Revenue Increased 61% Year-over-Year
Revenue Less Ancillary Services Increased 67% Year-over-Year
Total Payment Volume was
Company Updates Fiscal-Year 2021 Outlook
“We experienced another strong quarter with growth across all areas of our business, resulting in revenue less ancillary services growth of 67% compared to the third quarter of 2020,” said
Third Quarter 2021 Financial Highlights:
GAAP Results
- Revenue increased 61% to
$67.8 million in the third quarter of 2021, compared to$42.1 million in the third quarter of 2020. - Gross margin increased 1.4% in absolute terms to 65.8% in the third quarter of 2021, compared to 64.4%in the third quarter of 2020.
- Net income was
$10.0 million in the third quarter of 2021, compared to$5.2 million in the third quarter of 2020.
Key Operating Metrics and Non-GAAP Results
- Total Payment Volume increased 76% to
$5.3 billion in the third quarter of 2021, compared to$3.0 billion in the third quarter of 2020. - Revenue Less Ancillary Services increased 67% to
$62.0 million in the third quarter of 2021, compared to$37.2 million in the third quarter of 2020. - Adjusted Gross Margin decreased 0.9% in absolute terms to 71.9% in the third quarter of 2021, compared to 72.8% in the third quarter of 2020.
- Adjusted EBITDA was
$17.6 million in the third quarter of 2021, compared to$10.2 million in the third quarter of 2020.
Fiscal-Year 2021 Outlook:
Based on information available as of
- Revenue of
$190 to$193 million - Revenue Less Ancillary Services of
$174 to$176 million - Adjusted EBITDA of
$22 to$24 million *
*
Conference Call
The Company will host a conference call to discuss third quarter 2021 financial results today at
Key Operating Metrics and Non-GAAP Financial Measures table
We use non-GAAP financial measures to supplement financial information presented on a GAAP basis. We believe that excluding certain items from our GAAP results allows management to better understand our consolidated financial performance from period to period and better project our future consolidated financial performance as forecasts are developed at a level of detail different from that used to prepare GAAP-based financial measures. Moreover, we believe these non-GAAP financial measures provide our stakeholders with useful information to help them evaluate our operating results by facilitating an enhanced understanding of our operating performance and enabling them to make more meaningful period to period comparisons. There are limitations to the use of the non-GAAP financial measures presented here. Our non-GAAP financial measures may not be comparable to similarly titled measures of other companies. Other companies, including companies in our industry, may calculate non-GAAP financial measures differently than we do, limiting the usefulness of those measures for comparative purposes.
We use supplemental measures of our performance which are derived from our consolidated financial information, but which are not presented in our consolidated financial statements prepared in accordance with GAAP. These non-GAAP financial measures include the following:
- Revenue Less Ancillary Services. Revenue Less Ancillary Services represents our consolidated revenue in accordance with GAAP after excluding (i) pass-through cost for printing and mailing services and (ii) marketing fees. We exclude these amounts to arrive at this supplemental non-GAAP financial measure as we view these services as ancillary to the primary services we provide to our clients.
- Adjusted Gross Margin. Adjusted gross margin represents adjusted gross profit divided by Revenue Less Ancillary Services. Adjusted gross profit represents Revenue Less Ancillary Services less cost of revenue adjusted to (i) exclude pass-through cost for printing services and (ii) offset marketing fees against costs incurred. Management believes this presentation supplements the GAAP presentation of gross margin with a useful measure of the gross margin of our payment-related services, which are the primary services we provide to our clients.
- Adjusted EBITDA. Adjusted EBITDA represents EBITDA further adjusted by excluding (i) stock-based compensation expense, (ii) the impact from the change in fair value measurement for contingent consideration associated with acquisitions, (iii) the impact from the change in fair value measurement of our preferred stock warrants, (iv) other income (expense), net, (v) acquisition related transaction costs, and (vi) employee retention costs, such as incentive compensation, associated with acquisition activities. Management believes that the exclusion of these amounts to calculate Adjusted EBITDA provides useful measures for period-to-period comparisons of our business.
These non-GAAP financial measures are not meant to be considered as indicators of performance in isolation from or as a substitute for revenue, gross margin or net loss prepared in accordance with GAAP and should be read only in conjunction with financial information presented on a GAAP basis. Reconciliations of Revenue Less Ancillary Services, Adjusted Gross Margin and Adjusted EBITDA to the most directly comparable GAAP financial measure are presented below. We encourage you to review these reconciliations in conjunction with the presentation of the non-GAAP financial measures for each of the periods presented. In future fiscal periods, we may exclude such items and may incur income and expenses similar to these excluded items. We have not provided a quantitative reconciliation of forecasted Adjusted EBITDA to forecasted GAAP net income (loss) or to forecasted GAAP income (loss) before income taxes within this earnings release because the Company is unable, without making unreasonable efforts, to calculate certain reconciling items with confidence. These items include but are not limited to income taxes which are directly impacted by unpredictable fluctuations in the market price of the Company's stock.
About
Safe Harbor Statement
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding our future operating results and financial position, our business strategy and plans, market growth, and our objectives for future operations.
Contacts
Media:
Sarah.King@Flywire.com
pro-flywire@prosek.com
Investor Relations:
ICR
flywireir@icrinc.com
Unaudited Condensed Consolidated Statement of Operations | |||||||||||||||
(Amounts in thousands, except share and per share amounts) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
Revenue | $ | 67,788 | $ | 42,086 | $ | 149,755 | $ | 98,552 | |||||||
Costs and operating expenses: | |||||||||||||||
Payment processing and services costs | 21,724 | 13,777 | 50,937 | 36,254 | |||||||||||
Technology and development | 7,752 | 6,079 | 22,203 | 17,805 | |||||||||||
Selling and marketing | 12,540 | 7,640 | 35,377 | 24,342 | |||||||||||
General and administrative | 14,676 | 9,172 | 44,167 | 32,985 | |||||||||||
Total costs and operating expenses | 56,692 | 36,668 | 152,684 | 111,386 | |||||||||||
Income (loss) from operations | 11,096 | 5,418 | (2,929 | ) | (12,834 | ) | |||||||||
Other income (expense): | |||||||||||||||
Interest expense | (542 | ) | (584 | ) | (1,792 | ) | (1,860 | ) | |||||||
Change in fair value of preferred stock warrant liability | - | 9 | (10,757 | ) | (245 | ) | |||||||||
Other income (expense), net | (214 | ) | (4 | ) | (508 | ) | 72 | ||||||||
Total other expenses, net | (756 | ) | (579 | ) | (13,057 | ) | (2,033 | ) | |||||||
Income (loss) before provision for income taxes | 10,340 | 4,839 | (15,986 | ) | (14,867 | ) | |||||||||
(Benefit from) provision for income taxes | 346 | (382 | ) | 818 | (7,791 | ) | |||||||||
Net income (loss) | 9,994 | 5,221 | (16,804 | ) | (7,076 | ) | |||||||||
Foreign currency translation adjustment | (343 | ) | 192 | (80 | ) | (81 | ) | ||||||||
Comprehensive income (loss) | 9,651 | 5,413 | (16,884 | ) | (7,157 | ) | |||||||||
Net income (loss) attributable to common stockholders - basic and diluted | 9,994 | 1,157 | (16,817 | ) | (7,086 | ) | |||||||||
Net income (loss) per share attributable to common stockholders - basic | 0.10 | 0.06 | (0.28 | ) | (0.39 | ) | |||||||||
Net income (loss) per share attributable to common stockholders - diluted | 0.08 | 0.04 | (0.28 | ) | (0.39 | ) | |||||||||
Weighted average common shares outstanding - basic | 104,486,136 | 18,644,502 | 59,667,434 | 18,163,078 | |||||||||||
Weighted average common shares outstanding - diluted | 118,445,907 | 27,286,944 | 59,667,434 | 18,163,078 | |||||||||||
Unaudited Condensed Consolidated Balance Sheets (Amounts in thousands, except share amounts) | |||||
2021 | 2020 | ||||
Assets | |||||
Current assets: | |||||
Cash and cash equivalents | 449,130 | 104,052 | |||
Restricted cash | 4,000 | 5,000 | |||
Accounts receivable, net of allowance for doubtful accounts of | 12,949 | 11,573 | |||
Unbilled receivables | 1,760 | 1,698 | |||
Funds receivable from payment partners | 21,896 | 22,481 | |||
Prepaid expenses and other current assets | 10,208 | 3,754 | |||
Total current assets | 499,943 | 148,558 | |||
Property and equipment, net | 8,690 | 5,101 | |||
Intangible assets, net | 63,379 | 68,211 | |||
44,632 | 44,650 | ||||
Other assets | 6,340 | 4,922 | |||
Total assets | 622,984 | 271,442 | |||
Liabilities, Convertible Preferred Stock, Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) | |||||
Current liabilities: | |||||
Accounts payable | 12,799 | 5,436 | |||
Funds payable to clients | 66,855 | 59,986 | |||
Accrued expenses and other current liabilities | 18,531 | 14,991 | |||
Deferred revenue | 1,330 | 1,227 | |||
Contingent consideration | 7,580 | 6,740 | |||
Total current liabilities | 107,095 | 88,380 | |||
Deferred tax liabilities | 657 | 481 | |||
Contingent consideration, net of current portion | — | 5,760 | |||
Preferred stock warrant liability | — | 1,932 | |||
Long-term debt | 25,933 | 24,352 | |||
Other liabilities | 1,587 | 2,129 | |||
Total liabilities | 135,272 | 123,034 | |||
Commitments and contingencies (Note 14) | |||||
Convertible preferred stock (Series A, B, B1, | |||||
and 62,915,394 shares authorized at respectively; 0 and 54,208,461 shares issued and outstanding at and | — | 110,401 | |||
Redeemable convertible preferred stock (Series E-1, E-2, F-1 and F-2), | |||||
and 16,023,132 shares authorized at respectively; 0 and 11,239,920 shares issued and outstanding at at | — | 119,769 | |||
Stockholders’ (deficit) equity: | |||||
Preferred stock, | |||||
and outstanding as of respectively | — | — | |||
Voting common stock, | |||||
authorized as of 101,201,466 shares issued and 98,883,744 shares outstanding as of September 30, 2021; 22,240,872 shares issued and 19,923,150 shares outstanding as of | 10 | 2 | |||
Non-voting common stock, | |||||
as of issued and outstanding as of respectively | 1 | — | |||
Treasury Stock, 2,317,722 shares as of | (748 | ) | (748 | ) | |
Additional paid-in capital | 603,319 | 16,970 | |||
Accumulated other comprehensive loss | (294 | ) | (214 | ) | |
Accumulated deficit | (114,576 | ) | (97,772 | ) | |
Total stockholders’ equity (deficit) | 487,712 | (81,762 | ) | ||
Total liabilities, convertible preferred stock, redeemable convertible preferred stock and stockholders’ (deficit) equity | 622,984 | 271,442 |
Unaudited Condensed Consolidated Statement of Cash Flows (Amounts in thousands) | |||||||
Nine Months Ended | |||||||
2021 | 2020 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (16,804 | ) | $ | (7,076 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
Depreciation and amortization | 6,571 | 5,031 | |||||
Stock-based compensation expense | 15,538 | 2,860 | |||||
Amortization of deferred contract costs | 179 | 265 | |||||
Change in fair value of preferred stock warrant liability | 10,758 | 245 | |||||
Change in fair value of contingent consideration | 2,072 | 4,576 | |||||
Deferred tax provision | 137 | (8,547 | ) | ||||
Bad debt expense | 90 | 332 | |||||
Non-cash interest expense | 171 | 196 | |||||
Other | 158 | - | |||||
Changes in operating assets and liabilities, net of acquisitions: | |||||||
Accounts receivable | (1,467 | ) | (3,873 | ) | |||
Unbilled receivables | (62 | ) | 12 | ||||
Funds receivable from payment partners | 585 | 5,019 | |||||
Prepaid expenses and other assets | (7,419 | ) | (3,079 | ) | |||
Funds payable to clients | 6,869 | (24,846 | ) | ||||
Accounts payable, accrued expenses and other current liabilities | 10,903 | 2,543 | |||||
Contingent consideration | (3,212 | ) | (693 | ) | |||
Other liabilities | (364 | ) | (121 | ) | |||
Deferred revenue | 102 | (410 | ) | ||||
Net cash provided by (used in) operating activities | 24,805 | (27,566 | ) | ||||
Cash flows from investing activities: | |||||||
Purchases of property and equipment | (5,229 | ) | (1,812 | ) | |||
Asset acquisition, net of cash acquired | - | (79,401 | ) | ||||
Acquisition of businesses, net of cash acquired | (119 | ) | - | ||||
Net cash provided by (used in) investing activities | (5,348 | ) | (81,213 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from initial public offering, net of underwriting discounts and commissions | 268,694 | - | |||||
Payment of costs related to initial public offering | (4,860 | ) | - | ||||
Proceeds from issuance of long-term debt | 25,933 | 4,167 | |||||
Payment of long-term debt issuance costs | (418 | ) | (172 | ) | |||
Repayment of long-term debt | (25,000 | ) | (4,167 | ) | |||
Proceeds from issuance of redeemable convertible preferred stock, net of issuance costs | 59,735 | 119,755 | |||||
Proceeds from exercise of warrants | 294 | - | |||||
Contingent consideration paid for acquisitions | (3,800 | ) | (1,307 | ) | |||
Proceeds from exercise of stock options | 4,098 | 606 | |||||
Net cash provided by (used in) financing activities | 324,676 | 118,882 | |||||
Effect of exchange rates changes on cash and cash equivalents | (55 | ) | (148 | ) | |||
Net (decrease) increase in cash, cash equivalents and restricted cash | 344,078 | 9,955 | |||||
Cash, cash equivalents and restricted cash, beginning of period | 109,052 | 86,027 | |||||
Cash, cash equivalents and restricted cash, end of period | $ | 453,130 | $ | 95,982 |
Reconciliation of Non-GAAP Financial Measures | |||||||||||||||
(Amounts in millions) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
Revenue | $ | 67.8 | $ | 42.1 | $ | 149.8 | $ | 98.6 | |||||||
Adjusted to exclude gross up for: | |||||||||||||||
Pass through cost for printing and mailing | (5.0 | ) | (4.0 | ) | (13.4 | ) | (12.1 | ) | |||||||
Marketing fees | (0.8 | ) | (0.9 | ) | (1.2 | ) | (1.3 | ) | |||||||
Revenue Less Ancillary Services | $ | 62.0 | $ | 37.2 | $ | 135.2 | $ | 85.2 | |||||||
Payment processing services Costs | 21.7 | 13.8 | 50.9 | 36.3 | |||||||||||
Hosting and amortization costs within technology and development expenses | 1.5 | 1.2 | 4.2 | 3.4 | |||||||||||
Adjusted to: | |||||||||||||||
Exclude printing and mailing costs | (5.0 | ) | (4.0 | ) | (13.4 | ) | (12.1 | ) | |||||||
Offset marketing fees against related costs | (0.8 | ) | (0.9 | ) | (1.2 | ) | (1.3 | ) | |||||||
Costs of revenue less ancillary services | 17.4 | 10.1 | 40.5 | 26.3 | |||||||||||
Gross Profit | 44.6 | 27.1 | 94.7 | 58.9 | |||||||||||
Gross Margin | 65.8 | % | 64.4 | % | 63.2 | % | 59.7 | % | |||||||
Adjusted Gross Profit | 44.6 | 27.1 | 94.7 | 58.9 | |||||||||||
Adjusted Gross Margin | 71.9 | % | 72.8 | % | 70.0 | % | 69.1 | % | |||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
Net income (loss) | 10.0 | 5.2 | (16.8 | ) | (7.1 | ) | |||||||||
Interest expense | 0.5 | 0.6 | 1.8 | 1.9 | |||||||||||
Provision for income taxes | 0.3 | (0.4 | ) | 0.8 | (7.8 | ) | |||||||||
Depreciation and amortization | 2.3 | 1.8 | 6.6 | 5.0 | |||||||||||
EBITDA | 13.1 | 7.2 | (7.6 | ) | (8.0 | ) | |||||||||
Stock-based compensation expense | 2.8 | 1.0 | 15.6 | 2.8 | |||||||||||
Change in fair value of contingent consideration | 0.5 | 0.9 | 2.1 | 4.6 | |||||||||||
Change in fair value of preferred stock warrant liability | - | - | 10.8 | 0.3 | |||||||||||
Other income (expense), net | 0.2 | - | 0.6 | (0.1 | ) | ||||||||||
Acquisition related transaction costs | - | - | - | 1.3 | |||||||||||
Acquisition related employee retention costs | 1.0 | 1.1 | 3.1 | 3.5 | |||||||||||
Adjusted EBITDA | 17.6 | 10.2 | 24.6 | 4.4 |
Nine Months Ended | Nine Months Ended | ||||||||||||||||||||||
(In Millions) | Transaction | Platform and Usage- Based Fee | Revenue | Transaction | Platform and Usage- Based Fee | Revenue | |||||||||||||||||
Revenue | $ | 109.7 | $ | 40.1 | $ | 149.8 | $ | 67.1 | $ | 31.5 | $ | 98.6 | |||||||||||
Adjusted to exclude gross up for: | |||||||||||||||||||||||
Pass-through cost for printing and mailing | --- | (13.4 | ) | (13.4 | ) | --- | (12.1 | ) | (12.1 | ) | |||||||||||||
Marketing fees | (1.2 | ) | --- | (1.2 | ) | (1.3 | ) | -- | (1.3 | ) | |||||||||||||
Revenue Less Ancillary Services | $ | 108.5 | $ | 26.7 | $ | 135.2 | $ | 65.8 | $ | 19.4 | $ | 85.2 | |||||||||||
Percentage of Revenue | 73.2 | % | 26.8 | % | 100 | % | 68.1 | % | 31.9 | % | 100 | % | |||||||||||
Percentage of Revenue less Ancillary Services | 80.3 | % | 19.7 | % | 100 | % | 77.2 | % | 22.8 | % | 100 | % |
Three Months Ended | Three Months Ended | ||||||||||||||||||||||
(In Millions) | Transaction | Platform and Usage- Based Fee | Revenue | Transaction | Platform and Usage- Based Fee | Revenue | |||||||||||||||||
Revenue | $ | 53.0 | $ | 14.8 | $ | 67.8 | $ | 30.7 | $ | 11.4 | $ | 42.1 | |||||||||||
Adjusted to exclude gross up for: | |||||||||||||||||||||||
Pass-through cost for printing and mailing | --- | (5.0 | ) | (5.0 | ) | --- | (4.0 | ) | (4.0 | ) | |||||||||||||
Marketing fees | (0.8 | ) | --- | (0.8 | ) | (0.9 | ) | --- | (0.9 | ) | |||||||||||||
Revenue Less Ancillary Services | $ | 52.2 | $ | 9.8 | $ | 62.0 | $ | 29.8 | $ | 7.4 | $ | 37.2 | |||||||||||
Percentage of Revenue | 78.2 | % | 21.8 | % | 100 | % | 72.9 | % | 27.1 | % | 100 | % | |||||||||||
Percentage of Revenue less Ancillary Services | 84.2 | % | 15.8 | % | 100 | % | 80.1 | % | 19.9 | % | 100 | % |
Full Year Guidance | |||||||
Low | High | ||||||
Revenue | $ | 190.0 | $ | 193.0 | |||
Adjusted to exclude gross up for: | |||||||
Pass through cost for printing and mailing | (15.0 | ) | (16.0 | ) | |||
Marketing fees | (1.0 | ) | (1.0 | ) | |||
Revenue Less Ancillary Services | $ | 174.0 | $ | 176.0 |
Source:
2021 GlobeNewswire, Inc., source