Company: FLYW
Filing Date: 2025-02-26
Form Type: 10-K
Source: 0000950170-25-027078
Chunk: 384

Company: Flywire Corp
Filing Date: 2025-02-26
Form: 10-K
Item: Item 5
Chunk 384
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 as well as rent, and facility and insurance costs. Advertising Costs Advertising costs are expensed as incurred and are included in selling and marketing expenses in the consolidated statements of operations and comprehensive loss. Advertising expenses were $7.5 million, $6.6 million and $4.9 million for the years ended December 31, 2024, 2023 and 2022, respectively.Stock-Based Compensation The Company recognizes compensation cost for all stock-based compensation awards made to employees, net of an estimated forfeiture rate and recognizes compensation cost only for those shares expected to vest over the requisite service period of the award.The Company determines compensation expense associated with restricted stock units based on the fair value of the Company's common stock on the date of the grant. The Company determines compensation expense associated with options to purchase shares of common stock and Employee Stock Purchase Plan (ESPP) based on the grant date fair value method using the Black-Scholes valuation model. The Black-Scholes valuation model requires judgments and estimates. Such estimates include the exercise price, expected volatility, expected term, risk free rate and expected dividend yield. Any changes to those estimates may have a significant impact on the stock-based compensation expense recorded and could materially impact the Company’s results of operations. 

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The fair value of the Company’s common stock is determined based on the closing quoted market price of the Company’s common stock. The expected volatility is estimated based on the historical volatility of the Company’s common stock. However, since the Company’s initial public offering occurred in 2021, the Company lacked sufficient Company-specific historical and implied volatility information for its stock options granted in 2022; therefore, the Company estimated its expected stock volatility based on the historical volatility of publicly traded peer companies.The expected term represents the period that stock-based awards are expected to be outstanding. The expected term for options grants is determined using the simplified method. The simplified method deems the term to be the average of the time-to-vesting and the contractual life of the stock-based awards.The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is zero based on the fact that the Company does not have a history of declaring or paying cash dividends. Compensation expense is recognized using a straight-line amortization method over the requisite service period of the award, which is generally the vesting term of four years for stock options, one to four years for restricted