Flywire Corporation FLYW used its second-quarter 2026 earnings call to emphasize operating leverage, broader growth drivers and a raised outlook despite education-policy uncertainty.
Earnings of 4 cents per share missed the Zacks Consensus Estimate of 9 cents. Revenues less ancillary services of $163.8 million topped the $154.3 million estimate, supporting higher 2026 targets.
FLYW Raises Its 2026 Outlook
Chief financial officer Cosmin Pitigoi raised the 2026 outlook to 21% to 27% FX-neutral revenue less ancillary services growth and 200 to 400 basis points of adjusted EBITDA margin expansion.
For the third quarter, management expects 16% to 22% FX-neutral growth and 100 to 300 basis points of adjusted EBITDA margin expansion.
Pitigoi tied the higher outlook to travel strength, hospitality payments and B2B and health care processing ramps. He retained cautious education assumptions because of visa-policy pressure.
Flywire Explains the Margin Trade-Off
Pitigoi said adjusted gross margin fell about 450 basis points to 56.6%. Roughly 300 basis points came from lower-margin health care and B2B payment-processing ramps.
Excluding those ramps, the normalized decline was about 150 basis points, within management’s expected annual range of 100 to 200 basis points. The temporary pressure should be largely complete by year-end.
The CFO said these volumes require little incremental operating expense, supporting EBITDA conversion. He targeted an adjusted EBITDA margin of about 25% for 2027, while chief executive officer Mike Massaro reiterated a longer-term 30% goal.
FLYW Broadens Its Growth Base
President and chief operating officer Rob Orgel said Flywire signed more than 200 new clients across 45 countries for the second straight quarter. Deal sizes are rising as clients consolidate providers and manual workflows.
Education revenues outside the United States, United Kingdom, Canada and Australia grew more than 30% year over year. Roughly two-thirds of new education clients came from beyond those four markets.
Three new U.S. Student Financial Services deals carried double the ARR of the prior-year quarter’s signings. Orgel also highlighted the University of Liverpool win as evidence of demand for integrated billing, payment plans and collections.
Flywire Expands Software-Led Monetization
Orgel described software as the route to capturing more payment volume across education, hospitality, health care and B2B. Hospitality software serves more than 20,000 properties, with more than 40 locations signed across Europe and Asia year to date.
Massaro said about 45% of customer inquiries resolve automatically without human intervention. Flywire is targeting an auto-resolution rate above 50% by year-end while extending AI tools across engineering, sales and operations.
Pitigoi said operating-expense growth is running in the mid- to low-single digits this year and should remain in the low- to mid-single digits next year. Costs are expected to become relatively flat after transformation investment peaks in 2027.
FLYW Addresses Visa and Mix Risks
A Deutsche Bank analyst asked whether proposed U.S. visa restrictions could damage demand. Massaro noted that many measures remain proposals, while Pitigoi kept a prudent assumption for a 30% U.S. visa decline.
A Raymond James analyst pressed management on the United Kingdom, which represents about one-quarter of revenues. Pitigoi said U.K. growth should decelerate in the second half and exit below the companywide rate.
A Morgan Stanley analyst questioned SFS economics as domestic volume rises. Massaro and Pitigoi said the product captures domestic and cross-border flows, producing a typical two- to threefold increase in gross profit dollars from broader adoption.
Flywire Maintains a Balanced Growth Posture
Management remains focused on expanding the software moat, unifying the payments platform and using digital transformation to create operating leverage. Pitigoi said organic investment, repurchases and M&A compete under an IRR framework.
The tone was confident on client wins but measured on visa trends, gross-margin mix and tougher 2027 comparisons. Flywire continues to frame its ambition around $1 billion in annual organic revenue and a 30% adjusted EBITDA margin.
What Zacks Signals Say About FLYW
FLYW carries a Zacks Rank #3 (Hold). Its Value Score is C, Growth Score is A, Momentum Score is C and VGM Score is B, reflecting stronger growth characteristics and a favorable combined style profile alongside midrange value and momentum readings.
The Zacks framework gives greatest emphasis to Zacks Rank #1 (Strong Buy) and #2 (Buy) stocks paired with A or B Style Scores. A Zacks Rank #3 can still be held, but this is not a top-tier near-term signal. The rank can change as earnings estimates are revised after the results. You can see the complete list of today’s Zacks #1 Rank stocks here.
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