Q4 2023 Flywire Corp Earnings Call

Participants

Daniel Perlin; Analyst; RBC Capital Markets

Will Nance; Analyst; Goldman Sachs

Jeff Cantwell; Analyst; Wells Fargo

Nate Svensson; Analyst; Deutsche Bank

Darrin Peller; Analyst; Wolfe Research, LLC

Andrew Jeffrey; Analyst; Truist Securities, Inc.

John Davis; Analyst; Raymond James

Cris Kennedy; Analyst; William Blair

Tien-Tsin Huang; Analyst; PMorgan Chase & Co

Presentation

Operator

Greetings, and welcome to Flywire Corporation's Fourth Quarter 2023 earnings conference call.
At this time, all participants are in a listen-only mode. And a question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Akio Hollis, Vice President, Investor Relations and FP&A. Thank you. You may begin.

Thank you and good afternoon. With me on today's call are Mike Norona, Chief Executive Officer, Bob Lobo, President and Chief Operating Officer, and Mike Ellis, Chief Financial Officer.
Our fourth quarter and fiscal year 2023 earnings press release, supplemental presentation and 1,000 Form 10-K can be found at ir dot flagstar.com.
During the call, we will be discussing certain forward-looking information and actual results could differ materially from those contemplated by these forward-looking statements will also be discussing certain non-GAAP financial measures. Please refer to our press release and SEC filings for more information on the risks regarding those forward-looking statements that could cause actual results to differ materially and the required disclosures and reconciliations related to non-GAAP financial measures on this call is being webcast live and will be available for replay on our website.
I'd now like to turn the call over to Mark Massaro.

Thank you, Teal, and thank you to everyone that is joining us today. We are pleased to share our Q4 and fiscal 2023 results with you all showing strong performance across the business. We are also eager to share our business priorities and financial outlook for 2024. In a few minutes, Rob Wargo, our President and COO, and Mike Ellis, our CFO, will go into greater detail about our results for Q4 2023. We will tried to keep our prepared remarks short to leave more time for questions.
I will start with a few financial highlights from Q4 2023 revenue less ancillary services was $96.1 million in Q4, an increase of 43% year over year. Adjusted gross profit for the quarter was $63.5 million, an increase of 42% year over year, and adjusted EBITDA was $7.7 million for the quarter, increasing by $6.7 million year over year these Q4 results now capped off another great year for Flywire. I will take a few moments to talk about some of the key achievements in fiscal year 2023. First starting with our fiscal year 2023 financial highlights, Flywire as revenue less ancillary services grew by 43% year on year, and our adjusted EBITDA increased to $42 million or 11% of revenue less ancillary services. Both results were well above our targets discussed at the beginning of the year. In FY 2023, we also added more than 700 new clients across all verticals and now serve more than 3,800 clients globally.
Finally, we moved more than $24 billion through our global payment Note 2023, a 33% increase year over year. We also achieved a number of business highlights across all verticals and geographies. In education, we continue to expand our Higher Education footprint globally, including notable growth in the United Kingdom and throughout Asia Pacific. We also continued to see success in our land-and-expand strategy in the United States, increasing the footprint of our full suite solution landing many blue-chip clients in travel, we experienced strong growth in terms of new clients signed, most notably with tour operators and destination management companies in Amea and A-Pac regions. In B2B, we continue to sign large enterprise deals and see success in our partner strategy. In healthcare, we accelerated our partnership strategy, solidifying relationships with Cerner and fin thrive. We bolstered our global payment network with a focus on supporting our strategic payer markets like India and China, enhancing our relationships with WeChat Pay as well as three of the largest banks in India.
Lastly, we continued our strong track record of strategic M&A with the acquisition of study link and our sizable cash position allows us to pursue additional M&A that fits our core thesis.
Now let's look ahead to 2024 Mike Ellis and Roberto will talk about full year 2024 guidance in detail, but our plan anticipates strong growth numbers in a complex macro environment, further expansion of EBITDA in alignment with our multiyear expectations and delivering positive net income, we are truly excited for what is ahead for Flywire as we look at 2024, we remain focused on optimizing our go-to-market capabilities, expanding our Flywire advantage and strengthening our climate community. We are continuously working to optimize and invest in our go-to-market efforts to sustain our growth algorithm. For example, in fiscal year 2023, we improved our sales ramp time from hire date to first deal close by more than 30% this year. We plan to increase our investment in sales and relationship managers by more than 15% in aggregate spread across all verticals and geographies as we continue to grow. We will do so in the context of a very disciplined hiring plan that focuses on key roles to meet our objectives.
Another area of investment in go-to-market is our channel partnership strategy. We plan to grow our channel effectiveness, deepen partnerships by investing in channel sales teams, integration engineering resources, and building more certified integrations with our partners. Today, we have more than 90 partnerships in tech ERP integrations across our verticals that help us identify new clients, signed clients faster and accelerate our implementations. We have seen significant success with partners like Lucy and Bank of America. And we strongly believe further investment in channel partners and be a significant driver of future revenue.
As for expanding our Flywire advantage, we remain focused on product and payment innovation to power the vertical ecosystems in the industries that we serve this year, we are focusing in our ability to embed payments into the existing software and workflow processes of clients, partners and payers to add more value to our growing ecosystems. The cornerstone of us capitalizing on this opportunity is our API strategy to better serve our clients and partners and complement the Flywire software solutions they used today. In 2023, we began to invest in building a public API to surface the power of the entire Flywire payments platform. This allows our customers across all verticals to integrate our API into their existing ERPs or software to leverage everything from our KYC and AML processes all the way through our global payments so they can control their workflows and user experience in a PCI compliant fashion. We believe Flywire will be even more unique in our ability to provide a ready to use platform for complex domestic and cross-border payments, along with optional flexibility to use components of our powerful API. When clients seek deeper integrations into their workflows. Likewise, we will be exposing our new payables platform as an API, which can embed into any AP. process of an ERP. We have proven our ability to identify new use cases where software drives value in payments, and we'll continue to invest more to drive growth and value for our clients.
One example is our investment in study link, which we acquired in Q4 and whose software connects agents in Australian education institutions and powers the application and offer of admission and acceptance process for their international students embedding Flywire as payment technology into steady links, international admissions application and agent management software unlocks our opportunity to monetize the nearly $1 billion in deposit volume. Their platform is involved in today. Our vision is to extend the steady link platform beyond Australia, leveraging Flywire as global clients and team. We will also focus on the strategic payables opportunity, particularly around commission payments in our travel and education verticals. As a reminder, we are applying our existing framework of using software in our global payment network, solve specific payable use cases for our clients in travel payables, volumes, clients in our network of beneficiaries continues to grow since we piloted the solution last year for many European DMC's, Flywire is the only way they can both receive and payouts, cross border, high-value travel payments and in our education vertical, we are growing the number of clients who are using our solution to pay commissions to international education agents. We are also expanding our partner ecosystem of U.S. investments savings accounts were using Flywire as payable solution to digitally dispersed five 29 planned payments to US colleges and institutions.
Finally, we also continue to be focused on strengthening and growing our flying a community. As I've referenced in the past, our culture and fly mates are what makes Flywire successful. We believe that our financial success enables us to give back to our communities and empowers our Fly mates to build their careers, have a lifetime. As we continue into 2024, we remain committed to building and maintaining high performance teams developing exceptional talent and having a positive impact on the world around us.
In closing, I cannot be more proud of the progress we made in 2023. I am excited for the years ahead as we seek to continue to grow Flywire into one of the leading global payments companies of our generation.
Before turning the call over to Rob, wanted to officially welcome our incoming CFO, Karsten Pittaway, who will officially join Flywire on March fourth, most recently as Senior Vice President in Finance at PayPal's Codman brings decades senior financial leadership and a proven track record of scaling organizations in complex global environments. He's the ideal CFO to help us achieve the next level of scale and solidify our leadership position in the global payments ecosystem.
I wanted to also thank Mike Ellis for his many contributions to Flywire over the past nine years, including establishing many of our finance functions, taking the company, public and managing many strategic acquisitions. He has been a trusted partner to me, and we appreciate the seamless CFO transition that he is enabling.
I would now like to turn the call over to Rob Wargo, our President and COO, to review some operational highlights from the quarter.
Rob?

Thanks, Mike, and good afternoon, everyone. After another strong year as a public company, I'd like to start today by revisiting the algorithm we use to achieve sustained long-term growth. Our model includes first expansion with our existing clients. Second, annualization of client signed the prior year and third revenue from clients signed in the current year. We are also adding new payer and non-clients services as a fourth component that feeds our annual growth. Our growth starts with expansion with existing clients, which is driven by our primary focus on delivering exceptional solutions and service for our clients across all of our verticals.
For fiscal year 2023, we recorded net revenue retention of 125%, continuing in a favorable range, denoted by the 123%, three-year average between 2019 and 2021 we shared at our Analyst Day and the 124% we reported for 2022. Our technology and client service teams are obsessed with meeting our clients' needs their hard work and our new solutions allow us to earn client trust, deliver client retention that exceeds 95% per annum, grow clients effectively and produce a net promoter score in the 60's.
Next, in the growth algorithm, we benefit each year from the annualization and growth of clients signed in the prior year. As Mike mentioned, we signed over 700 clients in 2023, including over 170 in the fourth quarter. Our expected revenue per client signed in 2023 remains strong. And as usual, we only realized a fraction of that revenue last year in 2024. Based on our track record of positive client experiences, we expect to benefit from both a full year's revenue from these clients as well as further penetration of our clients payers.
Third, in the algorithm, we recognize a portion of the revenue from new clients in the year. We sign them we invest in our go-to-market capabilities to maintain our long-term growth. We estimate that our penetration of the total addressable market across our four verticals is in the low single digit percentage range. We see opportunity everywhere and plan to continue to build go-to market teams to capitalize on these opportunities and increase our market share.
Finally, as we address the needs of payers in our ecosystem, we have begun to generate meaningful revenue that is not associated with any particular clients. For example, as we grow our paying school capabilities rapidly, we recognize revenue from tuition paid to schools that are not Flywire clients. In other examples, we are helping students procure other needed services such as student health insurance required in Australia and with moving money from India to cover living expenses outside of tuition. We are excited to layer in payer services to our solution set and believe there can be a multiyear road map in this area.
Next, I'd like to briefly discuss how we grew across our four verticals during the fourth quarter. In our education vertical, we estimate our TAM to be about $660 billion. This plan includes US cross-border education, international, cross-border education and domestic education, both in the US and internationally. It includes higher ed K through 12 grade school summer programs and more. We are penetrating our TAM through broad integrations with best-in-class enterprise systems as well as deeper relationships with education agents prevalent in international education. We are also expanding our TAM by offering new solutions to payers and schools. During the fourth quarter, we signed several new clients in our US, cross-border and domestic subsegments as well as across Europe, Asia Pacific and Latin America. Recently, we went live with our domestic solution at Delphi University, private university based in Ohio and New York with over 7,500 students. Delphi had been a cross border education client of ours since 2013, representing another example of where we had been able to leverage our trusted relationship that originated with our cross-border solution to expand into a much broader offering for our US cross border segment. We went live with Florida State University and Oklahoma State University. Outside of the US, we went live with George Brown College George Brown College is a publicly accredited top 10 research college in Canada with nearly 27,000 full-time students. We are now live with both our cross-border and domestic education solutions GBC chose to work with Flywire to add more payment options, enhanced functionality support education, agent related payment flows and top-notch customer support. Stuart Brown was one of the education clients that were signed in Q3, but went live after the peak season. All delayed education implementations that we referred to in our Q3 call have now gone live in health care. We estimate our TAM to be about $500 billion. And we are serving many of the largest U.S. hospital systems. We are expanding how we work with partners in this channel to provide deeper integrations and even more flexible affordability solutions. We are also expanding into specialty sub-segments. During the fourth quarter, we went live with Ortho in Nebraska, a specialty hospital based in Omaha Nebraska focused on orthopedic care in implementing Flywire payments solutions for some of Rasco saw nearly 80% of all payments come through the patient self-service portal. Flywire solution has helped a specialty provider, significantly reduced staff hours spent on manually reconciling payments and has received high patient satisfaction scores. Overall, we are seeing early traction in new subsegments of the health care market as our receivables software solution helps reduce outstanding patient balances and increased collection rates for specialty hospital providers. In Travel, we estimate our TAM to be about $530 billion we have categorized our clients as destination management companies or DMC.'s global travel operators and accommodations providers. During the fourth quarter, we signed new clients in each of our existing subsegments. We are also exploring new areas of focus such as ocean experiences and niche online travel agencies or OTAs. Recently, we went live with Aqua expeditions of luxury travel company, specializing in small ship cruises and remote and exotic destinations such as the Peruvian Amazon and Peacock, Delta, Vietnam and Cambodia, along with yachting experiences in Indonesia and the Galapagos Islands, integrating with Flywire has helped Aqua expeditions, streamline their accounts receivable payment reconciliation process, enabling faster payment notification and funds disbursement capabilities. We are excited to tap into this new subsegment of travel and expand with Ocean experience providers around the world.
Finally, our B2B vertical covers have brought him estimated to be about $10 trillion, where we focus on providing mid market enterprise clients with a sophisticated and integrated Accounts Receivable solution, although starting from a smaller base. Currently, our B2B business is our fastest-growing vertical and we believe has a very promising future impact Flywire within this massive B to B tab. Flywire is gaining traction in various subsegments of the market, including insurance, software and tech manufacturing and distribution franchises and others that include the public sector we recently went live with the European Union Aviation Safety Agency 48 for short, which is an agency of the European Union responsible for overseeing and coordinating aviation safety across a number of countries. Flywire is directly integrated into a SaaS SAP instance to ensure consistent billing and payment workflow with their existing ERP system with a key benefit being automated payment reconciliation to remove manual processes around accounts receivable While on the topic of ERP integrations, I'll also mention that we built out and are live with an integration of with work-at-home cloud automation and integration platform for enterprises that seamlessly connects through widely used enterprise accounting systems such as SAP, Sage Intacct, Microsoft Dynamics three 65 business, central Intuit, QuickBooks Online and Oracle.
Next week. We believe that further building out our integrations with leading ERP integrators and systems will help us further penetrate our large TAM opportunity stepping out of the verticals and moving to our efforts towards efficiency and scale. I would highlight that in 2023, while we grew revenue less ancillary services by 43%, we reduced our hiring by almost 50% in terms of incremental run rate spend versus what we added in 2022. Our paced hiring in 2023 helps drive personnel expenses as a percentage of revenue less ancillary services down by over 530 basis points when comparing 2023 to 2022. We generate these scale efficiencies by working as a very collaborative team that is focused on careful pacing of hiring and managing of expenses. We expect to continue this focusing on managing all expenses, including personnel expense in 2024 to produce additional improvement in run rate personnel expense relative to revenue and to improve adjusted EBITDA margin.
I will now turn the call over to Mike Ellis to go over our results for the quarter and year as well as provide guidance for 2024.
Mike?

Thank you, Rob.
Good afternoon, everyone. Today I'll provide an overview of our results for the fourth quarter and then discuss our outlook for Q1 and the full year. Revenue like ancillary services was $96.1 million in Q4, representing a 43% growth rate compared to Q4 2022. On a constant currency basis, our revenue less ancillary services growth rate for Q4 2023 was 41% compared with Q4 2022 our revenue growth rate was driven by increases in total payment volume due to strong growth from our international cross-border payment volumes in our education vertical, particularly with our UK, higher education clients as well as growth from our travel clients. Fx rate changes represented a tailwind in comparison to Q4 of 2022 and a tailwind against the guidance we provided for Q4 and full year on our last earnings call, which were based on prevailing rates on September 30, 2023. For purposes of comparing our Q4 2023 reported results against our most recent Q4 guidance, we had an FX tailwind that amounted to approximately $0.7 million on Q4 reported results. Q4 revenue less ancillary services outperformance compared to our expectations was driven by stronger than expected volumes from new UK, higher education clients, strong monetization of payment volumes, better than expected utilization of our payment plan capabilities in the United States and higher Canadian volume, which we believe was driven by students accelerating some 2024 payments.
With respect to payment volumes, we processed $5.4 billion during Q4 2023, which represented an increase of 33% from the $4.1 billion processed during Q4 2022. Specifically, transaction revenue increased 45% compared to Q4 2022, driven by a 46% increase in transaction payment volumes. Platform and usage-based fee revenue increased 32% compared to Q4 2022, driven by a 5% increase in platform industries based payment volume as well as from platform fees that do not carry any associated payment volumes, including revenue associated with the contributions of our payer services offerings and our recent acquisition of study, we generated $63.5 million in adjusted gross profit during the quarter, representing a 42% increase compared to the $44.5 million earned during Q4 2022. Specifically, our adjusted gross margin was 56.1% for Q4 2023, up 10 basis points from 66.0% as adjusted for Q4 2022 over year-over-year change in adjusted gross margin was driven primarily by monetization rates on transactions and improved economics with our payment partners. However, this was offset by strong growth of our transaction revenue versus our platform revenue, particularly from our travel verticals.
Credit cards are predominate. Adjusted EBITDA for the quarter was $7.7 million, an increase of $6.7 million over the $1.0 million reported for Q4 2022.
With respect to capitalization as of December 31, 2023, we had $655 million in cash and cash equivalents, no long-term debt and 122.5 million shares of common stock outstanding. We also increased our borrowing capacity to $125 million, have an updated credit facility with an expanded five-year term. While we're not planning to draw on the facility in the near term, it provides financial flexibility for funding M&A and other strategic investments.
Moving on to guidance for full year 2024, which is based on foreign exchange rates. As of December 31, 2023, we expect revenue less ancillary services to be in the range of $483 million to $509 million, representing a year-over-year growth rate of 30% at the midpoint. This growth reflects continued confidence in our go to market and ongoing penetration of the TAM across our verticals. Our guidance reflects a net reduction of low-teens million of dollars to revenue related to recent announcements that the Canadian government will reduce applications for international study permits. We expect to deliver full year 2024 adjusted EBITDA in the range of $65 million to $76 million at the mid-point of our full year 2022 guidance range we expect to generate approximately 320 basis point improvement in adjusted EBITDA as a percentage of revenue less ancillary services for the year, we expect to achieve adjusted EBITDA margin expansion through strong revenue growth and disciplined spending, offset in part by the adjusted gross margin impact from our ongoing shift in revenue mix.
In addition to the impact on our full year revenue guidance. The Canadian regulatory changes are expected to impact the seasonality of our business in 2024. Ordinarily revenue from education customers in Canada is earned relatively evenly throughout the year and in the new Canadian undergraduate student permit policies that were announced in late January, provinces are not expected to allocate study permits to schools until late Q1 or early Q2, reducing applications, admissions decisions and payments for many international students so far in Q1. These dynamics are expected to push some payments into subsequent quarters as permits are available in Canada for students seek alternative destinations. With that context, Q1 2024 revenue less ancillary services is expected to be in the range of $106 million to $111 million. This guidance reflects a reduction of Q1 revenue in the mid single digit due to changes in Canada.
Rounding out the guidance discussion, we expect Q1 adjusted EBITDA to be in the range of $9 million to $11 million. Overall, we are excited about a strong 2024 and look forward to what we expect will be a strong year of revenue and adjusted EBITDA growth.
I'd like to finish by saying that it's been a great honor to be Flywire, CFO for the past nine years. Flywire is well positioned for continued success, and I will continue to chair the meeting. I'll now turn it back over to the operator.
Operator?

Question and Answer Session

Operator

Thank you. Ladies and gentlemen, at this time, we will be conducting a question and answer session. If you'd like to ask a question, you may press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue, you may press star two. If you would like to remove your question from the queue For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start in the interest of time, please limit yourself to one question and one follow-up. So we may get to everybody's questions.
Our first question comes from the line of Dan Perlin with RBC Capital Markets. Please proceed with your question.

Daniel Perlin

Thanks, scaling, and great quarter. I wanted to ask about the net revenue retention rate of 125% like it's accelerated from 22 and the average that we've seen from 19 to 21, which is it's pretty impressive and usually not necessarily the case and see this accelerate. So I'm just trying to piece out a little bit how we're thinking about where that's coming from specifically. So is that is that mix within the new cohorts and verticals that you're bringing on? Or is it more or less kind of the revenue opportunities that you're talking about within those new cohorts just being larger as they're coming onto the platform?

So Dan, it's Rob. I'll jump in on this first one. So we've always talked about the multiple levers that drive NRR and the continuing story for us is that all those levers are continuing to work. So as you go across the verticals, what you'll see as we're always working to increase the footprint we have inside the client. So whether it's more hospitals, more schools and departments or more of a business's sort of operations and subsidiaries. The first driver of it is to continue to expand our footprint inside those clients.
Second thing you see is we expand based on the products that we supply. So whether it's going pre service on top of post service at a hospital, whether it's adding more of our product functionality from our domestic capability. All of that is what's helping helping drive these things. There are other additional benefits where we do things like grow the payment network that allows us to capture more payments from more places around the world. But the first two that I mentioned are the main drivers there of sort of a healthy, healthy set of drivers on NRR that we feel really good about.

Daniel Perlin

Okay. That's great. And then just a quick follow up on seasonality. I'm Mike, you were just kind of running through this quick, but one of the things that you guys have kind of from hammered intuition, is that kind of 2Q and 4Q obviously being typical peak seasons for travel and how that's changed the seasonality of the business. And so I'm just making sure that obviously, 1Q, I understand the Canadian argument and it, but if it spills into second quarter and is it kind of like second quarter third quarter that were ramping? Or should we expect kind of the guide to be maybe slightly heavier on the margin side within second quarter relative to what we would have normally thought, given the seasonality of travel?

Sure. Thanks for the questions, Michael, are so that, you know, we guided to about 30% for the full year and discuss the Canadian regulator regulation changes will impact that quarterly revenue and seasonality specifically as it impacts Q1. And we do expect Q1 to be our slowest growth quarter and I would expect that the Q2 will be higher than the average in the second half will be right around the average annual growth rate. Hopefully, that gives you enough context there.

Operator

Our next question comes from the line of Will Nance with Goldman Sachs. Please proceed with your question.

Will Nance

Again, I appreciate your question next quarter today.
Yes, I was wondering if you could maybe just kind of go through the Canada stuff again and make sure everyone's getting the moving pieces there. I thought I heard maybe two separate impacts, one around the seasonality and the timing of payments and one around regulatory changes overall that it sounded like there was a low-teen's impact in the numbers for the full year. So just the $5 million that you called out in the first quarter. Is that overlapping with the low 10s for the full year? Or is that a timing impact in the low-teen's as separate and just bigger picture in any color on just what kind of assumptions you guys are having to make in the forecasting around this issue? And just how you think about the range of outcomes of the course of the year?

Yes.
Well, this is Mike. I'll start, and I'll probably just Rob, as we kind of go into how we modeled it. In short, we've got a history of dealing with certain types of shifts like this and enrollment from different countries. We have a large, diverse client base. We're heavily connected to our clients. And when we see something like Canada, we're talking to them. We have a massive network of educational agents that are also preparing those applications. And throughout the year as we get input from them and as the year goes on and you can expect us to talk about the release of permits, the study permits as they become more released. You expect updates from us throughout the year and also potentially different areas of study, right? If students potentially can't get a permit in a place like Canada that may end up in a different location. And again, Flywire benefits from that and from that diversity. And so we did call out an impact in Q1, single digit millions and full year low teen millions. And I'll let Rob talk about exactly how we structured that.

Yes.
So well, let me just clarify for one thing that I thought was in the middle of your question there. Those two effects are essentially inclusive, meaning when we talked about Q1 having the low sorry, the mid digit millions. And then we talked about the full year as low 10's do not add those that is cumulative or integrated in terms of just making you understand the effect on the two different periods.
So the way we got to that measurement, obviously, we arm I've gone and done our work to understand what we hear from our agent community from our client community. And based on that, we modeled out a series of scenarios. So a number that that will be relevant for you. If you look at the business, about 14% of the business is Canadian higher, Ed. And so we work through scenarios about sort of the impact of the recapture. And as we went through those sort of inform scenarios, that's where we came out at the mid-teen millions sorry, that type of low 10's millions for the full year impact.

Will Nance

Got it.
That's all very clear.
And I appreciate the detailed answer there. And then maybe you don't maybe want to follow up on earlier question on some of the NRR dynamics. And I guess in particular, looking at the cohort slide that you guys provide in the deck, you guys are seeing kind of mid to high 10s growth in cohorts from seven years ago, obviously super impressive. Just wondering if you could talk about specifically what's driving the continued strong growth among some of your back book cohort? I know you touched a lot on a lot of the levers that you guys have just in general, but for such seasoned vintages to be growing so strong. Any callouts on kind of what you guys are seeing success on over the past year.

Yes.
Maybe the one extra dimension of granularity I could add from my prior comment is the way to understand is just to understand that we do see growth just based in the core volumes that we see from the cohorts meeting, increased student penetration, increased payment volume from the offerings that we have all of that as part of the hard work of our relationship managers, instilling best practices at our clients, our reputation, our network, all the things that help grow sort of that base. What you'll also see is that within obviously a subset of any given year's cohort, we managed to do the land and expand, meaning a new product or service or going domestic as a as an obvious example, but it could be that or our collection management or our eStore. All of those will take some of those members of that older cohort and allow us to dramatically increase the revenue at Delphi, as the example we called out on this earnings call, right, 2013 client, but went full domestic capabilities just now. So all of that helps feed the NRR. of that out longer longer go cohort.

Operator

Our next question comes from the line of Jeff Cantwell with Wells Fargo. Please proceed with your question.

Jeff Cantwell

Hey, thanks so much on on the geochem, superb research. I just wanted to make sure on the 2024 guidance. And Mike, can you talk a little bit about your revenue growth thus gained share the risk services $483 million to $509 million. Can you talk about the volume are incremental volume that you're expecting in 2024, whether that's coming from education or your other three verticals? And where specifically you're thinking about volume growth across domestic versus international. Just want to get a flavor for how you are considering where your volumes will be growing in 2024?
Thanks very much,.

Jeff. It's Mike.
So first off, the range that we provided was $483 to $509 million, just to clarify a top end of that range.
Listen, the business and historically has always grown based off of payment volume improvement over time. And that's one of the things that we're really proud of.
The quality of our revenue growth has been exceptional since the beginning of our business and to your point, we do expect continued improvement with our B to B and travel to continue to contribute to our overall growth rate and payment volumes as well as our education on our business. As you know, the health care business is predominantly within our off-platform business and less about up transaction volumes in that vertical. But so we expect continued really good throughput based on all of the new clients signed and again, the NRR that we've talked about.

Okay, great.
Thanks so much. And then Mike, I wanted to ask you one on your you're obviously, we have been very appreciative of that. You have contributed to get up Flywire and overtime. Just wondering if you want to get your thoughts on the or actually it's coming in or what or how what are your thoughts are understated company and going forward? And obviously, you've done a lot on the in the focus on margins and so forth. I just wanted to get your sense of how you are handing things over to Katherine and bracing that Codman can contribute on this cause fires? Or how are you thinking about going forward, I would like to get a sense of what the transition like and then how we should think about margins and so forth. And anything you guys can talk about the great.
Thanks very much.

So this is Mike Gallo. So two questions here. With respect to your adjusted gross margin question, we do expect continued revenue mix shifts over 2024 and I would suggest similar to last year that the range of the AGM should be declining somewhere between one and 200 basis points. But that's all built into the great adjusted EBITDA throughput that we've guided to at the midpoint for 2024. So again, really good business, whether it's B2B, travel, education in Bogota will continue to enjoy those those healthy adjusted gross margins.
With respect to my view of the business, I've said it in my prepared remarks, Flywire is well positioned. It comes down to the fact that the team is focused on execution and that really cuts across every single fly make that works for the business. And for that, I'm it's been an honor and a privilege to be part of that type of execution.
Our mindset and again, just given the addressable markets that the company has to go after is really astounding and lots of room to continue to grow and that's why we're confident with this 30% growth forecast in the guidance range.
Finally, with respect to transitioning to Codman, I welcome Cosman to the Flywire team. I will be available for him for as long as he needs me to get to understand the business and be able to transition all of the home institutional knowledge that I may retain, but one thing good about Flywire is there really is no single point of failure. There's a lot of redundancy of knowledge across the organization. So I am 100% confident that cotton be able to go up, I get up and running very quickly.

Operator

Our next question comes from the line of Nate Svensson with Deutsche Bank. Please proceed with your question.

Nate Svensson

Hi, guys. Thanks for the question and great results on. So in your prepared remarks, you talked about a few drivers of revenue outperformance in the quarter that I was hoping we could dive a little deeper on. So I think you specifically mentioned were one better monetization of payment volumes and to better utilization of payment plans. So maybe can you give a little more color on what happened in the quarter that led to better monetization rates? And then likewise, what drove that higher utilization of payment plans in the US in quarter QUARTER

As it's Rob, I'll jump in and start here.
So for the most part, it was a straightforward, really strong performance across the business, right? So if you looked in education, which was I think the focus of your question performed really well. That strength was in the EU, the U.K. and the U.S., notably in the U.S. around that payment plan usage. But lots of good revenue performance elsewhere as well. I think in that payment plan utilization, it's around the some enhancements we've made in the user experience as well as just the expanding footprint for our domestic platform.
In terms of healthcare, we had quarterly revenue growth year over year, which was good after a few tough quarters. Travel & B to be performing exceptionally well. Really growing very nicely. And in terms of the adjusted EBITDA, it was it was helped mostly by the extra revenue, but also by the strong gross margin.

Nate Svensson

Got it.
That's helpful color. Onto the follow-up I had. So you know, a few weeks ago you announced a new partnership with the State Bank of India to help digitize payments in the country. And I know, sort of given some of the commentary from last quarter about FX volumes in India obviously been a lot of focused on payment choice in that country specifically. So I'm hoping you can talk a little bit more about the new partnership and what it means with regards to your ability to capture FX, volatile FX volumes going forward in India. And I guess maybe building on that. Can you talk maybe more about similar partnerships you're exploring in other geographies? I know you had a few comments in your prepared remarks there. So any color there would be very helpful.

Yes.
So a couple of things. So first of all, ISBI., one of the very largest Indian banks, we have done similar partnerships with three of the top banks, all part of our strategy for making sure that we deliver a great user experience in India, and we really are the easiest way to pay for folks overall that combined with the other aspects of our strategy, mostly focusing around agents and our servicing of the agent ecosystem, all contributed to a really strong quarter for India so India overall for us performed very nicely growth rates sort of in line with the overall corporate average. And so we view that as a very good result. So all part of our strategy to continue sort of growing that FX volume and continuing to drive impressive growth out of India is definitely one of our key markets.
Yes, Nate, the only thing I'd add to that is just obviously we're looking for other ways in which we can go ahead and add more online banking connectivity. We believe there's huge potential in digitizing a lot of the flows were banking rails in the future.

Operator

Our next question comes from the line of Darrin Peller with Wolfe Research. Please proceed with your question, guys.

Darrin Peller

Hey, Tom, maybe just start off with the strength you've been seeing in customer adds, which obviously has been coming in, I think it's around 170, 180 clients or customers per quarter. The last couple of quarters are clearly higher than it was for quarters.
Well before that. So just a bit more of an understanding as to the verticals around it. And if some of them are smaller customers, perhaps in the travel side? Or is there anything else that makes up that, that strength? And then if there's any also also just any changes in the sort of vintage analysis, then another way if there's like a translation of revenue from those at a different pace if it gets?
Thanks.

It began Rob here. So this was another really strong quarter, 170 plus clients signed. In this case, education actually got the top of the table in terms of driving the most client wins. So just beat out travel by a little bit. But in this case, a really strong quarter for the education team alongside a strong quarter for travel, nice adds in B2B and healthcare as well on the deal size, the average deal size just slightly lower than what you've seen across our sort of historical average, but only just slightly and again, strong and in a very good range. So we're pretty happy with all of those results.
In terms of the numbers and the deal size, lots of good-sized deals in there, too.

Darrin Peller

That's great.

Jim, kind of thing I would point out with the final thing that I got it wrong, but it sounds like one of the points we were also feeling really good about our investments in the go to market, right? So you're seeing these numbers come in strong. And the thing that we are very bullish on is that we are seeing very good efficiency as we invest in go to market. So when we look at the return on that investment in sales, we're seeing them get productive faster. We're seeing win rates be higher. We have a very favorable ratio in terms of there contract value they get signed in the 1st year relative to their costs. So they are delivering well over their multi nice multiple of their salary in terms of contract value wins in that first period. And if you look over at the RM side, which is the other side of our investment in go to market. We're signing out substantial growth targets for RMs as they get assigned out into the field on our accounts. And we feel really good about those results, too.

Darrin Peller

That's great. That's great.
It's good to hear that it's a diverse set of clients across segments.
And then just a quick question on the CFO side or the financial side. First, my congrats and all the best and then numb Cosman, congrats to you to and welcome. But when we think about the guidance first, it's about 300 bps of margin expansion this year. I think it's closer to the low end of the 300 to 600 bps that you typically have called out. But I know last year you also kind of started off lower and ended up with over 500 bps of margin expansion.
And just I guess we're just trying to figure out if there's an element of Just starting off the year the right way in providing for some upside? Or is this really something about the model that might might lead that to be the case this year?

Yes.
I'll take that one this is Mike. So what I would say is I think you've seen a bit of a track record from us like we as we look to set out for a year we want to look at how the year builds as we look into revenue. We also have control over our cost dynamics as we've proven. I think over the last couple of years. I think as Cosman comes in, I don't think you're going to see a significant shift in how we look at that. And I think you're going to see us continue to look at every bit of spend we have internally to the Company and make sure we feel like we're good on track when it comes to our top line numbers and we're going to invest in the business and I think in an efficient way, as people have seen from us. So hopefully people take it away, it looks very similar and that way, we may be a bit boring, but we think we're delivering great results.

Operator

Our next question comes from the line of Jason Kupferberg with Bank of America. Please proceed with your question.

Hi, good afternoon. This is Tyler DuPont on for Jason. Thanks for taking the question. I wanted to start by asking about changes in the Canadian environment. It sounded like in your prepared remarks that some of the 4Q beat was due to a pull forward in Canadian payments. Can you maybe just quantify how much, if any, of the single digit millions that isn't going to be in 1Q was pulled forward into into 4Q VERSUS, move forward into later quarters and then also disciplined on a go forward basis. How should we think about the EBITDA dollar impact to this movement?

Sure, Peter, it's Mike Massaro. I would say you can think of that as a kind of single digit sorry, single million dollar kind of impact from a go-forward perspective. So definitely not kind of anywhere near the number for kind of full Q1 in Q4. Really what it was was a dynamic where students new regulations were changing and as they had the opportunity to already were sitting on a permit that they were sure to pull the trigger on that permit where they may have had time in the first half of the year too make that decision as well. So they were actually making their payment a bit early because they had access to a permit that had already been issued. So that's really the dynamic we saw. It wasn't a huge impact to Q4. Wasn't a huge pull forward for Q1, but we did call it out.

Okay. Great.
That's helpful, Mike, appreciate the color. And then just as a follow up, I wanted to ask briefly about potentially an update on the client implementation delays mentioned on the last call. I know it's only around half dozen or so, but have you seen those contracts start yet? And if you see any incremental delays outside of those, I'm just sort of trying to level set what type what we've seen last quarter versus what we expect for 2024?

Yes, Rob here. So the vast majority of that revenue opportunity has gone live and so we had overall a great quarter in terms of deployments across all the verticals. If you look at the year, we will have gotten in the neighborhood of 700 clients live. If you look at sort of the status of things right now, I feel very good about the status of projects that have gone live on time as expected through Q4.

Operator

Our next question comes from the line of Andrew Jeffrey with Truist. Please proceed with your question.

Andrew Jeffrey

Hey Pardon me.
Appreciate you taking the questions. And I just wanted to be clear, I don't need to belabor the point on the guidance. By my math, it looks like the midpoint of the range is about 27% sort of organic somewhere in that neighborhood and recognizing sort of the puts and takes in Canada, I guess does the was some of those payments that were pulled forward into 4Q kind of normalizing for that or is Canada and the entirety of the delta between what otherwise would have been faster organic revenue growth? And it sounds like you have some levers that could accelerate it namely some some of the performance in travel and better India payment monetization. I just wanted to make sure I'm understanding that correctly.
And I've got a quick follow-up.

Yes, your organic number is relatively right. And if you look at the notwithstanding the Canadian impact, we would be right about that 30%. So we're pretty confident about the 30% growth rate Okay.

Andrew Jeffrey

That's really clear.

Yes, Andrew, you had a question of kind of other areas.
I mean, obviously, as we look to the year, it's early in the year, but we think we have lots of opportunity across all our verticals. So you can imagine we're putting our effort into to offset any impacts that Canada could have. And I expect plenty to continue to execute like they have the last many, many years.

Andrew Jeffrey

Okay.
Thank you. And then I appreciate the deep dive and education in the slides this quarter, particularly on slides 14 and 16. I wonder if I can ask.
We have the capabilities on 16 you call out are really notable and two to be client facing and then you discuss product expansion. One of the levers is agent portal adoption. I know that sort of the discussion of agent education has come up, especially as it relates to cross-border payments. Can you elaborate a little bit on how much of sort of the some of the growth in existing customers comes from sort of agent education and how the agents and you sort of help students get progress through the workflows and as a result, maybe monetize some of those expanding software solutions. That question makes sense of the agent single lever for growth and penetration of existing customers.

So our drivers are agents are an important presence in a number of the outbound student market, right? So certainly, India, China, Vietnam, they play a sizable role and for certain inbound markets. They play a sizable role, Australia's most notable, and we've mentioned before, 75% of inbound students to Australia have benefited from the assistance of an education, a general education counselor. So for our part, the software that we're providing and I'll start pre-study link, and then I'll add the study linked part, the capabilities that we're providing are to help them essentially facilitate that portion of their experience around making sure that all the payments work properly, right? So the counselors doing a bunch of things, and they're using the Flywire portal, which may be integrated into the rest of their software that facilitate those payments. So we really help provide value to the student and to the agent and everything around the payment and with study length. What we added, as Mike mentioned in his comment, was the ability for that agent to use essentially a Flywire platform starting even earlier in the process with the submission of the application, managing the admissions decision and then leading to the payments that we're taking on more and more of that lifecycle, again on a global basis is still far it's still not the majority of payments. It's still a smaller fraction than that. But for us, it's a great opportunity to further penetrate these very large markets.

Operator

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

John Davis

Hey, good evening, guys. Actually, one follow-up on Darren's question on new logo growth.
So if you look at 2023 and RR 125, I think organic growth was about 39%.
So 14 points from new logos, 700 new clients, maybe talk a little bit about how you think about and are our new logo growth going into '24?
And also how much growth you get in year? I mean you signed up 700 new clients this year. How much growth you early in the year you sign of a client? Like what percentage of that revenue to get kind of in year versus kind of annualization the following.

So when we've done our analysis into sort of those two elements of the growth algorithm starting Greetings, JT, when you when you look into the into the allocation between those two are the split. What you see is that it's relatively balanced to slightly on the larger side as the contribution from full year effect of a client signed the prior year. So that's the slightly bigger half of that portion. The other piece being the client signed a year. And so that's I think the allocation that you're looking for Okay.

John Davis

Great.
And then, Rob, maybe just on the health care, Mike healthcare down 1%. How do we think about the reacceleration of that business?
Kind of thoughts? Just bigger picture on health care and what do you think that business can grow longer term?

So we're doing a bunch of things to trying to accelerate the revenue on the healthcare side. So we've got we have great conviction in the platform. We have great conviction in the team. We're not satisfied with the results that we saw in 2023. And neither is the team. So in terms of things that we're focused on, we've been really good about trying to be very clear about how we can target the different segments at the hospital level, the large hospitals that have been the core of where we are making sure that we have clear strategies around each of the different EHRs and ways to bring a different set of solutions in based on the needs of that hospital and they're set up. So it may be the fullest version of our capabilities. That is our full platform plus integrated financing that we provide via a partner that's a very compelling offering. It may be the offering that we have installed in most of our base, which is sort of what you've heard us talk about in the past in terms of everything from pre service to post service. And we have new capabilities that focus just on payments, sort of the straightforward payment processing that are an even lighter lift that makes sense for some of our clients. So first thing is making sure we've got sort of that range of offerings in our traditional base.
The second thing is the subsegments that we started talking about. So today, I mentioned ortho, Nebraska, but they're one of a whole sort of category I'm sorry, multiple categories of subsegments that are an opportunity for us to take sort of the full power of our software and take it into the subsegments. And so that's a very exciting opportunity for us.
We've allocated some of our sales team to that. So between those two and continuing to expand with our existing clients, those are the three elements that we are looking to see a return to better growth in 24 for the healthcare business.

Operator

Our next question comes from the line of Chris Kennedy with William Blair. Please proceed with your question.

Cris Kennedy

Good afternoon, and thanks for taking the question.
Can you give a little bit more color on the payer services initiative?
I see in the deck over $10 million from the Australian insurance opportunity can you talk about the other opportunities that you have and how big those can if it can move the needle?

Yes, Chris, MicroStar ourselves on your obviously the payer services system we talked about back at our Investor Analyst Day a couple of years ago and talked about expanding into these ecosystems that that are that our industries really surrounded our industries. I would say when we got into payer services, we had a whole series of initiatives focused on what value add can we provide the payer in these instances. And so you start to look at things like insurance, which can be bundled at the point of checkout for education. There's potential, as we mentioned before, publicly of bundling something in relation to travel around that same component. If you look at how students that acquire other services that they may need when studying abroad, insurance is just one of the many things that a student or a parent, a potentially would like to have in Canada. We've mentioned things, I think, called the GIC., which is a actual deposit account that's required to get a permit in Canada to study, and that has to be funded prior to the issuance of that permit. And so again, that's something that, as you'd imagine, we're at a critical point in the flow between the family, potentially an educational agent and the university. And as you've seen the success in the insurance product in a very short period of time, we think we're at a unique position without any marketing dollars, really to be spent to put great solutions in front of the payer that can make their experience.
Great.
And so again, that's that's the strategy. It's across multiple industries and and we think we're just getting started when it comes to payer services.

Cris Kennedy

Great, thank you.
And then just real quickly, the follow up. Can you just give us an update on the FX volume that you had in India, that was an issue that was called out in the September quarter. Did things kind of normalize in the December quarter. Thanks a lot.

Yes, I think you used a good choice of words there. But you said normalized when you look at Q4 versus Q3 of F X percentage, it was actually up just slightly. So we view that as a sort of good healthy result. And I'm quite satisfied with the growth in India and the FX percent.

Operator

Our last question comes from the line of Ken Zener with Jensen Huang with JP Morgan. Please proceed with your question.

Tien-Tsin Huang

Hey, good afternoon, everyone. Good to talk to you guys. Just just one question, I'll close out the call, just with the guidance range, it looks a little bit wider than than usual. Any change there and the visibility to call out to get to the upper or the low end out lower end of the guide. The quarter obviously came in ahead. So I'm just trying to better understand the variance there. That's all I had?
Thanks.

Yes, it's Mike Ellis.
Yes, we did expand the revenue guidance. It represents basically 5% of the full year guide saying, given the growth of our revenue amounts, we thought would be reasonable given the uncertainty specifically around the Canadian regulatory challenges. And as we kind of update over the course of the year, of course, we'll narrow that range as that becomes more clear, no change with respect to how we guide guidance.

Tien-Tsin Huang

Yes, perfect. Thanks.

Operator

That is all the time we have for questions. I'd like to hand it back for management for closing remarks.

Appreciate everybody's time on the call. Thank you very much and talk to many of you soon.

Operator

Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time and have a wonderful day.