FLYW Q3 Deep Dive: Diversified Growth and Margin Expansion Highlight Quarter

Global payments company Flywire (NASDAQ:FLYW) reported Q3 CY2025 results topping the market’s revenue expectations, with sales up 27.6% year on year to $200.1 million. On top of that, next quarter’s revenue guidance ($147 million at the midpoint) was surprisingly good and 3.6% above what analysts were expecting. Its GAAP profit of $0.23 per share was 20.5% above analysts’ consensus estimates.

Is now the time to buy FLYW? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

Flywire delivered a calendar Q3 marked by robust client demand and strong execution across its core verticals, with the market responding positively to the company’s results. Management highlighted the addition of over 200 new clients and ongoing traction outside traditional education markets as key drivers. CEO Michael Massaro attributed the outperformance to Flywire’s ability to consolidate payment flows for clients, noting that their Student Financial Software platform and expansion in regions such as the U.K. and Asia played a significant role. Additionally, diversified revenue streams in travel, healthcare, and B2B contributed, with product innovation and operational efficiency supporting margin gains.

Looking ahead, Flywire’s forward guidance is shaped by expectations of continued momentum in education and non-education verticals, tempered by macroeconomic and policy headwinds in certain markets. Management expects the company’s diversified model and investments in automation and AI to drive operational leverage and expand profitability. CFO Cosmin Pitigoi emphasized ongoing cost discipline and targeted investment in high-return areas, while acknowledging that shifts in student mobility and regional demand will influence growth rates. Massaro stated, “We’re positioned to capture opportunity wherever students and clients choose to go, and our platform’s breadth allows us to adapt quickly.”

Key Insights from Management’s Remarks

Management attributed the quarter’s performance to strong diversification across regions, expansion of software-led solutions, and ongoing adoption in new markets and verticals.

• Education vertical expansion: Flywire’s Student Financial Software (SFS) platform was a significant growth driver, with more than half of new education wins coming from outside the traditional Big 4 markets (U.S., U.K., Canada, Australia). The company’s SFS Collection Management tool helped institutions recover substantial past-due tuition and improve student retention, highlighting the value of integrated software and payments.
• UK and APAC momentum: Deepening partnerships with U.K. universities and expansion in Australia and Asia, including new integrations with institutions in Singapore, Japan, and South Korea, contributed to outsized growth in these regions. The U.K. now represents roughly a quarter of Flywire’s total revenues and grew above the corporate average.
• Travel and healthcare diversification: The travel vertical saw strong client integration and tailored solutions, with Sertifi’s platform unlocking new cross-sell opportunities and incremental revenue. Healthcare posted growth near the corporate average, driven by new wins with enterprise customers like Cleveland Clinic.
• B2B platform transformation: Flywire’s acquisition of Invoiced accelerated its transition to a global invoice-to-cash platform, providing automation, compliance, and payment integration for clients such as KnowBe4. The B2B segment grew at multiples of the broader company, reflecting demand for unified receivables solutions.
• Operational efficiency and AI adoption: The company cited improved operating leverage, with automation and AI driving higher self-service rates and reducing support costs. This enabled Flywire to decouple growth from expense increases, supporting margin expansion despite business mix shifts.

Drivers of Future Performance

Flywire expects its diversified vertical strategy, automation investments, and global expansion to underpin growth and margin resilience, while acknowledging persistent policy and macroeconomic uncertainties.

• Education market dynamics: Management noted ongoing headwinds from policy changes affecting international student flows, especially in the U.S. and Canada, which are expected to persist into next year. However, Flywire anticipates that continued wins outside the traditional Big 4 and deeper penetration in existing markets will offset some of these pressures.
• Operational leverage and automation: Investments in AI and process automation are expected to further improve operating efficiency, allowing the company to manage support costs even as transaction volumes grow. This supports management’s outlook for sustained adjusted EBITDA margin expansion.
• Product innovation and cross-vertical growth: Ongoing enhancements to Flywire’s platform, including new integrations for verticals like travel and healthcare, are expected to drive incremental revenue opportunities. The company plans to continue targeting high-ROI investments in product development and go-to-market initiatives, while being disciplined with operating expenses.

Catalysts in Upcoming Quarters

Looking ahead, our team will be monitoring (1) Flywire’s ability to deepen client relationships and expand wallet share in the U.K. and key Asia-Pacific markets, (2) the pace of new client wins and product adoption in non-education verticals like travel and healthcare, and (3) the impact of ongoing automation and AI investments on operating margins. Execution in these areas will be crucial for sustaining revenue growth and margin expansion despite external headwinds.

Flywire currently trades at $15.60, up from $13.83 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free for active Edge members).

Stocks That Trumped Tariffs

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.