Flywire Projects 17%-23% Revenue Boost by 2025, Eyeing Education and Travel Sectors

Insights from the Earnings Call: Flywire Corporation (FLYW) First Quarter 2025

Management View

CEO Mike Massaro emphasized the company’s resilience and strategic focus amid a challenging macroeconomic environment. Flywire signed 200 new clients in the quarter, showcasing strong demand for its solutions across various verticals.
Massaro emphasized the firm’s operational and portfolio assessment focused on simplifying its framework, boosting productivity, and refining investment choices. Part of this initiative involves naming a Chief Payments Officer to unify strategic planning and spur product development.
CFO Cosmin Pitigoi stated that the company’s Q1 revenues, excluding ancillary services, amounted to $128.7 million, marking a 16.8% increase compared to the previous year. Both the travel sector and the Australian education divisions surpassed forecasts, while Sertifi contributed an additional $4.7 million in revenue following its acquisition.
President and COO Rob Orgel highlighted substantial developments in the educational sector. This includes notable advancements in the U.K., where they secured new local deals along with the implementation of student financial services at multiple institutions. Additionally, Orgel mentioned growing prospects for expansion into overseas markets like Germany, France, and Japan.

Outlook

The firm kept its complete-year 2025 income forecast unchanged, anticipating an exchange-rate-adjusted increase of 10%-14%, not factoring in Sertifi, and expecting a rise between 17%-23% when including Sertifi’s impact. For this period, Sertifi is projected to bring in revenues ranging from $35 million to $40 million.
The expected revenue growth for Q2, not counting Sertifi, is predicted to be within the 7%-11% range compared to last year. However, when factoring in Sertifi, the forecasted growth jumps to between 17% and 23%.
The company anticipates an increase in Adjusted EBITDA margins of 100 to 300 basis points over the entire year, driven by improvements in operations and effective cost control.

Financial Results

Year-over-year, transaction revenue increased by 14%, primarily due to a significant surge of 28% in transaction-related payment volumes, notably within sectors such as education and travel.
The platform and other revenues saw a rise of 35%, thanks to the additions from Sertifi and enhancements within the healthcare sector.
Adjusted gross profit reached $82.5 million, up 14.6% from the prior year, with adjusted gross margins at 64%.
The company reported a GAAP net loss of $4.2 million, attributed to restructuring and acquisition-related costs.

Q&A

John Davis, Raymond James: Questioned the Q2 slowdown and drivers for second-half acceleration. CFO Pitigoi explained impacts from Canadian payments timing and highlighted ramping clients and healthcare contributions in H2.
Timothy Chiodo, UBS: Inquired about U.K. market growth. Pitigoi and Orgel noted the U.K. is Flywire’s largest education market, with strong growth driven by new products like SFS and StudyLink.
Tien-Tsin Huang, JPMorgan: Asked about sources of upside in Q1. Management cited travel outperformance and better-than-expected Australian education sector results.

Sentiment Analysis

Experts voiced worries about broad economic unpredictability and how visa policies might affect things, notably in Canada and Australia. The inquiries showed a careful sense of hopefulness regarding the prospects for U.S. education and tourism sectors.
The management kept an assured demeanor, highlighting resilience and potential for expansion within the realms of travel, UK education, and the uptake of new products. CEO Massaro stressed Flywire’s capability to overcome challenges and provide value effectively.

Quarter-over-Quarter Comparison

The revenue increase in the first quarter of 2025 was fueled by better-than-predicted outcomes in the travel sector and Australian education, as opposed to the fourth quarter of 2024.
The operational efficiencies and restructuring initiatives introduced in Q4 2024 started producing benefits, leading to an increase in EBITDA margins.
Even though macro challenges continued in Canada and Australia, Flywire’s expansion into travel and U.K. education helped offset these issues.

Risks and Concerns

The issues faced in the Canadian and Australian educational sectors because of modifications in visa policies are anticipated to continue, with forecasts suggesting that revenues in these areas may decrease by around 30% compared to the previous year.
Management acknowledged potential macroeconomic impacts on travel demand but noted no significant headwinds currently affecting the sector.
Experts expressed worries over recent patterns in U.S. visa approvals and how these might impact upcoming enrollments of international students.

Final Takeaway

In Q1 of 2025, Flywire Corporation showcased remarkable resilience with significant expansion within the travel sector as well as in the UK’s educational market, which helped counterbalance difficulties faced in both Canada and Australia. By concentrating efforts on enhancing operational efficiency, fostering product development, and broadening their geographical reach, the firm anticipates achieving an annual revenue increase between 17% to 23%. This projection includes positive impacts derived from their recently acquired entity, Sertifi.

Review the complete earnings call transcript.