FLYW Q1 Earnings Call: Revenue Beats, Margin Pressures, and Expansion in Education and Travel

Cross border payment processor Flywire (NASDAQ: FLYW) reported Q1 CY2025 results beating Wall Street’s revenue expectations, with sales up 17% year on year to $133.5 million. The company expects next quarter’s revenue to be around $124.4 million, close to analysts’ estimates. Its non-GAAP profit of $0.11 per share was in line with analysts’ consensus estimates.

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StockStory’s Take

Flywire’s first quarter results were driven by robust client acquisition, expansion in both core education and travel verticals, and a continued emphasis on software-driven payment solutions. Management detailed how new wins, particularly in the U.K. and non-traditional education markets, alongside the integration of recent acquisitions like Sertifi, contributed to revenue growth. CEO Mike Massaro highlighted, “We continue to see huge demand for Flywire solutions as evident by our signing of 200 new clients this past quarter.”

Looking forward, Flywire’s outlook reflects cautious optimism, balancing positive trends in travel and healthcare with ongoing macroeconomic uncertainty, especially within North American education. The company maintained its full-year guidance, with CFO Cosmin Pitigoi emphasizing that operational efficiency measures and investments in automation are intended to drive margin expansion despite anticipated headwinds. Management also noted that upcoming quarters will depend on factors like visa policy changes and macro shifts in major student markets.

Key Insights from Management’s Remarks

Flywire’s Q1 performance outpaced Wall Street’s revenue expectations, underpinned by product expansion and geographic diversification. Management attributed growth to new client wins and product enhancements across its verticals, while also acknowledging pressures from macro trends and policy changes.

• Education Market Diversification: Flywire capitalized on shifts in international student flows, expanding beyond the U.S., U.K., Canada, and Australia into markets like Germany, France, Japan, and Singapore. New contracts and product integrations in these regions helped offset weakness in more traditional destinations.
• Product Suite Expansion: The company’s introduction of new software products, such as StudyLink and Student Financial Services (SFS), drove deeper client engagement, particularly in the U.K. and U.S. Management highlighted that the attach rate for these services remains low, presenting ongoing growth opportunities.
• Travel Vertical Growth: Flywire’s travel segment benefited from both organic growth and contributions from the Sertifi acquisition, which added software-driven payment capabilities and facilitated cross-selling. Integration efforts with Sertifi are yielding early wins and expanding the client base, especially among luxury and boutique hotels.
• Operational Streamlining: An ongoing operational and portfolio review resulted in cost optimization, restructuring, and centralization of payment strategies. Efforts included investments in procurement, automation, and digital transformation to drive efficiency and support future scalability.
• Resiliency Amid Macro Headwinds: Management emphasized Flywire’s low churn rates, strong client retention, and the ability to adapt product offerings in response to evolving market conditions, particularly in education and healthcare sectors.

Drivers of Future Performance

Management’s outlook for the remainder of the year is shaped by ongoing geographic expansion, product innovation, and operational discipline, but acknowledges risks from macroeconomic and policy uncertainty in key verticals.

• Geographic and Vertical Expansion: Growth in non-traditional education markets and the continued scaling of the travel segment, especially with Sertifi, are expected to drive future revenue. The healthcare vertical is also positioned for an uptick as new integrations and client wins materialize.
• Operational Efficiency Initiatives: The company is pursuing margin expansion through automation, vendor consolidation, and streamlining of global operations, with plans to reinvest savings into data, analytics, and product development.
• Macroeconomic and Policy Risks: Guidance assumes persistent headwinds in U.S. education due to visa policy changes and softer demand from international students, as well as anticipated declines in Australia and Canada. Management stated that “all this will be data dependent as we balance hiring and additional OpEx levers.”

Top Analyst Questions

• John Davis (Raymond James): Asked about the drivers of revenue growth reacceleration in the second half; management cited easier year-over-year comparisons, normalization in Canadian education, and new client ramp-ups in healthcare and SFS.
• Timothy Chiodo (UBS): Inquired about U.K. education growth and its revenue contribution; CFO Cosmin Pitigoi confirmed the U.K. is now Flywire’s largest education market, driven by new software product adoption.
• Tien-Tsin Huang (JPMorgan): Sought clarity on what fueled Q1 outperformance and management’s confidence in maintaining growth; management pointed to travel and Australian education segments as key contributors, with a conservative outlook for the rest of the year.
• Dan Perlin (RBC Capital): Asked about Flywire’s market penetration in the next 20 education markets and the timeline for converting travel customer backlogs; management noted strong addressable opportunities and faster deployment cycles in travel.
• Tyler DuPont (Bank of America): Requested updates on competitive dynamics in education and the status of operational reviews; management indicated that product quality remains the key differentiator and outlined progress on cost optimization and pricing strategies.

Catalysts in Upcoming Quarters

In the upcoming quarters, the StockStory team will be watching (1) the pace of client adoption for Flywire’s expanded software suite in education and travel, (2) the effectiveness of operational efficiency measures in supporting margin improvement, and (3) the impact of macro and visa policy developments on student flows in North America and Australia. Execution against these factors will be key to tracking Flywire’s progress toward its full-year goals.

Flywire currently trades at a forward price-to-sales ratio of 2.3×. In the wake of earnings, is it a buy or sell? See for yourself in our free research report.

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