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    FLYW
    Earnings call· Jun 2026(Q2 FY26)

    Flywire Q2 FY26 earnings call FLYW

    Aug 4, 2026 Source

    Executive summary

    Flywire Q2 FY26 — Strong Revenue and EBITDA Growth, Raising Full-Year Guidance

    Flywire delivered strong Q2 FY26 results, surpassing revenue and EBITDA expectations, driven by robust client acquisition and growth in travel and non-Big 4 education markets. The company is actively pursuing a multi-year strategy to achieve $1 billion in organic revenue and 30% adjusted EBITDA margins, leveraging software-led monetization and geographic diversification. Despite a challenging macro environment and mix-driven gross margin pressure, Flywire remains confident in its operating leverage and free cash flow generation, supported by ongoing digital transformation and AI integration.

    Highlights

    5

    • Total revenue less ancillary services reached $164 million, up over 28% on a spot basis and 27% FX-neutral growth, exceeding expectations.

    • Adjusted EBITDA was $24 million, resulting in a 14.6% margin and expanding approximately 160 bps year-over-year, above the upper end of guidance.

    • Signed over 200 new clients across 45 countries and all verticals, marking the second consecutive quarter at that level.

    • Education revenue outside the 'Big 4' markets grew over 30% year-over-year in Q2.

    • GAAP net loss improved to $8 million, versus a $12 million loss a year ago.

    Concerns

    3

    • Adjusted gross margin of 56.6% was down approximately 450 basis points year-over-year, primarily due to mix shift towards lower-margin payment processing revenues.

    • The macro backdrop remains challenging with recent negative trends in U.K. visas, increased Australian visa fees, and more stringent regulations in the U.S. and U.K.

    • The accelerated ramp of newer revenue streams creates a tougher comparison for revenue growth in the second half of FY26 and into FY27.

    Guidance & targets

    13
    CategoryTargetConfidence
    Annual Organic Revenue
    $1 billion
    high materiality
    High
    Adjusted EBITDA Margin
    30%
    high materiality
    High
    Full-Year 2026 FX-Neutral Revenue Growth
    21% to 27%
    high materiality
    High
    Full-Year 2026 Adjusted Gross Profit Growth
    High teens year-over-year
    medium materiality
    High
    Full-Year 2026 Adjusted EBITDA Margin Expansion
    Approximately 200 to 400 basis points
    high materiality
    High
    Full-Year 2026 Stock-Based Compensation
    Approximately 10% of revenue
    medium materiality
    High
    Full-Year 2026 Dilution
    Less than 2% this year and less than 3% on an ongoing basis
    medium materiality
    High
    Full-Year 2026 Free Cash Flow Conversion
    70% to 75% of adjusted EBITDA
    high materiality
    High
    Full-Year 2026 GAAP Net Income
    Over $50 million (fourfold growth)
    high materiality
    High
    Q3 FY26 FX-Neutral Revenue Growth
    16% to 22% year-over-year
    high materiality
    High
    Q3 FY26 Gross Profit Dollar Growth
    Low teens range at spot rates
    medium materiality
    High
    Q3 FY26 Adjusted EBITDA Margin Expansion
    Approximately 200 basis points year-over-year at the midpoint
    high materiality
    High
    Adjusted EBITDA Margin
    Approximately 25%
    high materiality
    High

    Segment performance

    5
    SegmentRevenueYoYQoQMargin
    Total Company
    Total revenue less ancillary services, exceeding expectations. Outperformance driven by travel segment, particularly hospitality payments, and stronger-than-expected payment processing volumes from healthcare and B2B.
    		$164M28% spot basis, 27% FX-neutral——
    Transaction Revenue
    Driven by growth in transaction payment volume, with continued contribution from education (cross-border and domestic) and travel. Blended yield can vary with mix due to higher domestic volumes and credit card penetration.
    Transaction payment volume growth: 43%
    		$135.9M35%——
    Platform and Other Revenues
    Primarily driven by growth in hospitality.
    		$28M3%——
    Education (outside Big 4 markets)
    Strong growth in geographic diversification, with significant share gains in Spain, Switzerland, South Korea, and Japan. These markets are actively courting international students.
    New education clients signed outside Big 4: Approximately 2/3 of total
    		—30%——
    U.S. Education
    Expected to grow in the low single digits this year, despite pressure on the cross-border side, due to strong growth from the domestic SFS business.
    		—Low single digits——

    Operational metrics

    15
    Adjusted Gross Profit
    $93M19% year-over-year
    Q2 FY26

    Successfully converting into adjusted EBITDA margin expansion, demonstrating real operating leverage.

    Adjusted Gross Margin
    56.6%Down approximately 450 basis points
    Q2 FY26

    Margin dynamics driven by mix, FX, and temporary large payment processing ramps, not competitive pressure. Normalized decline is within the expected annual range of 100-200 bps.

    FX on Settlement Impact
    $0.7M
    Q2 FY26

    Absolute impact, with a favorable year-over-year comparison due to a headwind in Q2 2025.

    GAAP Net Loss
    $8MImproved versus $12M loss a year ago
    Q2 FY26

    Q2 is seasonally the smallest revenue quarter, with net income and free cash flow generation expected to reverse in Q3 and be strongly positive for the full year.

    Corporate Cash Balance
    $167M
    Q2 FY26 end

    Provides significant financial flexibility for opportunistic investments, dilution management, and acquisitions.

    Payment Processing Ramps Contribution to Revenue Growth
    Approximately 7 pointsAhead of mid-single-digit impact guided to
    Q2 FY26

    Expected to decelerate in the second half as these revenue streams annualize.

    SFS Deals ARR Value (U.S.)
    DoubleSame quarter of 2025
    Q2 FY26

    Reflects focus on full-suite enterprise deals and growing market reputation.

    Customer Inquiries Auto-Resolution Rate
    45%
    Q2 FY26

    Achieved without human intervention, with a target to exceed 50% by year-end using generative AI.

    Client Count (New)
    Over 200Second consecutive quarter at that level
    Q2 FY26

    Travel led new client count, followed by education. Pace of signings is strong, moving towards larger, more strategic engagements.

    Client Money Moved (90%+ threshold)
    20Up from approximately 12 previously
    Q2 FY26

    Number of U.K. clients for whom Flywire moves 90% or more of their money, demonstrating increased penetration.

    SFS Inbound Student Contact Volume Reduction
    40%
    Q2 FY26

    Achieved by automating billing, payment plans, and past due outreach, allowing school finance teams to run leaner.

    SFS Payment Plan Enrollment
    50% higher
    Q2 FY26

    Driven by self-service payment plans, with default rates falling from as high as 34% to below 2%.

    SFS Past Due Tuition Collected
    $360M
    To date

    Collected in-house by clients, saving over $70 million in agency fees through the revenue recovery solution.

    Hospitality Properties Using Software
    Over 20,000
    Q2 FY26

    Software streamlines workflows and replaces manual card processing, leading to lower payment fees and higher win rates on disputed transactions.

    Hospitality Locations Signed (Europe and Asia)
    More than 40
    YTD

    Expansion of the hospitality model internationally after proving it in the U.S.

    Deals & partnerships

    7
    University of LiverpoolSigned for SFS platform in the U.K., consolidating manual processes and systems for student finance onto one platform.

    The platform offers a modern portal for students/families with real-time balances and self-service payment plans, and integrates with Unit4 ERP for the university.

    Sheridan CollegeStarted processing payments for the major Canadian college.

    Sheridan has over 8,000 international students out of roughly 20,000 enrolled, representing a share gain in a constrained market.

    Bond UniversityStarted processing payments for Australia's first private nonprofit university.

    A prestigious Gold Coast institution with one of the highest international student ratios in the country, representing a share gain in a constrained market.

    Peregrine HospitalityContract for hospitality solutions.

    Peregrine Hospitality is a large hotel management group that owns or manages a portfolio of hotels and resorts.

    Avion HospitalityContract for hospitality solutions.

    Avion Hospitality is a large hotel management group that owns or manages a portfolio of hotels and resorts.

    Marcus Hotels & ResortsContract for hospitality solutions.

    Marcus Hotels & Resorts is a large hotel management group that owns or manages a portfolio of hotels and resorts.

    DriftwoodWorking across a whole bunch of their properties for sign and pay authorization and payment.

    Driftwood is a hospitality management company with a portfolio of clients including brands like Marriott, Hyatt, and Hilton.

    Risks & headwinds

    5
    Macroeconomic HeadwindsCurrent environment

    Recent negative trends in U.K. visas; Australia raised visa fees again; U.S. and U.K. regulations became more stringent.

    Mitigation: Flywire's business is vertically and geographically diverse with multiple product growth levers, allowing it to navigate challenging conditions. Industry pressure can also strengthen the case for automating payment flows.

    Tough Comparables from Large DealsNext year

    Large healthcare deals like Cleveland Clinic can boost growth one year and create a tough comparable the next.

    Mitigation: Diversification across verticals and geographies helps mitigate impact of individual deal cycles.

    Payment Processing Ramp DecelerationSecond half of FY26

    Payment processing ramp in B2B and healthcare contributed approximately 7 points to Q2 growth, but is expected to decelerate.

    Mitigation: This is a natural annualization of revenue streams going live, and the company has other growth levers.

    Gross Margin Pressure from Mix ShiftFY26

    Q2 adjusted gross margin down approximately 450 basis points, with ~300 bps from mix contribution of higher payment processing revenues (healthcare and B2B). Full year gross margin decline expected closer to 350 bps reported, or 200 bps normalized.

    Mitigation: The pressure is pure mix; processing volume carries a lower gross margin rate but very little incremental OpEx, leading to strong EBITDA dollar flow-through. These ramp dynamics are temporary and expected to be largely complete by end of 2026.

    U.K. Education Revenue DecelerationSecond half of FY26

    U.K. visa rejection rates higher in Q1; assumed bigger decline than mid-teens visa declines seen in prior years.

    Mitigation: Flywire has levers like SFS and increasing client penetration (moving 90%+ of money) to gain share in the U.K. market, despite macro headwinds.

    What to watch in Q3 FY26

    5

    U.S. Visa Decline Rate

    Q3 FY26
    Current30% decline assumed
    TargetActual F-1 visa issuances and impact on Flywire's U.S. education revenue

    Why it matters

    The U.S. education market is significant, and actual visa trends could materially impact revenue if they deviate from conservative assumptions.

    As you know🎣, usually, U.S. peaks around August. And so we do have some visibility into that, but we feel pretty good that we've taken that -- the right prudent approach.

    Q&A highlights

    6

    What is the probability of new U.S. visa regulations impacting demand, similar to other geographies? And can you provide an update on the 30% visa reduction assumption for the U.S., given current F-1 visa issuances?

    Management noted that many proposals are just statements, not approved policies, and historical headlines have often been worse than actual outcomes. They maintain a prudent 30% decline assumption for U.S. visas, feeling good about the approach given current visibility a month into the quarter.

    “And historically, we've seen the headlines oftentimes be a lot worse than the actual end results. And so again, we're being prudent. Cosmin, I think, has taken that into account in the way in which he looks at different regions in the guide, and I'll let him comment on that.”

    asked by Christopher Svensson · answered by Michael Massaro

    2 min read7 chapters

    Detailed Narrative

    01

    Strategic Vision and Financial Model

    Flywire aims to achieve $1 billion in annual organic revenue and a 30% adjusted EBITDA margin within the next few years. This growth is underpinned by its diversified engine, with growth outside traditional Big 4 education markets outpacing the overall business. The company emphasizes converting gross profit into durable earnings and expanding free cash flow, supported by a strong balance sheet and disciplined capital allocation.

    02

    Operating Leverage and Digital Transformation

    The company expects significant EBITDA margin expansion from operating leverage, with operating expenses growing well below gross profit growth. This is driven by a digital transformation initiative, unifying systems onto a single modern payment architecture, and rearchitecting internal operations. These investments are designed to structurally lower the cost to scale and create durable operating leverage, with transformation investment peaking in 2027 and material savings expected thereafter.

    03

    AI Integration and Productivity Gains

    AI is becoming a key enabler, with approximately 45% of customer inquiries now resolving automatically. The company targets over 50% auto-resolution by year-end through generative AI in its support platform. AI is also embedded across engineering and product teams for tasks like code retirement and bug fixing, and in go-to-market strategies for continuous coaching, cutting new hire ramp times.

    04

    Client Consolidation and SFS Success

    Flywire is systematically gaining share by consolidating clients from traditional payment processors and point solutions. The SFS (Student Financials Suite) platform is a key driver, with new U.S. SFS deals in Q2 showing double the ARR value compared to Q2 2025. SFS provides significant ROI through operational efficiency (e.g., 40% reduction in student contact volume), improved cash flow (50% higher payment plan enrollment, default rates below 2%), and revenue recovery ($360 million collected in past due tuition, saving $70 million in agency fees).

    05

    Geographic Diversification and Growth Markets

    Strong growth was observed outside the traditional Big 4 education markets (U.S., U.K., Canada, Australia), with education revenue in these regions growing over 30% year-over-year. Approximately two-thirds of new education clients signed were in growth markets outside the Big 4, particularly in Europe (Spain, Switzerland) and Asia (South Korea, Japan), where universities are actively courting international students.

    06

    Software-Led Monetization Across Verticals

    The software-led approach is critical for capturing and monetizing payment volume. In hospitality, software streamlines workflows and replaces manual card processing, leading to meaningfully lower payment fees and doubled win rates on disputed transactions. This model is expanding internationally, with over 40 locations signed in Europe and Asia year-to-date. In healthcare and B2B, software is attaching to payment processing, with new B2B clients increasingly adopting both invoice software and payments from day one.

    07

    Capital Allocation Philosophy

    Flywire employs a disciplined capital allocation strategy, evaluating every dollar based on expected return through an IRR framework, weighing organic investment, share repurchases, and M&A. The company repurchased shares aggressively into dislocation and concentrates organic investment in high-conviction areas. With $167 million in corporate cash, Flywire maintains financial flexibility to be opportunistic, manage dilution, and pursue acquisitions.

    AI-generated summary of the company’s earnings call. Not investment advice.