Dive Brief:
- Flywire, which provides payments software in education, travel, healthcare and business-to-business verticals, cut about 10% of its workforce, equal to about 125 employees, in a restructuring after “significant headwinds” late last year resulted in a fourth-quarter loss, the company said Tuesday.
- The Boston-based company also plans to undertake a comprehensive review of its business, seeking to increase efficiencies, partly by reducing costs, including possibly vendor expense in addition to the labor cost reduction, according to a Tuesday press release.
- In addition, Flywire said it purchased the hospitality software company Sertifi this month for $330 million in cash, with another $10 million contingent on performance, according to its annual filing with the Securities and Exchange Commission.
Dive Insight:
Reduced demand in the company’s education vertical stems from some countries’ changing their student visa policies in ways that pared the issuance of visas for students to study in those countries. For instance, Canada reduced its issuance of visas for foreign students in that country, cutting into Flywire’s revenue last year.
Flywire reported a fourth-quarter loss of $15.9 million for last year, compared to net income of $1.3 million for the year-earlier quarter even as revenue increased 17% to $117.6 million. For all of 2024, the company reported net income of $2.9 million, compared to a loss of $8.6 million in 2023, as revenue rose 22% to $492 million in 2024, according to the annual filing.
The company expects the visa policy pressures to continue this year as a result of ongoing challenges from the Canada situation. It also expects an impact from changed policies in Australia, where government authorities increased fees related for foreigners receiving student visas.
As Flywire girds for a decline in students receiving visas for study, the company is undertaking an “operational and portfolio review,” with all options on the table, Flywire CEO Mike Massaro said during a Tuesday webcast with analysts to discuss the company’s fourth-quarter results.
“This review will encompass geographies, products, verticals, cost structure and explore various options,” Massaro said.
The company had about 1,250 employees as of the end of last year, according to its annual filing with the SEC.
Flywire, which services about 4,500 clients globally, offers digitized accounts receivable payments processing tailored to the education, travel, healthcare and B2B industries, allowing clients to shift away from checks and paper processing to more automated systems.
“There have been substantial strides made in payments technology in the retail and e-commerce industries; however, massive sectors of our global economy—including education, healthcare, travel, and B2B payments—are still in the early stages of digital transformation,” Flywire said in describing its business in the SEC filing.
The company is counting on an eventual recovery of demand in the education vertical, with the visa issues expected to be temporary, Massaro told analysts on the webcast.
Meanwhile, it’s leaning on acquisitions to keep bolstering the business. The Sertifi acquisition is expected to buttress Flywire’s travel vertical by adding a hotel property management system to its operations reaching to 20,000 hotel locations, according to the release. The company also acquired Invoiced last year for $55 million.
