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Flywire Corp (FLYW)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered a revenue beat and stronger non-GAAP profitability: GAAP revenue rose 27.2% YoY to $131.9M; Revenue Less Ancillary Services (RLAS) increased 27.7% to $127.5M; Adjusted EBITDA was $16.6M with a 13.0% margin, up >700 bps YoY, though GAAP net loss per share was ($0.10) .
  • Versus Street: Revenue beat consensus by ~9% while EPS missed on the S&P “Primary EPS” measure; the beat was driven by Travel strength, FX tailwind, and operational outperformance; EPS miss reflects reporting basis differences and GAAP net loss . Q2 estimates table below uses S&P Global data.*
  • Guidance: FY 2025 FX-neutral RLAS growth maintained at 17–23% (10–14% ex-Sertifi); Adjusted EBITDA margin expansion raised by 75 bps at the midpoint to +200–350 bps YoY; Q3 2025 outlook calls for FX-neutral RLAS growth of 13–21% and +50–150 bps margin expansion .
  • Capital actions and catalysts: Share repurchase authorization increased by $150M to ~$200M capacity; revolver upsized to $300M; Q2 buybacks of ~0.6M shares for ~$5.0M. These, alongside raised margin guidance, were positive sentiment drivers .

What Went Well and What Went Wrong

What Went Well

  • Travel vertical momentum and early Sertifi synergies: Sertifi revenue contribution exceeded Q2 guidance ($12.3M vs $11M mid) and drove international expansion, net-new wins (Caesars), and accelerated payments upsell .
  • Margin expansion and cost discipline: Adjusted EBITDA of $16.6M and 13% margin, +700+ bps YoY, supported by lower personnel costs, FX hedging strategy, and automation/AI productivity initiatives (“auto-resolve over 40% of customer inquiries”) .
  • Education wins outside the “Big 4” and UK product traction: Record quarterly projected ARR signed; multiple EMEA/Asia wins; UK SFS go-lives and loan workflow innovation strengthened UK leadership despite visa noise .

What Went Wrong

  • Visa headwinds: Management flagged U.S. F-1 visa approvals modestly down YoY with processing delays across APAC corridors; Canada demand weakness and SDS program changes reduced first-year upfront tuition payments; Australia soft caps and higher visa fees expected to weigh on H2 .
  • Mix-driven gross margin pressure: Adjusted gross margin fell to 61.1% vs 63.5% in Q2 2024 as faster-growing Travel/B2B (with greater card usage) and FX settlement losses weighed; hedges mitigated the EBITDA impact .
  • GAAP results remained lossmaking: Net loss ($12.0M) and ($0.10) GAAP EPS despite robust non-GAAP performance, with a higher tax provision in Q2 based on full-year estimates and FX effects .

Financial Results

Quarterly performance vs prior periods

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Millions)$103.7 $133.5 $131.9
Revenue Less Ancillary Services ($USD Millions)$99.9 $128.7 $127.5
GAAP Net Loss Per Share ($)($0.11) ($0.03) ($0.10)
Gross Margin % (GAAP)59.7% 60.3% 57.0%
Adjusted Gross Margin %63.5% 64.1% 61.1%
Adjusted EBITDA ($USD Millions)$5.8 $21.6 $16.6
Adjusted EBITDA Margin % (of RLAS)—16.8% 13.0%

Segment revenue mix

MetricQ2 2024Q1 2025Q2 2025
Transaction Revenue ($USD Millions)$85.3 $108.5 $100.6
Platform & Other Revenue ($USD Millions)$18.4 $25.0 $31.3
Revenue Less Ancillary Services ($USD Millions)$99.9 $128.7 $127.5
Transaction % of RLAS85.2% 84.0% 78.8%
Platform & Other % of RLAS14.8% 16.0% 21.2%

KPIs

MetricQ4 2024Q1 2025Q2 2025
Total Payment Volume ($USD Billions)—$8.4 $5.9
Revenue Less Ancillary Services ($USD Millions)$112.8 $128.7 $127.5
Adjusted Gross Profit ($USD Millions)—$82.5 $77.9
Adjusted EBITDA ($USD Millions)$16.7 $21.6 $16.6

Results vs Wall Street consensus (S&P Global)

MetricQ2 2025 ConsensusQ2 2025 Actual
Revenue ($USD Millions)$120.7*$131.9
Primary EPS ($)$0.0735*$0.0213*
EBITDA ($USD Millions)$10.2*($2.9)*

Note: S&P Global consensus/actual figures denoted with an asterisk (*) are Values retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
FX-Neutral RLAS GrowthFY 202517–23% YoY 17–23% YoY Maintained
FX-Neutral RLAS Growth (ex-Sertifi)FY 202510–14% YoY 10–14% YoY Maintained
Adjusted EBITDA Margin Expansion (YoY)FY 2025+100–300 bps +200–350 bps Raised
Sertifi Revenue ContributionFY 2025$35–40M $35–40M Maintained
FX-Neutral RLAS GrowthQ3 2025—13–21% YoY New detail
FX-Neutral RLAS Growth (ex-Sertifi)Q3 2025—7–13% YoY New detail
Sertifi Revenue ContributionQ3 2025—$9–12M New detail
Adjusted EBITDA Margin Expansion (YoY)Q3 2025—+50–150 bps New detail

Earnings Call Themes & Trends

TopicPrevious-2 (Q4 2024)Previous-1 (Q1 2025)Current (Q2 2025)Trend
AI/productivityAnnounced operational review; automation savings in support & verification Streamlining org; data architecture & AI to boost onboarding, KYC Auto-resolve >40% inquiries; ML >90% bank transfer matching; product features up 20% YoY Building and scaling
Education visas/macroCanada SDS removal hit Q4 revenue by ~$3M; U.S. slower growth Canada/Australia down high-20s; cautious U.S.; EMEA/UK strong U.S. F-1 declines and delays; headwinds in CA/AU; diversified growth elsewhere Headwinds persist; diversification offsets
UK market & SFSU.K. strong growth; major wins and upsells 4 UK SFS clients signed; UK loan workflow product Multiple UK SFS go-lives; client pipeline expanding Accelerating
Travel/SertifiSertifi acquisition announced; >$100M travel business combined (TTM) Early integration; strong organic growth; large wins Beat Q2 Sertifi revenue; international sales rising; marquee Caesars deal Strong momentum
Healthcare8-figure hospital contract; H2 ramp expected Pipeline strengthening; expect growth later 2025 Endeavor Health signed; large client phase 1 live Turning the corner
Capital allocationBuybacks; Sertifi funded with cash/debt; liquidity maintained $57M buyback remaining post Q1 Buyback capacity lifted to ~$200M; revolver upsized to $300M More flexible

Management Commentary

  • “Our strong Q2 results and double-digit FX-Neutral revenue growth are a testament to the high-performance culture we’ve built… and the momentum is just beginning.” — CEO Mike Massaro .
  • “Acknowledging student visa headwinds in the US, we are maintaining our revenue guidance and raising our adjusted EBITDA margin outlook for the full-year 2025.” — CFO Cosmin Pitigoi .
  • “Machine learning based algorithms now auto match over 90% of bank transfers… our hybrid AI support model resolves 40% of payer inquiries automatically.” — CEO Mike Massaro .
  • “We signed nearly 200 new clients… and set a new record in quarterly projected ARR signed in education.” — President/COO Rob Orgel .

Q&A Highlights

  • Guidance shape: Strength in Australia Q2 was modest pull-forward; back-half cautious given U.S. visa dynamics; margin cadence more expansion in H1 due to restructuring timing, continued discipline in H2 .
  • Education outlook: Domestic U.S. SFS adoption expected to offset international softness; mix shift improving durability and expanding wallet share; UK momentum intact .
  • Travel/Sertifi: International expansion underway; payments monetization accelerating; synergies validated by partner referrals and non-U.S. sales .
  • Stablecoin initiative: Planned rollout over ~6 months focused on high-inflation/capital-control corridors to add payer choice and optimize money movement .

Estimates Context

  • Q2 2025: Revenue beat ($131.9M vs $120.7M consensus*), EPS missed on S&P “Primary EPS” ($0.0213 actual* vs $0.0735 consensus*); note Flywire’s GAAP EPS was ($0.10), reflecting reporting basis differences .
  • Q3 seasonality and lapping tougher comps underpin wide guidance ranges; management raised FY margin expansion midpoint by 75 bps, signaling improved operating leverage despite education macro .

Note: S&P Global consensus/actual figures denoted with an asterisk (*) are Values retrieved from S&P Global.

Key Takeaways for Investors

  • Travel is a core growth engine with verified Sertifi synergies; expect continued above-company-average growth and monetization of under-tapped workflows .
  • Education pivot to domestic/SaaS (SFS, payables, StudyLink) is strengthening revenue visibility and offsetting cross-border variability; UK leadership is a durable driver .
  • FY 2025 margin outlook raised; H1 restructuring and AI-driven productivity should support sustained operating leverage even amid visa headwinds .
  • Capital returns and liquidity improved: Buyback capacity at ~$200M and revolver at $300M provide flexibility to manage dilution and invest opportunistically .
  • Q3 guidance cautious but diversified portfolio (Travel/Healthcare/B2B/EMEA EDU) mitigates education macro; monitor U.S./Canada/Australia visa developments and FX .
  • For near-term trading, catalysts include: incremental Sertifi wins, UK SFS expansions, large healthcare client ramp, and any signals of easing visa constraints .
Sources: Flywire Q2 2025 8-K and press release **[1580560_0001193125-25-173548_d248653d8k.htm:0]**–**[1580560_0001193125-25-173548_d248653dex992.htm:9]**; Q2 2025 call transcript **[1580560_2056508_0]**–**[1580560_2056508_18]**; Q1 2025 8-K and call **[1580560_0001193125-25-113876_d880037d8k.htm:0]**–**[1580560_0001193125-25-113876_d880037dex992.htm:12]** **[1580560_FLYW_3425541_0]**–**[1580560_FLYW_3425541_23]**; Q4 2024 8-K and call **[1580560_0001193125-25-035188_d843798d8k.htm:0]**–**[1580560_0001193125-25-035188_d843798dex21.htm:49]** **[1580560_FLYW_3417850_0]**–**[1580560_FLYW_3417850_24]**.