Flywire Corp Q3 FY2025 earnings call

Management Statement and Operational Highlights

• Priorities:
  • Focus on optimizing go-to-market excellence, accelerating product innovation, and cultivating high-performing teams. Executed well in Q3, on track to exceed ARR contract signing goals.
• Education Diversification:
  • Growth beyond traditional Big 4 markets: More than half of new education wins this year from outside Big 4 markets. SFS platform was a major growth driver, with Collection Management solution delivering significant impact on institutional health and student success.
• Travel Integration:
  • Sertifi integration: Unlocked new workflows, cross-sell opportunities, and incremental monetization potential. Strong performance in destination management companies and luxury accommodations.
• Healthcare Growth:
  • Revenue growth driven by large enterprise customer wins. B2B growth strong, reflecting demand for invoice-to-cash capabilities.
• Product Innovation:
  • AI-driven: Pushed self-service rate to 41%, up 28% year-over-year, driving efficiency and reducing support costs.

Segment Performance

• Education:
  • New clients: More than 200 new clients signed across verticals, with over half of new education wins this year from outside traditional Big 4 markets. The Student Financial Software (SFS) platform was a major growth driver in Q3. SFS's Collection Management solution helped institutions recover over $360 million in past due tuition, deliver $72 million in pre-collection savings, and preserve over 177,000 student enrollments. In the U.S., demand for Flywire's solutions accelerated as schools sought to improve cash flow and efficiency. Canada higher education faced headwinds with weak demand, especially from Indian students.
  • Travel:
  • Revenue growth: Strong momentum, significantly exceeding Q3 bookings plan and achieving strong year-over-year revenue growth. Integration of Sertifi unlocked new workflows, cross-sell opportunities, and incremental monetization potential. Performance was robust across APAC with new wins in Thailand, Australia, and Indonesia.
  • Healthcare:
  • Revenue growth: Approached organic corporate average in Q3, driven by recent wins with large enterprise customers. B2B continued to grow at multiples of overall company revenue growth, reflecting strong demand for invoice-to-cash capabilities.

Guidance

• Full Year 2025:
  • Exceeded top end of revenue and adjusted EBITDA guidance. Updating full year FX-neutral revenue growth to 23%-25% (including Sertifi) and adjusted EBITDA margin expansion to 330-370 bps.
• Q4 2025:
  • Expect FX-neutral revenue growth 23%-27% year-over-year on a reported basis or 13%-15% when excluding Sertifi. Adjusted EBITDA margin to increase 50-200 bps year-over-year.
• 2026:
  • Preliminary outlook: Mid-single-digit pressure due to U.S. policy uncertainty. Canada and Australia revenue growth to run below organic corporate average, with Canada particularly impacted by demand softness.

Risks

• Macro Conditions:
  • U.S. policy uncertainty creating mid-single-digit pressure into 2026.
• Demand Softness:
  • Canada higher education faced weak demand, especially from Indian students. Australia and Canada revenue growth below organic corporate average.

Question and Answer

• Q: Cris Kennedy with William Blair asks about 90% penetration clients in the U.K.
  • A: Rob Orgel explains U.K. strategy to move all the money, with 12 clients at over 90% penetration, and sees opportunity to do so for more clients.
• Q: John Davis with Raymond James asks about new client distribution and 2026 outlook
  • A: Rob Orgel states new wins are diversified across verticals and geographies. Michael Massaro mentions confidence in navigating environment and large growth opportunities ahead.
• Q: Christopher Svensson with Deutsche Bank Securities asks about SFS implementation timing and macro impact on financial metrics
  • A: Rob Orgel talks about deal counts and timing of SFS implementation ahead of peak periods. Cosmin Pitigoi explains dynamics of first year vs. other year students and their impact on metrics.
• Q: Jeffrey Cantwell with Seaport Research asks about international student flow change and 2026 GAAP profitability
  • A: Cosmin Pitigoi discusses assumption of decline in U.S. international revenue and longer-term opportunity outside U.S. Cosmin Pitigoi and Michael Massaro talk about GAAP profitability and investment areas.
• Q: Tien-Tsin Huang with JPMorgan asks about domestic payments opportunity in EDU
  • A: Rob Orgel explains benefits of Flywire's solutions including back-office efficiency, student experience, and integrated platform.