that business for years to come. And so if you look at new geographies, you could look at some of the expansion we've done in Southeast Asia, Australia and New Zealand, where we actually, with relatively small investments of go-to-market teams, you can actually bring on luxury and experiential companies in those regions.

And these are typically high 5, low 6-figure a year ARR accounts. And so again, for us to be able to do that, leverage all our existing infrastructure to process those payments. That's obviously one expansion. We've talked about some of the other segment expansion opportunities we've seen in luxury travel, so things like ocean experiences, things like golf, cycling. These are kind of subsectors within travel, but they're very specialized. They're very -- a lot of the individuals who run these companies know of others running similar companies all around the world.

And so again, as we look at that, those are all kind of great opportunities for us to grow the business. And then when you look at product expansion, we continue to do kind of an invoicing and billing and payment solution for those luxury experiential companies. But we think there's a whole series of additional software assets over time that you'd see us bring into that to that customer base. And one actually is inside our hospitality product suite already called sign and pay and so if you think of the Sertifi business we acquired, we had 2 really growth synergies underwriting that deal when we acquired Sertifi. It was to first monetize about $3 billion of payments that was not being monetized.

We're ahead of schedule on that monetization effort with Sertifi. We've accelerated payment monetization, which was kind of our core strategy. And then on the hospitality side, it's to go international. So the 20,000 hotel locations we acquired with the Sertifi acquisition, they were mostly in the United States. And so the team hadn't had an international sales team. The product wasn't ready to go global.

And so we spent the last year really integrating the product, integrating it with Flywire payments and preparing for that international launch. And so in essence, the product allows you to kind of sign and pay for complex workflows at hotels all around the world. And we think that capability is something that, frankly, all our luxury and experiential customers would also want to have, right? If you ever go on one of these trips, you're probably realizing you're signing your life away 5 or 6 times through various consents and documents. And right now, that's all being handled kind of offline. Typically, it's either in person, pen and paper. And we think that's a software value-add that we could easily apply to our luxury experiential business.

Yes, that makes sense from a cross-selling or synergy standpoint. But Sertifi has been a -- it feels like it's been a home run.

Yes, it was our biggest deal we've ever done. Obviously, timing with just the macro conditions last year wasn't great. But it was a great deal. It's ahead of plan. We're excited. The team is doing really well executing, and we're really excited for the global launch of our hospitality solution.

So what should we expect then as you move outside the U.S. with Sertifi. What other steps? How quickly can you do that at what cost? What should we be asking you as we move ahead on that?

Yes. I would say, for us, we've always had a great presence globally, right? We've got clients in over 50 countries across our business right now. And so for us, expanding our hospitality offering globally is not something that's new to us, right? We know how to hire. We know how to build sales teams, build client success teams in those regions. And we're able to do it relatively light, right?

Because, again, you already have the payment infrastructure you're sharing you typically have a language or a regional sales investment you're trying to make. We even have teams already in places like Southeast Asia and Europe ready to kind of take that solution into hotels all over the world. And then the other part that I think is super important is that when you look at the hospitality sector, what we loved about it was you get relationships at the brand level. Think of that as like the Hyatts and Marriotts and things like that. You get relationships at the management company levels.

And then you have the relationships at the individual hotel, kind of boutique hotel levels. And we have contracts at all of those various levels. And so if you can imagine, you're not only going into hotels in some of these international countries, you're also going to the management companies that may manage hotels in many countries, even going to the brands who have yet to be able to use this product globally and saying, "Hey, we're ready to do this." and so we think we're going to see great acceleration when it comes to that business. as we take it international. And it's not a skill we haven't proven time and time and time again over the last 15 years of being able to take a business global.

Okay. Good. No, so travel feels like it's in a good place. So we covered a lot there. So let's pivot to education then, and I know that business has evolved quite a bit. Catch us up on what you're seeing on the ground, the flows on visas. I think we now need to track that a lot closer. What's happening? Just give us an update on what you're watching.

Yes. I mean, obviously, we look at Visa numbers that are coming in. Data isn't released as frequently or up to date as we would love. But again, we have taken the approach in our guide to be really prudent in how we're incorporating Visa headwinds into the guide.

So if you look at the U.K. and Canada, for instance, we're pretty much assuming Visa issuance is flat, which, again, we think is a pretty prudent approach. If you look at the U.S., Cosmin assumed the U.S. Visas will drop 30%, and that's already baked into our guide. And so we feel like we've been quite prudent in looking at it and trying to turn the noise -- shut the noise off in relation to what headlines coming out about Visa's at a given moment. And I think that prudence is going to allow us to kind of watch how the Visa's continue to perform and if you look at the last 12 months, which if you look at '25, it was a lot more uncertain of a time than it was now when it came to Visa. You just didn't know where the policies were going to come in. You didn't know if there was demand destruction happening.

And so I think as we've navigated that and still proven we could gain share and grow the regions, that's pretty impressive in an uncertain time in our biggest business in multiple parts of the world. And I think the reason we're still growing those regions, even though you have Visa headwind, is because you have this land and expand strategy, which is deploying more software. So you're getting student account software, our SFS product deployed at more places. And then we're winning new logos and actually adding new clients in these regions. And so to be able to outperform that headwind. And again, I think we're in a great position to execute for this year.

Yes. I mean I think you've talked about it, right? These Bursar's offices are facing a lot of complexity. It does feel natural that, yes there's changes on the Visa side, but just shifting more towards software and automating, getting rid of that complexity, like you said, I don't see that being a change here, right? If anything, it's more intense.

I think that's right. And I think who isn't trying to do more with less, right? And our clients are the exact same. And there -- if we can offload additional workflows, if we can add new features and capabilities, right, if we can integrate AI into the products that we have to offload work for them. that just makes us a stickier set of software and a better partner for our clients.

Okay, good. I know you mentioned SFS and there's a big cross-sell push. What else is on your priority list to summarize for us on the education front?

Yes. I mean, obviously, SFS is a huge one, right? We think we can have a huge share of the global universities in their student account portal. And that's really the core use case for SFS, right, is to get that deployed to own all the tuition dollars, whether they're coming in domestically, international, whether they're onetime payments, whether they're payment plans. And so that billing and payment suite really allows us to do that. And we're only about 10% penetrated of our existing education customers with that product.

And so there's a huge amount of land and expand opportunity for us. Our focus right now is on the top 4 geographies around the world. But I'll tell you, the demand is there in countries all over the world for that type of product. You go to a lot of kind of non-top 4 education markets they don't even have a student account portal. They don't have a secured login state. They don't have real-time payments. They're typically kind of sending a PDF and e-mail as an invoicing process.

And so if you just think of the evolution of e-billing, if you just think of what is modern in the United States, all the universities around the world want the product. The question is how do we roll it out there? How do we kind of roll and upsell globally in those 30, 40 countries in which we operate.

All right. Good. So yes, you're controlling what you can control in education, I think, has sort of been the lesson over the last year or so, which is comforting. So let's do -- I do want to get to AI and stablecoin, I want to ask that stuff. So let's get one more out of the way with health care.

I think last year, when you were here, right, there was a push towards getting that into a better place. And it's actually moved a lot faster than I thought. I know Cleveland Clinic and some things that have happened. So there's been some good momentum there. Can you keep it up, right? Can you compound this? Can you replenish this backlog? It does feel like it's in a good place, but is it repeatable?

Yes. I mean the team has done a great job executing on a strategy in a complex market that traditionally typically has just lower growth in general. And big deals for us are Cleveland Clinic, Endeavor, Cook County is another one we've talked about, Jackson Health, so again, to get some of those big logo wins are really important.

We're obviously finishing our implementation at Cleveland Clinic. We are seeing huge amounts of payment volume ramp, which has been one of the mix shifts in kind of gross margin we've talked about. And again, I think it's exciting to see us have such traction in what is a really complex industry of health care. I think we would tell everybody like there's only so many Cleveland Clinics out there, right?

And so we'll continue to go win kind of big deals. And we're excited to see that growth. But at the same time, like there's a finite number of hospitals. And so we're going to kind of keep being persistent, get those big deals done, and it's exciting to see it on a better growth trajectory than it was last year.

Okay. Good. So let's get the necessary AI question out of the way just to ask it. We've been asking all the companies, Mike, as you can imagine, tech conference and everything else.

So the first one is the obvious one, right? Is AI a threat from a -- could it lower the barriers to entry for other players to do what you're doing, could it automate some of the work that you're doing, which impacts the value of goods or services that you provide? Or could it replace some of the things that Flywire does. So how do you respond to that in general...

Yes. I'd start by saying any company that doesn't innovate with an amazing technology and the changes in AI that we're seeing today. should be worried, right? And so like priority one for us is to continue to innovate and to be on the forefront of it. And so for us, that's kind of how we look at it. If we were just a software player, I think you'd have more concern, right? We have regulated infrastructure all over the world. We move money.

And I think when you look at the problems that AI is solving I don't think it's going to kind of speed into letting AI move your money around the world for you, right, or dealing with complex global regulation. And so again, I think that's a pretty hard and protective moat around the business as you kind of have this regulated payments infrastructure, the movement of money, people want kind of a trusted, regulated, proven vendor to deal with that for them. you have software that is industry-specific that's deeply embedded.

Typically, we have 3- or 5-year agreements with our clients on that software. And then you have a team, right, which is kind of a group of people that are really subject matter experts at Flywire, who have really close relationships with our customers. And so you kind of put those together and to me, that's like a series of moats that makes disruption very, very difficult. And you can see that in our very, very low churn numbers. You can see that as we're continuing to hit kind of record average new deal signed, average transaction value for our new signed deals.

You're also signing 200 clients a quarter in the last quarter. So again, for us, we see it as an opportunity. We have to innovate. I think it allows us to do more with less in every company to become more efficient. It allows us to enhance the value we're giving to our customer by automating more of their workflows in the back office using AI. And then I think there's a whole bunch of just operational improvements we can do as a company.

So again, for us, I think it's way more of an advantage than it is a threat. And I think part of that -- the major part of that reason is because of just the regulated payment infrastructure that's really hard to replicate.

Yes. No, that's the complexity right? That is the moat, like you said, and how integrated you are between the software, the payment, the network and of course, the compliance around all that, that can't be wrong in any way, no errors?

Yes and I'll tell you internally, I think the other part of the question was kind of how are we using it? Or what opportunities do we see? And I mean, of course, we're seeing major progress in development, right? So just faster iteration between product, engineering, you're seeing things like identification of a tech support ticket come in, triage through AI, solution proposed through AI reviewed by an engineer pushed to production, right? That's -- those are pretty cool advancements that you're seeing kind of happen for the first time.

You're seeing a 40%, we've talked about a 40% reduction in support -- in customer payer support tickets, right? Like that's a pretty significant reduction driven out of a manual queue into kind of an automated agentic kind of queue. Even internally, we're probably driving our organization crazy, but Cosmin and I are probably in the top 10 of our internal users when it comes to AI, token and usage. And part of that is about just driving up information to make decisions quicker, better, faster in the organization.

And I think when you have a company that has a data mindset and is eager to become more efficient. And there's probably no company that shouldn't be pick your number, 15%, 20%, 25% more efficient in the next 2 or 3 years. The question is the speed and the timing of that. and maybe how inefficient you were at the start of all of this, right? And so -- but if you look at just becoming more efficient as a company, this is the perfect opportunity to do it. I feel like I'm in my early 20s of the emergence of the Internet again, like it's that cool at a time where things are changing so fast, you can actually build things funnel up data into your organization quicker, move the business faster. And I think that's how we're using it.

I mean, a couple of things that I've personally built have probably saved me 150 hours a year of my own time, right? Things that I would have manually had to do, reviews I would be doing, data I'd be digging into. Like I said, driving our teams crazy, but like these are things that have become part of our day-to-day workflows at the company. And I think we're pushing that from the top parts of the organization, which is the right way to do it.

I'll have to ask you guys about the token consumption race between the 2 of you, who wins that one. Okay. Good. No, and like I said, I think you addressed most of it. We've been asking everyone across marketing or go-to-market operations. you hit upon it all. It does seem like the energy on the Flywire side is pretty pervasive culturally in terms of the embrace of these tools?

Yes, I think so. And we're talking earlier, we get -- kids are getting up there in age and you're starting to think about kids potentially in their careers and you start to wonder like what does it impact for the future of employment. And again, even what the shift I've seen in, I would say, 3, 6 months has been wild, right, where initially, everybody was saying, "Hey, anybody coming out of school, like good luck finding a job." like you're finding AI-native people, right? Like these are people who grew up in the age of AI, right? And it's like people want those folks at their company.

And so you kind of have this combination of -- how are you going to retrain, how are you going to enable people to understand these tools in your organization. But like stopping the spigot of hiring AI native people is a bad strategy for companies, right? Like you want to hire great kind of AI forward AI native people. And you want to uptrain your existing teams.

And I think that's the combination where you can't be binary in either one of those because I think that combination is going to be really, really important. So for us culturally, we've always had kind of innovation and change has always been a constant, right? Our company, even just in the last 5 years going public, it has grown significantly in size and profitability. It's gotten more diversified. And I think our team knows that level of change that we've seen in the last 4 or 5 years. And we're very clear like we expect innovation to be a cornerstone of our culture as it always has been. So...

All right. Good. So let's do the similar question on stablecoins, and Mike, just same thing, right, threat opportunities. So just get the threat one out the way, the worry that same thing lowers the barriers to entry it's going to pressure the economics on B2B payments. We've heard from some of your peers about this. I think you have talked about it as well. Any new thoughts on the threat side of the equation from stablecoins to Flywire?

Yes. I mean, again, we look at every method, right? Our job is to accept whatever methods our clients want to accept and whatever methods a payer wants to pay in. Flywire never forces anyone to pay in a given method or a given currency, we announced a stablecoin pilot a couple of quarters ago that's active and live across over 1,000 clients. And so again, we're obviously watching and monitoring it. There's really 3 areas when you think of stable coin for any, I think, payment-related company. You have acceptance, you have internal money movement and then you have payout or settlement.

And so I think we look at it in those 3 ways, right? And so take them one by one. If you look at acceptance first, again, there are certain markets around the world that I think you're going to see people hold stablecoin, right? If you're in Nigeria and your choice is holding Naira, which could fluctuate heavily and it's difficult to kind of move around outside the country, and you could hold the USDC stablecoin, like, yes, that makes a lot of sense. And I think there's countries where you've got volatility in currency or you have certain types of difficulties kind of moving money in and out of the country, where you're going to see a stablecoin kind of emerge and whether that emerges as a Visa-oriented card product, whether that emerges as a stored value wallet, I think there's all types of things, but look, we want to accept those methods.

And even in the pilot that we've done, again, it's a very small amount of total payment volume compared to all of Flywire, but you're seeing economics that are on par with bank transfer for us, right? Remember, we control the payment methods, we control the economics, and we want to accept all the ways to pay and let the payer choose. And so again, very encouraging to see stable, good bank transfer like economics for us to see it live and see people using it to pay but we're not seeing that kind of rocket ship growth yet, right? And so we heard similar things around crypto as a payment method in 2015, 2016. Again, we were there evaluating the technology. We'll watch stablecoin in the same way around acceptance.

If you go into the second set, I think any company that isn't using it for internal money movement or to operate in a 24/7 way when certain currency markets don't have liquidity, certain currency markets are closed. Stablecoin provides a huge opportunity to become more efficient, 7 days a week as money is crossing borders in your kind of treasury and operations. And so you can expect us to be investing in that and to gain some efficiencies there.

And then the third area is around settlement. Don't have huge demand, right? Most of our clients are in pretty major countries and markets. We haven't seen a shift for our clients. Again, a lot of our clients are enterprise $100,000-plus ARR clients for us a year. The demand for them to settle in stablecoin isn't huge yet but it's another thing we're monitoring, right? I think you'll see that a lot in small businesses, especially small businesses, operating around the world. So you'll see that differently in companies that service that sector. where if you're in a country like Pakistan or India or somewhere, you may want to get settled in stablecoin, but it's not something our clients, major universities, large businesses have really asked us for yet.

Got it. So demand is not there. Economics have been good so far from what you've seen. And I think that's been the lesson, right? It's not -- right, Mike, it's not -- money movement is not the value, and what you do is all the complexity around what you do...

For sure. I think any time you see a new method. And again, we've seen this -- you saw it from some of the remittance players last 15 years, like the cost of money movement goes to 0, right? Like we've talked about our stable spreads for over 8 years with public disclosures. If you look at what the cost is in kind of complexity in global payments, it's actually more in identity and risk than in operations, then it actually is in the conversion of currency.

Once you get to a certain scale, you're converting currency even through the traditional banks system at a couple of basis points, right? So it becomes the value equation of what are you providing to either the consumer, the business that you're serving and what's the risk and operational demands to run a good compliant, safe business. And there's a cost to that. And until whether it's crypto, whether it's stablecoin or whether it's something new, solves identity and money movement and risk.

And oh yes, by the way, it has to also solve global government regulation, right? So it has to magically allow the governments in China and India. And South Korea and Argentina to magically let money leave their country without any regulatory checks on that, right? Like you're not going to remove all the cost because it's in operations, it's in compliance and it's in risk. And so it isn't actually just the conversion economics that are costly. They're actually not that costly through traditional bank rails.

Well, said. Just to wrap that up then you did mention it in your second point just around efficiency around an settlement and the whole treasury services function and whatnot. Do you see it potentially having some structural benefit to margins at some point for Flywire?

I think for us, movement, being able to move money on a -- after a market is closed on a Friday and have it sit in a Flywire account for 2 or 3 days before payout, I think those types of things increasing kind of money that's kind of coming through our system and putting more inside Flywire network. I think it has real potential to do that or improve economics because, again, in some of these markets, once those markets close, you can kind of trade the currencies. You're just paying a higher rate in trying to get that money there on a Friday or a Saturday versus get there on Monday.

And so if stablecoins provide, we've built a payment platform that's already done this across banks, meaning we source different FX rates by bank, we'll actually engage and trade that currency via different bank connections based upon speed, based upon economics. And you can imagine, we're adding kind of stable coin rail to do that same thing. So if we get a better price, if we get a better speed, imagine our platform kind of executing that just seamlessly.

Yes. I'm hearing you describe it that way, it makes sense, right, why you're pushing into B2B, and that's your right to win on that category, just wrapping it all together.

Pretty much out of time. Just trying to think of just a way to close it out, Mike. I know you're working on a lot of different things. We talked about the strategic review and the 4 main lines of business. What are you excited about maybe the way that you talk about? What are the one or two things you're most excited about? What do you think will be talking about? Hopefully, I have you back here next year to highlight or to lead the discussion upfront. What would you call out for the audience here?

I think for us, we've started really strong for the year. I think, as I mentioned before, we've navigated lots of uncertainty in our largest market. We've continued to gain share. We continue to become more efficient. It was 300 basis points EBITDA margin expansion last year. We've guided 275 this year. We're showing we can become more efficient of a business. And oh yes, by the way, we're still transforming the organization.

Underlying systems, data, AI, all making us set up for more scale and more growth. And so to have a company that's doing as well financially as we're doing that's culturally a great place to also be and yet you're gaining share, your customers like you, you're becoming financially more efficient and more profitable. And you get the opportunity to invest in the business and transform and set yourself up for future growth, it's pretty cool. It's pretty cool to be able to do all those things, especially in an uncertain time.

Yes. No, it's been fun to cover it and follow it and see it evolve and like you said, mature since the IPO. So I appreciate the update. Mike. It's a pleasure.

Yes. Thanks for having me. Appreciate it.

Good day, and welcome to Flywire's First Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note, this call is being recorded.

I would now like to turn the call over to Masha Kahn, Investor Relations. Please go ahead.

Thank you, and good afternoon. With us today are Mike Massaro, Chief Executive Officer; Rob Orgel, President and Chief Operating Officer; and Cosmin Pitigoi, Chief Financial Officer.

Our first quarter 2016 earnings press release, supplemental presentation and when filed, Form 10-Q are available ir.flywire.com.

Today's call is being recorded and will be available for replay on our website. During the call, we'll be discussing certain forward-looking information. Actual results could differ materially from those contemplated by these statements. In addition, unless otherwise indicated, all financial measures discussed on this conference call are non-GAAP financial measures. Please refer to our press release and SEC filings for more information on the risks related to forward-looking statements and the required reconciliations of non-GAAP financial measures.

With that, I'll turn the call over to Mike.

Thank you, Masha, and thanks to everyone for joining us here today. It was a great quarter with significant growth and a beat on both the top and bottom line, with broad-based outperformance across education, travel, health care and B2B.

We are building for scale while driving efficiencies into our operations. Our product and tech organization continues to generate high-quality, high-value, differentiated products and services. And our go-to-market teams continue to sign meaningful enterprise deals, while also landing and expanding across our global client base.

We are executing against our multiyear strategy to deliver $1 billion in revenue with impressive financial metrics, and I want to spend a moment on why those metrics keep improving. We go where others are unable or unwilling to go. Most companies are built for simplicity, ours is built for complexity, multicurrency, multi-method, multi-rail, deeply integrated, sector-specific payments and software at scale. This is what Flywire is built for. Every new payment method, every new regulatory layer, every new integration only strengthens our differentiated position. The heart of the workflow, the fewer companies can follow, and that is exactly where we specialize.

This is what defines our moat. We have proven the thesis and the execution continues to improve. We are signing larger clients, growing volumes and product attach rates within existing relationships. Our momentum is yet another proof point. When clients stay, expand and refer others to Flywire, the market is telling you clearly our model works. And the total addressable market continues to expand. 3 years ago, Flywire is primarily a cross-border payments provider. Today, we serve the full suite of domestic and international payment flows across major geographies. And in educational loan, that expansion has grown our addressable market, roughly tenfold. Many of our existing clients are still cross-border only, moving them towards processing 100% of their payment volume through Flywire is a growth engine that lives within our installed base, independent of macro conditions.

Let me walk you through 4 priorities, each designed to build long-term value. First, optimizing and strengthening the core platform. The most important thing to understand about our platform is that it gets more efficient as it scales. As payment volume grows, our routing intelligence improves, banking relationships deepen, cost per transaction declines. This is not static infrastructure. It is a network that becomes more valuable with every new corridor, every new client and every new additional dollar of volume we process.

To put that in concrete terms, our payment platform today moves well over $30 billion per year, adds value to clients in more than 50 countries and accepts payments from 240 countries and territories. That scale funds better banking relationships, better routing economics and better localized experiences than a smaller platform can replicate. More volume improves the network, a better network attracts more clients, more clients deepen the integrations and deeper integrations make us harder to displace. And every capability we build, whether in education, travel, B2B or health care, becomes part of our shared platform designed to compound across every vertical.

Our second priority is accelerating our revenue flywheel. We are seeing clear acceleration across our go-to-market motion. We are seeing bigger deals, more enterprise wins and time to signature is decreasing. Across every vertical, clients get more. More conversion, more AR visibility, more staff time on high-value work and less of everything that slows them down. Fewer payment failures, less reconciliation burden, less bad debt, less inbound questions. That ROI is what drives retention and retention drives expansion. Our land and expand strategy drives gross profit growth and paired with very low revenue churn across education and travel, it reflects a platform that once adopted, becomes foundational infrastructure for our clients.

Our third priority is innovating to deepen our ownership of critical workflows. What keeps clients with us is not just the payment, it is everything Flywire does around it, the software, the workflow, the visibility, the operational efficiency. We are continuously expanding our software platform to reduce operational burden and strengthen revenue management for our clients. This quarter in education alone, we enhanced our solution capabilities to better automate student communications, improve due date visibility and scaled our U.S. loan disbursements for U.K. institutions. Similar innovation is happening across every vertical, in health care, travel, B2B, we are removing the complex workflows that our clients have managed manually for years. Clients trust Flywire with their most critical workflows and look to us to deliver new products, features, and payment methods.

One of our key moats is the network of integrations, compliance infrastructure and operational connections around the transactions, embedded into ERP systems, bank networks and systems of record in ways that are genuinely hard to displace. As payment complexity increases, our relevance grows because clients do not want to solve orchestration, reconciliation and compliance themselves, they want a trusted platform that absorbed that and streamlines operations for them. That is exactly what Flywire does.

And our fourth and last priority, AI is an enabler for Flywire, not a threat. AI increases the value of whoever owns the workflow and the data. At Flywire, we own both. Generic AI solutions do not have our transactional data across education, health care, travel and B2B. They cannot replicate our deep ERP integrations and our regulatory licensing or the years of client-specific behavior data that underpin what we do. So as AI becomes more powerful as a category, we believe our position becomes more valuable to our clients, not less.

We are also already seeing internal AI benefits emerge in our cost structure, and the opportunity ahead is significant. We've seen approximately 40% of customer inquiries auto resolved without human intervention, with 30% reduction in support handling time and cost per contact. We are also seeing faster onboarding, thanks to AI-assisted implementations and increased throughput without a linear increase to head count.

Across the business, the impact is broad. Engineering teams shipping code faster, product teams innovating more quickly and incorporating client feedback more rapidly. And a finance team automating routine analysis so they can focus on higher judgment work. These improvements are already happening even while we continue our enterprise-wide digital transformation. Rearchitecting not just our underlying operating systems and data, but also our organization, process working end to end with an agentic AI future in mind. The winners in an AI-driven world will be platforms that own the workflow, the data and the client relationships, delivering results and doing so more efficiently than ever. That is the future of Flywire.

So let me leave you with what defines Flywire. We run toward complexity. We operate a network of global and local payment methods, coupled with regulatory expertise all around the world. We manage the deep software integrations that most payment companies cannot build and most software companies cannot operate. We have built the capability, the team and the infrastructure to go exactly where others cannot or will not follow. We focus on underserved large industries, education, travel, health care and B2B which have massive addressable markets with long-term structural growth tailwinds.

These are not cyclical bets. They are durable expanding opportunities and Flywire is built to capture them at scale. And we deliver innovative technology paired with exceptional client service, removing complexity for our clients so they can focus on their mission while fundamentally improving how they get paid. Flywire is uniquely positioned to do this, our industry-leading software, our global payments platform and our fly mates, genuine experts in the industries we serve, who execute every day to deliver real outcomes for our clients. That combination is rare. It is hard to replicate. It is what gives us confidence in where Flywire is headed.

Rob will now take you through the further evidence of what I've described, the wins, the go-lives and the client outcomes that are compounding into durable growth. Rob?

Thanks, Mike. The pattern across our business is consistent. We go where payment workflows are fragmented and operationally intensive. We embed deeply and we expand as clients consolidate more of their financial operations onto our platform.

Let me walk you through 3 themes that define Q1: strategic vendor consolidation of these workflows, geographic diversification beyond traditional markets and accelerated software-led monetization across travel, B2B and beyond.

Let me start with vendor consolidation. Clients are choosing to consolidate fragmented financial workflows onto a single trusted platform. We are leveraging this dynamic across our verticals and the reason we win is that we are the only platform that can handle all the complex workflows they need. As an example, Cornell University has committed to a long-term agreement for our full student financial software suite. Cornell is a large institution, tens of thousands of students, significant national enrollment, multiple funding sources, including sponsor billing and loan disbursements and a collections operation that touches separate debt types simultaneously. They are consolidating their billing, payments, payment plans, refunds and collection processes onto a unified global platform that only Flywire can provide. This reduces the complexity and cost of managing multiple fragmented vendors while giving Cornell a simpler, more automated and uniform view of their student financial activity.

In the U.K., our SFS is delivering measurable results at institutions facing similar operational challenges. Kingston University reduced manual financial suspensions by over 30% this quarter through automated workflow management. We signed 3 additional U.K. SFS clients this quarter all attracted by our ability to manage their unique operational needs. Separately, the University of Edinburgh, one of our largest U.K. cross-border clients, achieved approximately GBP 1 million in savings in under a year by consolidating their international tuition flows and doing reconciliation via our platform.

In health care, we expanded with Endeavor Health, where we are now managing their pre-service, point of service and post-service patient payments deeply integrated with Epic across this multisystem organization. Endeavor operates across multiple hospitals and care sites, each with its own billing environment and requiring us to support a high degree of specialized workflows. And our certified integrations with Epic, Cerner and Oracle, combined with our regulatorily compliant vertical software workflows are barriers that keep most payment providers out of this market.

The second thing we are seeing clearly reaffirmed in 2026 is the demand for our solutions is truly global. Using education as an example, our solutions are proving themselves outside of our traditional big 4 markets, being the U.S., the U.K., Canada and Australia. Education revenue outside those markets grew over 40% year-over-year in Q1 and more than 60% of new education clients signed were from outside the big for. In Europe, we are seeing momentum in Germany, Spain, Italy and other markets as international students continue to diversify destination markets. These are not simple markets to operate in. Each requires navigating local requirements, including integrations, translations, reconciliation requirements and payments infrastructure. Institutions need a platform that can absorb that layered complexity and that is what we provide.

In Asia, we are seeing the same strong demand. This quarter, we went live with a top global university in Singapore and now have the majority of the country's universities using Flywire. Singaporean institutions are managing multiple currencies, regional payment rails and local compliance requirements on top of international tuition flows. Having the majority of this market using our platform also creates compounding network effects. That shared corridor economics, deeper regional banking relationships and routing intelligence that improves with every additional dollar of volume we process there. We see lots of needs in Singapore and many other markets that are addressed by our software capabilities.

Wrapping up my comments on why we win in global education. In Canada, where the broader market remains under pressure, our revenue has turned positive as we continue to expand our installed base and win competitive RFPs. This quarter, for example, we started processing payments for University of Calgary, a major Canadian university with over 30,000 students, and we see continued opportunity to take share in that market.

Finally, our software-led approach has been a key catalyst for capturing and monetizing payment volume. In travel, our hospitality solutions, formerly branded, Sertifi, are continuing to grow well. Payment attachment is increasing and more volume is routing through Flywire as we replace legacy gateway processors with our solution. The complexity these clients face is specific to high-value hospitality, contracts involving multiple signatories, card-not-present fraud prevention, multicurrency deposits, refund and charge-back management across jurisdictions and reconciliation against property management systems. All workflows a generic payment gateway was never designed to handle.

Unlike a gateway, we sit inside the contract workflow itself. Our sign and pay capability collapses the contract and payment into one moment. The client signs, the payment is captured, the booking is confirmed. For operators running high-value cross-border transactions, that reduces charge-back exposure at the point of transaction. A level of workflow ownership no generalist processor can replicate. We estimate there is still an additional $2.5 billion of payment volume within our existing U.S. hospitality clients alone that we can capture. And we are investing also in an international rollout this year as we see the same fragmented workflows exist in other major travel and hospitality markets.

In luxury and experiential travel, Q1 was our second largest quarter for ARR signings with 15 deals over $100,000. [ Car, golf and traveling to fairways, ] both left large horizontal processors for Flywire, drawn by operational efficiencies and the ability to replace a separate invoicing tool with a single workflow. The reason we win in luxury travel has not changed, competitive rates, automated reconciliation and a level of service generalist processors cannot match.

Software-led monetization is also working well in our B2B business. [ Studycast ], a cloud-based imaging workflow platform for health care came to us with unique invoicing scenarios across multiple markets. They were seeking to improve low cash flow visibility and improve an entirely manual AR process. We are giving them invoicing, payments and global settlement in one workflow, and that means automated reconciliation, faster collections and better working capital visibility. CMC and [ Lula Life ], 2 other clients that went live this quarter are variations of the same story. Complex billing and operations that are perfectly suited for Flywire.

Across every vertical, the logic is the same. We go where others are unwilling or unable to go. We embed deeply and our platform becomes critical infrastructure once deployed. Cosmin will show you what it looks like in the numbers. And with that, I'll turn it over to Cosmin.

Thanks, Rob. I'll detail our financial performance for Q1 2026, discuss our margin dynamics and provide our updated full year outlook.

Q1 performance strength was broad-based and results exceeded expectations. Total revenue reached $184 million, up 43% on a spot basis and 37% FX-neutral growth, including 7 points in organic contribution from Sertifi. Almost half of the 9-point outperformance versus the midpoint on an FX-neutral basis was driven by a strong January education peak in some of our core markets, with the remaining beat coming from strength in our travel segment, specifically hospitality, in particular, certified payments. In addition, we continued seeing stronger-than-expected payment processing volumes from Cleveland Clinic and invoice migration, which had approximately a mid-single-digit tailwind in Q1 and expect to be of similar magnitude in Q2.

Transaction revenue was $155 million, up 43% year-over-year. This was driven by a 45% growth in transaction payment volume with continued contribution from education, both cross-border and domestic as well as travel. As a reminder, quarter-to-quarter blended yields can vary with mix, especially as domestic payments ramp up. Higher domestic volumes and greater credit card penetration carry different economics than cross-border flows. On a like-for-like basis, pricing remains stable and competitive behavior continues to be disciplined. Our spreads reflect the value we deliver, compliance, reconciliation, ERP integrations and enterprise-grade infrastructure, not commodity payment processing.

Platform and other revenues were $29 million, up 40% year-over-year, primarily driven by growth in hospitality. Adjusted gross profit reached $110.5 million increasing 34% year-over-year at spot, including 3 tailwinds. Approximately 8 points inorganic contribution from Sertifi, a mid-single-digit points from FX translation and a high single-digit benefit from stronger education performance in January.

Importantly, this 34% gross profit dollar growth is successfully converting into adjusted EBITDA margin expansion, demonstrating real operating leverage. Adjusted EBITDA was $39 million resulting in a 21.4% margin expanding at 452 bps year-over-year, which was above the upper end of our guide. The strength in adjusted EBITDA reflects gross profit growth and continued operating leverage across every expense category as our non-GAAP operating expenses grew at a meaningfully slower rate than gross profit.

Our adjusted gross margin of 60.1% was down by approximately 400 basis points. Margin dynamics are driven by 3 factors: mix, FX and temporary large payment processing ramps, not competitive pressure. This quarter, the margin change was primarily driven by approximately 250 basis points from the mixed contribution of higher Cleveland Clinic and B2B invoice client payment revenues that began ramping in the second half of 2025. The balance of the margin change was due to continued vertical mix shifts. FX on settlement impact in Q1 was minimal on an absolute basis. But we did benefit from a favorable year-over-year comparison given the headwind we experienced in Q1 2025. Excluding the ramp activity, gross margin dynamics would be within our expected range. We emphasize that these ramp dynamics are temporary and will be largely complete by the end of 2026.

In Q1, we delivered GAAP net income of more than $12 million. It is a direct result of the operating leverage we have been building into this business, and we remain on track to grow GAAP net income by approximately 3 to 4x on a full year basis.

Turning to capital allocation. Our balance sheet remains strong with approximately $215 million in corporate cash, giving us significant financial flexibility while continuing to invest in the business. Today, we're announcing an accelerated share repurchase program of up to $50 million under our existing share repurchase authorization, the single largest capital return action in Flywire's history as a public company.

The ASR program reflects our conviction in the intrinsic value of the business and our view that the current share price represents a compelling opportunity. This is not a change in our growth investment philosophy. We're acting on mark at this location. The company intends to fund the ASR with available cash on hand. The ultimate amount and timing of repurchases will be informed by prevailing market conditions and price levels ensuring alignment with our return thresholds and broader capital allocation priorities, including continued investment in organic growth and selective M&A. Since launching the repurchase program, we have now deployed $128 million in total share buybacks, which represents the majority of free cash flow over that time period. A track record of consistent execution, not episodic activity.

Moving to guidance. We are raising both revenue and EBITDA guidance for the full year 2026. We now expect 18% to 24% FX-neutral revenue growth with approximately 3 to 4 points from payment processing ramps in B2B and health care, mostly benefiting the first half of the year. And roughly 1.5 points of inorganic contribution as we lap Sertifi. Adjusted gross profit is expected to grow just above the mid-teens year-over-year at spot. We expect approximately 175 to 375 basis points of full year EBITDA margin expansion, reaching approximately 22.8% at the midpoint. Stock-based compensation remains targeted at approximately 10% of revenue, while we continue managing growth and net dilution in a disciplined manner. And anticipates free cash flow conversion of 70% to 75% of adjusted EBITDA. Our Q1 outperformance flows through to upgraded full year 2026 guidance.

Before I walk through the details, I want to flag one shaping dynamic. Second half revenue growth is expected to decelerate relative to the first half, not because of any change in the underlying business, but because we are anniversarying the Cleveland Clinic and invoice payment volume ramps from the second half of 2025. Gross profit growth is less affected given the margin profile of that revenue.

On macro, we are not changing our underlying assumptions. While Q1 benefited from a strong January education peak and favorable timing that we view as nonrecurring, we continue to expect performance to normalize over the remainder of the year as we remain prudent and data dependent. For Q2 2026, we expect FX-neutral revenue growth of 18% to 24%. As we indicated last quarter, growth will moderate from Q1 as Sertifi laps out. But underlying organic momentum remains solid. At current spot rates, we anticipate 1 point of FX tailwinds. Gross profit dollar growth is expected in the mid-teens range at spot rate including low single-digit estimated benefit from FX on settlement year-over-year dynamics. Adjusted EBITDA margin is expected to expand by approximately 75 basis points year-over-year at the midpoint of our guidance.

Following a very strong Q1 margin expansion, the Q2 expansion is modestly below our typical annual expansion rate, reflecting 2 dynamics. First, we're lapping the restructuring actions we took the first quarter of 2025, which created a more favorable cost base than the prior year period in Q2. And second, we're making deliberate investments in domestic expansion growth, data and AI infrastructure alongside scaling Sertifi beyond the historically U.S.-focused business into a global platform as part of our broader hospitality strategy, all high conviction long-term priorities. Note that Q2 is our seasonally lowest revenue and EBITDA quarter with margin expansion weighted to the back half of the year as revenue scales seasonally.

In closing, Q1 demonstrates the durability of our diversified platform, the scalability of our operating model and our continued commitment to disciplined capital allocation. As Mike described, we are actively embedding AI and automation across our operations. We structured AI governance at the executive level to accelerate adoption and rigor.

Having spent 2 decades believing in the power of data architecture and machine learning to empower people, today, that conviction is being supercharged by AI agents that are profoundly enhancing our human capabilities across the business. One of the core principles of the enterprise-wide digital transformation program is the concept of democratizing [ Sertifi ] data, making accurate structured data available to everyone across the organization, both our people and AI agents working side by side. We are actively investing in the capabilities our teams need to thrive in an AI-augmented environment, and we are being equally deliberate about aligning our organizational structure.

The goal is an organization that is faster, more scalable and structurally better suited to the next phase of Flywire's growth. We're redesigning how work gets done from the ground up, not layering new tools on to old workflows. This is the hardest part of any transformation and where the greatest long-term efficiency and scalability gains will be realized. In sales and marketing, this will enable us to match the right product to the right client with greater precision and less resource strain and our sales reps to become even more productive with more revenue per rep and shorter sales cycles. In R&D and product, it enables us to iterate and innovate faster for our clients. And in G&A, we see the longest runway ahead. We're rearchitecting these functions from the ground up to be agent ready and we expect the productivity gains to be meaningful as that infrastructure matures.

As gross profit continues to grow faster than OpEx over time, the operating leverage is driving our EBITDA margin expansion, and we expect to continue as growth and profitability reinforce each other. By normalizing our foundation, embedding AI natively and rearchitecting our systems and how we operate, we are structurally lowering the cost of scale while expanding our capacity to grow. Q1 is evidence. The model is already working, and our digital transformation is how we make it more durable at scale.

I'll now turn it back to the operator for questions. Operator?

[Operator Instructions] Our first question comes from Ken Suchoski with Autonomous Research.

Really good results here. I just wanted to dig into the success in the non-Big 4 education markets. I think I heard 40% revenue growth, 60% of new clients coming from these markets. So are these just less penetrated? Are you taking more share? Or maybe it's a smaller base, but any additional detail there would be great.

Ken, it's Rob here, and I'm happy to take this one. You're right, we called out the success in the non-Big 4 markets. And really, it's the product of our strategy and our capabilities, combined with a lot of market opportunity out there. So if you think about what we can bring to those markets, right, it's the distinctive software capabilities, all of the global payment network. The solution tailored for the industry. And in those markets, they don't tend to have somebody who looks like us can do the kinds of things we do. And so take that combine it with a team that's local, a customer service capability that's local and suits them, and we really have a distinctively strong capability I'd remind you that for even more of those places, we've expanded this capability. It's not just cross-border, it's domestic plus cross-border in a lot of the major markets. And so it's a set of markets that we're really excited about, especially as students overall diversify their destinations.

Okay. Great. That's really helpful. And then maybe just on Sertifi, I think you talked about scaling that business sort of outside the U.S. and taking that global. Maybe just give us an update there. What are the actions you're taking? I mean, which markets you're looking to prioritize and what the road map is there.

Ken, this is Mike. So on the hospitality business, I mean, I think the synergies still are very clear as they were at the time of deal, right, which is monetize more payment volume that sits next to the hospitality software that Sertifi had and prepare the platform and take it global to hospitality clients all over the world. And so that second one is on track. A lot of great work done by the tech teams to kind of integrate travel capabilities from the core Flywire travel business as well as the hospitality side. And that team is being built out and super excited to continue that international expansion. Specifically, probably think of us as going to Europe. It's a big area for us, obviously, with our existing travel business in Southeast Asia, in particular, being our kind of 2 geographies that we'd expect most of that growth to be coming from in the short term, but it is a multiyear strategy.

Our next question comes from Tien-Tsin Huang with JPMorgan.

Great results. Thinking about the second quarter margin variance. I know you talked about there a little bit, but I'm just curious, is that mostly discretionary on your part from an investing standpoint? What would drive you to go ahead and invest more? I'm sure that would translate into a pretty fast return if you did that. So I'm just trying to better understand the puts and takes around where you might land and what would drive that?

Yes. Thanks, Tien-Tsin. This is Cosmin. So following a very strong Q1, even in Q2, we were investing obviously modestly around some of the high conviction areas that we've seen. But as you've seen us for the rest of the year, we're expecting to see margins expand even more so and raise the full year outlook. And so feel good about the investments and the return of those. And so -- and plus, I would remind you just from last year, we're lapping some of those one-offs. But in general, Q2 is pretty small. So on a very small base, overall, as you saw in my prepared remarks, in terms of the EBITDA number there.

Got it. No, that makes sense. And then Mike and Rob, you both talked about enterprise wins and competing for larger deals. I know you're comping out Cleveland Clinic. Just in general, do you feel like there's some, I don't want to call them gorillas, but just larger deals like that in the pipeline that you're seeing, maybe that's a little bit different than maybe this time last year.

So we're overall really pleased with the quality of pipeline growth. We're pleased with the size of deals. We called out the deal size growth here in Q1. Want to be careful making reference to clients like Cleveland Clinic and so on, like that's obviously -- I know exactly what animal you just referenced, but it's a very, very big animal. And so we don't sort of call that out as being the norm. But overall, we're very happy with the quality of pipeline, and we're pursuing a lot of great accounts.

Our next question comes from Dan Perlin with RBC Capital Markets.

Again, great results. Mike, I just want to go back to the original topics you're going to run through and the one that kind of stood out again is kind of vendor consolidation becoming more of a, I think, a consistent theme I think you always thought that was going to be kind of the case, but it does feel like it's picked up some, I guess, velocity here over the past several quarters. And I'm wondering, is that a function of your go-to-market motion? Is it like the density in market and people are increasingly recognizing your capabilities, I guess, holistically. I'm just trying to get a sense of where that might help in itself going forward.

Sure, Dan. Yes. I think it's a combination of things. I think, obviously, we sit in an area where we're dealing with lots of complexity. We're offloading that for our customers. And when you do that, they trust you to do more. And so I would say the more problems we solve, the more they come to us looking for other opportunities to leverage Flywire technology. I think that's probably the first one.

The other thing I would just say is in this age of right? A lot of people talk about kind of disruption from AI, but like if you innovate, if you deliver value, leveraging this technology, customers see that value. They want to work with you more. And I think for us, our teams are moving faster. They're delivering better results. They're delivering great client experiences, when their payers have challenges, we're there to help. And I think all those things are just driving people to realize all the potential they have to work more with Flywire and I think that's what you're likely to see, right? We're sitting there with the regulated infrastructure to process complex payments, and we have industry-leading software, and we have an amazing team. And I think that combination is really powerful and hard to beat.

Yes. Totally makes sense. Just a quick one on travel, Understanding that you guys obviously tilt more towards affluent travelers. But have you seen any evidence that higher oil prices or jet fuel or any of those things are putting any kind of organic crimp. I mean, obviously, there's kind of some noncyclical overlays just given the pace of wins that you guys have in that business that would mask it. But like if you thought about it on a same-store basis, are you seeing anything creep in yet?

Yes. So this is Mike again. I haven't seen anything creep in. Obviously, Q1 was good, as Cosmin mentioned in travel. I would say, I'd just point obviously something that causes us to continue to be prudent in how we talk about the year. It's early in the year. You started to hear a little bit of disruption around oil availability for airplane travel. It's something we're watching closely. haven't seen any impacts yet. Again, you're exactly right. We're dealing typically with a luxury traveler. And if they've kind of committed to this once in a lifetime or big trip a year, if something changes in their logistics, they're probably going to figure out how to go a little earlier or adjust around some of those changes. And so that's our expectation. Our clients haven't seen any hit yet. But obviously, the world is quite dynamic, and we continue to be prudent in how we talk about the year.

Our next question comes from Chris Kennedy with William Blair.

Cosmin, thanks for the comments on the data platform initiative. Is there a way to think about kind of where we are in that journey and when most of the benefits that you talked about will be fully realized?

Chris, thanks for the question. And certainly, as you can probably tell, a very exciting and passionate kind of area for me. So we're sort of, I would say, we're past the early innings. We're certainly deepened already in sort of the architecture and systems integration side. And we have a very ambitious -- one of the reasons you see G&A, that area kind of investments. This is where we're putting a lot of investments there. So already kind of lost to the races and expect as you get into next year, a lot of that platform around the data and the systems architecture and the capabilities will be built out, but we're actually seeing some early results even now we're doing some work around how we manage vendors internally, how we manage a lot of our processes.

So you're seeing some of that already play out, but I would say exiting this year into next year, you'll see a lot more. And I think with the launch of some of the new tools certainly Claude, as many of us here are using that on a daily, hourly basis. The sort of acceleration and amplification of the impact of what we're putting in place. We're even more excited about it. So look forward to that.

Great. And then it was great to see the Penn State win. Can you just talk about kind of the traction or the momentum that you guys have for SFS in the U.S.?

Yes, I can take that. This is Rob. As you called out, we announced the go-live for Penn State. Just recently, we announced Cornell today, along with [ Wagler ]. We've announced a number of other wins over recent quarters here in the U.S. And I think there's a bunch of things going on that are helping us build this momentum, right? So there is this theme of vendor consolidation that is strong, and I referenced there's a strong push for modernization that's happening inside our client base, particularly inside U.S., [indiscernible], EU.

And I think the third thing that's happening that I'd call out is sort of our reference base of clients is growing. So sort of our reputation and our standing in the segment continues to improve as the premier provider of SFS and domestic type capabilities. That, along with the skill of our team is all what's driving our momentum.

Our next question comes from Michael Infante with Morgan Stanley.

Can you just break down what you're seeing with respect to payer retention at schools that are only using cross-border payments versus schools that have adopted domestic payments and SFS, are you beginning to see evidence that SFS is improving payer retention, just given the traction that you guys are seeing on the net new side.

Yes. So this is Mike, and I'll [ let Cosmin make ] some comments, too, about the different cohorts of users as well, but I'll let him jump in on later. But I would just say, in general, remember, when you get SFS, you get all the volume, right? You're getting all the tuition dollars, whether they're coming in, be a cross-border, whether they're coming in domestically. And so for us, the core strategy is to own that student account portal. And if you own that student account portal, you get full utilization. And so obviously, as you're dealing with just a cross-border solution, you're getting a percentage of that, Cosmin's spoken in the past about what that is. I'll let him comment.

Yes. So if you look -- because one of the questions we always get is around the U.S. in particular. So in the U.S., you can think of the U.S. revenues, for example, last year, about 1/3, 1/3 is first year, 1/3 is first years of international, about 1/3 that are sort of every other cohort, if you will, international and another 1/3 is domestic.

So that 1/3 of first year and existing cohort of international students, we see, as Mike said, the continued retention from that comes from a few different sources. One, we talk about the domestic expansion. So the more SFS, domestic full suite we have, the bed that retention gets Second, we obviously can improve user experience and as we work on that. So that is also the second thing. And then third is all of our banking partnerships in those source markets help us to improve that retention. Now we don't have a lot of that necessarily baked into guidance. We're taking a prudent approach with that. But we're seeing good trends around retention and overall, feel good about the mix of the different cohorts over time, even with, again, I'm sure the pressure on that first year part of it.

That's helpful. And then maybe just on the macro side of the equation, obviously, you saw the reiterated assumptions on some of the Visa trends. Can you just sort of level set with us in terms of what you're seeing by market? It looks like the U.S. and Australia broadly tracking with those expectations, maybe the U.K. and Canada, a little bit soft. Just what are you sort of seeing with respect to things like deposit trends and your conversations with schools and agents?

Yes, I can start. So yes, our macro assumptions haven't changed. So for the U.S., while even last year, we didn't see much above sort of 20% as you're getting to the mid part of the year into September. For U.S., we've assumed Visa is down 30%, which is quite prudent as we look into it. Look, we've looked at some of our data. And if you look at some of the application data, it's down sort of in the high single digits as we've mentioned before, -- not yet, and again, you saw the performance in Q1 quite strong, but we're not counting on that for the rest of the year.

We're taking a prudent approach as we think about the Q3 peak. So that's in the U.S. And certainly, lots of headlines, lots of headlines everywhere technically, but we've taken a pretty prudent approach across the board. Canada again, coming off several years of being down almost 60%, we've assumed down 10%. Again, lots of headlines there, too, but so far, we feel pretty good about our path to basically continuing to -- now that market actually growing again for us, which is great to see, and again, driven by a lot of our new client wins. And then U.K., Australia, roughly flat Visas, again, some headlines there, but overall, both of those markets are growing faster than the Visa trends, which is kind of what we normally watch for. So hopefully, that's helpful.

Our next question comes from Jeff Cantwell with Seaport Research.

I apologize if I missed this earlier. I want to see if you could elaborate maybe a little bit more on RLAS growth which grew faster than your TPV growth this quarter, that was by over 600 basis points. What are you seeing in terms of the underlying strength in [ your RLAS ] analyst growth across your 4 businesses that are the biggest drivers of that? And could you maybe help us understand on your outlook for the remainder of the year? How durable is that spread between RLAS growth and volume growth? Or what are the main things to be thinking about?

Jeff, thanks for the question. Yes. So in general, when we look at the spreads, still pretty stable overall, as you saw in my prepared remarks, Q1 was a slight jump, but as you've seen in the past, there's volatility from one quarter to another in that number. But overall, we feel pretty good about the -- it is not necessarily an impact of pricing, for competitive pricing specifically, but really it's a mix effect. So overall, spreads are pretty stable and feel good where we -- as we look ahead for the rest of the year.

Great. Okay. And then if I could just squeeze in a quick follow-up. On AI, I'm curious if you guys are thinking about that as an OpEx opportunity as well. We're seeing some of the payments companies, payment software companies start to rationalize some of their OpEx lines in the spirit of we are finding efficiencies on the side of things. I'm just curious what your thoughts are there? And maybe if you're seeing some opportunities as you think out over the next, call it, either 2 years and so forth.

Jeff, it's Mike. So I think there's huge opportunity for us internally and externally. So if you look at internally, imagine, we've all various teams inside Flywire leveraging it, whether it's product designs faster, whether it's development faster, whether it's -- we have some great stats on the call around customer support in ways we're leveraging it. So I think every company has to be looking at a world in which they're going to become more efficient. They're going to be able to do more with less as they grow their business over the next couple of years, and that's how we're thinking about it here at Flywire.

So I'd say we're definitely thinking about it. I share Cosmin's excitement about the data and the transformation efforts we have at the system layer and being able to do that at a time when so much is emerging around AI, it's really -- it's a lot of fun running a company when you have all those different tools at your disposal.

Our next question comes from Nate Svensson with Deutsche Bank.

[indiscernible]. Want to follow up on a couple of questions that have been asked earlier. First on SFS, obviously, nice to see all the new wins. I was hoping you could remind us on how long it takes for the SFS deals for wrap once you sign them. I think the typical contract is something like a low single-digit million revenue contributor on an annual basis. Maybe that old commentary was U.K. specific. So you can correct me if I'm wrong there. But really just wondering how long it takes for these wins from 1Q to ramp then fully flow through to the P&L for the year.

Nate, it's Rob here. So from the time of a client go live, we would expect that ramp to essentially initiate right away, but to get to the full maturity, what we would call the target ARR in the way we look at these things. you'd expect that to take you well into the second year, right? You've kind of got the adoption and learning cycle that comes with the payment plans. You've got the full rollout of all the other capabilities that may follow the initial launch. So that's the -- that's kind of the range of time frame that we'd be focused on for achieving the significant majority of that would be the target ARR.

Got it. Helpful. And then I did want to ask for a little more color on the January education outperformance. I think you had called out that it was some of your key markets. So I assume that's Big 4, but I was hoping for a little more specifics there. I know Canada returned to growth in 1Q, but I don't know if that was a driver of the outperformance relative to expectation or if there was better performance in some of the other markets, U.S., U.K., Australia that caused you to call out January specifically?

Yes. It's your latter. So it's actually -- it's U.S. and U.K. with a bit of Australia. We saw sort of strong from a destination market. And then -- and we saw that coming from across our main corridors that we usually see. We also saw some strong domestic performance within the U.K. where we continue seeing strong growth. So those are the markets, U.S., U.K., Australia with, again, kind of our main corridors and as far as the outperformance and a bit of the domestic performance in the U.K. And again, that's why we're also just being prudent. We're not flowing that through into the rest of the year, but feel good that we had that strong start to the year.

Our next question comes from Charles Nabhan with Stephens.

Congrats on the result. Good to see another strong quarter of bookings activity. I was hoping you could comment on the composition of those bookings as well as whether you're seeing any changes in the size of the new clients that you're bringing in?

This is Mike. So we're actually seeing a whole bunch of positive trends. So we even time to signature being faster, but deal size being up and the number also being up from prior quarters. So again, back to that kind of 200 range that we had talked about in previous quarters. So we feel good about all those metrics. Again, I think, Rob, mentioned a little bit earlier, just some of the reasons. Again, I think it's great execution by our go-to-market teams. I think you're seeing us continue to kind of cross-sell exceptionally well with that land and expand strategy, and I think that's what's driving it.

SGot it. And as a follow-up, you've announced a number of new integrations over the -- in partnerships over the past few quarters. And it sounds like you have the key ones in place like elution and [ Oracle, Workday ]. But Curious as we think about the medium- to long-term outlook of the business, how much opportunity is there to expand business through new integrations. If you could give us a sense for how we should think about that portion of the TAM, that would be helpful.

Yes. This is Rob. I can jump on that one. So there's really 2 dimensions that get us excited about the partnership piece. So first is having coverage across the key partners that really matter in our verticals. And so the most recent one that we announced was the partnership with Workday, which we are indeed very excited about. But that builds on successful capabilities we have across the other major systems in education namely [ Ellucian ] and PeopleSoft for Oracle or the Oracle Suite but know that we have partnerships in a whole bunch of other parts of the world that are relevant for the work that we do there. And so we take a lot of pride in the work that's done by that integration team and it's what helps make it possible for us to do things all around the world.

Our next question comes from Madison Suhr with Raymond James.

I wanted to start on the payment processing ramps. So you raised the expected contribution from 2% to 3% to 4% for the year. Just how much of that increase was driven by existing signings that you already have in place that are maybe going live more quickly or seeing greater volume than you initially thought versus how much of that incremental 150 basis points was driven by new customer signings throughout the quarter.

Madison, thank you. Yes, it is all the existing signings and it's really the Cleveland Clinic. And some of the B2B invoiced migration that we talked about. So as those existing ramps. Just obviously, you saw a much stronger Q1 performance from those coming through, and we expect that to continue into Q2 and then you sort of lap it as you get into the second half, but it's existing clients.

Okay. Got it. And then just a follow-up here on incremental margins. So it looks like the updated guide implies like a low to mid-30% incremental for the year. I understand that there's some investments in 2Q, but it does seem like the second half will need to step up even from 1Q levels. So Cosmin, maybe can you just help bridge what gives you the confidence that incremental margin should accelerate in the second half.

Yes. Thank you. Yes, partially, it's a dynamic of lapping last year. So we had a number of investments even in the second half of last year. And so we're lapping that. So that's why we feel good that we're going to see that acceleration into the second half and also just on the investments start to pay off. So I feel good about the sort of mid-30s for the year with higher kind of leaning into second half. And then 24% to 25% EBITDA margins into next year certainly look like well within our sights then as we exit this year with that kind of strength.

Our next question comes from Patrick Ennis with UBS.

So on Cleveland Clinic, I know you talked about maybe some higher margin revenue coming online in Q2. Just wanted to confirm that's still the case and should be supportive of gross margins, all else equal.

This is Rob. I can jump in there. You said that exactly right. So as we called out earlier in the explanation for the rollout plan for Cleveland Clinic, we went with the payment processing first and the software piece is what comes next. Still on track for Q2 launch. And just as you say, that improves the margin of the overall Cleveland Clinic opportunity.

Okay. Awesome. And then just on the hospitality business, I mean, impressive [ QTD ] growth there. Could you talk about maybe the success you're having in cross-selling payments into certified clients? And then maybe just talk more generically about what the net take rate looks like there compared to kind of maybe some of the more non cross-border-related volume you have, so domestic education, B2B, health care payment processing?

Yes. So this is Mike. I guess what I'll say is that was a core thesis when we acquired the Sertifi hospitality business, and I think the team is doing a great job executing, right? We knew that there was a lot of volume that was kind of going through that workflow in that software. And we knew with our kind of focus on our network, we could monetize more of that volume. And so the team is doing a great job doing it.

Plenty of room to go on that. It's a multiyear synergy that we've always talked about. And I would say you can think about that monetization as mostly being domestic. Remember, 20,000 hotel locations in the United States were the primary customer set of that. And as we go international, you can expect some of that to be a little more cross-border there. The U.S. volume does have some ACH [ and ] some card, but I think you can think about it kind of as domestic volume monetization initially with international expansion and expected more foreign exchange impacts potentially as we go international with that product.

Thank you. That's all the time we have for questions. This does conclude the question-and-answer session. You may now disconnect. Everyone, enjoy the rest of your day.

Thanks for joining us. 9:15, we're going to get started here. I'm Michael Infante, I'm an analyst covering fintech here at Morgan Stanley. Very pleased to be joined by Cosmin Pitigoi, Flywire's CFO. Before we get started here, I just have a quick disclosure to read. For important disclosures, please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures.

If you have any questions, please reach out to your Morgan Stanley sales representative. So with that out of the way, Cosmin, thanks for joining us.

Awesome. Thanks for having me.

So maybe before we get into the details, just stepping back to 2025, obviously, a lot of external noise around international student visa trends. You guys still ended up delivering 17% organic ROS growth and an average of about 6% estimate upside through the course of 2025. Maybe for those in the audience that are a little bit newer to the story, can you just sort of unpack what your initial assumptions were for revenue growth in some of your core education markets in 2025 relative to the results that you ended up delivering?

Yes. And I think to some extent, maybe we need to reintroduce ourselves a little bit because I think if you look over the last few years, we've just become -- and I've heard it from a lot of folks that we've been so much more diversified than if you think even 3 or 4 years ago, everyone thought of us as sort of a cross-border mostly education sort of business. And now we're diversified beyond just not just the cross-border business into other verticals that have become a bigger portion.

We've also seen a lot of growth on the domestic side, increasingly enterprise sized clients and increasingly more -- just more and more software than in the past. So we've certainly evolved from that and increasingly just talked a lot more about free cash flow and margins continue to do quite well. So that's sort of the backdrop of kind of how we've evolved. Now if you think, yes, to your point, so early 2025, certainly a lot of uncertainty in the environment. And so what we did was we took a very prudent approach given that to the guide.

And listen, at the time, what I said is I'm going to take sort of 3 principles. One is prudent; two is data dependent and very transparent. And so what we did is, yes, we assumed both Canada and Australia will be down around 30%. Now what we saw there is Canada was a little bit better than that, even though actually the visas were down more than that, we actually performed better than that. And then at the other extreme, Australia, where, again, looking at early trends in 2025, it looked like maybe it could have gone the same as Australia -- the same as Canada, it did not.

So actually, Australia was a growth market for us in 2025, and their visas actually are relatively flat. And so those are some of the drivers. But look, at the same time, what we also did is we took -- we assumed U.S. was going to be down. It didn't ended up being actually better and U.K. continued to outperform. At the same time, though, we really emphasized a lot of the sort of fundamental aspects of the business. So we did the restructuring. We announced that we're looking at sort of everything in the business, and we executed on a lot of those margin and cash driving components, which, again, these are the things that focus on what we can control to show the value in the business. And that's, I think, as you exit the year, we're not just more diversified, more of a margin-driving business, but also a much stronger kind of foundationally business exiting the year coming out of that.

That's helpful context. As we think about 2026 and the outlook that you just gave to investors, market by market, you expect U.S. visas for first year to be down about 30%, Canada to be down around 10% and U.K. and Australia to be flat, respectively. I know we're early in the year, but maybe you can help sort of investors understand how you sort of formulate some of those assumptions. What are you seeing on the ground in your own deposit data? What are the conversations with agents look like, et cetera?

Yes. So look, taking the same approach, again, sort of very prudent data dependent and transparent. So when we look at some of the assumptions around the U.S. being down 30%, right, we look at -- we talk to agents. Of course, we have our own agent networks. We talk to them. We look at common app data, which is available out there. So what we're hearing on the U.S., for example, is -- and you've seen this in the F1 data over the last couple of years, some pressure in the India channel. So sub students from India choosing to perhaps go to other locations. So we're seeing diversification, which again works kind of in our favor, too, because we have the footprint globally.

So we're seeing that a bit play out. It was already playing out in Canada. We saw that. It's -- and it's been playing out in the U.S. So -- and we look at common app data. It's a good indicator. Again, a lot of these things are indicators until you kind of see the actual seasonal peak play out. It's kind of tough to call how these things play out, and that's kind of the data-dependent piece of it. But look, at the end of the day, we're continuing to take a very prudent approach around it. And again, in Canada, we're assuming some small pressure there, but you've seen in all of these cases, we've taken a pretty prudent approach around the assumption, and then we'll see how things play out, and we'll update everyone.

But along the way, we are seeing students apply to more. So I guess the summary is students are applying to more destinations around the edges. Obviously, the big -- there's still -- there's a lot of demand for still international education in general because you're always going to have an imbalance of talent in different countries. And so I think -- and I still believe as -- including myself as an immigrant a little bit, but believe in the strength you build in your ability to attract the best talent to the country that you want to kind of -- especially as we're AI conference, tech talent and talent in general, I think, will be still a demand for it, but I think the diversification of those is kind of what we're seeing, especially from the India channel.

How about from the actual spread between your own visa assumptions and the revenue growth that you end up delivering, right? So if we break it down market by market, the spread between the U.S. visa degradation and your assumptions for U.S. revenue growth, it's in the low 30s percent range, right? If we take the Canada market, it's closer to 20%, U.K. similar in Australia, a little bit lower. So can you just sort of unpack why the spread between visas and revenue in the U.S. is so large and maybe why it's so narrow in Australia?

Yes. So let's start with that. So if I start with the U.S., that's our longest and most mature market. And so we've built many years of cohorts of students over time. And so the things that play into that are some of that retention of some of those cohorts as -- as you would realize, obviously, the visa component mostly impacts your first year kind of cohort. So the other cohorts and the retention of those offset some of that pressure. So when we talk about last year, assuming visas were down 20%, again, we're still waiting for the data, but just looking at our own data on first payers, so it's down in the sort of high teens. Offsetting that, we do see this retention aspect where about half of our revenue in cross-border U.S. comes from existing kind of cohorts and the other sort of less than half is from new.

And that enables us to then have improved or lower sort of impact from that. And then, of course, you have the tuition aspect where undergrad is still pretty demand, so higher tuition kind of opportunities. But also, we have other levers, right? So we continue gaining share. So we announced continue to win in cross-border. And then we have the domestic aspect in the U.S. where -- especially, I think we've sort of given these metrics, but specifically for 2025, if you look at the U.S. business, the domestic portion is in kind of low teens share of revenue -- sorry, the cross-border business is low teens share of revenue, while the domestic is sort of mid-single digits.

So that domestic portion is growing much faster and also, I'd say. So again, continuing to win enterprise SFS clients. So all of those things play out into that spread for the U.S. In Australia, it's a bit different. They have not seen as much even though we thought they would, but they haven't seen as much pressure on the Visa side. But we are -- we have larger clients there in particular. So -- and we also have an insurance business, if you recall, the Cohort Go acquisition. So that is impacted by sort of volume of students -- so all of that kind of plays into Australia having kind of a narrower spread.

Although if you think of 2025, if you assume visas are roughly flat in Australia, and we grew in the low teens. But again, Australia, we did -- the market did better than we thought, and we also did -- we had kind of a higher spread. But again, as we get into this year, we want to be prudent. Look, U.K. and then U.K. and sort of Canada is kind of a different aspect where U.K., we've continued to outperform significantly. The Visa market because we've got product is great, lots of interest, very different competitive dynamic.

And then in Canada has obviously just been very volatile. So we've continued to win share there. And we -- and now as they've come off of this volatile kind of time, we expect, as you can -- as you saw, with Visas down 10% to continue having that spread that kind of works in our favor. But that's where, again, it's sort of structural and share gains and more so than anything driving this.

Before we pivot to SFS, I just wanted to hit on the U.K. market in particular. One of the concerns that we tend to hear from investors about the U.K. specifically is sort of just looking at the major schools in terms of the composition of international students and investors coming to the conclusion that you already have a fair amount of those universities. So what would you sort of say to investors that are concerned about the client penetration levels within the U.K. and how you're thinking about incremental revenue growth in that market?

Yes. I mean, listen, if you look, we've heard this sort of question for several years. And to some extent, we did disclose the U.K. this year for the first time to show that it is not only our largest education market, but also growing at 25%, which is obviously ahead of company average. So still a lot of growth strength there, given the product penetration that we have there with the domestic business, I think -- and now with the cross-border and domestic together with SFS.

And so I think the right way to think about it is if you just look at number of clients or schools, what you're maybe missing is our penetration within those schools. And so the stat that we -- and so for us, there's the opportunity to sort of call it, if you think of it a share of the student financial flows at a particular school is more important than you could have all the schools, but if you don't have the full share within those schools, then that's less relevant.

So for us, the one metric to keep in mind is last year, I think we said about a dozen or so schools and now there's a bit more. We have about 90% of their student kind of financial flows. And so if you think of that, obviously, a dozen is obviously a pretty small number generally related to the entire market over there. So for us, that opportunity in the U.K. remains to continue gaining more share within those schools because we have those integrations that are very unique that no one else tends to have. So that's the way to think about it, and we'll continue to unpack that, but we feel the U.K. should continue to grow at pretty healthy rates. For this year, we said U.K. plus EMEA will grow at or above the company average.

Helpful. On the SFS product, what percentage of your education clients are using that product today? And how should we be thinking about SFS penetration as a percentage of education revenue and where you might expect that to go over the near to medium term?

Yes. In the U.S., we've given the stat where we have about 1,000 institutions on our sort of legacy cross-border. And by the way, we keep adding that. And then of those, we have about a 10% attach rate. So about 110 signed 13 SFS clients last year in the U.S., which is a record number for us, and we continue to see strong pipeline demand there as the perception of us has shifted from -- it used to be, again, it's not just, I think, the perception for, to some extent, shareholders and investors and others, but also, I think, for our clients is shifting from, oh, you're not just the cross-border provider, you can also do domestic.

So those conferences, and we had, again, our conference this week in the U.K. We have a similar one in the U.S. So we see that capture. But 10% adoption is still early. And in the U.K. is even sort of lower in the U.K., we started with. We have now 6 live on SFS with 4 kind of design partners. So where we kind of test the product and launch and the demand there is quite great. And again, U.S., we differentiate on a number of product and innovation capabilities. And so we continue to see a long runway there now that especially that kind of -- that mindset has shifted around kind of how people view us.

But continue to expect, like I said, in the U.S., even this year, if you're saying low single-digit growth despite a 30% visa, you have to assume that the domestic business is assumed to be growing pretty healthy. And again, that's us, again, remaining quite prudent around it, but the team is quite excited around the opportunity on SFS. It's a longer cycle, but we like it because then it's -- those clients stick with you for a very long time.

On the scaling cadence, how important is ERP coverage there to sort of scaling SFS? And what do you have to do internally from an integration milestone perspective to make sure that those integrations are in place and you can continue to get the attach that you want?

Yes. I mean the integration is an incredibly critical differentiator and that last mile of any payment that we always talk about is in many -- and for us, there's a last mile in both directions. There's the last mile as far as the university receiving that money and having to book it into a system of record and that system of record many times, again, we gave this picture of the U.K., for example, we have 4 or 5 different types of integrations and building those, whether it was Tribal, Unit4 (Aggresso), and now increasingly, you've heard us talk about Oracle Fusion.

All those are super critical, and they're difficult to build, and you have to actually work with those partners. So that creates a very unique differentiator for us. And then, by the way, on the customer side, providing the banking relationships on that side and being able to connect, again, that last mile on both sides is a big differentiator, but the ERP piece is very critical. Differentiator huge in the U.K. In the U.S., other -- our competitors have that also, but that's where kind of our product and innovation and sort of that's kind of what's been driving our differentiating factor there, too.

As students establish local banking relationships in years 2 to 4, you obviously have really healthy net revenue retention metrics even with the macro headwinds that you saw, still delivering 110% plus NRR. How do you think about that payer retention piece and just the dynamic of students establishing those local banking relationships and what you internally can do to drive higher share of wallet?

Yes. So NRR increasingly now as we diversify is obviously, there's a number of components driving it. But within education, we still see healthy retention and NRR because, one, you have on the enterprise side, obviously, you have very low churn, which plays into that. But yes, there's a few things that drive sort of student retention for us, and these are levers that we obviously push quite a lot to make sure that we do create these long-term relationships with the students.

So first, SFS adoption. So that is as you go from being just a cross-border provider to then processing kind of all the student flows, I think you see and we talked about it, and there's a few slides you can look at as far as how that plays out. But imagine it's sort of a 3 to 5x revenue multiplier and sort of a 2 to 3x gross profit multiplier as you shift. But we do see just more retention even in the cross-border students from first to second year because of that -- because we now sort of process their payments.

Then the second thing is managing sort of presentment at checkout. Obviously, we can always optimize that and provide a better experience for the student. And that's another way to obviously help manage that sort of retention. And then third, which again, is kind of unique to us is partnerships where our partnerships with the banks upfront. So that was kind of my point around the last mile on that side, where we have partnerships with the biggest banks in India, with banks in China and other places. So creating that sort of level of comfort with the student and knowing the name and feeling sort of safe with obviously your life savings in many cases that you're transferring creates that sort of, again, retention in future years for us.

That's helpful. Maybe pivoting to more thematic topics with both AI and stablecoins. As you sort of think about the opportunities and risk to Flywire from an AI perspective, how should we be thinking about things like your routing economics, some of the reconciliation productivity the efficiencies that you're seeing with the sales organization and customer support. Maybe just sort of like rank order some of the buckets where you see AI being a tailwind to the business and/or areas that you think sort of reinforce the stickiness of the platform?

Yes. I mean, as I said, I'm a data platform and machine learning sort of guy for over 20 years. So these are exciting times for me in terms of what you can do. I've always tried to automate myself if I can. And in every situation, and these are -- now you have the tools and the ability to move even faster. And look, I think of it as AI as sort of there's the fluency and then there's the accuracy aspect of it. So wherever there's a number of documents that need to be summarized and synthesized, those areas are going to be very quickly automated.

So for us, customer service is obviously the easiest first place to go. And so for us now, I think it's something like almost half of our calls are through kind of some sort of automation. Routing economics, although obviously, AI can accelerate this, that's been something that we've -- as being in payments for 20 years, that's been an area of always an optimization through a number of different models.

You can think of any sales also, we've now implemented a number of tools for the sales team. So if you're managing multiple relationships and documents and obviously, you can automate. So those are the fluency level kind of areas are one aspect. Then there's coding itself. Obviously, our engineers can be used, I would say, -- majority of our teams are basically use AI-enabled almost for everything, for every coding kind of activity that is kind of AI-enabled. And so they already are accelerating everything they're doing through that.

So that becomes kind of an opportunity to continue optimizing the R&D function, if you will. And then on the G&A, and I think the last bucket where a lot of my passion and history is around data architecture and data governance, where rebuilding and improving your data architecture underneath kind of your systems of record and rebuilding the systems of record and consolidating that, then you can actually build agents on top that can communicate with all of that data at scale.

So if right now, your HR data is separate from your finance data is separate from your treasury and so forth and/or marketing and risk and other areas, you missed the opportunity to really see end-to-end. But part of that is, one is data architecture, two is data governance, that you set the right definition. So when you send an AI agent to say, "Hey, give me the revenue for this market, this product, tell me the risk related to it and did we run a marketing campaign in that region?" Like all of these sort of definitions are key. And so I see that as improving the G&A function then even faster, but it requires some investment. And that's one of the things that I've done in my career in my past, but we're doing here, too. So you've heard me talk a lot about that investment in terms of the digital transformation architecture.

That's helpful. On the stablecoin topic, I was actually somewhat surprised to hear Mike talk about the demand that you're already seeing for stablecoin-based payments. How are you thinking about that more as a customer-facing payment method versus more of an internal segment rail where you have an opportunity to sort of reduce some of the payments and settlement-oriented costs, where you think we'll see the impact show up first?

Yes. Look, we're -- while we haven't heard a lot of our clients come to us and say, I'm going to -- I want to pay my tuition or pay for this very large sort of vacation that I've saved up my sort of life savings for with stablecoin yet. We have a partnership with BVNK and are already testing that. But -- and the way we think of this is yet another rail that we can enable for our clients. Look, this will be actually incremental for us because if you think of countries where it's either high inflation or volatility, this could be an actual incremental rail for us that is helpful.

So we'll be ready for it from an economic standpoint. It's not very different than sort of our lower cost. But I would say the thing on this is kind of the main takeaway is that we -- the rail is not the value that we provide. It's the orchestration and the integration with the client that really matters, and it's that end-to-end workflow.

And that's kind of going back to the -- whether it's the AI conversation on the software side or stablecoin it's the end-to-end orchestration and integration, and we're solving that workflow kind of the workflow point and in a regulated industry that really matters. So the compliance, the regulatory, the FX, the integration are all the things that our clients pay for, and that's the value we bring more so than just the rail. But we'll be ready. We -- our Chief Payments Officer has been on this, and we're excited to continue unveiling kind of as we innovate in this area.

Helpful. On that sort of disintermediation topic, any updates on just the overall competitive backdrop? We obviously, at this conference have widely heard about the pace at which new businesses can get formed and sort of try and attack some of these industries with more AI native solutions. But how do you sort of think about the stickiness of Flywire. You obviously mentioned the breadth of the payments network and the infrastructure that you have developed. But how should we be thinking about that structurally?

Yes. Look, I mean, I think there's a number of different scenarios that we've all played out. And we -- to me, it's interesting that we've had better software for decades and always had that argument to say, we've got better software than the incumbent. And so I'm excited to hear that the better software should win faster. So for us, that actually works in our favor. And look, we've looked at it. You can look at it from a checkout, from a stablecoin, from the banks and the ERPs, who's going to play in that space and whether it's -- look, it's not just checkout.

Checkout is one step in the process, as I said, is the -- being able to -- so you can by code the checkout maybe experience, but then you -- once you receive that money, if you're an educational institution and great, now you've got $10,526.51 from somebody -- some name, now you got to go reconcile that into your system of record to the penny. That is a differentiating. That's one of the many steps in the process that we solve for, which, again, would not necessarily be solved by just the checkout experience.

The same with -- again, with stablecoin, we sort of talked through the rail kind of example. And then look, on banks and/or ERPs, banks are not necessarily going to build software and the vertical integration and domain expertise because we are in very unique domains that require very specialized knowledge to even interact with, whether it's a school or a travel operator.

And so again, and we're not standing still here either. And then on the ERP side, most of those folks don't really want to deal with the payments and regulatory issues and licenses and all that stuff that comes with it. So -- and we -- obviously, we play in those, and we've been playing in those areas. And obviously, we're not standing still. We keep moving quite fast in terms of our own innovation. And we are in very unique verticals that play to our strength.

And the last thing I would say is we are focused on that accounts receivable piece, which is also a little bit of a differentiator. We can do the payable side, too, but the AR side of it is also kind of a unique thing. So I know we're hard to compare to anybody else, and that's the way we kind of like it. But we feel like we -- this is an environment that actually works in our favor as kind of being the disruptors.

Helpful. On the gross margin topic, you obviously have several puts and takes this year. You also have the structural dynamic where things like B2B and travel are growing quite quickly and are, therefore, a gross margin headwind, but still dollar accretive. How should investors be thinking about the ramp that we're seeing this year in terms of domestic payments processing with the client ramp that you mentioned? What's specifically driving that drag? And when should we be thinking about that outsized headwind sort of lapping that dynamic?

Yes. And one of the things going into this year that we wanted to do is also remind people that, look, what really matters, yes, we look at revenue and gross margin, but gross profit dollar growth is actually one of the key metrics, and you've heard Mike talk about is one of the areas and metrics that we're focused internally and balancing that gross profit dollar with every dollar of revenue is key.

So I would say that is not so we even sort of directionally guided the mid-teens kind of gross profit dollars. So -- but sort of the dynamics on gross margin are sort of threefold. One is kind of mix, which we've always talked about, so it's business mix. Second is FX. And then third is this temporary kind of payment processing ramp. So if I unpack those briefly, those 3 in Q4 last year, you saw about a 600 bps decline. And the breakdown is about 1/3 across each. So there's about 1/3 of it was kind of our normal mix of business, about 1/3 was this FX on settlement, which we'll talk briefly about.

And then another 1/3 was this payment ramp from Cleveland Clinic, in particular, and then the B2B invoiced cross-sell that we've started. So the way to think about the 3 components, the mix is mainly driven by domestic and EDU growing faster, so SFS and others, still positive gross profit growth, as you saw. And then whether it's travel or B2B, those growing faster than the company average with a lower gross margin. So it's not sort of pricing pressure or anything like that. It's sort of spreads are quite stable, as you saw in our supplement.

And so it is just -- that mix is kind of a function of just business mix. So overall, that -- so then that's the part that will continue to be sort of 100 to 200 bps into next year. Then FX is actually 2 pieces to FX. One, gross profit is at spot. So we're not -- but it has very similar dynamics as kind of the revenue side somewhat. And then this FX on settlement is -- and we've talked about this briefly before, is the timing between when we pay a client and we get paid. And it's a few days, and we hedge that on gross profit on the cost of sales line, but then the hedge shows up in OpEx.

So actually, on EBITDA, those are pretty well hedged. So what happened there is -- then in Q4, what you saw is a bit of a headwind for about 2 points because the prior year kind of versus year-over-year impact was impacting that. And what you'll see this year is first half actually will reverse and it will be actually a tailwind because last year was kind of a negative in FX on settlement. So first year will be a little bit positive, a couple of points or so. And then the second half will be sort of offsetting that. So for the full year, that kind of neutralizes. And then last thing, again, payment processing, again, we kind of unpacked it in the guidance to the point of being transparent. So again, more of a first half by the time we get to Q4 and exit Q4 should kind of normalize back into that 100 to 200 bps kind of range.

Helpful. On free cash flow generation, obviously, I know it's a priority for you in terms of ramping that. Can you just talk through some of the nuances with the 2025 free cash generation? I know there were some internal initiatives to sort of prepay expenses to achieve more favorable rates on a go-forward basis. How should we be thinking about what you're expecting in terms of the ramp of free cash flow generation as that prepayment dynamic normalizes?

Yes. I'll say 2025, the lower conversion versus -- we guided 70% to 75% for this year, which implies, yes, I realize a pretty big jump versus '25. But '25 was depressed by a number of things. One was the restructuring. So that was a big chunk of it. Second, we did have some M&A costs and related costs that were sort of onetime in nature. And then third, yes, there were some prepayments where we can lock in a contract for longer by prepaying and getting a better rate. So we did take some of those there. So when you actually unpack all of that, you get back to a similar range of already kind of a sort of normalized basis, even last year was kind of above 70%.

So then getting to 70% to 75% this year doesn't become quite as big of a stretch. And in addition then, we have an opportunity to -- as we move from just revenue and EBITDA to really look at gross profit, free cash flow, you heard me talk more about the importance of gross dilution and net dilution and now free cash flow, all these metrics that are kind of foundational are something that we're going to look at. And for free cash flow, working capital, obviously, there's lots of opportunities there to also tighten up the working capital levers to continue improving. But 70% to 75% for the year is kind of the right range for now.

And lastly, from a capital allocation perspective, obviously, with the expected ramp in free cash flow, how are you sort of thinking about the decision framework about reinvesting in the product, things like ramping SFS penetration, et cetera, relative to continuing that sort of historical acquisition cadence that you historically have been on as well as just the buyback itself. How are you sort of thinking about the puts and takes across those 3?

Yes. I mean I think we're still in that same order. So organic investment first. So whether it's the domestic penetration in SFS or travel is a key area, obviously, a combination of Sertifi and legacy for travel luxury for us. And then third is kind of this more foundational investment in kind of AI and data architecture. All those are key, and that's number one.

Two, buyback, as Mike sort of said on the earnings call, obviously, the most dislocated thing we see right now is kind of our own stock. So it will remain kind of -- the buyback will be a big focus. And then third, look, we'll continue to be looking at the M&A market. But obviously, we have the Sertifi acquisition, to some extent, the Invoiced acquisition that we are focused on from an integration and getting the synergies there.

So that will be a big focus, but certainly always looking in the market to see if anything interesting comes up. But yes, the first 2 are going to be our main focus.

Awesome. Well, Cosmin, I think we're going to wrap it there. Thanks very much for joining us. Appreciate it.

Thank you.

Good day, and thank you for standing by. Welcome to the Flywire Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Masha Kahn, VP, Investor Relations. Please go ahead.

Thank you, and good afternoon. With us on today's call are Mike Massaro, Chief Executive Officer; Rob Orgel, President and Chief Operating Officer; and Cosmin Pitigoi, Chief Financial Officer. Our fourth quarter 2025 earnings press release supplemental presentation and when filed, Form 10-K 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. Unless otherwise mentioned, all financial measures discussed on this conference call are non-GAAP.

Please refer to our press release and SEC filings for more information under 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. 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 in our conciliations relating 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, Masa, and thank you all for joining us here today. Before we share more details about an outstanding quarter across all our operating metrics, I want to step back and revisit the progress we've made, the structural advantages of our model and how we've positioned Flywire for continued durability and growth.

Since our IPO nearly 5 years ago, we have scaled Flywire into a diversified, resilient and increasingly profitable business. We have grown across multiple verticals and geographies, expanded margins reached GAAP net income profitability and continue to generate increasing levels of free cash flow, all while navigating significant macro disruption across payments, software and global education and travel markets. That progress reflects consistent execution against a deliberate strategy designed to leverage our competitive strengths, deepen our moat and deliver long-term shareholder value. Our strategy remains just as relevant and differentiated today as it has ever been.

At our core, Flywire operates across multiple industries, but we execute a single, scalable playbook we embed deeply into mission-critical financial workflows, solve complex payments end to end and expand over time as clients turn to us for more of their critical operations. A defining characteristic and key competitive advantage of our business is the complexity of the environments in which we operate. We specialize in large value cross-border receivables in highly complex verticals, where payments must be processed with precision compliance and full reconciliation. This complexity creates real barriers to entry and allows us to embed deeply within systems of record and core financial workflows of our clients. Once embedded, expansion becomes a natural motion. We process a greater share of payment volume and attach value-added software that improves client outcomes, creating a flywheel that reinforces our position and value to our clients over time. Today, approximately 90% of our education revenue and over 70% of our travel revenue come from enterprise clients, which we define as clients generating more than $100,000 in the last 12 months revenue. with more than 100 direct integrations into ERP and vertical systems, including over 70 in education alone, we are embedded into the operational fabric of our clients.

As a result, revenue churn across education and travel was below 1% last year. This advantage compounds through our proprietary global payment network, which supports transactions across more than 240 countries and territories, in over 140 currencies and through more than 1,200 local payment methods, fully integrated into enterprise platforms. That infrastructure is difficult to replicate and becomes more valuable with scale. As our volumes grow, our routing intelligence, compliance capabilities and localized economics improve. Access to direct relationships with China UnionPay, leading Indian banks and in-country accounts across markets such as Vietnam, Mexico and Brazil are just a few examples of our network in action.

These specialized partnerships allow us to localize payment flows and deliver outcomes that generic providers cannot. As AI adoption accelerates, we believe value will increasingly concentrate in platforms that already control trusted financial workflows and proprietary transaction data. Flywire operates at that control point where data, compliance, workflow and transactional execution intersect. We are embedding automation and AI across routing, reconciliation, compliance and our client-facing software. Enhancing productivity and lowering friction while the underlying system of record remains ours. The takeaway is simple.

Flywire delivers an end-to-end embedded receivables platform, not a stand-alone payment solution or a point software tool. We are structurally integrated into mission-critical workflows of our clients, where reliability, compliance, trust and scale matter most. That structural position translates into measurable consistent outcomes, durable client relationships expanding gross profit per client over time and increasing lifetime value. Our competitive position continues to strengthen, not because of market cycles, but because of how deeply we are embedded in enterprise systems in the industries we serve. These advantages are durable. They do not fluctuate quarter-to-quarter, they compound as we scale. With that proven foundation established, let me now shift to how we are extending our advantage, balancing revenue growth with gross profit expansion, margin progression and disciplined capital allocation.

As CEO, I'm focused on 3 core metrics. First, revenue and gross profit dollar growth. Together, they reflect demand for our platform, the durability of our client relationships expansion of payment volume over time and the incremental value created through software adoption across verticals and geographies. Second, EBITDA margin progression. Over the last 3 years, we've increased adjusted EBITDA margins from nearly 6% to 20%. This reflects the scalability of our operating model and our ability to grow profitably while driving disciplined operating leverage including continued discipline around stock-based compensation and dilution.

Third, multiple year annual free cash flow growth. Free cash flow generation and capital efficiency are central to how we think about long-term shareholder value. Over the past several years, we have meaningfully inflected and scaled free cash flow from $5 million in 2021 to $62 million in 2025. Together these metrics, define how we run Flywire and how we allocate capital. As we have scaled, we have deliberately shifted from a pure revenue lens towards gross profit growth, margin expansion, GAAP profitability, free cash flow generation and capital efficiency. That shift reflects the strength and maturity of our business model.

With that context, we continue to transform Flywire into a more scalable and efficient company. This transformation is structural, not cyclical. We are strengthening the core drivers of our business: pricing, routing, productivity, capital allocation so that our performance is powered by execution, not external conditions. Our execution is anchored around 3 operating priorities that reinforce our strategy and support durable value creation. First, accelerating product and platform innovation. We are not focused on incremental features. We are focused on solving high-value problems, deeper in client workflows. And -- we are consolidating our platforms into a unified modular architecture where core services like payments, FX, risk and compliance are shared across verticals. We -- this build once, deploy everywhere model increases development velocity, improved durability and supports margin expansion as we scale; second, building a scalable enterprise growth engine we are increasingly focused on larger clients, higher value deals in repeatable vertical playbooks that we are successfully executing across geographies.

Flywire already operates as a global platform with deep local integrations and payment infrastructure across major markets. That means we can scale efficiently within our existing footprint and capture a significant portion of our global TAM. This is driving measurable improvements in pipeline creation, sales productivity and lifetime value per client while strengthening revenue durability and expanding unit economics. As a result, our go-to-market model is becoming structurally more efficient and globally scalable, supporting durable growth and long-term margin expansion.

Third, accelerating our internal transformation, scaling the company through data automation and high-performing teams. We are building a unified data architecture automating core internal processes and deploying AI-enabled decision support across the business. Our transaction data, reconciliation data and workflow data are all strategic assets, not just reporting tools. They improve routing economics, reduce manual intervention, enhance risk management and accelerate innovation. The impact is clear in our financial results. From 2022 to 2025, revenue has compounded at approximately 31% annually, with gross profit growth only slightly below revenue, while non-GAAP operating expenses have grown just 17%. That spread reflects operating leverage driven by systems, automation and execution discipline rather than short-term cost reductions.

At the same time, we are strengthening high-performing teams with clear accountability and strong pay-for-performance culture. The combination of proprietary data, automation and operational discipline enables us to scale revenue and gross profit without proportional cost growth. Together, these pillars reinforce 1 another. They enable faster innovation, more efficient execution and disciplined scaling. -- while staying aligned with the outcomes that matter most to clients and long-term shareholders. You see this reflected in financial outcomes that matter, expanding EBITDA margins, sustained GAAP profitability and growing free cash flow even amid macro headwinds. As AI adoption accelerates, we believe AI will amplify platforms that already control trusted financial workflows and proprietary data. The winners in the genetic era, will combine innovation with end-to-end workflow ownership, embedded data, measurable ROI and disciplined capital allocation. Because we own the workflow, the reconciliation layer and the underlying transactional data across complex and highly regulated verticals, we believe Flywire is structurally positioned to be 1 of those winners. Together, these priorities are reinforcing Flywire structural advantages and positioning us to scale efficiently, expand margins and capture our global market opportunity.

With that context, Rob will walk you through how our go-to-market execution is driving this model across our verticals.

Thank you, Mike. I'll focus on how our go-to-market execution is driving durable efficient growth across the business. Our go-to-market engine is built around deep vertical expertise. We organize our teams around specific industries, develop specialized integrations and embed directly into the systems and workflows our clients rely on every day. This vertical specialization allows us to solve complex financial workflow challenges and positions Flywire as a long-term infrastructure partner rather than a transactional provider. This model continues to scale effectively. .

In 2025, we signed approximately 750 net new clients. This reflected strong demand across our verticals and geographies with solid new logo momentum as we exited Q4 2025. We -- that 750 net new clients, a number of which are named in our earnings supplement exclude additional properties added through Certify, invoiced only software clients and upsells across our existing client base. Because Flywire is deeply embedded in mission-critical workflows, our client relationships are highly durable. Revenue churn across our core verticals remains below 1% and reflecting the strength of our integrations and the long-term value we deliver. Education remains a strong example of our expansion-led model.

Growth in EDU is driven primarily by expansions within our existing client base supported by adoption of our student financial software, broader full suite deployments and deeper ERP integrations. We are seeing particularly strong momentum in the U.S., where projected ARR from signed SFS deals grew more than threefold year-over-year. This reflects accelerating demand as institutions modernized financial infrastructure and demonstrates the increasing efficiency of our sales engine. In the U.K., growth is driven by deeper integrations, including SSS deployments and expansion of coverage of domestic tuition and accommodation payments. We remain early in full platform penetration but continue to make progress with full suite wins at University of Cambria and the University of the West of England. As previously mentioned, we are working on our SFS support for Oracle Fusion and expect to have our initial U.K. launch clients signed and live this year.

We are also seeing strong growth outside our traditional Big 4 markets with more than 50% of new education clients signed in 2025, coming from outside those countries and revenue from these markets growing more than 30% year-over-year. Beyond education, our vertical expertise continues to drive strong growth across the business. In travel, Flywire purpose-built platform allows travel providers to streamline global payment workflows and improve operational efficiency. Clients such as Villa Finder, a leading villa rental platform in Asia, serving a highly international client base, selected Flywire to modernize their global payment infrastructure and fully integrate payments into their booking workflows. We -- this win highlights the strength of our vertically specialized platform and its ability to support complex cross-border travel providers at scale.

Since acquiring [ Certify ], we have increased the number of properties served and payment volume has nearly doubled year-over-year, driven primarily by higher attachment within the installed base. As we continue to make progress on integrating contracting, booking workflows and Flywire payments into a unified platform, we expect to see continued cross-sell and international expansion opportunities. In health care, we tailor our integrated solutions to the complexity of each health system, particularly those running Epic or Cerner as their core EHR platforms. Success in this market requires deep domain expertise intricate integrations across pre-service point of service and post-service workflows, seamless patient and administrative experiences and payment excellence.

During the quarter, we signed Jackson Health System, an integrated health network based in the Southeast alongside several midsized and community hospital wins. We are also progressing through the phased rollout at Cleveland Clinic. Initial payment processing components are live with additional phases, including our robust patient financial experience solution expected to roll out in Q2. We -- in B2B, we are seeing strong adoption of our integrated software and payments platform as businesses modernize their invoice to cash workflows.

Increasingly, new Flywire B2B clients are adopting both software and payments from day 1, strengthening workflow embedment and improving long-term monetization and retention. Our invoice platform already delivers enormous automation to the accounts receivable process, but will shortly be introducing new AI-powered features that amplify the power of the platform for our clients and further streamline its implementation. As Mike mentioned, enterprise clients represent the majority of our revenue and provide significant expansion opportunities due to the depth of integration and breadth of workflows we support.

At the same time, our go-to-market engine is becoming structurally more efficient. Pipeline creation entering 2026 increased by approximately 35% year-over-year, reflecting strong demand and improved market positioning. Sales productivity continues to improve, and we are generating significantly more ARR per sales rep than in prior years. These productivity gains are translating into meaningful operating leverage in 2025, signed ARR grew over 35% year-over-year, and that's excluding the impact of large payment processing contracts in health care. This ARR growth reflects strong underlying sales momentum across our core verticals.

From 2022 to 2025, and sales and marketing expenses declined from approximately 25% to approximately 20% of revenue, all while delivering significant yearly revenue and gross profit growth. This demonstrates the scalability and efficiency of our go-to-market model. Stepping back, our go-to-market engine is delivering durable, efficient growth driven by vertical expertise, deep workflow integration and expansion within our existing client base. This model strengthens revenue durability increases gross profit per client and supports continued operating leverage as we scale.

With that, I'll turn it over to Cosmin.

Thanks, Rob. I'll cover our financial performance, margin dynamics and our outlook on profitability and capital allocation. Starting with Q4 performance. In a year that demanded agility and discipline, we finished with strength. We delivered Q4 revenue almost 8 points above the midpoint of our guidance while continuing to expand EBITDA margins, outperforming consensus expectations.

Importantly, performance was broad-based across verticals and geographies reflecting disciplined execution and the durability of our diversified model. Starting with our top line performance, Revenue was $152.7 million, growing 32.6% on an FX-neutral basis. FX-neutral organic growth, excluding Certify, was 20%. We -- the guidance beat was primarily driven by strength in the health care payment processing ramp followed by travel as well as better-than-expected macro conditions across many of our education markets. On a reported basis, foreign exchange contributed a 270 basis point tailwind relative to Q4 of the prior year. Transaction revenue increased 33% and driven by 42% growth in transaction payment volume, continued contribution from education as well as travel.

Quarter-to-quarter, you may see variation in blended yield due to mix. For example, higher domestic volume or greater credit card penetration, which naturally carry different economics than cross-border effects Importantly, on a like-for-like basis, pricing remains stable and competitive behavior continues to be disciplined. Our spreads reflect the value we deliver, compliance, reconciliation, ERP integrations and enterprise-grade infrastructure rather than commodity payment processing. Platform and other revenues grew organically with the inclusion of Certify and continued momentum in health care patient affordability solutions contributing to 50% year-over-year growth, platform-related volumes increased 11% and -- adjusted gross profit was $93.7 million, up nearly 24% year-over-year. adjusted gross margin was 61.3%, reflecting mix and ramp dynamics as well as roughly 2 points of FX settlement pressure versus a benefit last year. Excluding FX and payment processing ramp activity, the normalized mix-driven margin decline was within our expected roughly 200 basis points annual range. As we attach payments with deepen monetization and expand lifetime value.

Even when gross margin percentage shifts with mix as evident this quarter, gross profit dollars increased and those incremental dollars carry minimal incremental operating expenses. That operating leverage drove EBITDA to scale faster than revenue. Adjusted EBITDA margin was 16.6% in Q4, expanding 190 basis points year-over-year and exceeding guidance. Our objective remains clear. operating expenses must grow more slowly than gross profit. We are simplifying and modernizing our architecture, consolidating platforms, eliminating tech debt automating workflows and optimizing routing economics. We are making a focused near-term investment to build a unified end-to-end data foundation designed for an Gentek AI future. By embedding AI directly into our existing infrastructure, we are strengthening the platform today while expanding structural operating leverage over time.

For the full year, we generated $13.5 million in GAAP net income and expect to build on that profitability as we scale. Our balance sheet remains strong with a $200 million net cash position. Since launching our repurchase program, we have deployed $118 million towards share buybacks with approximately $180 million remaining authorized under the program. Diluted weighted average shares outstanding declined year-over-year as share repurchases more than offset dilution, resulting in negative net dilution for 2025. We -- our capital allocation priorities remain unchanged with continued focus on growth and disciplined share buybacks, especially at current dislocated valuation levels.

Turning to 2026 guidance. Starting our full year revenue, we've seen the strong momentum from Q4 continued into Q1. We expect approximately 15% to 21% FX-neutral revenue growth, including roughly 2 points from B2B migrations and the Cleveland Clinic ramp and approximately 1 point from inorganic contribution as we lap the Certify acquisition. First, some guidance context around our margin dynamics and macro assumptions. As those payment processing programs scale, they create temporary mix pressure, particularly in gross profit margin due to early stage ramp economics. As a result, we expect adjusted gross profit margin to decline approximately 200 to 300 basis points year-over-year. Excluding the impact of these payment processing ramps, we would expect gross profit margin dynamics to be closer to the lower end of that range, roughly in line with our historical approximately 200 basis points annual mix-driven shift as software and payments scale together. As discussed, our focus is balanced around expanding gross profit dollars. For 2026, at spot rates, we expect gross profit dollar growth in the mid-teens.

Importantly, the incremental pressure from ramp activity is temporary and largely complete by the end of 2026. As we move beyond the ramp phase and into 2027, we expect margin dynamics to normalize towards the 100 to 200 bps annual decline and reflect steady state mix and demand. From a macro perspective, our 2026 outlook reflects a prudent set of country level assumptions. We have modeled U.S. first year visas down approximately 30%. Canada down 10%. And and flat visa issuance in the U.K. and Australia. In the U.S., total education revenue is expected to grow low single digits, with cross-border modestly down under our Visa assumptions more than offset by domestic strength and continued SFS penetration.

In Australia, we are assuming flat Visa volumes and expect modest low single-digit revenue growth driven by continued strong execution and expansion within our existing client base, while closely monitoring tighter visa requirements for Indian students. In Canada, despite the Visa headwinds given new client additions and continued expansion into domestic payments expecting education revenue growth to exceed 10% year-over-year, reflecting the impact of new contracts signed last year. EMEA and U.K. Education revenue growth is expected at or above company average. Importantly, our guidance does not assume a rebound in global student mobility. Growth is driven by share gains, SFS expansion and deeper enterprise penetration.

Moving to margin guidance. We have now crossed the 20% mark on a full year basis. We expect approximately 150 to 350 basis points of EBITDA margin expansion reaching 22.5% at the midpoint of our guidance. Since 2022, we've scaled revenue while reducing operating expense intensity across every major category. Sales and marketing declined from 24.8% to 20.1% of revenue, reflecting higher annual contract value platform deals and improve productivity. Technology and development declined from 13.7% to 8.3%, driven by platform consolidation and greater engineering efficiency. Our expense leverage reflects productivity gains, not reduced ambition. We continue to fund product, engineering, data and enterprise expansion where we see strong return on investment. General and administrative declined from 24% to 15.8%, supported by automation and system simplification.

As we invest behind our accelerated data strategy and digital transformation advanced analytics and AI, these investments sit within G&A, but function as enterprise infrastructure, strengthening data architecture, automation and risk management across the platform. Our guidance assumes some deceleration in revenue growth from the first half to the second half, primarily due to more difficult year-over-year comparisons in the second half of 2020. and the timing of ramp-related contributions and as we remain prudent given the dynamic macro. Margin expansion, however, is expected to be more pronounced in the second half given normal seasonality and and as operating leverage flows through the model.

Looking beyond this year, we continue to invest for growth while scaling gross profit dollars faster than operating expenses. That operating discipline underpins our confidence in achieving 24% to 25% adjusted EBITDA margin for 2027. We -- for 2026, we are focused on efficiently converting every dollar of adjusted EBITDA into sustainable free cash flow. After normalizing our historical conversion rates to remove onetime items, we expect conversion in the 70% to 75% range. Importantly, our equity program is directly aligned with our pay-for-performance culture. As a result, dilution remains disciplined and performance-based and is increasingly offset by growing free cash flow and opportunistic repurchases. Equity compensation is tightly aligned with long-term shareholder value. and we carefully manage both gross, equity issuance and net dilution. Our goal is to limit gross dilution and maintain net dilution at approximately 3% over time, while continuing to reduce stock-based compensation as a percent of revenue with a target of approximately 10% in 2026.

Finally, as a result of this focused discipline on profitability, we expect GAAP net income to grow approximately 3 to 4x versus 2025. Our objective remains durable free cash flow growth, supported by disciplined expense management and capital allocation. For Q1 2026, at the midpoint of guidance, we expect approximately 28% FX-neutral revenue growth and a 225 basis points of margin expansion. Revenue growth includes a 7-point contribution from lapping the Certify acquisition as well as approximately 3 to 4 points from the payment processing ramp. At current spot rates, we expect a 4- to 5-point FX tailwind in the quarter. Q1 includes multiple tailwinds that will moderate as the year progresses, particularly as we lap the certify acquisition, and payment processing ramps from health care and invoiced clients. Gross profit dollar growth is expected in the 20% to 22% range at spot rates with approximately 7 points of that growth attributable to Certify, consistent with its contribution to revenue.

In summary, in 2026, we expect to demonstrate the durability of our diversified platform, the scalability of our operating model, and our continued commitment to disciplined capital allocation. We remain focused on driving sustainable growth and expanding profitability over time. Stepping back, I spent more than 2 decades working through major data and technology transformations and moments like this are rare. The work we've done to modernize our systems, simplify our architecture and build a unified data foundation is not just an efficiency program. It positions us to participate fully in the next wave of intelligent AI-driven software from a place of architectural strength and financial discipline. What excites me most is that we are building a company designed to compound over time. I'll now turn it back to the operator for questions.

[Operator Instructions] Our first question comes from Nate Svensson with Deutsche Bank Securities.

Tonic results. Just on the guidance, some of the macro assumptions, I think the prudent approach as you put at Cosman is the right 1 to take. But just kind of wanted to dig down into the assumptions in the U.S. and Australia. So I guess I'll just ask both of them. So in the U.S., you're assuming Visa is down 30%. Obviously, we aren't getting F1 data anymore, but based on some recent reports that seems like a pretty material step down in 26 relative to 25%. And I guess relative to that common app data you called out in the slides.

So I just wanted to ask if there's anything you're seeing or hearing that makes you think things are maybe getting worse versus how much of this is prudence or conservatism? And then in Australia, you're assuming flat Visas but you also called out 9% growth in places for new international students. So just, again, trying to hope you can break down the delta between the 9% increase in new places and the flat Visa growth.

Yes. Thanks, Nathan. I'd say the summary is trying to be prudent. Obviously, we've seen this very dynamic environment in both of those markets. In the U.S. look, we've seen -- we don't have external data yet, but just looking at our own data last year, looking at first year payers sort of down in the first -- in the high teens. Of course, that is offset for us, as you've heard us talk about stronger retention and some of the improved or higher tuition kind of sized payments. So there are different dynamics always that play out beyond just visas. But looking at 30% for this year is, again, trying to be prudent as we look ahead still early in the year.

So not necessarily, obviously, the same as all of you don't have a lot of data, and we have to wait for the usual peak season later this year to really kind of quantify it. But so far, just trying to take a prudent approach around the U.S. in particular. And then on Australia, Again, last year, we assumed that was going to be worse. It turned out to be a lot better than we thought, not just the external environment but also kind of our performance against that -- but again, starting out the year early, I want to remain prudent around it. So again, we're seeing good performance there. Otherwise, in the market, as you saw the team keeps winning deals and growing above market in both of those markets. So good performance so far, both in the U.S. and Australia.

Yes, it makes sense. And I think the proven approach is the right one. I guess for the follow-up, I wanted to ask on SFS. I think Rob had some interesting stats in his prepared remarks there. So I think ARR growing 3x, if I recall correctly. So I just wanted more color on new signings, maybe impact to 2016 numbers, what the pipeline looks like. And I guess, the area in SFS I'm really interested in, like you've talked a lot about the non-big for success that you're seeing. I think revenues were up 30%. And I don't think SFS is live outside of the big 4. So I guess specifically on that opportunity, can we start to roll SFS out in these new geographies. So kind of a broad-based question on SFS, but really interested in the non-big 4 opportunity.

Yes. So let me start with the U.S. SFS part of your question, and then I'll talk nonbig4or. So look, it was a very successful year last year for SFS. We talked about the threefold increase in ARR signed. We also saw -- it was about 13 wins for full suite deals over the course of last year that helped build that 3x growth and we enter the year feeling very good about our position with the product, very good about the amount of pipeline and deals that look to be opportunities for us in the year ahead. So we've done a lot to improve the caliber of our sales team.

We've got great senior leaders around that team and looking forward to a good 20 on -- you said it about right on the outside the Big 4, you are right in saying that SFS is not what's driving the success there. Rather that is our core offering of both cross-border and domestic payment capabilities that we are taking around the world, and we do that with sort of the lighter solution than the full SFS, but those markets are very dynamic. They are seeing lots of student growth and we are very successful in penetrating those markets. I think the last part of your question was around just sort of SFS expansion. We are focused primarily on the U.S. and U.K. There are other opportunities that we'll continue to evaluate around the world, but don't expect us to be focused on those in the near term.

Our next question comes from Dan Perlin with RBC Capital Markets.

Great results, guys. The area I wanted to focus on just briefly, you're talking about winning, obviously, much bigger deals more products per kind of these transactions and then higher ARR per deal. You touched on it a little bit in the prepared remarks, but I would love to just hear more about that sales motion. And I guess, how we should be thinking about all of that rolling through throughout the year as those deals continue to kind of, I guess, come in at bigger ticket sizes? .

Yes. I mean you -- it's Rob again here. So you correctly sort of summarized my comments there. We did see a nice growth in overall ARR, but we also saw growth in average deal size across the business. that would be true across our different verticals. So it's not just an EDU story, but you will have seen that across other verticals as well. And in all cases, it's partly a function of what we target. We are targeting more clients that would generate larger ARR. We are also targeting, especially in EDU sort of the full suite presentation of our platform. that, combined with our success in the U.S. and the U.K., all of that sort of drives the higher ARR that we've been talking about. .

Yes. That's great. Just a quick follow-up. I think over 30% of the business now is kind of noneducation verticals. I'm just wondering kind of as we sit here today and we think about the diversification going forward, the balance sheet you've got, obviously, you're going to put money to work, it sounds like in buyback. But just -- how are you thinking about M&A opportunities in the context of the way the business is currently structured? .

Dan, this is Mike. I would say, obviously, you've heard us talk, we think our own stock is quite dislocated. So you can expect us to use capital to to buy back stock and continue to be active in the market. Clearly, the valuation environment right now is quite dynamic. You've got a huge dislocation between private and public markets. I think for us, we have a core belief that is still our core M&A strategy, which is we like to sit in critical workflows. We like that combination of software and payment monetization -- and so of course, we're going to be continuing to monitor companies that fit that profile. .

But at the same time, we're going to be very disciplined. I mentioned kind of the dislocation of our own value an opportunity for capital deployment there. I also think we have great acquisitions that we've accomplished in the last 18 months. We've got synergies that are playing out quite well there. And so we're going to continue to kind of land those planes. And and stay focused on our organic investment plan and an to synergies. So that's probably what I'd say on that.

Our next question comes from Charles Nabhan with Stephens. .

Congrats on the results. would love to drill into Canada and some of the underlying macro assumptions. It looks like there's pretty wide outperformance versus the Visa, where the visas are expected to come in next year. And I was hoping to get a little color as to the drivers of that outperformance. And just to broaden that, if we think about the guide, it's about a 6% 6-point delta from the top to the bottom. Could you maybe talk about like the key variables overall in the model, what would lead you to come in at the top versus the bottom end of the range for the year. .

Two-part question. Maybe so I'll start with the first part on Canada. Look, after 2 years of Canada being down last year, over 50% visas, and you're right, we outperformed that, right? Because if you look at revenue for us last year in Canada was down just a little bit short of the down 30%. So we still have done better than the market. both years, and that's the accumulation of the work that the team has done to continue winning clients, and we've mentioned that. Now as -- you saw in our expectations going into this year. Visas will be down around 10%.

So again, a big reduction still down, though, with growth up 10%, and that is driven because of that accumulation of client wins on the domestic side and just strong execution by that team despite that market being down. So all of that kind of obviously compounds and starts to drive benefits finally seeing Canada now on a positive going into this year. And then as far as your question about overall guidance, look, at the high end of that range, I would say you would be looking at things like macro being a little bit better. continuing some of those ramps that we talked about across a lot of large clients that we've talked about, that could also drive some of that upside. -- and just general strength in the execution in the overall business. So -- and similarly, kind of on the downside of some macro remains something that we're watching. But I would say we've -- as you've noticed, we've captured most of that quite well and taken a very prudent approach to the overall. So we feel the midpoint is a solid starting point.

Our next question comes from James Faucette with Morgan Stanley.

This is Michael Infante on for James. Apologies if I missed it in the prepared remarks, but any color you can share on what's embedded in the outlook from a travel perspective, both including and excluding Certify and maybe how you're thinking about resource allocation to travel to sustain the growth that you guys saw in '25?

Yes. No, look, at a high level, we continue to believe travel will grow at or above company average. So solid growth for the year. And again, it's a large growing, as you saw, our share of the overall business. And that's really both on the certified side where we continue to see strong performance in that business. Obviously, the payment monetization side, as we talked about, seeing that performing well, but also our legacy luxury travel business is doing well.

And so overall, I would say travel continues to be a big growth driver for us. And look, obviously, we're excited about all the wins there, adding a lot in terms of new clients, as you saw -- we're -- in terms of investments, we're growing the sales team. That is 1 big area of focus for us as far as investments and then, of course, investing in the overall certified global expansion. So definitely a lot of focus in terms of investment dollars around the travel vertical.

That's helpful, Cosma. And then just for my follow-up. On the stable coin topic, you guys have obviously spoken about payment costs there, large sort of being in line with some of your lower-cost payment modalities. But what are you actually seeing from a demand perspective, if anything? And any key quarters that you would call out there to the extent you are seeing some level of demand

Yes, this is Mike. I think we talked late last year on just our initiatives around stable coin and getting into the platform and focusing on markets that were, I would say, more volatile currency markets, right, where we could see payer usage from those areas. And so happy to say that we are live. We are testing demand actively and actually processing payments. And so we'll continue to kind of talk about that in the future and maybe break out a little more details. But right now, it's -- it's a small bit of usage, but we have high hopes it's going to grow.

And then I would say the second use case is really an internal one, like many companies looking at what internal processes we can use from a stable going perspective to either settle different currencies, quicker, more cost effectively and our teams are really pursuing both acceptance and internal use of stable claim.

[Operator Instructions] Our next question comes from Darrin Peller with Wolfe Research.

It looks like gross margins and the monetization rate is a little bit lower just given the progress you're making on domestic payments. And so I think if you could just first give us a little bit more color on what's going well there. Anyway it's been an initiative of the company is really since you've been public. But -- any further acceleration you're seeing there or something sticking more than before, but it looks like it's obviously going well and to some degree, having an impact on the numbers. And then as you continue to upsell domestic to customers, -- just how should we be thinking about gross margins this year where they could reasonably normalize? .

Yes. Thanks, Darrin. So I'll start. So look, overall, like we said, although gross margin is under some pressure, and look, it's payment processing. It's what the what we're calling out specifically is Cleveland Clinic ramping up and some of the B2B cross-sell from invoiced. So those are sort of unique and mostly temporary actually playing out this year.

Historically, as you said, domestic has been 1 area where the domestic payments piece does create some mix. But look, stepping back, you've heard me say it, and you see it in the supplement, our spreads are quite stable over time. That's kind of what we normally look at, and that's just understanding kind of pricing, so stable spreads across, especially our transaction side. But again, as we've looked at gross margin, what we really wanted to also include, and you saw me even talk about guidance around gross profit dollars. That's really what ultimately matters in these deals, whether it's domestic deals in the U.S. or in the U.K. and B2B, as you saw in our prior disclosures, all of those add incremental gross profit dollars. And -- as you probably know, they actually had less -- you don't have to add a lot of OpEx to that.

So then what that does actually drive incremental EBITDA dollars with it. So Look, from a gross margin perspective, again, as we said, this year, we'll be in that 200 to 300 decline range. But if you exclude some of those -- so the timing of those ramps, we would be back in the kind of 100 to 200 bps range, which is kind of our historic as you go into next year. overall. And again, for Q4, I would say 1 last thing just on Q4. You saw FX also can have an impact. So in Q4, in particular, 1 of our impact was about 2 points or about $1 million of FX lapping from last year, which actually drove about 2 points of decline last year just from FX. And another couple of points or so actually from the same payment ramp. So Cleveland Clinic doing really well along with B2B. So those created some additional pressure in Q4.

All right. Guys, maybe just 1 quick follow-up would be your expectations around the potential success of health care in 26 just following the wins you've seen now with Cleveland Clinic and it's more broadly. I know you've been trying to put a lot of emphasis in investing back into that segment for at least a year now. And so I'm curious where you see that going. .

Yes. So Rob here. And obviously, we are -- we've talked explicitly about Cleveland Clinic. And not only is that a big deal for its sort of economics and how it rolls through our numbers, but it's also a big deal in terms of signaling to the rest of the health care marketplace. Cleveland Clinic has been kind enough to talk a bit about what we're doing with them and for them, and that has also gotten out. if you look at the combination of deals we've already signed both in our core patient financial experience and in the payment processing. Those are very positive. .

But you'll also see that in that pipeline expansion that I talked about in my comments, a good piece of that is from health care, where they are also seeing on the backs of recent success, a lot of opportunity opening up for them.

Our next question comes from Ken Suchoski with Autonomous Research.

I wanted to ask about education just outside of the big for I think I heard 50% of new education clients signed came from these markets, revenue up 30%. And can you just talk a little bit more about where these share gains are coming from, how you're organizing the sales team around this effort -- and just anything on the growth algorithm as to how it might differ versus some of the mature -- more mature education markets?

Yes. I can jump in and start with that. So the major markets the next group, the group outside the big 4 sort of cluster around main markets in Europe and main markets in Asia, right? So as you think about Europe, France, Germany, Switzerland and the like. Spain. As you think about Asia, you start seeing places like Singapore, Malaysia and others that are being successful. And so what -- what's happening is, first of all, those markets are being opened to the international students. And what you're seeing is a lot of interest intra regionally as well as interest of people moving around.

So as you see patterns evolve, you may find more students and families from Asia choosing to stay somewhere in the region for their international experience. Again, these are not the big 4, but the next group, but you do see some of that kind of corridor dynamics that we're observing here. From a Flywire perspective, we're investing in making sure we have good coverage across those markets. So we are present in all those markets. We have strength and capacity in all the places I've named, and we're seeing good wins in these markets that are being successful, places like Singapore and so on that are emerging are places where we're enjoying really good client additions.

4 And just -- I think I heard a comment on just on the payment processing programs ramping. I think you -- I think Cosmin, you might have mentioned that this is going to hurt the gross profit margin due to the early stage ramp economics, can you just give a little bit more detail as to why it takes some time for that to ramp or just what the economics look like upfront and how that changes over time?

Yes. I think if you think of Cleveland Clinic, for example, but also the B2B invoiced cross-sell, which already started in Q4, you can see the dynamic kind of starting to play out -- and so if you look at the materials and disclosures, that's where we talked about some of the pressures that come from. You had a larger dollar amount on the revenue side with still some incremental positive gross profit dollars that naturally puts some pressure on the gross margin. We've kind of called that out for this year. You have some of those ramps basically running through most of the first half of the year, and then it comes off in the second half.

Now you've also heard Rob in his prepared remarks, talk about that you start -- we started with Cleveland Clinic in the payment processing. And now sort of in Q2, you'll see us go live with some of the other sort of higher margin components of the products there. So that's why we -- as we exit this year into next year, we expect the gross margin kind of profiles to then decline to kind of go back to normalized levels. But again, we've also provided everyone with gross profit dollar growth guidance for the year in that mid-teens with this in mind and also for Q1, obviously, strong gross profit dollar growth in the 20% to 22% range with 7 points from certified. So still a very strong growth when you look at it from a gross profit dollar growth for these deals. But that's the timing dynamic that kind of plays out in the first half versus second half.

Our next question comes from Tien-Tsin Huang with JPMorgan.

Hope you can hear me okay. Mike, you mentioned private public market differences I'm just curious from being opportunistic on the private side, are there assets out there like certified that are on your radar that you and Rob and team are considering and be opportunistic. I'm just curious sort of what the where you are there with what you've done so far with acquisitions and the appetite to do more as they become available. .

Yes. Tien-Tsin, I would say the strategy still holds. I mean, we think there's -- we have a proven track record of being able to do this of driving synergies post deal. And again, we really think that intersection of around the financial transaction and critical workflows and our payment network is a really, really powerful combination. Again, I think what makes it challenging is there's dislocation, a lot of private companies think their values are still very high. Public companies probably don't think that or most of them don't. And so that dynamic is a little more challenging.

Our team has always got a great pipeline of targets and is always looking at the market. The good news for us is we've got great organic investments, and we've got great synergies to continue to execute on. So we'll be ready. We'll be opportunistic if we see it and no change in strategy. just obviously some complexities around valuation, and it's really hard to bet against our own stock price right now. .

Yes. That's all fair. It makes a lot of sense. Then just quickly, I always like to ask about visibility around just guidance, but how you see new sales booking across all the different businesses. How would you view it today versus this time last year? I would think it's better? I know things changed in April last year, but -- how would you qualify it? .

Yes. I mean I think for us, Bob did a great job just talking about some of the sales metrics and the go-to-market metrics. The thing I'd also just encourage people to realize is that transformation we're doing, and Cosmin mentioned about systems, about data, even how we're organized we're really focused on investing more behind that go-to-market engine. And so sometimes increased capacity. Sometimes it's the way we organize, the way we deal with contract negotiations, the way we minimize distractions for our sales team and our client-facing teams. And what gets me most excited is we're doing all of those things, right, which I think is going to continue to help us increase velocity and really benefit us across industries and across geographies. And that's what gets me excited is setting the company up for going faster and doing more. Our final question.

Comes from Timothy Chiodo with UBS.

I want to talk a little bit about the mechanics behind optimizing international payment flows. So -- my understanding is that this relates to when there is a student going into year 2, 3, 4, they might have opened up a local banking account and all of a sudden, their payments are being made more domestic. I was wondering if you could talk a little bit about how do you entice or change the behavior to keep those payments cross-border and running through Flywire on a cross-border basis. .

Right. So bigger picture, as you well know, our strategy has always been around moving all the money. Now 1 of the reasons why we like to move all the money is you get the opportunity to monetize both domestic and international flows. Both of those are lucrative for us, and both of those help us serve the clients better. There is a particular dynamic that I had referred to in all of that, which is that there is a fair bit of payment that shows up through what looks like a domestic channel. But -- and it is, in fact, from an international payer oftentimes using an international payment instrument, but it's just been showing up on the domestic payment routing website. where we take over all of it, we can make sure that payment gets routed properly.

It also means we can make sure that we present to that family the best set of choices they have. It is oftentimes beneficial for them to understand the local payment options that we would make available to them. actually quite a bit better for them than the choices that they may be making, not realizing what we could be doing for them. So it's an opportunity to better serve the payer. It's certainly an opportunity to better serve the school, and it is also beneficial for us.

Thank you. This concludes the question-and-answer session and today's conference call. Thank you for participating. You may now disconnect.

All right. Good morning, everyone. Welcome to the third day Wednesday of the UBS Global Technology and AI Conference. We're very happy to kick it off this morning with the team from Flywire. We have the CFO, Cosmin Pitigoi here. We also have the Head of Investor Relations, Masha Kahn, who joined us in Arizona. So thank you to both Cosmin and Masha for making the trip to Arizona.

Awesome. Thanks for having us here.

All right. Joining me on stage is my colleague, exceptional senior associate on our team, Patrick Ennis, who's led a lot of our work on Flywire, so we'll be doing this fireside chat together. So I'm going to kick it off. We're going to start with the cross-border education market. As we just laid out, we're going to talk a little bit about cross-border education. We're going to get into the domestic education market. We'll hit a little on travel, a little on health care, a little on B2B and then we'll talk about financials. So we're going to run through as much as we can and see what we can tackle here in 28 minutes.

All right. First, all on the cross-border education market. So in terms of some of the data, right, we don't have the latest U.S. Visa data, given there were some delays associated with the government shutdown. But there was a recent survey from the Institute of International Education, suggesting that new international student enrollment in the U.S. was down 17% year-over-year. Can you walk us through how that compared to your expectations and what you saw from your cross-border clients?

Yes, thanks. And obviously, a big question, not just for this year, but looking into next year, is around the U.S. education in a macro environment. So what we had assumed for this year back in Q3 was around a 20% decline. And so what we actually saw was a little bit less than that. And so if you think of kind of our -- the way we look at it is that we look at our first year payers trends separate from kind of the revenue that we get from first year international students. And so, what we saw is, again, a little bit less than the 20%. However, what we are seeing is some offsetting factors to that. So first off, what we've seen as better performance in the high ticket or higher tuition type of programs.

So if you think of undergrad, undergrad type programs are doing better than some of the maybe shorter term or lower cost type tuition programs. So we saw that in our numbers. So even though our first year payers were not down quite as much as 20%. By the way, not far off of that. I would say still in kind of the mid- to high teens is kind of where we're seeing it. Again, our mix of schools is different, obviously, than the F1 visas. So there's not a perfect correlation, but that number seems about right as far as kind of the external numbers. Internally, however, if you look at our, one, like I said, higher tuition; second, the other offsetting factor was around higher retention. So we're seeing improved retention in our existing students. So also seeing that trend kind of play out.

And then as you step back, we look at our overall U.S. education business. We're continuing to add more cross-border schools. And also, obviously, as you know, the domestic business and the SFS is doing well. So when you add it all together, our U.S. education business, what we guided to this year is kind of still growing actually in the low single digits because of those dynamics.

All right. Excellent. As a follow-up, we know that you've talked about a mid-single-digit headwind or so to revenue growth from Canada, Australia and U.S. this year and then a similar headwind next year. And was just wondering if you could talk a little bit more about that and what's embedded into the outlook?

Yes. So first, let me start with just as you saw this year, we started out in terms of the guidance principles around just being prudent, being very data dependent. So watching the trends sort of turn or change before we actually take that into account. And also just being very transparent with everyone around our assumptions. So with that, the mid-single-digit impact sort of for this year, if you think of it is it's -- I would say it's a large portion of that is Canada, which is mostly now behind us. So first half was a heavier impact. As we exit, it's a little bit less negative but still negative. So Canada was a big portion of that with Australia and then to some extent, U.S. being the other 2 components of the mid-single digit for, again, this year 2025.

As you look into next year, we think U.S. is sort of -- will take over as -- potentially as the larger component. But again, as you saw, even this year, we're trying to be very prudent in our approach. So if you think of a mid-single-digit number in terms of dollars, it's around $30 million. And if you look at the U.S. business, again, we've said about $80 million last year in terms of the revenue from that with about -- a little about less than half of that being from first year students. And so if you do the math on that, obviously, it would have to be a much more negative impact than what we've seen this year. So we were just talking about that, sort of, call it, 20%. It would have to be more than that. Now again, we're not necessarily seeing that yet, but taking a very prudent approach, again, as we have this year to try to anticipate that.

And then the other components of the mid-single-digit sort of assumption for next year aside from U.S. would be continued softness in Canada, again, the data-dependent principle. We're going to watch the trends there and see them improve. And so far, again, we're seeing kind of better than, say, first half, but we're going to wait to see how that plays out. And then Australia, U.K., again, we're watching that, the environment there. Obviously, Australia has played out much, much better than we expected this year, but not necessarily -- not counting on that continuing until we kind of see it play out a bit more.

Excellent. I'm going to turn it over to Pat to talk a little bit about the U.K. business. Then I'll go back to kind of a last follow-up on cross-border before we move to domestic.

Okay. Great. Yes, I wanted to transition to the U.K., your largest market. So the one door strategy has definitely been a highlight and something that the company continues to expect to be a sustainable growth driver going forward. But that's something I think we'll try to touch on a bit later, only focusing on the cross-border side of the business right now. It sounds like visas in the U.K. have been slightly up, maybe close to flat. Can you talk to the latest political climate there? Is there anything in addition to the May 2025 immigration white paper we should be mindful of?

Yes. Look, we're watching to see how the white paper plays out. In general, so far, again, we haven't seen the trends, if you just, again, start with the fact, I think last year, U.K. Visas were down a bit. This year, they're flat to up. And so not yet seeing an impact from sort of anything in the macro in the U.K. But look, I mean, they have a white paper. I mean, they're building on it sometime soon. And so while we saw actually there was obviously the post-graduate work kind of permit, which can -- was 24 months, it was reduced to 18 months, which, again, there's some reduction, but at least it's not eliminated. So that still is -- sort of still a positive. And then we're -- although we're seeing kind of immigration or international student sort of headlines, they haven't taken a very hard stance. So they haven't taken sort of the Canada or even the Australia hard stance with sort of caps. And so they're addressing it in a much more thoughtful way because, look, U.K. education and institution is the same as U.S. and other parts of the world are struggling financially, and they have a pretty strong voice, and I think everyone wants international students in general. So there's that recognition. So, so far, we've seen a balanced approach, but again, as I said, taken a very prudent approach like we did this year with the U.K. for next year.

Perfect. And as a follow-up there, in terms of the cross-border payments monetization angle, so only cross-border we're thinking about here with WPM, which you, I believe, acquired at the end of 2021. Where are you in terms of penetrating that base of clients?

Yes, we're still early. I know there's obviously been a great growth coming from that acquisition and our execution around it. But keep in mind that is always kind of our M&A playbook is we bought the software and have those integrations but monetizing those payments. And again, think of it as we have to go almost a bit of school-by-school individually. So we still have a long runway around WPM. The metric that we gave in the latest earnings call was just to give you a sense that we do have room to grow even in WPM is the fact that only about 12 of our clients in the U.K., we process 90% or more of their volume. So that tells you that obviously, there's a lot of clients where we can go after what we're usually aiming for, which is move all the money related to kind of tuition. So still a lot of room to grow, but it is obviously a bit of a school-by-school approach. And then even once we do that, there's obviously a lot more cross-sell that we can do with our kind of cross-border domestic and SFS and other kind of components on top of that.

Certainly, I think we'll get into that, but I'll hand it back to Tim.

All right. Let's wrap it up on cross-border with the outside the Big 4 countries. So about a low to mid-teens percentage of your revenue in 2024 and higher than company average growth that you've been talking about. You had some big wins you announced in some different European companies. Maybe you could talk a little bit about the drivers of those wins.

Yes. No, look, we're very excited about the performance outside the Big 4. What we see there, if you think from a macro perspective, it's a little bit like a balloon that you're kind of push in one direction and it pops in somewhere else. It's -- as not the Big 4 pushback on bringing international students, many other countries are more than happy to welcome those students in because you're talking about very high talent and talented students who are willing to pay tuition. And that's a very interesting proposition for anybody who's trying to build kind of AI technology or for schools that want to obviously look to bring great students in. So we're seeing good growth there. So it's -- to some extent, obviously, it's a combination of the growth in those markets. So we are seeing good growth in those markets kind of naturally. But also our sort of product is uniquely positioned.

So to give you a very practical example because it helps me sometimes is if you're a university in France, and you were getting maybe 5 or 10 students kind of a year in international students, you would probably be okay dealing with you get 10 wires, then you got to reconcile them. You got to figure out who it is that sends you the wire and all that kind of sort of manual process type stuff. Well, now suddenly that school is probably getting 100 or more students that no longer is feasible. And so what we're doing is we're coming in, and again, I think -- well, you guys know this better than me as far as software. The importance of software eating the world. But for us, that software is such a key component of the value prop because we're replacing a manual outdated process with the software. It's not the payment so much that is sort of the key is the fact that now you're reconciling that payment from the 100 students you're dealing with the FX, the chargebacks, the reconciling into the system of record. So you basically are replacing a very manual process. So there's a lot less sort of resistance. You're not -- so it's a very different kind of approach. But we're seeing good growth in those markets and expect to continue for sure because again, like I think the demand is there from the incoming kind of corridors.

Excellent. All right. I think we covered cross-border quite well. Let's move on to domestic, and I'll turn it back to Pat.

Okay. Great. Yes. So transitioning to domestic. In the U.S. market, can you talk about the 3 incumbents in domestic education and where Flywire solutions are resonated well compared to the competition?

Yes. So sort of the same 3 incumbents, I think, have been around in the U.S. for the last sort of couple of decades plus. We've competed quite well with them. Our clients are the ones who basically sort of pushed us in this direction of combining what is our core capability of cross-border with the domestic and just realizing it, obviously, what -- so there's a couple of components there. One is just a combination of both cross-border and domestic as schools are looking to consolidate vendors. So I don't have to deal with one vendor for one part and another vendor for something else. That capability certainly resonates. But also, there's -- look, there's multiple reasons. One, just modern approach. So if you -- if you know how sort of software is written and designed, if you've designed it for kind of on-prem, and then you have to design for cloud, and then you have to design for mobile, it's a very different kind of approach. We -- our software and our -- we were born sort of in -- if you will, we were born in the cloud, we're born in mobile. And so we design it for that experience. And also, we're continuously innovating. So we haven't stopped. So that resonates quite well in addition to the consolidation of vendors.

But also there's other capabilities we've built. And as you know, the 529 accounts are being able to pay with that and -- but collections capabilities. So we have the collections module, which enables you to really treat the student with a bit more dignity. And it's a much more sort of -- and obviously, it saves a lot of money for the school because they're not paying some third party to go sort of approach to student with an aggressive kind of approach. We have that built in. So there's just a lot of different capabilities in addition to the flexibility of the payment plans and other things which you can do with our software. So we're seeing it very much resonating. We're going to obviously continuing to evolve and seeing a lot of clients, big reference clients now as you've seen out there, and we certainly are getting to that point where everyone sort of thinks of us is more than just cross-border, which is that mental shift is really critical as you -- obviously, for the sales team to go in.

And yes, to that point, those reference clients, you've got -- you've won some larger higher education institutions. On the domestic side, do you expect that to be a catalyst for additional universities looking to migrate over? And can you just talk about the sales cycle and integration process on the domestic side?

Yes. Look, it certainly is. You get past that point where people think of you differently and suddenly, you do have -- yes, we have the reference clients. We have the Samford, the UVAs and now Penn State and others who are out there. I mean we have our conference, our Fusion conference where we bring together about 100 clients, and it resonates quite well. But also think of it as we've built the muscle internally around the go-to-market with this enterprise sales because this is a -- it's a more complex, obviously, you're usually, especially in the U.S., you're replacing something that is already there. And so it takes a bit more kind of team effort on the enterprise side. But we've built that muscle now, including kind of the marketing and the perception. And so we're seeing good -- obviously, good momentum there, as you've seen with the launches this year.

And look, it's a long sales cycle, right? So you engage with the client, they go live, they have to ramp through a tuition peak. But you -- when you are part of their DNA to some extent, and again, software point, but you're part of their process. And so again, speaking as the finance guy a little bit, I think when you change your process around the software and around a certain kind of vendor, you are there -- you are a partner to that client. You're no longer just another vendor. You become part of their ecosystem, which is again, what the software piece does for us to solve that complexity but also it becomes embedded into their process. So it takes a bit longer, but we've been patient, and we've been winning clients and continue to win clients even in that environment.

Certainly, a great momentum in the U.K. as well. It sounds like you guys are seeing a lot of success there. So I know you've discussed integrations with each of the student information systems with Unit 4 being in pilot, I think it's a big one. Can you talk to the importance of these integrations and whether they have been a gating factor for winning any domestic business in the U.K.?

Yes. I would say not a gating factor. We've been winning even without them, but it certainly helps accelerate progress because you're suddenly connected into the system of record. You have that very unique capability. And so for Unit 4, it creates an additional capability, which is around the student portal, which a lot of those -- a lot of universities don't actually have that. So for us being able to add that additional kind of value prop, where we can say, look, we are connected into your system of record. So it's an easier integration. It's an easier lift. So it accelerates. I would say the pipeline is -- we've always won with it, but we can obviously go even faster. And we, again, have a very unique proposition there. That same conference that we have in the U.S., in the U.K. is extremely well attended and the capabilities there because there's just not -- the incumbents are not there to provide those resonate even more so. So we see really strong demand for the product there.

Okay. That's great to hear. And I think I'll kick it back to Tim to hit on travel.

All right. Great. So on travel, you talked about some expansion into some new adjacent subverticals. One example was the ocean experiences. Maybe you could just talk a little bit about some of those new verticals and some of the drivers of the growth within the travel subsegment?

Yes. So the travel -- so this is -- we think of our business now is sort of there's luxury travel, which is our legacy travel business and then now our hospitality side, which is kind of the Sertifi acquisition. So just talking about the luxury legacy kind of travel business. A couple of quarters ago in our earnings supplement, we actually gave the growth. I'll go break down a little bit for that. But it is very much driven by the go-to-market motion. So kind of the ramp of new clients and that addition of new clients is the biggest growth driver. There's a bit of -- market is obviously still doing well. Luxury travel is still growing. So that -- that is certainly a component of it. But the biggest component is this go-to-market motion. And look, it's -- the product resonates because if you're, again, thinking of the travel operator who's dealing with it's multi-day bespoke travel and you have people traveling in different countries, you're again, solving an operational kind of complexity.

We're not there to just do the payment because it's one thing if somebody was to say, I'm traveling, I have to pay $10,000, but I only want to pay $5,000 now and $5,000 later, sure you can do that. But now if you're the travel operator, I got to deal with the FX. I got to deal with how do I reconcile this into my system. So we provide all those capabilities again through the kind of the software side and obviously, lower cost for those large type cross-border transactions, we -- our payment network plays a very important role. But from a go-to-market motion for travel, think of it as very strong LTV to CAC and very strong sort of marketing pipeline and also starting to get, again, referral clients. So what we're seeing is, whether it's ocean experiences or heli-skiing trips than these luxury vacations, those operators, they talk to each other. And now we are obviously a known name. So you certainly start to get to the point where you're getting those reference clients that are also driving a lot of the growth. So it's great. The team is obviously doing really well. So very, very excited about the opportunity.

All right. Great. A brief follow-up before we move to health care. You mentioned Sertifi, but you guys have talked about it growing over 30% year-over-year. Just to clarify, is this the -- just the revenue that came in from Sertifi? Or is this including some of the synergies associated with additional payments monetization?

This is just the business itself is doing really well. Obviously, a lot of the investment area for us this year is building those capabilities, whether it's payments internationally, locally for -- build out the local kind of payment capabilities for some of the clients. So we're investing in that to drive the synergies that we talked about on the payment volume, the $3 billion and the $100 million cross-border international. So we're seeing a lot of opportunity there. But the synergies are more -- I expect them to be more into next year. This year, it's just the business itself is obviously doing really well.

All right. Great. I'm going to turn it back to Pat. And then I think in the interest of time, we might go after that right to some of the profitability and some of the financial side. But over to you, Pat.

Okay. Yes. I wanted to hit on health care, Cleveland Clinic, 8-figure revenue win. It sounds like you've been working on that for some time. Do you expect this to be a lighthouse customer that will help reaccelerate growth in the health care vertical beyond just kind of the recent client wins?

Yes. Look, certainly is a lighthouse client. As for those of you who are familiar with the space, obviously, that is -- it's kind of one of its kind to some extent. So there's not a lot of others like it. But it creates that validation that the product that we've built and the capabilities that we've built. And again, the integration piece and the software does a number of unique kind of things that others can't do out there. So the 3 that I usually kind of comment on is just the affordability piece. So again, it's the same capability that helps you split your payment at a school or split your payment if you're traveling is being able to do that as a patient when you get that out-of-pocket bill.

But then it's the -- also the financing. So again, not on our balance sheet, but that financing component integrated into the software. And now the latest addition capability is the payment processing, which lower margin. And so this is why we've called that out, but still obviously a positive gross profit, but is the combination of those 3, along with the capabilities that the team has built over time and those integrations into Epic and others is the key component. So you have, obviously, Cleveland Clinic Endeavor counting and others. The way to think about the growth rate, just quickly on that -- this year, we've said health care is growing somewhere in the low teens. I would expect next year maybe accelerate, obviously, to some extent, based on this. We're not necessarily at the total company level, not yet sort of counting on a lot of that in terms of how we thought about initially about next year. And again, being prudent around it, but certainly could be a source of upside as we think about that going into next year, albeit some of it would be at a lower -- in case of the payment processing piece will be at a lower margin, while the software and the other components will be at the usual higher software margin.

Okay. That's really helpful to hear. And then in the interest of time, I think I'll give it back to Tim to hit on profitability.

All right. Thank you, Pat and Cosmin. Let's wrap it up with some of the numbers. So in the past, the company has talked about a 25% plus EBITDA margin longer term. I know that's kind of a number that was out there some time ago. I just wanted to see if you could maybe update the investment community on how we should be thinking about longer-term margins. And while we're at it, any other comments that you would want to just to remind investors around financials for either fiscal '26 or beyond?

Yes. Look, on profitability, I think if you look historically, we've consistently beat expectations sort of year after year, including this year, we've exceeded. I think the 25%, I don't see that as a -- that's not a tough target. I suppose, and we've already kind of given indicative sort of mid-30s incremental margins on revenue as we look into next year. And so that kind of gives you a sense that we -- that's within eyeshot. I think the -- beyond 25%, I would say then in general, the principle for us and for me internally is obviously grow OpEx less than the growth of gross profit growth. Simple math. And to some extent, we should be able to do that. We've got scale. We have leverage. So we're going to continue to do that. But again 25%, not -- again, not a complicated target, I think, for us.

I would say the other thing as we look at the other costs, stock-based compensation and others, again, this year, and that we've hit sort of the IPO kind of anniversary, so it was around -- stock-based comp percent of revenue is around 12% expect stock-based comp to also grow sort of closer to OpEx going forward, which means that, that 12% as a share of revenue continues to go down. While at the same time, we're -- you heard us talking about managing dilution, which is really key for us. So looking to stay kind of within that sort of hopefully 3% or lower. Obviously, that depends on a number of factors, the stock price itself and other things, but we'll try to manage that, again, in a very disciplined way across the business.

All right. Excellent. Well, you covered the stock-based comp. We really appreciate that. I think we have time to maybe squeeze in one more, and I'll turn it back to Pat to hit on retention.

Okay. Great. You hit on this at the beginning, but you've recently touched on some of the positive student retention rate trends within higher education. Is it fair to attribute that to incremental SFS adoption? Or are there other areas you found to be working better now versus in the past?

Yes. Look, I think the SFS is probably the biggest one because obviously, once you manage end-to-end the experience, you have -- and also you have the ability to bring in those students, that's one driver. So that we've seen that. But obviously, that's still sort of 10% or so kind of penetration. What we're also seeing is just managing the user experience is a big difference in terms of how you present them, if you will, in checkout is another driver. Second, our relationship with some of the banks in India, for example, play an important role because if you're being able to work with those partners is really key. And so this is another differentiator for us versus other players out there is that we have so many partners in the ecosystem. So the banks in each of the different locations, that makes a big difference. And those are not easy, by the way, to create relationships with banks in India and China and other areas.

And then we haven't talked a lot about this, but the agent components of being able to work well with agents and help kind of who the agent community helps going to place. Some of these students also helps drive some of that capability. But when you look at from an overall perspective, we're continuing to build those relationships with students and the user experience, which then drives a lot of the retention. And so again, we're good trends there. We don't assume a huge movement yet, but a lot of good positive trends. So very excited about it.

Definitely, that's positive to hear, and I'll turn it back to Tim.

All right. It looks like we might be able to squeeze in just a quick comment on B2B. Maybe just talk a little bit about the invoiced acquisition, and then we'll bring to a close.

Perfect. Yes. Great to close on that. B2B, obviously, a good acquisition for us last year, same -- same sort of M&A playbook, buy the software, monetize the payments. We talked about $1 billion volume opportunity that opened up for us, and we're now sort of launching, connecting that AR. And if you want to talk about AI, the invoice capability that we bought that sort of the ability to go straight from sort of all the way from invoice to cash and being able to identify in real time through machine learning, which invoice you should pay, how you should approach that. So truly was a differentiated factor combined with our payment capabilities.

So you heard us talk a little bit about -- even some of the Q3 performance was supported by the invoice and B2B performance and some of the Q4 kind of growth in addition to that. So I feel really good about that capability. And it's playing out. We, again, put it in the supplement, seeing good revenue, but also good gross profit growth in that business.

Excellent. Well, on behalf of our full team and Patrick Ennis, who joined me on stage here, we want to thank both Masha and Cosmin for making the trip here at Arizona and being a big part of our conference. Thank you so much.

Thank you.

And we're excited to have Flywire, and Cosmin is the CFO at Flywire, and we'll go through a list of questions here. And if you have a question, you can raise your hand, and we can bring a mic up. But Cosmin, thanks for coming.

Of course. Thanks, Bryan. Thanks for having me here.

I wanted to start just overall and talk about the pipeline. I think you guys signed over 200 clients in the quarter. How is that pipeline for new client signings? And how is that versus historicals? And what do you think about it going forward?

Yes. Obviously, our go-to-market engine has been a strong contributor and will continue to be. I think the way to think about the 200 clients a quarter because that's been pretty consistent is we look at it from multiple more dimensions. Obviously, the number of clients is important. But equally, the way to think about it is we're seeing that is diversified across all of our four verticals. So it's not coming just from one vertical. Generally, the travel and the education business are the biggest contributors. But overall, we've seen a good diversification across the verticals of those 200 clients in terms of sources and also across geographies. So that's point one. Two, I would say we look at ARR or the size of those deals. And so we've seen this year is not just continued seeing the size of the deal going up, but also more strategic. So we'll talk about SFS and domestic. But increasingly, those are more strategic relationships that we're building with those larger clients. So again, that's another dimension of those 200 clients that we look at, that's important. And of course, then third is the pipeline, and we look ahead, and we feel pretty good again that the pipeline is pretty healthy and quite diversified across the four different verticals with not just number of clients, but also continued improvement in the size of those clients from an ARR perspective. So again, feel really good from that perspective in terms of the driver of growth and us continuing to gain share through that lever.

In business, how much of the revenue comes from existing clients versus these new clients that you're signing on in any given year?

Yes. I mean we haven't split it, and it's a bit different by vertical. So in travel, you would see more of the new kind of clients driving more of the growth. We've given some disclosures in the past of that split. In education, it's a bit more equal because in those verticals like education, you have a long -- you start with one part of the university and then you expand. So you do have this, we would call the land and expand kind of motion that expands existing client once you actually go live with it. But generally, I'd say, it's still pretty healthy. And now with obviously the macro factors impacting our kind of our longer-term cohorts, then you would have more of the growth coming from these new sales motions, which we feel, again, quite good about, and the team is executing quite well on that part, which is, again, focusing on we can control in this environment is really important.

Got it, got it. Can you talk maybe first about the education, your biggest vertical, maybe updated thoughts on demand momentum you're seeing in some of the four countries or the biggest four countries?

Yes. So look, in terms of just sizing the business a little bit, education still remains our largest kind of vertical, but we are seeing obviously good growth in travel now becoming bigger in B2B and health care also. Within education, the top four markets make -- still make up a good sort of large share of the overall education market. However, the non-Big 4 are becoming bigger, too. So -- and we'll talk about that later. But within the Big 4, obviously, outside of the macro headwinds, we're seeing good momentum with the SFS or the domestic kind of products. So think of it this way, obviously, as we think back the origin story of the company is starting with cross-border for education. We've now shifted that perception to really -- for most of our clients to start thinking of us as moving all the money, if you will, for us to summarize, just moving all the money, being able to move the sort of both the domestic and the cross-border in one place. And so we started with the U.S. So in the U.S., we've got about 100 or so, just over 100 clients on the domestic out of the 1,000-or-so cross-border clients. So -- and we're gaining momentum. So this year, we've announced 11 wins in the U.S., which is the largest actually in several years. And all those are large universities like Penn State and others, who are significant sized accounts, very strategic. So we're seeing demand for a few reasons. So one, I think the perception shift, which as our clients have asked us to come help them innovate and grow in terms of the universities that need our software. But I would also say is that being under pressure, so from a budget perspective, a lot of schools, I think everyone knows, obviously, educational institutions are under a lot of budgetary pressure right now. And so our software helps simplify that and also helps with saving -- obviously, saving cost, automation, reducing the need for people in the back room to do a lot of efforts. The second thing is modernization. So a lot of our schools are looking to modernize, automate their systems. And so that's the other driver of this. And then third, I would say, it's also just the overall effort of vendor consolidation. So if you're a university and you have us doing your cross-border, someone else, other parts doing the domestic, obviously, bringing all those vendors together saves a lot of cost. And so those are some of the drivers we're seeing. And it's obviously a big driver for the U.S. business. As you know, the international side of our U.S. business is under pressure because of the visa numbers. And at the same time, we're able to say the U.S. education overall is actually still growing a little bit this year, and that's because of the strength of the domestic business offsetting that, which is a smaller part of the business. Domestic is around -- it was around $30 million last year. So even with that, it's growing so much faster than it's offsetting some of those headwinds from international, along with gaining share in international. And then on the U.K. side, we're starting with SFS. U.K., we disclosed that now is about 1/4 of the business is the U.K. EDU business, which is significant growing, faster than the company average. And we started out with four SFS clients, and we're building the capabilities there, but feel good that as you look at the U.K. business, we have the ability to now consolidate bills and present and reconcile bills, which in the U.K. kind of market, there's not a lot -- the competition is not as established as in the U.S. So we -- our product there is even more kind of stands out overall. So I feel good about kind of the long-term domestic there, both U.S. and U.K. Australia and Canada, again, sort of separate kind of discussions. Canada is coming off the Q2. Q2 was obviously kind of the lowest number in terms of visas, and we're coming off of that and improving as we exit the year. Still expect to see some pressure there, but we're still growing better than the market and Australia is -- while it's been under pressure, we're seeing obviously very strong growth there, too, from gaining clients and less-than-expected macro impact than we thought.

Yes. In that investor presentation, I think it said something like 2 to 3x the uplift in GP from the U.S. and U.K. education relationships that migrate from cross-border only to the full SFS suite. Can you just talk through the profitability bridge?

Yes, for sure. And look, we wanted to provide a little bit -- so actually, if you haven't looked at the latest supplement, there's a lot of disclosures there around the SFS product, especially in the U.K., but also in the U.S. But specifically to the modernization. Look, as you go from a cross-border-only client into processing all of the tuition kind of money, obviously, there's three components to that gross profit dollar pool going up 2 to 3x. First, obviously, the biggest component of it, and you'll see it in the slide we provided is still the processing of the tuition payment. And so that could be an ACH, that could be a credit card in domestic markets. So that will be at a lower gross margin percent, but still gross profit positive. Then the second component of that is the software itself or payment plans. So that -- those 2 have generally higher gross margin, as you can imagine, software where if you're paying $35 or $40 to basically break up your tuition payment into 3 or 4 payments, or we're very flexible around that. That is also high margin. And then that's the second component of that gross profit. And then the third one that's interesting that maybe people haven't realized is the cross-border component itself, once you go from cross-border only to managing all the money or sort of domestic, you actually get more of the cross-border volume. So it is actually helping capture more of those students that are sort of first year, second and third year and fourth and so on. It helps us capture those because, again, we can optimize our checkout, we can optimize the kind of experience and gain more share even within the cross-border. So when you look at all those combined, obviously, it's very different by each school. And so the gross profit profile may differ depending on those combinations, including things like collections management and 529 plans and other capabilities that we build on to, the basics of kind of billing payments and a sort of end-to-end view, so then -- and cross-border. So that all kind of works out to be roughly 2 to 3x, but again, illustrative as we're starting.

No, that's helpful. The visa immigration policy headwinds are expected to result in, I think, mid-single-digit headwind to revenue growth in fiscal year '25. Can you talk a little bit about the headwinds you've seen this year? How do you think about it for next year and maybe what a normalized kind of growth rate of the business is in education?

Yes. Look, obviously, we've navigated some pretty choppy waters in the last 2 years, and that's been something that obviously we've shown our resilience as a team overall through that time. So let me start with 2025 and then maybe talk a bit about '26 within that mid-single-digit kind of framework. So for 2025, look, we're still growing. If you look at full year guidance, excluding Sertifi, FX neutral, we guided to about a 15% growth rate with a mid-single-digit headwind. And so obviously, underlying that, you have to assume that the rest of the business is growing that much faster to be able to offset a mid-single-digit headwind. And obviously, we're continuing to win clients. We're continuing to drive stronger product capabilities and innovation. And to some extent, we're able to offset some of that negative impact. Now that -- this year in 2025, that mid-single digit is, I would say, more of it is coming from Canada. We've talked about that. So that remains a component with, to some extent, less U.S. and Australia. And the U.K. has actually generally been relatively flat, maybe a little bit positive in terms of visas. And U.K. is just itself growing quite fast for us outside of that. As you look into 2026, and again, we haven't given guidance, but just to help folks kind of think about next year, we've said, look, we're going to assume the same kind of mid-single-digit pressure. And if you think about it, obviously, that's a relatively large kind of macro headwind to assume. But if I go back to the principles that I've tried to approach guidance this year, which is: One, prudent; two, data dependent; and three, transparent, we're trying to provide some at least starting point around next year. And we've said, look, the exit for Q4 is a good way to think about it, and that's -- we guided to 14% FX neutral, ex-Sertifi as you think about next year. As you unpack all of that, obviously, the rest of the business has to be growing quite fast for us to be able to offset some of the assumed headwinds. But what I would say is that we feel pretty good that we've accounted for most scenarios out there. We've tried to take a very prudent approach to the U.S., for example, for next year. So I would say, as you think about the mid-single digits, this year was mostly sort of Canada. As we think about next year, it would be, again, some assumption around the U.S. being almost worse than it is today. But that's us, again, trying to take a prudent approach around the U.S. and being cautious as we look into next year. So we feel that we've trying to change the narrative out there, too, as people look at headlines and macro has always been kind of a negative, trying to shift away from that mindset and say, look, we've tried to -- we've captured most of those headlines. We continue seeing those headlines, kind of playing out. But the hope is that, obviously, as F1 visas maybe start to improve to some of these policies and headline -- policies start to kind of lock down and some of the headlines hopefully reduce, then that should help. But for now, we feel we've well captured kind of the scenarios certainly in the U.S., but also in the other three big markets with this mid-single-digit assumption into next year.

Is the best metric to watch just F1 visas and...

F1 visas is one. I think second, I would say, again, it's just fewer sort of headlines in general around the uncertainty, I think, is when you have either H-1B visa headlines or OPT or other things that are just headlines without necessarily policies. And then the third would be actual policies in place because I think we have to separate what is actual noise and sort of things that are being said in the news versus actual policies being implemented. And then third would be once the policy is implemented, it doesn't always have the impact you think. So we have to watch all those things play out. Sometimes there's a headline, not -- is there a policy that follows the headline once you implement the policy, does that actually play out the way you think it is? And we've seen, for example, Canada versus Australia, completely different kind of ways the market actually played out. In Canada, the headline was followed by policy and the impact was quite negative. In Australia, there was a headline, some policies, but we just haven't seen the same negative kind of impact even though we've assumed that in our guide, again, very prudently. Australia, and that's, again, another way to think about the kind of mid-single-digit assumption and our macro assumption in the guide is looking at Australia, where the policy and the headlines have actually turned out to be a little bit better in terms of how they play out in the market. And Australia may be learning from Canada and others, they've actually adjusted and some of the caps -- they've increased the caps assumptions for next year, which, again, good to see the policy. We'll -- in the kind of data-dependent category, I'll wait to see the trends continue over several quarters to improve before we kind of change our view on the outlook. But so far, Australia has played out better than we had assumed in our guidance.

No, it has. It has. So is there anything in the policy in the U.S. that we should be watching in particular?

So far, obviously, the more pressure, one of the reasons students come to the U.S. is to work here. And so anything around the H-1B visas or OPT or other kind of policies around that are important to understand demand. Ultimately, U.S. is still the kind of the destination of choice as far as work opportunities. So that's going to -- the number of universities and obviously, the educational opportunities here are very unique. But for us, we're going to be somewhat agnostic as to where students end up going. But in the U.S., I would say, yes, some of those policies. But again, I would say that we've captured most of those kind of negative assumptions into our mid-single-digit assumptions. So from that perspective, at least there should be comfort that we've captured some of the negative. And hopefully, as it turns out better than we thought, then...

There could be some upside there...

Yes, potentially, yes.

Well, the good news is you're seeing besides those four markets, people -- students seem to go somewhere. So you're seeing growth beyond the Big 4. Can you talk a little bit about what you're seeing in other regions?

Yes. And that's been, to some extent, obviously, an exciting development for us because as we talk to our agents, so we have this unique relationship with agents who help kind of -- guide students along this complicated international student journey, they're telling us that students are starting to apply to more destinations. That's a trend that's happening outside maybe U.S. or just U.K. or even the Big 4. And so outside the Big 4, just to size that market in terms of revenue for us, we've said that the non-Big 4 EDU in terms of revenue is about low to mid-teens share of our 2024 revenue, growing above the company average. And that was sort of -- think of it last year. This year, we're seeing that part of the business growing quite well. And the way to frame that is kind of back to your first question. Out of all the EDU clients that we signed this year, over half or about half are from outside the Big 4. So it tells you that, obviously, there's demand growing, as you can imagine, as some of these other educational institutions outside the Big 4 are starting to get more applications, they're going to look for cross-border or U.S. education -- sorry, education software partner, and we obviously play well in that role for them. So I'll say that is a benefit for us. And again, we're excited about those. Now there's a tuition difference there. As you can imagine, there's lower tuition in some of those countries. So just to name a few in Europe, you have Spain, France, Germany destinations. And then in APAC, sort of Singapore, Japan, Southeast Asia. So some of those countries will have lower tuition than a U.S. tuition or U.K. tuition, but still very healthy margins in those businesses, strong unit economics because it will be mostly a cross-border client for us, given that that's the product that we will be selling to them. So I feel really good about those and the opportunity to grow with the non-Big 4 is certainly a big one for us.

Got it. I want to move to the travel vertical. Can you talk about the growth you're seeing there, and what Sertifi adds to the business portfolio?

Yes. And so if you think of our travel business, which next year will be almost 1/4 of the business, so let's start with Sertifi. So Sertifi right now is sort of our, call it, our hospitality side of the business, and luxury is kind of our legacy. So within Sertifi, the 3 synergies that we talked about, which will play out mostly in 2026. But the three synergies we talked about first was the payment modernization, which is our usual M&A sort of playbook, where we acquire the software, monetize the payments. So that was about a $3 billion volume, that we are looking to monetize the international kind of cross-sell, and that was about $100 million of revenue. And then third, it was just cross-sell between our legacy luxury business and the Sertifi hospitality. There's three kind of, I would say, things that we're looking at this and showing that we're seeing progress here and these synergies are playing out. So first, we're hearing from our clients that, that combination of the agreements from Sertifi, the agreement, the contracting and the payments, that flow resonates very well, and that's an important capability, especially on the payment side, as you think about having payment capabilities in each country, that's something that obviously Sertifi didn't have. We bring that to the table. And so that's one aspect that we're seeing where it's giving us comfort that we've -- those synergies are playing out. Then second is this idea of just being able to drive continued integration with the system of record. So if you think of some of the players out there, this is one of our unique capabilities. We are integrated into a system of record. So things like PEAK 15, which is one of the integrations for one of our clients, we are integrated into that system of record. So it's not just the agreement and the contract and the payment, but the fact that you can reconcile into your system of record and drive significant operational savings and visibility for them into the end-to-end kind of process. And then third, we are seeing -- as we talk to our enterprise clients now like Hilton and Marriott, we're getting validation that this product resonates with these larger clients. Again, our sort of legacy luxury business played mostly with smaller travel clients, but now the validation with enterprise is certainly good to hear. So again, good overall kind of early visibility into the fact that the synergies are going to start playing out. But I would think of this year, Sertifi growth is mostly driven by them stand-alone, and they're growing over 30% year-over-year. Into next year, some of these synergies start to play out, but it's, again, more of a next year kind of dynamic.

No, it looks like a good complement to your business.

It's a great one, yes.

What about health care? Can you just talk about that business? Obviously, Cleveland Clinic and Cook County Health, how does that flow, the timing of that? And how big of an impact will that have on the vertical's TPV and run rate?

Yes. We're quite excited about the health care vertical this year after sort of several years of transformation. So we've improved the sales team and brought in folks who can work with the enterprise side. We've improved the product. The Cleveland Clinic, obviously, it's a marquee large client. We've talked about it as an 8-figure client. Now if you think of the health care vertical being around a $30 million vertical, if you add an 8-figure client, that's a significant growth driver. So what we've said for this year is health care is growing in the kind of low teens. And so with an 8-figure client like Cleveland Clinic, we expect next year to accelerate well beyond that. And then you've got the Endeavor -- so that's already gone live, and it will ramp kind of into next year, if you will. Then you have Endeavor, which we also announced, that's going to go live probably next year and ramp beyond that. And then Cook County is the third line. So we've got a sort of a layered kind of new client-driven kind of growth rate. And so we feel good about that. Again, this is now a combination of capabilities. So historically, health care was mostly software. Now we've got the payment processing also in there. So that has a lower gross margin, but still gross profit dollar positive. And that would show up in the transaction revenue part of our business. But I feel good that as you look long term at health care, it is no longer going to be a drag on growth. And certainly, next year will obviously be a huge lift from this Cleveland Clinic ramp. And then I would say, normalized for that, I would still expect it to be less of a drag and now be an actual growth part of the business.

Yes, I was going to ask, besides those three big wins, what does the pipeline look at for the hospitals?

Yes. Pipeline is great. And I think the fact that you have this marquee client and have them talk to other large clients out there. And we have a very unique product, very few other players out there combine the kind of the payment, the billing, the kind of the affordability suite with the other components of our health care software. So that altogether enables us to have a differentiated product and having someone like Cleveland Clinic and others out there being reference clients is great for the team and certainly helps the pipeline long term.

I have to ask about AI, and what you guys are doing with the Gen AI capabilities. Is it more to streamline processes and costs, or can you generate some revenue as well?

I think it's all of the above. I think of AI -- by background, I'm sort of a machine learning, data science, data guy. So I've been doing this for almost 20 years now, and I think there's exciting opportunities. If you look at it the right way, I think of it as -- it's a different mindset within the company. So I'll give you an example. We had an AI hackathon inside the company where every single group, every employee was able to participate and give ideas. So that's -- so to me, AI is -- it enables us to -- first, there's three buckets kind of like to the point you're making. One is how do we improve capabilities for our clients. And so whether we have very unique data, which is one of the things that I think building AI capabilities on top of what you can imagine, whether it's the education side with very unique kind of flows across education and integrations in terms of data or luxury travel and hospitality or health care and others, again, you have unique kind of capabilities that you can build and examples that you can build client capabilities on top. So invoice already has the ability to provide machine learning type matching for invoices for clients, or we have machine learning or matching around payments. So all those are -- we have client-focused kind of AI innovation. Then we have, what I would say, function-focused AI. So think of customer service as the obvious area where our customer service kind of support is getting a lot of our efficiencies driven by this. And then we have in the functional or support areas like finance and analytics, we have chatbots and others that we've built on top of our data architecture, and that's an investment area for us. So again, to me, it's more of a mindset, and that's -- we're driving that across the company and certainly can drive both kind of revenue and business in the future, but also more efficiency inside the company overall.

With the push in real-time payments and stablecoins maybe in the future, what does that do for your business?

I mean, in general, we believe it's incremental. So if you think of -- and we've announced a partnership with BVNK, and we'll talk more about that as we go live. But I would think of it as incremental for us because especially in the markets where there's volatile currencies, we have an opportunity maybe using the stablecoin, and we have that in real-time payments. But using the stablecoin to enter those markets where you may not have normally entered because of the currency volatility. From an economic standpoint, the cost of the stablecoin is very similar to one of our lower-cost instruments. So it doesn't necessarily change the economics for us. But ultimately, we'll provide choice. So if our clients want to pay by stablecoin, we'll have the ability -- we'll provide that option. So -- and we build -- we're building the capabilities to enable that overall, and we'll announce more as our partnership with BVNK kind of launches in soon here.

How do you think about the margin structure? It sounds like you're expecting a little bit of gross margin pressure, but overall adjusted EBITDA margins expansion and then GAAP margins. How do you think about -- how that all comes together?

Yes. Look, so historically, our gross margin was sort of declining slightly year-over-year, mostly because travel and B2B were growing faster. Now with the macro pressures, that's adding a bit of pressure on that side. And also, as I just described, the domestic business or the -- some of the new capabilities in health care and others come at a lower gross profit. But having said that, so you end up sort of closer to the 200 bps decline versus the 100 to 200 that we talked about. Having said that, we've beat margin expectations every year. And so we feel pretty good that we can continue to drive margin expansion. So growing OpEx below gross profit dollars, and that's driven by kind of every single line item, so sales and marketing and maybe even R&D, but certainly in G&A, you've seen us see opportunity there to continue to lower that, and I expect us to continue to increase margins. And at the same time, reduce the stock-based comp impact so that on a GAAP basis, too, we should be able to continue seeing profitability from a net income perspective growing along with GAAP EPS over time. So looking not just at EBITDA, but increasingly all the way down through GAAP EPS and including free cash flow actually.

Any change in your prioritization of capital allocation, especially with the stock price obviously being down more buybacks? And then how do you think about M&A build versus buy?

Yes. I mean, for now, I would say our focus is on organic investments. So continuing to invest behind travel, Sertifi integration or the domestic EDU capability or some of the data architecture and AI investments that we talked about. So kind of continuing to drive investments organically. From a share buyback this year, we've pretty much reinvested most of the free cash flow into buyback, if you look at it that way. So we remain pretty aggressive. And as long as the stock remains pretty dislocated, we're going to continue to look at that and be opportunistic in terms of the share buyback. And from an M&A perspective, well, of course, we have a pipeline, and we always look at opportunities. For now, we're busy, obviously, with the integration of Sertifi and invoice. So the focus is on execution there in the short term.

You gave a preliminary outlook for 2026, and we talked a little bit about that through the education side. But how do we think about the overall outlook that you kind of outlined for '26 in terms of growth versus '25 and maybe a normalized kind of overall business for Flywire?

Yes. Look, I mean, what we've tried to do is try to take some of this macro noise by being, again, transparent and data-driven and also very prudent in our outlook. So if you look at the last few quarters, we've done better than that macro assumption that we've had. So the intent is that we take some of that -- a little bit of that uncertainty around the macro impact. But obviously, for this year, to think about the normalized growth rate would be looking at taking out the mid-single-digit impact against the fact that we're still growing in the mid-teens, and that's FX neutral, excluding Sertifi. So as we get into next year, again, similar profile, as we said, related to our Q4 exit. But we feel quite good that we've -- the way we've sort of framed this mid-single-digit headwind, it allows us to be more predictable and feel quite comfortable that we've captured some of those risks that are out there, and that the rest of the business, like we said, it's very disciplined growth, very durable growth. And again, it's highly sort of margin profitable.

Okay. With that, Cosmin, we'll keep it there. Thanks so much.

Thank you.

Good day, and thank you for standing by. Welcome to the Flywire Third Quarter 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Masha Kahn, Vice President of Investor Relations. Please go ahead.

Thank you, and good afternoon. With us on today's call are Mike Massaro, Chief Executive Officer; Rob Orgel, President and Chief Operating Officer; and Cosmin Pitigoi, Chief Financial Officer. Our third quarter 2025 earnings press release, supplemental presentation, and when filed Form 10-Q can be found at ir.flywire.com.

During the call, we'll be discussing certain forward-looking information. Actual results could differ materially from those contemplated by these forward-looking statements. We'll 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.

Thanks, Masha. This quarter reinforced Flywire's leadership as a trusted partner for modern payments. Our results underscore Flywire's strong execution, resilient business model and expanding client demand across markets, supported by macro conditions that were better than expected.

We signed more than 200 new clients across our 4 verticals, a clear sign of both the consistency of our execution and the global relevance of our products and platform. Flywire continued to win where it matters the most, winning new clients, expanding existing client relationships, and doing so across verticals and across geographies.

Our focus remains on three priorities: optimize go-to-market excellence, accelerate product innovation, and cultivate high-performing teams. And in Q3, we delivered across all three. Our sales, client success and operations teams executed at a high level, keeping us on track to exceed our ARR contract signing goals for the year. Flywire is increasingly the partner of choice for organizations looking to modernize complex payment flows, consolidate vendors and drive measurable ROI.

Our diversification strategy is delivering results with education growth now extending well beyond our traditional Big 4 markets. More than half of our new education wins this year came from outside those markets, reflecting the strength of our global reach.

Within education, our Student Financial Software platform was a major growth driver in Q3 as institutions continue to consolidate all payments with Flywire to improve collections and protect revenue. Our Collection Management solution within SFS has helped institutions recover more than $360 million in past due tuition, deliver $72 million in pre-collection savings, and preserve over 177,000 student enrollments, demonstrating our impact on both institutional health and student success.

Our value proposition is clear and differentiated. We bring together industry-specific software and deep expertise in payments into one integrated offering. This unique combination positions Flywire as a comprehensive solution partner with our ability to solve the most complex domestic and international payment challenges often becoming the entry point to deeper client relationships.

In our travel vertical, client momentum remains strong, helping to grow this business into a meaningful contributor to total company revenue. Our integration of Sertifi continues to unlock new workflows, cross-sell opportunities and incremental monetization potential.

In health care, revenue growth approached our organic corporate average in the third quarter, driven by recent wins with large enterprise customers. B2B continues to grow at multiples of overall company revenue growth, reflecting strong demand for our invoice-to-cash capabilities.

Product innovation remains a key priority as we continue to leverage technology across the business to deliver results. Our teams are using AI to drive greater scale, efficiency and precision. From automated prototyping and code conversion that reduce migrations from months to weeks to data-driven insights that enhance the client experience. We are also seeing growing interest from clients in expanding their use of Flywire solutions as they look to streamline more of their payment operations through a single trusted partner.

Our success reflects years of investment in go-to-market execution, product innovation and a culture built on relentless client focus. Flywire's evolution from a cross-border payments company to a diversified global software and payments leader is well underway, and the opportunity ahead is significant as we aim to deepen client relationships, expand market share and drive durable high-margin growth.

Finally, none of this happens without our FlyMates. Their creativity, discipline and focus on results drive our performance and client success every day. Together, we have built a culture that values accountability, impact and growth, reflected in high engagement and talent across our teams. Flywire is built for the long term, resilient, scalable and positioned to lead.

With that, I'll turn the call over to Rob to share more on our operational performance for the quarter.

Good evening, everyone. We are delighted to share the results of a strong third quarter of 2025, reflecting Flywire's resilience, disciplined execution, and continued global competitive momentum, all amid a macro backdrop that was better than expected.

Starting in global education, we continue to see strong momentum driven by strategic upsells, geographic expansion and deepening partnerships. We just completed our peak quarter with excellent execution, helping clients streamline payment operations and delivering great payer experiences.

Our deeper integrations with China's UnionPay, Indian loan providers and agent networks are enhancing retention and engagement across key markets.

Now, let me zoom into key geographies. Starting with our largest market, the U.K., we continue to see strong demand from international students choosing to study in the U.K., and Flywire is expanding its presence with several new client wins, including Heriot-Watt University and Royal Holloway, together representing roughly 39,000 students with around 11,000 international students. We also signed a new StudyLink deal with De Montfort University, further strengthening our regional footprint.

Momentum continues with our U.S. federal loans disbursement offering for U.K. universities. Seven new U.K. clients signed this quarter, bringing the total to 15 since launch. Our SFS pipeline for Agresso Unit4 institutions remain strong with all 3 development partners for our Unit4 integration now live and delivering excellent results. This differentiated capability positions Flywire as the only comprehensive platform serving both domestic and international payment needs, enabling us to win broader institutional relationships and capture significantly greater wallet share.

Our U.K. strategy focuses on deeper integrations that position us as the sole channel for all significant university domestic and international payment flows, either through a unified payment portal powered by our SFS solution or by integrating into existing portals for tuition and accommodation billing. The U.K. represents approximately 1/4 of Flywire total revenues and grew above the organic corporate average growth rate in the third quarter.

We see substantial runway ahead across three key areas. First, domestic payment expansion. With only 12 U.K. clients currently at what we believe to be 90% plus Flywire adoption, there is considerable room to capture a higher share of payment flows at existing institutions.

Second, we see runway for SFS for finance systems integrations. A large portion of U.K. universities manage student invoices in systems like Unit4 without student-facing portals. Flywire's SFS fills this critical gap, enabling real-time payment reconciliation and consolidated billing across all student charges.

Third, we see runway for optimizing international payment flows. Billions in tuition payments currently appear as domestic transactions, despite being funded by parents abroad. By improving the payer journey, we can shift more of these flows to cross-border transactions through our network, capturing higher-margin revenue. Note that we've included additional detail on U.K. strategies in the earnings supplement.

Turning to the United States. Financial pressures continue to weigh on U.S. educational institutions. As schools look to improve cash flow and efficiency, demand for Flywire's full suite of solutions continues to accelerate. We are deepening partnerships with leading universities. Notably, Penn State University is expanding its relationship, now adopting our full suite SFS platform for billing, payments, payment plans and third-party invoicing.

Our Collection Management module of SFS also helps institutions streamline receivables and reduce administrative workload with clients like DePaul University calling Flywire invaluable to their business. This expansion reflects the value Flywire delivers in improving financial operations and enhancing the payment experience for students, families and staff.

And importantly, opportunity for growth isn't just coming from long-standing relationships. There are more than 3,000 U.S. institutions that aren't Flywire clients, and we've recently signed 2 full suite SFS deals with community colleges that don't have many international students, but want to modernize their domestic payments. For them, it will bring the full benefits of SFS, and for us, it's an emerging path to securing more software and domestic revenue in a large and mostly new segment for Flywire.

Our SFS pipeline remains very strong. Through Q3 2025, we've signed more than double the ARR versus the full prior year cohort. We just hosted our second annual Fusion conference, bringing together nearly 100 U.S. higher education institutions. When finance leaders from universities get on stage and talk about the ROI achieved through Flywire suite of products, it sends a strong message to the broader market. Universities must embrace change and technical innovation to stay competitive.

Turning to Australia and Canada. In Australia, Q3 performance was significantly better than expected, growing above our organic corporate average growth rate during the quarter, driven by resilient demand at top universities that continue to attract students despite visa fee increases. New and upsell wins through StudyLink, including Swinburne University and Flinders University, further strengthened our position.

StudyLink is helping institutions accelerate offer letter turnaround times and enhance the student experience. As a result of our expansions with StudyLink, alongside our direct selling efforts, Flywire's higher education market share in Australia's total education payment sector has expanded significantly over the past 12 months.

In Canada, existing Flywire clients that previously used our platform, primarily for cross-border payments, are increasingly expanding into domestic payment flows. This trend is helping diversify revenue and offset softer international volume. During the quarter, Flywire successfully enabled domestic processing for clients such as Fanshawe College and Georgian College, deepening relationships with these institutions and broadening payment coverage across their campuses.

Moving on to our progress outside the Big 4 markets. Flywire continues to see students applying to a broader range of study destinations as students hedge against potential policy changes in traditional English-speaking markets. As a result, we anticipate sustained growth outside the Big 4, Australia, Canada, the U.K. and the U.S., with strong momentum already underway across APAC and EMEA. These regions are driving diversified expansion as institutions attract more international students and modernize their payment ecosystems.

In Asia, Flywire is accelerating growth in Singapore, Japan and South Korea. In Singapore, our OneDoor model continues to gain traction with Nanyang Technological University, or NTU, and the Singapore Institute of Management, or SIM, both live on Flywire for domestic and cross-border payments.

In Japan and Korea, we are expanding beyond language providers into public higher education institutions, aligning with government initiatives to significantly increase international student enrollment over the next several years.

In EMEA, Flywire continues to broaden its education ecosystem, deepening its footprint in higher education and adjacent segments such as private K-12, sports academies and student housing. A landmark partnership with Inspired Education Group, one of the world's largest private K-12 networks, underscores our ability to combine local expertise with global scale to manage complex cross-border payment flows.

Beyond academia, Flywire is enabling leading sports academies and student housing providers across Europe to manage tuition, training and living expenses through a single seamless platform. Across these regions, Flywire's combination of local market expertise, integrated technology, and trusted partnerships continues to drive strong diversified growth and reinforce our leadership in international education payments.

Moving on to our travel vertical. The travel vertical continues to grow through targeted client integrations and tailored payment solutions. To give a few client examples, Quasar Expeditions integrated Flywire with PEAK 15, simplifying bookings, payments and reconciliation while offering transparent multicurrency pricing.

In Indonesia, BaliSuperHost went live with Flywire, benefiting from lower card fees, local currency payments and dynamic 3DS to boost international bookings.

In Australia, Southern World's DMC integration reduced FX fees, highlighting Flywire's global payment capabilities. Bigger picture, travel delivered a standout quarter, significantly exceeding Q3 bookings plan and achieving strong year-over-year revenue growth, driven by continued momentum in destination management companies and luxury accommodations and robust performance across APAC, supported by new wins in Thailand, Australia and Indonesia.

Moving on to Sertifi. Sertifi provides hotels and travel operators a streamlined way to capture incremental revenue by reducing payment friction and operational inefficiencies. It is designed to decrease turnaround times on payments and contract signatures, lowering reconciliation and manual data entry, reduces chargebacks, and improves transparency between sales and finance teams. Features like secure online portals, ACH payments, fraud prevention, multicurrency support and automated reminders enhance efficiency and the guest experience.

As an example from among many client wins, one key upsell was a master services agreement with Aimbridge, the world's largest property management company covering over 1,400 locations, a strong validation of Sertifi's value.

Our strategy to expand globally and cross-sell is progressing with Flywire scale reassuring enterprise clients like Marriott, Hilton, Hyatt, IHG and Choice that we can drive revenue growth, operational improvements and broader adoption outside the U.S.

I'd also like to provide an update on health care. Health care continues to build momentum, as we expand our integrated payments, financing and affordability platform. A key driver of growth during the quarter was the early ramp of our new payment processing capabilities on behalf of Cleveland Clinic, a previously referenced new marquee client that we can now share the name. With nearly 6 million patient visits per year across more than 200 locations worldwide, Cleveland Clinic is now live with initial phases of implementation in the U.S. and the U.K., including MyChart payments with point-of-sale rollout underway across its U.S. locations.

We're also seeing strong new client activity. This quarter, Cook County Health selected Flywire's health care affordability and integrated payment solution to consolidate vendors, accelerate cash collections and improve yield. These wins underscore the strength of our value proposition, and our ability to drive measurable financial and operational outcomes for leading health systems. Our new payment processing offering will operate at lower gross margins than the rest of the health care solutions, but it is helping us win deals, establish scale and add long-term revenue durability.

In B2B, Flywire has evolved beyond a global payments network offering into an all-in-one invoice-to-cash platform with leading integrated payments capabilities. We unify receivables and invoicing across more than 140 currencies, provide transparent pricing, flexible payment options and seamless ERP integration backed by dedicated support and compliance teams.

At the same time, the software plus payments proposition is so compelling that it is well-suited for entirely domestic businesses as well, and we are winning nicely in those opportunities as well.

It's been 1 year since we acquired Invoiced, a move that opened the door to over $1 billion in payment volume opportunities within the Invoiced installed base. Since then, we've delivered meaningful synergies by combining Invoiced's automation and billing tools with Flywire's global payment rails, driving strong ARR growth across clients.

A great recent example of success with Invoiced this quarter is KnowBe4, a global leader in human risk management operating in more than 200 countries. With Flywire's Invoiced platform, KnowBe4 expects to achieve over 95% auto reconciliation, centralized global billing and enterprise-grade compliance. One year later, we feel really good about Invoiced and how it has served as a catalyst accelerating Flywire's transformation into a leading global invoice-to-cash and payments platform. It's another great example by Flywire of software drives value in payments.

I will now pass it over to Cosmin to talk about our financial performance and outlook. Cosmin?

Thank you, Rob, and good evening, everyone. Today, I'll provide an overview of our third quarter results and share our outlook for the fourth quarter. We exceeded the top end of our revenue and adjusted EBITDA guidance, supported by better-than-expected macro conditions across key education markets, including Australia and the U.S. as well as a stronger peak in the U.K., upside in B2B, early go-lives and operational excellence in our payments network. As a result, we're raising our full year revenue and EBITDA guidance.

Turning to our performance in the third quarter. Revenue less ancillary services was $194 million in Q3, representing a 26% year-over-year FX-neutral growth or 28% on a spot basis. Sertifi contributed almost $13 million in Q3, adding approximately 8 points of growth.

Our Q3 results, once again, exceeded expectations, demonstrating our ability to thrive in a dynamic macro environment. This performance was driven by better-than-expected macro conditions across Australia and the U.S., a stronger peak in the U.K., along with continued robust underlying growth across the rest of the business.

To further unpack the drivers, Australia significantly outpaced organic corporate average revenue growth in Q3 as resilient demand for top universities, new client wins, and upsells drove substantial market share expansion despite an increased $2,000 visa fee and soft caps affecting broad visa trends.

The U.K. market had a strong peak season, driven by demand from India, China, the U.S., South Korea and Mexico. Early wins and integrations like Tribal ERP helped outperform visa trends. Some Q4 activity possibly shifted into Q3 due to the extended October Golden Week holiday in China, so a more normalized view of growth comes from combining Q3 and Q4 results.

Our U.S. education business exceeded our expectations with first year international payers declining by slightly less than the 20% visa decline that we anticipated.

The trends in the U.S. underscore solid demand for undergraduate programs in the past academic year, especially at academically rigorous institutions. However, trends were uneven across different corridors. For example, we saw a strong performance in China, Lat Am, South Korea and Hong Kong, but weaker numbers from Indian students, which could be attributed to visa issues.

Canada higher education headwinds shaved 2 points of growth due to continued weak demand. However, this weakness was baked into our guide, and we'll continue to remain prudent in our expectations for Canada given weak demand, especially from Indian students.

B2B, health care and travel were all slightly stronger than our expectations, thanks to go-lives and stronger-than-expected ramp-up in volumes.

Fueled by a robust education peak season, total payment volume climbed to $13.9 billion, 26% higher year-over-year and almost double the average of the last 2 quarters, highlighting the growing strength and scalability of our platform. From a modernization standpoint, our spreads have remained relatively consistent and in line with the last several reporting quarters.

Operationally, we're scaling smoothly without proportional cost increases. Our contact rate dropped in the mid-teens year-over-year, meaning fewer escalations despite processing significantly more volume. This efficiency is driven by AI automation, which pushed our self-service rate to 41%, up 28% year-over-year. We're successfully decoupling growth from support costs, protecting margins as we scale.

Breaking down our revenue streams, transaction revenue is largely derived from fees tied to payment volume, while platform and other revenues mainly reflect software subscription and usage-based fees.

Starting with transaction revenue, we saw a 24.4% year-over-year increase, approximately 4 percentage points of which were attributable to Sertifi. Transaction-related payment volume was up 30.9%, 3 percentage points of which were attributable to Sertifi, primarily in our education vertical as well as travel.

Platform and other revenues increased 56% year-over-year, primarily driven by the platform fees that do not carry payment volumes, specifically revenues associated with Sertifi, which were $7.8 million and improving growth in our health care revenues.

Platform-related payment volumes of $2.4 billion were up 9% year-over-year, lower than platform revenue growth as some of our software revenues do not have associated TPV volumes.

Adjusted gross profit increased to $127.5 million during the quarter, up 25% year-over-year. Adjusted gross profit margin was 65.7% for Q3 2025, which is a decline of about 170 basis points, compared to Q3 2024.

Our business mix continues to exert downward pressure driven by travel and B2B verticals growing faster, which have higher credit card usage, along with domestic transaction growth in the education vertical.

Foreign exchange fluctuations during transaction settlements, including the positive effect of less than $1 million seen this quarter in gross margin are largely counterbalanced by FX hedges recorded in operating expenses, softening the overall impact on adjusted EBITDA.

Adjusted EBITDA increase was approximately $5 million above the midpoint of our guide and grew to $57.1 million for the quarter, compared to $42.2 million in Q3 2024. Adjusted EBITDA margin was up 155 bps year-over-year, beating the high end of our previous guidance range.

We continue to balance top line growth with long-term productivity and margin expansion by focusing on optimizing operations and support functions.

In Q3, sales and marketing spend was $32 million or 16.6% of revenue, improving approximately 120 bps year-over-year as we maintain go-to-market investments in travel and B2B while streamlining for stronger LTV to CAC performance.

G&A spend was $27 million or 13.9% of revenue, improving modestly year-over-year, but meaningfully lower as we compare year-to-date trends driven by operating leverage and continued investment in automation and systems, including Sertifi integration.

Technology and development spend was $12 million or 6.4% of revenue, improving approximately 160 bps year-over-year as we scale our platform and enhance engineering productivity.

While the majority of the gross profit flowed through to adjusted EBITDA this quarter, we continue to drive operating leverage while making targeted reinvestments in platforms, including Sertifi integration, systems and automation initiatives, data architecture and analytics and go-to-market expansion.

To close out the income statement, GAAP net income in Q3 was $29.6 million, down roughly $9 million year-over-year due to lapping of a onetime tax benefit in the third quarter of 2024 and timing of tax provision reversals. We expect full year GAAP net income to remain positive around the high single-digit millions.

Our balance sheet remains strong. We ended the quarter with $212 million of cash, cash equivalents and investments, with just $15 million of outstanding debt, we intend to pay down soon.

Turning to capital allocation, we generated strong cash flow in Q3 and repurchased 0.8 million shares for approximately $10 million under our share repurchase program, keeping total fully diluted share count within our guided range below 3% for the year.

Having passed the peak of our post-IPO stock-based compensation vesting schedule, stock-based compensation expenses as a percent of revenue are trending down on track to be approximately 12% for the year. We expect stock-based compensation growth to remain below gross profit margin growth as the business continues to scale in the near term and expect to continue managing dilution in a disciplined manner.

Now shifting towards guidance for Q4 2025 and our early thoughts around next submission cycle for the education vertical. Some context as we enter Q4 2025. As noted previously, tuition payment patterns can shift slightly from year-to-year around major holidays.

In 2025, the October Golden Week holiday extended to 8 days due to the overlap of China's National Day and the mid-autumn festival, which was longer and later than in prior years, causing some payment activity to be concentrated in Q3 prior to the start of the holidays rather than in Q4. We do not expect this temporary shift in payment timing to have a material effect on our overall annual results, but it may impact comparisons between the affected quarters. For a clear and more normalized view of growth, it's best to evaluate performance across the second half, combining Q3 and Q4 results.

Hence, for full year 2025, we expect FX-neutral revenue to grow in the range of 23% to 25% year-over-year, including Sertifi. Excluding Sertifi, we expect revenue less ancillary services growth in the range of 14% to 16% year-over-year.

For 2025, we're updating our full year adjusted EBITDA margin expansion outlook to a range of 330 to 370 bps. This reflects OpEx efficiencies and cost discipline across the organization, supporting a trajectory towards sustained GAAP net income profitability growth as we move into next year and beyond.

On FX, with weaker U.S. rates as of September 30, we now expect the FX impact on full year revenue to be around a positive 1.5% and about 3% for the fourth quarter.

Turning to Q4 2025. We expect FX-neutral revenue to grow 23% to 27% year-over-year on a reported basis or 13% to 15% when excluding Sertifi, and expect adjusted EBITDA margin to increase 50 to 200 bps year-over-year.

On gross margin expectations into Q4, just a couple of dynamics to note. First, last year's Q4 gross profit margin benefited from $2.7 million in FX on settlement gains, which should be normalized for a comparable view. And secondly, we previously indicated gross profit margin would decline in the range of 100 to 200 bps headwind annually due to mix. As we see our newer verticals growing faster along with strong domestic expansion, these mix shifts are expected to create further margin pressure towards the higher end of that range.

Looking ahead to 2026. While we are not yet guiding and we are still going through our usual detailed planning process, we wanted to provide some preliminary thoughts. Agents tell us that students are applying to more destinations, but demand from Indian students for U.S. and Canadian institutions remain under pressure. We're gaining great traction with clients outside the Big 4. However, it is important to note the tuition differences across different geographies.

Macro-related headwinds are expected to persist, driven mainly by U.S. policy uncertainty, creating a mid-single-digit pressure into 2026, relatively similar to our current full year and Q4 2025 exit growth assumptions. We also expect both Canada and Australia revenue growth to run below organic corporate average, with Canada particularly impacted by ongoing demand softness.

In closing, we remain agile and disciplined in managing our costs while leveraging the strength of our diversified business model. This diversification allows us to balance investments, allocate capital to the high ROI projects, and scale the business even amid volatility of headlines and government policies. We're confident in our differentiated products, the breadth of our growth opportunities across all verticals, and our ability to deliver meaningful and sustained shareholder value.

I'll now turn it back over to operator for questions. Operator?

[Operator Instructions] Our first question comes from the line of Cris Kennedy with William Blair.

Rob, you mentioned 12 clients in the U.K. are at 90% penetration. Can you just provide a little bit of more perspective on that metric relative to the U.S. or any other market you want to talk about?

Yes. Cris, good to hear from you. So what we've described in our U.K. strategy for some time now has been about trying to move all the money. And so we have a set of potential methods that we use for achieving that objective. You can see there's a slide in the earnings supplement that sort of outlines how all that works. And thus far, we've managed to get at least 12 clients in our view over that mark.

And we view that as sort of one of the core elements of our strategy going forward, and it's a strategy that works both for our clients and for us in that by consolidating with us, they get all the benefits of our platform, serving their efficiency, their administrative efficiency, they get cost savings, and we deliver a superior quality experience for the students. So whether we accomplish that through SFS, whether we accomplish that through things like integration through Tribal, it's all part of that same objective of moving all the money, and we see a lot of opportunity to do that for more clients.

Got it. And then just as a follow-up, Cosmin, can you just talk about the preliminary initial outlook for 2026 again? I think you talked about mid-single-digit pressure relative to the fourth quarter run rate? Or is that consistent with the fourth quarter run rate?

Yes. Thanks, Cris. So pretty consistent with the fourth quarter, I would say, in general, with that mid-single-digit growth -- impact to growth. I would say, however, think of that as more coming from the U.S. is obviously, Canada is going to be still somewhat negative, but not as big of an impact. So we feel that the mid-single digit with kind of that exit growth rate that you see in our Q4 guidance around that 14% is the right way to think about it. But think of the mid-single-digit headwind is more U.S. with Canada and Australia being still negative, but a little bit less of an impact in addition to, again, we're watching the U.K. numbers. But as we think about -- as you think about the mid-single digit, we feel that it's quite a prudent approach, and we feel good about sort of where we are in terms of adjusting for what we're seeing in the environment out there.

Our next question comes from the line of John Davis with Raymond James.

Mike, I kind of want to follow up a little bit on Cris' question, but just taking a big step back, it feels like we're past peak geopolitical headwinds, yet you're kind of implying similar headwind in '26 versus '25. Maybe just talk a little bit about that. What's conservatism versus what are you worried about in the U.S.? Obviously, there's a lot of unknown, but it does feel like we're hopefully over the hump. But would just love to square being past geopolitical headwinds with a similar headwind to growth in '26.

Yes. JD, thanks for the question. I mean I think obviously, as Cosmin has always said, we're trying to be very data-centric in how kind of we look at the future and have a level of prudence in it. I think if you look at Australia and the U.S., there are 2 good examples of where headlines didn't quite jive with what we saw play out in those 2 markets, right? Things were more positive than probably what the headlines looked like a few months back. If you look at Canada, I think it played out, obviously, over the last 18 months in a very similar way, quite negative.

And so I think we've seen both sides of it. I said if you just start looking out, right, from my perspective, over the next multiple years, like we're really excited to keep building the company, right? We just see a huge opportunity. I think we've proven our ability to navigate complex times between COVID, between some of this macro geopolitical risk in the last 18 months. We have a diversified business, multiple industries, multiple sectors, products, revenue streams, and we just continue to win. So I think as I sit here, I just think we keep continuing to prove we can navigate this environment. We're going to do so with a level of prudence per what Cosmin said. But I couldn't be more happy with how things are going and the opportunity I see ahead.

Okay. And then just new wins, pretty consistent 200 clients, plus or minus a quarter here. It feels like that's been the run rate for a while now. So clearly, having success. But Mike, just talk a little bit about -- I'm just trying to think things forward. It feels like NRR should probably get a little bit better as geopolitical headwinds pass. Maybe talk about new logo growth. Are these -- as we think about kind of ACV or size of client, are there any kind of material changes there, maybe where are those 200 new clients concentrated from a vertical perspective?

JD, it's Rob. I'll step in on this one. The growth continues to be strong and diversified. So if you look at this quarter, you'd see that EDU beat out travel in ARR signed, but travel beat out EDU in total deals signed. If you look across geographies, they're diverse in both. We called out that more than half the wins in the EDU space were outside the big 4 markets, but that obviously means there's lots of good traction inside the Big 4 as well, some of which we called out in talking about SFS and similar wins. If you look over on the travel side, particular strength across APAC, across EMEA, across DMCs, across accommodations. So again, nicely diversified. Average deal size is going up over the comparable prior period. We feel very good about our achievement against our ARR goals for the year. So overall, the team continues to execute very, very well, nicely diversified wins across all the verticals.

Okay. And I'll squeeze one more in for Cosmin, if I can. I think year-to-date incremental margins have been roughly 40%, Cosmin, before the fourth quarter guide by our math is incrementals of roughly 20%. Are there any sort of incremental investments planned in the fourth quarter or anything seasonally that we should think about as we think about fourth quarter margins?

Yes. I think, Dave, stepping back, I look at the full year margins, incremental margins, as you said, sort of being well above that 30% and as you know, Q3, Q4, there is seasonality. But in the first half, obviously, we were very prudent as we looked at OpEx and investments given the macro. And so as I said in my prepared remarks, we've invested in targeted ways in Q3. But as you look ahead in terms of a normalized kind of incremental margins, again, that being EBITDA over revenue. Q3 is probably a good way to look at it. So think of it as kind of in the mid-30s kind of range looking ahead and also for the year in terms of kind of where we are in terms of normal incremental margins. And again, with OpEx being very sort of disciplined as always, growing well below what I look at as gross profit growth is what I compare to. So that's the way I sort of look at it is OpEx to gross profit growth to ensure we continue driving that sort of mid-30s incremental margins growth.

Our next question comes from the line of Nate Svensson with Deutsche Bank Securities.

Nice results. I wanted to ask about SFS. Obviously, continues to chug along. I think I heard 7 new clients signed in the U.K. I think in the past, you said each of these should be maybe in the low single-digit millions of annual revenue. I guess my question is more just on the time it takes to implement these wins and get them to ramp. I guess, for the deals you just announced, do you have to wait until the next academic year for them to start hitting the P&L? Or can they go live quicker than that? Just understanding those dynamics would be helpful.

Rob here. So let me jump in. Let me first just start with a couple of numbers just to make sure we level set on sort of the deal counts. So for the U.S., we're at 11 SFS for the year. Some of those are live, some of those continue and will ramp either later this year or into next. In the U.K., we have 4 SFS clients live at this point. And we're -- what I announced on this call was the live count for the U.S. loan disbursement product. So that's a different product that helps support our U.K. universities. So in terms of average deal size, what we always talk about is the opportunity to grow at a given institution. So you'll see in the earnings supplement, there's a slide there that talks about the gross profit multiplier that these schools all represent.

And so I think the last part of your question, the timing of that is often going to focus around where those semester and due dates are. So our goal and typically our clients' goal is to get live comfortably ahead of whatever their next peak or their next enrollment period is going to be. Just like no retailer will launch a new platform in the middle of like Christmas holidays, a school wants to get a platform in ahead of that peak period. So that's what we're always working towards and have been very successful in doing that. So what you'd see from those next batch of deals and things that we do in the future, we'll always be working to get those live in time for typically their next peak period.

That's super helpful. Appreciate it. I guess for the follow-up, this is going back again to the macro, and I know we've touched on it on a bunch of calls. But I guess I just want to understand the mechanics of the flow-through, how lower international students coming into the U.S. or any other particular country in 1 year impacts the financial metrics for Flywire in the outer years, right? So maybe some sort of breakdown or unpacking of the revenue impact to your model from first year students versus second, third or fourth year students, just how that flows through, how we should think about things like NRR, stuff like that as we move forward and as one of the prior questions implied, hopefully get past the worst of these macro headwinds.

Yes, it's Cosmin. So let me try to approach that assume from a U.S. perspective. What we've told you before is if you look at U.S. international revenue, call it, roughly $80 million, roughly just half or less of that is first year. So as we look at it from new cohorts versus existing, that gives you a sense for the dynamics there. And so when we assume for this year, for example, before that 20% decline, if that continues into the future, as you can imagine, some of that impacts the second, third and fourth year and so forth, graduating classes. However, in that mid-single-digit headwind that I mentioned for this year, but also into next year and sort of looking at Q4 exit, that already basically accounts for that graduating class being smaller as that kind of decline flows through.

So we've already accounted for that and actually assumed an even larger decline than that into next year. So we've already taken that view into the numbers and still feel pretty good again that the rest of the business is growing fast enough to offset that, as you can see, for example, for the Q4 guide in that 14% and then full year this year on the mid-teens growth. But again, that -- the way we look at it is, obviously, that first year and the graduating classes, we've accounted for that, but that's a little bit of the dynamics there overall.

And look, in terms of NRR question, obviously, with where we are in terms of growth in the mid-teens, NRR will be below that. But again, still feel quite good about where we've kind of assumed in terms of being very prudent around the guide overall. And as we look ahead, accounting for all those dynamics, including the future graduating cohorts.

Our next question comes from the line of Dan Perlin with RBC Capital Markets.

Nice results here. I wanted to just -- I don't know, maybe reconcile a little bit. So you have 50% of the new education wins that are coming outside of the big 4. And presumably, obviously, those types of transactions might be smaller institutions, maybe not quite the same level of revenues and so forth. But it does sound like you're having a lot of success. Australia was one of the markets you talked about where you're really seeing pretty material market share gains. So maybe can you just help us understand like the maybe weighted average contribution that we should be expecting? Like you've got all these new wins that are coming from maybe smaller markets. But at the same time, it does seem like you're having some pretty material success expanding into these same existing big 4 markets with deeper penetration and kind of wallet share. So just trying to weigh the 2 pieces of that.

Yes. Maybe I can help a little bit with that. So obviously, we did call out success in Australia qualifies as one of the big 4. But as you focus on outside the big 4, there's a trend out there for sure where people out in the education ecosystem are now calling it sort of the big 10 or even the big 14 as they talk about adding more schools to that group. As we look for us and we sort of define sort of the group that way, we're now sort of talking about what's the mid-teens percent -- low to mid-teens percent of our education business and growing at a pace that sort of significantly exceeds the corporate average. So you're right in calling out that while some of those deals are smaller in sort of their absolute size, we're winning a lot of them, and they are good deals. And as a result, they are contributing meaningfully from what is a good piece of the business and growing very quickly.

Yes. And Dan, this is Mike. I'd just add that having come back from multiple client events, international trips, there's a lot of good interest in just doing more with Flywire around the world. And so I think we have this huge footprint of clients in many geographies, and it's really up to us to introduce the right software products and the right payment solutions in those markets over time, and there's a lot of room to run in that opportunity. So we're excited we're seeing the traction, but really excited about just what that means for the future road map and growth in the future.

Yes. No, it looks great. I guess a quick question for Cosmin. So on the sales and marketing, as we just kind of think about kind of framing the context of what that might materialize into in the current environment versus maybe where you were. So like that number clearly is getting optimized to your point, at 16.6% and you look at that on a year-over-year comparison, it's obviously down. But at the same time, it does sound like you've kind of maybe hit trough periods with some of these international cross-border accounts. You got a lot of new business really across all of your segments. And I'm just wondering how do you think about spending into kind of the go-to-market motion to the extent that maybe we are past the worst?

Yes. I think in general, look, we've invested in this area, and we're being very targeted around balancing, obviously, not just the top line and the TAM opportunity with the profitability side. And so as you look at kind of overall the 16.6% this quarter, we're driving productivity in those areas, but that we are definitely investing in the areas in the geos and verticals where we see the opportunity. We talked about domestic U.K. travel outside the U.S. So I would say we're certainly investing in those areas, but we're also being more efficient.

One of the investments you saw around data and that architecture analytics allows us to sort of be very, very targeted around how and where we invest. And so that's one of the areas, again, that you'll see us continue to invest in, but also be more efficient. We don't need to grow the same level of gross profit, certainly not with revenue in terms of investments, but yet still find those areas of growth and go after it ambitiously. So we feel pretty good. And the sales team, as you heard, is executing quite well, and the pipeline remains quite large. So we feel pretty good about those investments even with the efficiencies that we're seeing driven in the sales and marketing areas.

Our next question comes from the line of Jeff Cantwell with Seaport Research.

I wanted to follow on some of the earlier questions. I want to take another shot. In your education business, the change right now where international students are increasingly attending schools outside your core 4, is that temporary? Or do you think that's the new paradigm going forward? How do you size that opportunity? I'm just curious if you could talk about volumes or revenue as you maybe start to see less international students in the U.S., for example, but those students are now attending schools outside the U.S. Any additional color there would be great.

Yes. Thanks, Jeff. So I'll start and then we can see if anyone wants to pile on. But I would say, look, if you look at overall U.S., as I said, about $80 million of overall revenue in cross-border with about half of that being first years, and so we've assumed a decline in that. And I think as you look at our -- my stated assumption for next year, I would assume that, that decline continues to be in that range or larger. Again, we've assumed the other cohorts similarly being impacted. But we do know that those students will generally want to go somewhere else. So we've talked about the demand for other geographies, certainly outside the U.S., but outside the big 4. And we have products and we have a footprint in all those markets.

So even with lower tuition in those markets, we feel good that we can, again, capture that volume, but it would be obviously at a different tuition rate. But again, as you look longer term, while, again, we feel good that we've captured those dynamics quite well for this year and into next year. The longer-term opportunity for us is certainly -- remains quite large, again, outside the U.S. As those trends, we feel, especially for Indian students, as we talked about coming to the U.S. and looking at other destinations, for example, specifically, we feel that, that will continue to play out.

And Jeff, I'd just say, this is Mike. Over the long term, I'd just continue to say student interest in education is not waning, right? As different levels of affluence happen around the world, I think people want to see their children educated. They want to have them get the best education in the best environment in a receptive environment. And so I think there's still strong interest in the United States. I think there's some lack of clarity in some of the policy. And hopefully, as that stuff clears up, you'll see those numbers continue to come in over the long term. And I think at the same time, Flywire is positioned well because we've got clients in 40-plus countries, and we'll be there where students choose to go in the meantime.

Okay. Great. Appreciate it. And then on your commentary about 2026, combine that with what you stated about your GAAP profitability going forward, my question is, are you saying that every quarter next year should be GAAP profitable? The reason I'm asking is because typically, your Q2 GAAP net income, for example, is negative just due to seasonality. But I would think perhaps maybe what certifies future impact and the operational excellence you're highlighting today, that now can maybe swing to positive. Do you mind just confirming that or giving us any additional color there? And then lastly, Mike, when you think about the next dollar of investment at Flywire these days, I'm curious where does it go?

I'll be quick on my side before I pass it to Mike. But yes, I'd say, look, we're not guiding '26 yet. But for now, I would say still seasonality will lean towards Q3, but we feel good that we'll continue to see increased profitability. And again, we'll update you early next year as part of our regular guidance around the seasonality of that.

And Jeff, just on your last one for me, we're so fortunate to have the choices that we have, right? We see great areas of opportunity to invest organically in the business. The payback in our go-to-market investments is great. The opportunities our product and tech teams see in developing new products or enhancing new products is strong. Cosmin's called out some of the automation and AI work we're doing to improve and scale the company. Those are all great areas of potential dollar investment for us, makes the choices a little more difficult, but they're all great choices.

We continue to obviously think that we're not quite valued properly. And I think that gives us an opportunity when it comes to buyback and Cosmin will be opportunistic there. And then hopefully, people are seeing we just have a track record of finding great targets. And so although not our primary focus, we're focused on integrating in the deals we have. We're still active in looking. And so we've got those hard choices to make across those areas, but we have lots of great organic investments, and that's kind of #1 priority for us.

Our next question comes from the line of Tien-Tsin Huang with JPMorgan.

Great sales execution here. I get the question a lot, and I may have -- we may have discussed this before, but just on the domestic payments opportunity within EDU, just remind us of the general ARR there? And what's the pitch to win? I mean is it price? Is it increasingly more payment design that bursar offices are caring about just because of things being complex and you bring something different to the table than what an incumbent solution might offer? Just trying to better understand why -- what your right to win is there.

Tien-Tsin, it's Rob here. I feel this very strongly having just come back from our Fusion conference where we had clients up on stage telling the story of their experience with Flywire and speaking to the audience there of their peers. And in that conversation, they really focus in on a couple of things, right? There is absolutely sort of back-office efficiency and benefits that they get from software that just reconciles better, offers more flexible payment plans, service their students better in terms of things that help the back office efficiency. But they really do care about the student experience. They really do care about affordability.

There's a lot of pressure out there on students and the kinds of things we can do with payment plans really matter. And then you put all of that in the context of our full suite and it's helping them on things like overdue payments, which are served by our collection management platform. And it's all in one integrated sort of modern tech platform. I think what we saw at the Fusion event was folks standing up saying, this was a great experience deploying it. This is a great experience operating it and the benefits are very real for clients. So it is not about sort of the cost saving on the payment. It's about the overall benefit of all the things I just said.

This concludes the question-and-answer session. Thank you all for your participation on today's call. This does conclude today's conference. You may now disconnect.