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

Thank you, and good afternoon. With me on today's call are Mike Massaro, Chief Executive Officer; Robert Orgel, President and Chief Operating Officer; and Mike Ellis, Chief Financial Officer. Our second quarter 2023 earnings press release, supplemental presentation and when filed, Form 10-Q can be found at ir.flywire.com. During the call, we will be discussing certain forward-looking information. Actual results could differ materially from those contemplated by these forward-looking statements. We will also be discussing certain non-GAAP financial measures. Please refer to our press release and SEC filings for more information on the risks regarding these forward-looking statements that could cause actual results to differ materially and the required disclosures and reconciliations related to non-GAAP financial measures. This call is being webcast live and will be available for replay on our website. I would now like to turn the call over to Mike Massaro.

Thank you, Akil and thank you to everyone that is joining us this afternoon. We are excited to share our Q2, 2023 results, which show continued strong performance and momentum across the business. In a few minutes, Rob Orgel, our President and COO, as well as Mike Ellis, our CFO, will go into greater detail about our results for the quarter. But it will first share some highlights for our second quarter. Revenue Less Ancillary Services was $79.5 million during the quarter, representing year-over-year growth of 54.4% or 56.7% on a constant currency basis. Adjusted gross profit for the quarter was $50.5 million, an increase of 46.8% year-over-year. And adjusted EBITDA was negative $0.1 million for the quarter, representing a $6 million increase in our adjusted EBITDA versus Q2 of 2022. Based on this quarter's results and our outlook for the second half of the year, we are also increasing our guidance for 2023 and these details will be shared later in the call. It has been an exciting two years at Flywire since our first public earnings call, as we have continued our track record of efficient growth, making significant progress. We have roughly doubled in revenue on an organic basis. We acquired and successfully integrated two companies. We are driving improved operational efficiency within the organization, and we are also performing well against our financial targets we discussed at our Analyst Day last year. As you can see, we continue to execute against our growth strategies, while also making progress against three key investment areas, which I will provide an update on now. As a reminder, these investment areas are optimizing our go-to-market efforts, expanding our Flywire advantage with product and payment innovation and strengthening and growing our FlyMates community. In Q2, we continue to optimize our go-to-market…

Thanks Mike. Good afternoon everyone. As Mike mentioned, it's been a great start to the year and we believe we will continue to see robust growth in the second half of 2023. Our sales team delivered great results during the quarter and added over 165 new clients. This kept off a strong first half of the year for the sales team. Q2 NRR also remains strong and above the three year average discussed in our Analyst Day. This quarter’s success was driven by our continued execution of our five strategic growth pillars. As a reminder, those pillars include growing with existing clients, adding new clients, expanding our ecosystem through channel partnerships, expanding the new industry's geographies and products and finally strategic value enhancing acquisitions. Starting with growth with existing clients, our first example is our going live with our Domestic Collection Management Solution at Wellesley College, a top liberal arts college for women based in Massachusetts. Wellesley has used our cross border payments offerings since 2011. Within just a few months of being live with our Domestic Collection Management Solution, Wellesley saw nearly a 20% reduction in past-due student tuition balances while also reducing manual staff efforts through an automated outreach and sign-up process. We are seeing many schools interested in our collection management solution reflecting their interest in a streamlined process for collecting overdue the student tuition bills. Within our travel vertical, I'll highlight Fresh Tracks Canada, a Canadian tour operator in business for over 20 years and based in Vancouver. We on boarded Fresh Tracks a year ago to support their cross border payments and enable them to accept payments from 31 different countries and 25 different currencies with the ability to scale to over 140 currencies. With our recent integration with Fresh Tracks instance of Salesforce.com, we…

Thank you, Rob. Good afternoon, everyone. Today I'll provide an overview of our results for the second quarter, and then I will discuss our outlook for Q3 and the full year. Revenue less Ancillary Services was $79.5 million in Q2, representing a 54.4% growth rate compared to Q2 2022. On a constant currency basis, our revenue less ancillary services growth rate for Q2, 2023 would have been 57%. We experienced a revenue headwind of approximately $1.3 million due to the strength of the U.S. dollar compared to the British pound and the Canadian dollar in Q2 2023 compared to Q2, 2022. Our revenue growth rate was driven predominantly by increase in total payment volume, particularly due to strong growth from our international cross-border payment volumes in our education vertical in the United Kingdom, as well as strength from European destination management companies in our travel vertical going into the summer season. With respect to payment volumes, we processed $4.1 billion during Q2, 2023, which represented an increase of 43% from the $2.9 billion processed during Q2, 2022. Specifically, transaction revenue less ancillary services increased 61% compared to Q2, 2022, driven by a 55% increase in transaction payment volume. Platform and usage-based fee revenue increased 27% compared to Q2, 2022, driven by an 11% increase in platform and usage-based payment volumes, as well as fees that did not carry associated payment volumes, such as our revenue from student health insurance referral payer services that we discussed on our prior call. We generated $50.5 million in adjusted gross profit during the quarter, representing a 46.8% increase compared to the $34.4 million earned during Q2, 2022. Specifically, our adjusted gross margin was 63.5% for Q2, 2023 down 330 basis points from the 66.8% for Q2, 2022. The year-over-year change in adjusted gross margin…

Thanks Mike. We appreciate everyone joining us today, and would like to finish with a thank you to Mike Ellis. It has truly been a pleasure building Flywire and team over the past eight years, and I know this business would not be where it is today without his efforts. With that, we will now transition to the Q&A portion of the call. Operator.

Thank you. [Operator Instructions]. Thank you. Our first question comes from Dan Perlin with RBC Capital Markets. Please proceed with your questions.

Thanks. Good evening. I wanted to just start on the education vertical for a second, and specifically, you called out like Wesleyan College for domestic based payments. One of the driving factors I guess for that, it sounded like there's a 20% reduction in past few collections. I'm wondering, as you're continuing to pursue this kind of domestic based approach into your back book for cross boarded. Is that one of the main drivers for universities as they trying to think about assessing taking guys on with the domestic side of the equation as well?

Hey Dan. This is Rob. I'll step in and start on this one. The strength in our domestic education business is broader than just this domestic collections platform. So first and foremost, our operating center is around the ability to have a fuller solution that it enables a full breadth of payments across the domestic student population. So that's our payment plan capabilities and one time payments and many of the things you've heard us talk about in the past. The particular solution that we described for Wesleyan just now is another part of our suite, part of our student financial software. And that is focused on these overdue tuition payments. That's not the only school that has seen some pretty remarkable results using that platform that they've shared with us in recent months. And so we do see strong interest in the U.S. and we look to enable that offering outside the U.S. as well going forward. So all part of our ability to be strong and domestic here in the U.S., but also enabling some of those capabilities around the world.

Got it. Can I just – with a quick follow-up on kind of adjusted gross margin. You called out, I think you said declining more than 1 to 1.5 points for the year. Can you put a finer point on that, as you think about, maybe the trajectory into the second half and is there any cadences we need to be mindful of as we think about sequential movements there? Thank you.

Sure. So I would first say, and listen, we're really pleased with the 47% improvement that we show in adjusted gross profit. And again, the second thing I'll point out is that the spreads in our transactional revenue have been stable. What we're seeing is that the travel out performance is having a small drag on adjusted gross margin, but still really excellent unit economics in driving adjusted gross profit dollars for us. You know when you have to – you don't lose sight of the fact of the 150 basis point impact from the FX loss. So if you exclude that, you're somewhere, in that 1.8% range and that's probably where I probably peg it. But that we're pretty confident in our unit economics and our ability to kind of drive our adjusted gross profit dollars and that's really what we're focused on.

Got it. Thanks for that.

Thank you. Our next question comes from Jason Kupferberg with Bank of America. Please proceed with your question.

Hi. Good afternoon, guys. This is Tyler DuPont on for Jason. Thanks for taking the question. I wanted to start by first asking about the upside surprise to revenue during the quarter. When looking at the business, I know 2Q is more of a seasonal low point when it comes to education, but if you just break out sort of where the growth really came from. For example, whether the quicker ramp up in APAC travel. And when just thinking about the back half the year, this sort of given the current macro environment, are there any puts and takes there worth considering?

Hey, Tyler. I appreciate the question. So in short, a couple of the areas that were called out. Out performance throughout education, Asia and EMEA also for travel. We talked a lot about, the growth in our EMEA travel business, again, in a recovery of Asia from a travel business perspective. So those are two clear callouts in the quarter. And again, I think part of what you're seeing as well is also different seasonality, right. As we add different business units, you'll see additional seasonality come from travel that is different that the historic seasonality of our education business, which again is typically predominant in Q3. So you're seeing kind of almost a redistribution of that seasonality of it as we see growth and other vertical. So hopefully that answers your question.

Yes, it does. I appreciate that. And then just as a follow up, at first glance the updated guide looks like revenue was raised by more than the beat. EBITDA was raised potentially by the beat. I know you mentioned that there's going to be some increased expenses that got moved into the back half the year. But I was wondering if you could maybe just level set for us sort of investments the company is planning on implementing the back half and then are those incremental or just any update there.

So, this is Rob. I can start and then Ellis feel free to jump in if you like. We are essentially performing very well across the business. We see a bit more hiring that will happen in the second half of the year that's just pushed from Q2, that's a main piece of expense. There's a little bit also in marketing that will just hit in the second half versus the first half as we actually lay out the full plans for the year. But you can see that the increments or the adjustments are very modest relative to the plan.

Yes, I’d only add that, we take a very disciplined approach. And I think as we talked about during Q1, some pacing of our hiring, ensuring we're seeing some macro concerns dissipate over the year. And we're anticipating investing more in the sales and marketing as Rob indicated.

Great. Thanks again guys. Nice job on the quarter.

Thank you. Our next question comes from Ashwin Shirvaikar with Citi. Please proceed with your question.

Hey, congratulations on the results. And Mike, sorry to see you go. I know you're going to be around for a few more quarters, but my appreciation and thank you. The question I have is with regards to, is there a good way to measure penetration of your services. I mean, the burning out of your footprint, that's something that's proven that you can do. We get a lot of investor questions about, what percent of students are actually using, Flywire instead of other choices and things like that. So any thoughts on how to measure penetration?

So Ashwin, it's Rob, I'll start this one off. We've obviously been in this business for a good long time. And we have always had initiatives to continue to drive forward utilization, retention, all the metrics around adoption. And so the first thing I do is say, because I think your question is probably focused on sort of that cross border adoption use case, where we continue to drive things that build value around our services to continue to drive it up. The comment we've always heard is that adoption is highest in first year and then there may be some drop off in subsequent years. That phenomenon is true, but we actually view that as opportunity, right? The opportunity for us to continue to get better at providing value and retaining those students for even longer through their educational cycle. So we've got active initiatives around that and really do that as upside. The broader point that I’d make is remember that the, the business and the NRR that we deliver is driven on expanding our set of offerings across the university as well. So if you think about the things we're doing, it's not just about the cross border, we have an incredible opportunity across our business, to serve the domestic student populations within our clients, as well as the cross border that's our, sort of our course strength historically. And then even more broadly taking the example of folks like Wesleyan that we just talked about earlier in the call, other product dimensions as well. So when you ask the question about sort of adoption and utilization broadly, we're very early in the cycle with upside across all the dimensions I just mentioned.

And Ashwin, just to add to Rob's point, I would say obviously our strategy of land and expand is also kind of our end game right, where through all that software deployed you're getting all the payments right by having cross border domestic overdue receivables, right. When you deploy more software you inherently solve the utilization question as you're being used for all student payments at a given university. So again, as Rob said, different strategies depending on geography, but ultimately same end goal.

Understood. That's very useful. I want to focus maybe on healthcare. I mean obviously you guys continue to have incremental signings and more progress in this space. But what we perhaps have not necessarily heard is the type of – sort of the profusion of signings like we have in say travel or education. And so I kind of just wanted to ask about the environment and the desire of those clients and prospects to sign, what may or may not be perhaps holding them up, what might be a good longer term growth rate for healthcare.

Yes, this is Rob, I'll start here again. So just to be super clear, we're very positive on our healthcare business as long term prospects despite what we have to concede is some challenges in the first half of the year. So just to put all this in context, obviously it's a business with very strong contribution to gross profit. It's got great and very high gross margins. We are signing new clients as you heard today with Rogers and growing many existing clients. There are a bunch of other new clients signs as well along with two new customer deployments and a major expansion that have already happened in Q3. At the same time, healthcare isn’t a sector that's growing as fast as some of our others. And we haven't enjoyed the level of growth rate that we expected to see in the year. And so, that's been on a combination of factors, but ultimately we do believe the second half of the year, will see us where all the progress and the hard work that the team is doing. The clients that they're signing, the clients that they're getting live will bring us back to a healthy growth rate. We are seeing good progress getting signings through our partnership with Cerner. We've had success through other partners and other EHR integrations. And so overall, look healthcare is a tougher business to sell in, but we remain very bullish on the business.

Thank you very much, and tremendous job. Thanks.

Thank you. Our next question comes from John Davis with Raymond James. Please proceed with your question.

Hey, good afternoon guys. Mike Ellis, I just wanted to touch on gross margins, to put a finer point on it. If I understood what you were saying earlier, basically the lower gross margin is just a function of our performance in travel, so gross profit dollars are better than expected. It's just mix and nothing else that's causing the lower gross margin just, just want to confirm that.

Yes, John, that is true. The one thing I'd add to that is the lapping of the Cohort Go acquisition that occurs July. I think we just lapped it. So that will also not have that. That did contribute to our adjusted gross margins during the first half of the year.

Okay, great. And then Rob, I think in your prepared remarks, you called that out NRR strong that kid of the three year average in the quarter. Just wonder if you could touch on that, is that just students returning in a post-COVID environment, cross sell. Anything you call -- the couple factors are leading to that strong NRR that would be helpful.

Sure, JD. So the NRR has been in a pretty narrow range across a series of quarters. That's led to a pretty consistent NRR, whether you're looking at one year or three year averages. And so it's all been very consistent and built on the same foundation of sort of land and expand that you've heard us talk about before. So what you see there is strength really across education and travel, which probably are driving that NRR the most. B2B is a smaller piece of it and operating at the highest level. Healthcare a bit lower, but all contributing to that overall corporate performance that's staying in that exact range that we talked about. And the underlying drivers of that are really the same as what we've talked about in the past, which is to say, you see us growing cohorts very well over periods. You see us having strength across the geographic channels that you've heard us talk about in the past and continuing to win, placement of expanded software across the range of our clients. So whether it's getting more coverage in a B2B client, whether it's getting more software into a school. All the same building blocks are what's adding up to that that NRR in our typical range.

Okay, great. And then a last quick one for Mike Ellis. Both of the 3Q guide, it implies a little bit less of the sequential step up than in prior years. Maybe how much about like travel and some of the other verticals being a bigger contributor virus some services. Just help us think about the sequential improvement and revenue, kind of 2Q and 3Q.

Yes, John. So we're pretty confident in the guidance range that we provide and it's really a function of what we believe is going to happen with respect to our travel vertical, as well as international education. Health care as Rob indicated has been a little bit of a drag, but still really excellent economics and we've kind of built that all into our model. And similar to last year, if you look at the trend lines as a relates to first half and second half, we typically do see a slower overall growth rate in second half of the year. That's really a function of the really the size and the contribution and the seasonality of our business that we see in Q3, just to a lesser extent Q4.

Okay. Appreciate all the color. Thanks guys.

Thank you. Our next question comes from Rob Napoli with William Blair. Please proceed with your question.

Thank you. And Mike Ellis, thank you for all your help over the years. I appreciate it. Wish you the best.

Thank you, Bob.

So just on competitively, are you seeing – your Tencent relationship. I think there is another education company works with Tencent. Just broadly, are you seeing any changes in the competitive environment? What are you most keeping your eye on competitively?

Hey, Bob. This is Mike. I'm going to continue to be we continue to be very encouraged. It was how we compete in the markets. As we've said before, we compete within the verticals. We compete with no one across these verticals. So again, it's within a given vertical, which we see competition. And I would say we feel very strong about how we're competing and the innovation we're doing, the accounts we're winning. In new geographies, adding new methods, you mentioned the Tencent. I mean, that I think is just further indication that we’re an important player in this space and we can get deeper relationships with globally recognized brands like that. I think that's obviously very important. We also mentioned in part of the earnings, the recognition by PCI being added to that council. We think that's a really good indicator, right. That's not a position that a lot of our competitors have or can hold. And so that recognition, I think, helps us continue to innovate, be seen as an innovator within the sectors that we're in. And I've said it before, we like to compete. We have a team that is good competing and we're going to get up every day and do it.

Thank you. And then you called out the, the insurance business a couple of times and maybe a little more color on that, and just in travel and then I'll get off. Where are you seeing the success in travel? Who are you competing against? What areas of travel are you having the most success and why are you enabling it? Is it – you know generally there's a lot of players in the travel market that you seem to have a unique position.

Yes, I think what we're doing is identifying sub sectors that have very much kind of been neglected inside the broader travel system, right. We're not competing for small dollar e-commerce for travel. We're looking at kind of luxury tours accommodations. These destination management companies and those segments that really have been forced to kind of select a local regional acquirer to process card payments and then manually deal with bank related payments or sign up third party wallets that may be applicable in giving countries and have to string together a solution on their own. Oftentimes those companies don't have extensive IT teams. And so, they're kind of putting together kind of a patchwork solution. And so what we've done is we've brought our kind of modern technology software invoicing payment capabilities. Those payment experiences into these clients that have been able to streamline the back office management of all those vendors, in addition to really deploy a payment experience that's like an e-commerce experience, but really tailored to those sectors and those large and complex payments. So, that's really putting us on a different level and just allowing you to accept credit cards. And so obviously Flywire has the bank, the banking infrastructure. The credit card processing capabilities and the third party payment method capabilities are we’re bringing that all together for them. So, traditionally they're stringing something together, multiple vendors, multiple banks, multiple card processing players and that's where we're replacing. [Cross Talk] And then I think that's a very good question around insurance as well. Really, we continue to be very much encouraged. We talked about that a lot as an expanding part of our Flywire advantage and kind of looking at what can be done to provide additional value add to the payer, and that's a great example. We had a great agent solution, which targets educational agents, and the Cohort Go acquisition had an insurance offering that was part of that. And so really bringing that's insurance offering to our number of payers, which was obviously significantly larger and also the number of educational agents, right. That's really led to a great synergy that we were expecting when we did that deal and are proud to say, we continue to see great growth from. So we think we're just getting started when it comes to payer related services and things we can do to drive additional value. And I think the insurance aspect is just one of them. You can imagine other offerings that are travel business. There's also certain types of additional account creation that could occur with payers. So we think the future is really bright in relation to that offering.

Thank you.

Thank you. Our next question comes from Darrin Peller with Wolfe Research. Please proceed with your question.

Hey guys. Let me just start off quickly on the number of customer adds, which is coming in at pretty healthy, in fact very strong rates in the last two quarters. I think you had 170 and now one – it was at 165 if I’m not mistaken. That's up somewhere around 20% or 10%, 20% from the run rate. Quarterly ads you would have about a year ago already. So, is that – how much of that is just the pure organic strength as you scale out the business versus inorganic and just adding new geographies and contribution from M&A. But also any color on – you know the size of these is a small travel businesses or is it really meaningful universities. Just the mix would be helpful.

Hey Darrin, this is Rob, good to hear your voice. I'll jump in and start on this one. So first of all I’d say, it’s really all organic. When we talk about the sort of new customer signs at this stage, maybe there's just a few that tie up somewhere in some of the way, but really this is organic strength. This is based on the investments we've made and the sales team expanding our geographic capabilities. The success is really very global and across the verticals. I think the last part of your question was, can you talk a little bit more about sort of the size and profile of the deals. We have looked at that..

Mix and the size, yes, yes.

Yes. So it is definitely skewed towards travel, but underneath that skew where there's travel, if you looked in the EDU side of things, the actual client size was up just slightly. If you looked at the average client size and the travel business, it was down just slightly and blended out to an average client size that was right in line with what we've achieved in recent quarters. So overall, a really good result for our sales team that is working hard and doing well.

That's great to hear. I guess my follow-up would be around really two quick topics that interject. One of them is the M&A side and I know WPM was being built out and kind of scaled up for third quarter and so how has the progress been there. And then just the implications of that plus broadly speaking, the conviction you have and the EBITDA margin trajectory both from M&A impacts, but just pure and simply organically. You guys talked about this year having the impact of anniversary hiring. I know somebody touched on this earlier, but a little more detail on your confidence level of back to the midpoint of that 3% to 6% medium term would be great. And Mike Ellis, by the way, congrats to you and all the best. Thanks again.

First on the EBITDA margins. This is Mike. I'd say we continue to be confident to be confident in that range, that 300 to 600. Obviously as we get over kind of Q3 and into Q4, we've always said that's going to give us optionality for next year. One thing we want people to hopefully see is, our confidence by increasing those numbers from this point forward in this year. And so we're going to look at next year as we get into 2024 planning, we have a lot of optionality, and hopefully come together with a plan that I think balance is growth as well as those EBITDA margin expansion targets that we've shared before. So that was – hopefully that answers that part of the question. The other part of the question, I mean…

I can jump in on the WMP.

The WPM, yes.

The WPM continues to progress very well. We've signed additional clients. I believe our client signing count is now north of 55. We are heading into what will be the larger peak types season for the U.K. as well. We've taken advantage of the previous several months to get our implementation work as far along as we can for as many clients as we can. So we feel really good about what will be the contribution from WPM this Q3, which we think will be kind of the, the first quarter, we have a substantial number of clients that are able to leverage the integration. I would say the work on WPM is not done. Like we still have opportunities going forward, because they'll be chances to take on even more schools, they'll be chances to expand our footprint on the domestic. Because most of the work that we've done so far has been not entirely, but predominantly focused on cross border. Net-net, we feel really good about the contribution for Q3, but also feel really good about upside opportunity after Q3.

Thank you. Our next question comes from Tien-tsin Huang with JP Morgan. So sorry.

No need to apologize, all good. How are you guys doing? I want to – well, first I want to say appreciation of course to Mike Ellis as well on the news. Just wanted to ask on the new payment types you talked about Interact and some others. I'm just curious, is there greater demand for some of these RCP networks or lower costs, national schemes. I'm just curious that that's the general theme that you're observing and if there are any implications for Flywire.

You know, I mean. [Cross Talk] Sorry, go ahead Mike.

Hey Tien-tsin. Thanks for the question. I would say, we continue to see positive signs when we adds new methods. We're always looking to increase acceptance. As we said before, Flywire doesn't control how people choose to pay and we want to have as many options available as we can to the payers. I would say in general, there's a desire from our clients to have the most convenient ways to pay. And then in addition to always look at cost of acceptance, right and provides different price points from a cost of acceptance perspective. So as bank transfers become easier or there are certain countries around the world that have systems that make that easier, more digitized, more online, we see an interest in having them and our clients have an interest in making it as convenient and as easy to pay. So we don't see it really have any shift from a Flywire perspective, right, from a pricing or spread perspective. We control the cost associated to any method. And again, if that's a domestic option or a cross border option, we have different, obviously ways to monetize those transactions as folks are quite familiar with.

So, thinking about it from a travel perspective, 100% understand travel and card and you're not trying to influence, the consumer's funding choice. But I'm just curious, is there an opportunity to maybe price that business a little bit differently on the travel side or would you be willing to take on more credit exposure, maybe with the alternative payment method there if these trends sort of continue on the travel side.

Yes, I mean obviously there's a certain aspect that exists inside travel around just usage associated to credit cards. It's how the consumers traditionally paid for travel experiences. At the same time, we see consumers that want convenience, right. So you could see things like installments become more into a travel business. Again, Flywire is non-interest bearing, the right clients don't extend interest payments, really just different payment terms. So sometimes different payment terms can kind of invoke different ways to put it in a payment method. And again, clients are always looking for ways in which they can provide more value. I think banking, banking rails are critical as you start looking at something we've talked about before around payables and around commission flows in a lot of these industries. And we think having the banking rails and the infrastructure to do that helps on not only the received side, but on the send side. So, I'd expect those types of things to come into the travel business over time, as well as more software. Obviously, as we drive more solutions for customers in that segment, I think all of those will help improve our offering to travel clients.

Got it. Okay it now something to watch. Nice results. Thank you, guys.

Thank you. Our next question comes from Joel Richards with Truist Securities. Please proceed with your question.

Hi, guys. This is Joel on for Andrew Jeffrey. Thanks for taking my questions and congrats Mike. Regarding both the health care and education components of the domestic business, can you tell us a little bit how you expect those two areas to ramp for the remainder of the year and whether or not we could see any acceleration in organic growth for the second half of the ‘23 and into 2024. And then kind of just like in that context, any color around like what greater domestic volume means for yield and growth margin would be really helpful.

I can start with sort of the trends and then Mike, you can maybe talk to the gross margin piece. So the U.S. domestic education business is growing very nice and right. Its growing well above overall company growth rate, which as you see us announcing today is a very healthy growth rate. So we expect that to continue and doing very well with that domestic EDU footprint across the range of solutions we've talked about. Healthcare has had a tougher first half of the year, but we do believe with the deployment that are going live now and that have gone live just in the last little bit, that we will see a much healthier growth rate for health care business in the second half of the year. A – Mike Ellis: Yes, I would expect that adjusted gross margin profile for the domestic business to be pretty consistent with what we've been reporting in our transactional base business and probably closer to the overall average, but on the higher end of that average. So really, good business and again, the unit economics regardless of the payment method or the type are really strong business.

All right, awesome and then it sounds like you also kind of expected durability of the travel recovery to kind of be sustained for the remainder of the year. How are you guys thinking about potentially tougher comps over the next 12 months for international?

Yes, I'll take that one. This is Mike. Joel, I think we continue to look at how early we are the travel sector, right. It’s a massive total addressable market. It isn't like when the pandemic hit we were sitting on a high percentage market share and this is the recovery plan. Obviously, there is some benefit of returning to pre-pandemic level that's happening, but we're signing significant numbers of accounts and we see a lot of room to run a new client acquisition in the sub-segments. I'd also highlight there's geographies, right. Think of the same playbook we've talked about before. More geographies allow us to drive more NRR, new client ads and new geographies for travel. So there's geographic expansion to expect in travel, there's sub sector expansion, there's other sub sectors we're looking at expanding into another use cases in then travel. And then I mentioned earlier the additional products, right. We're still primarily driving one main product into our travel accounts. And so you can imagine we have a number of plans to add additional software, just like we've done in other verticals. And add more value and drive more revenue within those existing accounts. So we feel really good. We're early innings in travel. Obviously the growth numbers are great, and we think it's going to continue to grow for years to come.

Awesome. Thank you so much.

Thank you. Our next question comes from Charles Nabhan with Stephens. Please proceed with your questions.

Hi. Good afternoon and thank you for taking my question. So with respect to the full year guide increase you had mentioned that FX would be a bit of a tailwind relative to your previous expectations. Would it be possible to quantify how much of that raise was attributable to the greater than expected FX tailwind?

Yes, sure. So essentially when we think about our full year guidance, Mike just talked about all the positive results as it relates to travel and we called out our cross border education. The majority of the increase in the guide really comes to those two components that we do have built into that guidance. Some FX tailwinds that we do anticipate, low single digit millions if that much, but really it comes down to the fundamentals of the business.

Got it. And just as a quick follow up, one of the verticals that you didn't really touch on tonight was B2B. So I wanted to get your comments on any notable trends your seeing there.

Yes, we're feeling really good about the B2B business. We expect to continue to invest in that. It was one of their strongest quarters ever in terms of ARR. It was a great quarter in terms of revenue. It's still growing from a smaller base, but it's growing at the highest rate in the company and we expect that to continue to perform really well. Look forward to investing more in that part of the business.

Got it. I appreciate the color and Michael. Thank you for everything and best of luck.

Thank you.

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