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Business Combinations | 6 Months Ended
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Jun. 30, 2024
Business Combinations [Abstract] |
Business Combinations | Note 8. Business Combinations StudyLink On November 3, 2023, Flywire, through one if its Australian subsidiaries Flywire Pacific Pty Ltd., acquired all of the issued and outstanding shares of StudyLink, an Australian-based software as a service (SaaS) education company that provides platforms to education providers to support their student admissions systems and processes, including features such as eligibility assessment, offer generation, recruitment agent and commission management and acceptance processing. The acquisition of StudyLink was intended to accelerate the Company's growth in the Australian higher education market and enhance the Company's value proposition to payers, universities and agents in the higher education ecosystem. The acquisition of StudyLink has been accounted for as a business combination. During the first quarter of 2024, the Company completed its purchase accounting and recorded an immaterial net working capital adjustment. Pursuant to the terms of the business combination agreement, the Company acquired StudyLink for estimated total purchase consideration of approximately $37.6 million or $35.5 million, net of cash acquired, which consisted of (in thousands):
Cash consideration, net of cash acquired |  | $ | 32,764 |
Estimated fair value of contingent consideration |  |  | 2,701 |
Total purchase consideration, net of cash acquired |  | $ | 35,465 |
Contingent consideration, which totals up to approximately $2.7 million, represents additional payments that Flywire may be required to make in the future which are dependent upon StudyLink's successful achievement of revenue, volume, cross-selling and engineering implementation milestones and is subject to exchange rate fluctuation adjustment between the U.S. Dollar and Australian Dollar. A portion of contingent consideration can be paid in the form of cash or shares of common stock, at the Company's option. Additional payments in the form of shares of common stock will be made based on the continuing employment of a key employee; accordingly, the fair value of $2.4 million, or approximately 84,000 shares of common stock, have been excluded from the purchase consideration. These shares were fixed on the date of acquisition and payable only in common stock, therefore are equity-classified. During the three and six months ended June 30, 2024, the Company expensed $0.3 million and $0.6 million, respectively, in stock-based compensation associated with retention of the key employee. The stock-based compensation expense is included in the Company’s condensed consolidated statements of operations and comprehensive loss and additional paid-in capital on the condensed consolidated balance sheet. The table summarizes the allocation of the purchase consideration to the assets acquired and liabilities assumed (in thousands):
Cash |  | $ | 2,108 |
Accounts receivable |  |  | 2,762 |
Prepaid expenses and other current assets |  |  | 432 |
Other assets |  |  | 193 |
Goodwill |  |  | 20,705 |
Identifiable intangible assets |  |  | 19,553 |
Total assets acquired |  |  | 45,753 |
Deferred tax liabilities |  |  | 2,663 |
Deferred revenue |  |  | 2,654 |
Accounts payable |  |  | 859 |
Accrued expenses and other current liabilities |  |  | 2,004 |
Total liabilities assumed |  |  | 8,180 |
Net assets acquired |  |  | 37,573 |
Less: cash acquired |  |  | 2,108 |
Net assets, less cash acquired |  | $ | 35,465 |
Goodwill arising from the acquisition of $20.7 million was attributable to the assembled workforce of StudyLink and the synergies expected to arise from the acquisition. No goodwill from this acquisition will be deductible for income tax purposes. The following table reflects the fair values of the identified intangible assets of StudyLink and their respective weighted-average amortization periods.
|  | Fair Values |  |  | Weighted-Average Amortization Periods |
|  | (in thousands) |  |  | (years) |
Developed technology |  | $ | 7,397 |  |  |  | 7 |
Customer relationships |  |  | 12,027 |  |  |  | 14 |
Trade Name/Trademark |  |  | 129 |  |  |  | 2 |
|  | $ | 19,553 |  |  |  |
The results of StudyLink have been included in the condensed consolidated financial statements since the date of the acquisition. StudyLink contributed $1.6 million and $3.7 million in platform revenue during the three and six months ended June 30, 2024, respectively. The Company has not disclosed net income or loss since the acquisition date as the business was fully integrated into the condensed consolidated Company’s operations and therefore it was impracticable to determine this amount. Unaudited Pro Forma Financial Information The following unaudited pro forma financial information shows the results of the Company’s operations for the three and six months ended June 30, 2023 as if the acquisition had occurred on January 1, 2022. The unaudited pro forma financial information is presented for information purposes only and is not necessarily indicative of what would have occurred if the acquisition had occurred as of that date. The unaudited pro forma information is also not intended to be a projection of future results due to the integration of the acquired operations of StudyLink. The unaudited pro forma information reflects the effects of applying the Company’s accounting policies and certain pro forma adjustments to the combined historical financial information of the Company and StudyLink. The pro forma adjustments include: • incremental amortization expense associated with the estimated fair value of identified intangible assets; • incremental employee compensation expense for StudyLink employees; • transaction costs; and • the estimated tax impact of the above items.
|  | Three Months Ended June 30, 2023 |  |  | Six Months Ended June 30, 2023 |
|  | Actual |  |  | Pro Forma |  |  | Actual |  |  | Pro Forma |
|  | (in thousands) |
Revenue |  | $ | 84,869 |  |  | $ | 86,551 |  |  | $ | 179,226 |  |  | $ | 182,714 |
Net Loss |  | $ | (16,813 | ) |  | $ | (17,543 | ) |  | $ | (20,496 | ) |  | $ | (21,600 | )

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 805 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479907/805-20-50-5 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/805/tableOfContent + Details
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