Flywire Beats Q2 Expectations, Raises FY2026 Outlook Despite Visa Uncertainty
Flywire (NASDAQ: FLYW) delivered a stronger-than-expected second quarter, powered by travel and hospitality payments as well as faster adoption in healthcare and B2B processing. The company raised its full-year revenue and adjusted EBITDA guidance, even as management remained cautious about international student visa trends across the U.S., U.K. and Australia.
Revenue excluding ancillary services rose 28% year over year on a spot basis and 27% on an FX-neutral basis to $164 million. Transaction revenue grew 35% to $135.9 million, helped by a 43% increase in transaction payment volume. Adjusted gross profit climbed 19% to $93 million. Adjusted EBITDA reached $24 million, a 14.6% margin and roughly 160 basis points of year-over-year expansion.
The company recorded a GAAP net loss of $8 million for the quarter, a narrower loss than the $12 million reported a year earlier. CFO Cosmin Pitigoi said Q2 is seasonally Flywire’s smallest revenue quarter and added that net income and free cash flow are expected to be strongly positive for the full year.
Management said the revenue beat versus the midpoint of its outlook was led by travel, where hospitality payments ramped faster than expected. Education revenue also exceeded internal targets. Healthcare payment processing and the migration of B2B invoice customers together added roughly seven percentage points of growth to payment-processing revenue during the quarter, above the mid-single-digit contribution Flywire had anticipated. That tailwind is expected to moderate in the second half as the related go-lives annualize.
Gross Margin and Mix Shift
Adjusted gross margin came in at 56.6%, down about 450 basis points year over year. Pitigoi attributed roughly 300 basis points of the decline to the revenue mix shift toward higher payment-processing volumes from healthcare and B2B clients. He said the remaining decline reflected continued changes in vertical mix rather than pricing pressure or a less-disciplined competitive environment.
“Processing volume carries the lower gross margin rate, but very little incremental OpEx because it runs over infrastructure and relationships we already have,” Pitigoi said. He added that those revenue streams can still convert gross profit dollars to EBITDA at a high rate.
Education Market Remains a Watch Item
CEO Mike Massaro said Flywire is still operating in a difficult international education environment, citing negative visa trends in the U.K., higher visa fees in Australia and tighter regulations in the U.S. and U.K. The company’s guidance includes an assumed 30% decline in U.S. visas, a level management described as prudent.
Even with those pressures, Flywire said it is gaining share and expanding beyond its traditional core education markets of the U.S., U.K., Canada and Australia. Education revenue from markets outside those four countries rose more than 30% year over year in Q2, and roughly two-thirds of new education clients signed during the quarter came from those growth markets.
President and COO Rob Orgel highlighted momentum in continental Europe, including share gains in Spain and Switzerland, and noted activity in South Korea and Japan, where institutions are seeking international enrollment. The company also reported wins in Canada and Australia, including Sheridan College and Bond University.
Client Momentum and SFS Traction
Flywire signed more than 200 new clients across 45 countries during the quarter, matching the pace in Q1. Travel led new-client additions, followed by education.
In education, Flywire is leaning on its Student Financial Services platform, which combines billing, payment plans, collections and payment processing. The company signed the University of Liverpool for SFS in the U.K. and closed three new U.S. SFS deals. Combined annual recurring revenue from those U.S. signings was double the comparable 2025 quarter, according to Orgel.
He said clients using SFS have reduced inbound student-contact volume by as much as 40% in some cases. Self-service payment plans have raised plan enrollment by about 50%, and default rates have fallen from as high as 34% to below 2%. The company said clients have collected more than $360 million in past-due tuition in-house, saving more than $70 million in agency fees.
Hospitality Expansion and AI Leverage
Flywire’s hospitality software is now used in more than 20,000 properties. The company added contracts with hotel management groups including Peregrine Hospitality, Avion Hospitality and Marcus Hotels & Resorts. It has also signed more than 40 hospitality locations in Europe and Asia year to date, extending a business historically concentrated in the U.S.
Management said AI is increasingly embedded in support, engineering and sales operations. Massaro said about 45% of customer inquiries are now resolved automatically without human intervention, and the company expects to exceed a 50% automated-resolution rate by year-end. AI tools and autonomous agents are also being used for code retirement, bug fixes, test maintenance and sales coaching.
Outlook and Long-Term Targets
Flywire raised its full-year 2026 outlook, now calling for FX-neutral revenue growth of 21% to 27%. That includes roughly three to four percentage points of growth from B2B and healthcare payment-processing ramps, plus about 1.5 percentage points of inorganic contribution as it laps the Sertifi acquisition.
For the third quarter, the company expects FX-neutral revenue growth of 16% to 22%, low-teens gross profit dollar growth at spot rates, and roughly 200 basis points of adjusted EBITDA margin expansion at the midpoint. Management cautioned that education payment timing around U.K. deadlines and Chinese holidays could affect the distribution of second-half revenue.
Longer term, Massaro reiterated Flywire’s goal of reaching $1 billion in annual organic revenue and a 30% adjusted EBITDA margin over the next few years. Pitigoi said the company is targeting about a 25% adjusted EBITDA margin by 2027 and expects transformation investment to peak that year, with material savings expected afterward.
Why This Quarter Matters
The quarter illustrates how Flywire is leaning into lower-margin but higher-volume processing businesses to diversify beyond education, its largest vertical historically. That strategy supports stronger top-line growth but has pressured gross margin, making operating leverage and AI-based efficiency central to the company’s path toward its long-term profitability targets. It also shows a payments firm navigating a cross-current: international education remains an unpredictable revenue driver because of visa policy, while faster-growing verticals such as healthcare and B2B bring scale but require a more deliberate cost structure.
Flywire is a global payments enablement and software company focused on complex cross-border transactions across education, healthcare, travel and hospitality, and commercial services. Founded in 2009 by Iker Marcaide as peerTransfer, the company rebranded as Flywire in 2015.