A global payments company that helps schools, hospitals, travel companies, and businesses get paid from abroad, handling cross-border tuition and invoice payments across hundreds of countries and currencies. It was founded in 2009 by Spanish MIT student Iker Marcaide, who created it as peerTransfer after struggling with the high fees and hidden costs of paying international tuition. The name became Flywire in 2015, a nod to the speed and reach of a wire transfer in flight.
Gross margin fell 3.6 points to 53.4% as a shift to lower-yield domestic transactions caused processing costs to outpace 27% revenue growth.
growth stayed strong, but the cost of that growth rose faster. Revenue increased 27.2% to $167.7 million, yet compressed to 53.4% from 57.0% a year ago because a continuing shift toward lower-monetization domestic transactions pushed payment processing costs up 38.6%. The company is growing its top line at the expense of profitability on each dollar processed, a trade-off that now defines the story.
Key takeaways
A shift in transaction mix toward lower-yield domestic transactions and higher credit card usage caused payment processing costs to rise 38.6%, outpacing the 27.2% increase and compressing to 53.4% from 57.0%.
Total payment volume rose 38% to $7.1 billion, but the yield on that volume declined because domestic transactions generate less revenue per dollar processed than cross-border ones.
Platform and other was nearly flat at $31.8 million, a sharp deceleration from the 70.1% growth in the prior-year quarter when the Sertifi and Invoiced acquisitions were new contributors.
Section summaries
Management's Discussion and Analysis
Revenue rose 27% to $167.7M on 38% payment volume growth, but margins compressed from mix shift toward lower-yield domestic transactions.
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Total grew 27.2% to $167.7M in Q2 2026, driven by a 43.1% surge in transaction payment volume to $7.1B, while platform revenue was nearly flat at $31.8M.
declined to 53.4% from 57.0% as payment processing costs rose 38.6%, outpacing growth due to a higher mix of domestic transactions and credit card usage.
The net loss narrowed to $8.1 million from $12.0 million a year ago, helped by the absence of $1.4 million in restructuring charges, but a $6.8 million swing in —from a $3.9 million gain to a $2.9 million loss—partly offset the improvement.
The company deployed $59.5 million on share repurchases during the first half of 2026 and ended the quarter with $282.4 million in cash and equivalents and a fully undrawn $300 million .
Management confirmed that international student visa caps in Canada, Australia, the U.K., and the U.S. continue to dampen education growth, a expected to persist.
What changed
The decline flagged in earlier quarters accelerated: the 3.6-point drop to 53.4% is steeper than the 3.5-point drop in Q1 2026, confirming the mix shift toward domestic transactions is intensifying rather than stabilizing.
Platform growth stalled after two quarters of outsized gains from the Sertifi and Invoiced acquisitions, suggesting the inorganic boost is now largely annualized.
The securities class action moved forward: Flywire filed a motion to dismiss on June 15, 2026, but still cannot estimate a potential loss and has not recognized a provision.
The OFAC voluntary disclosure remains unresolved, with the company continuing to engage with the agency while maintaining its belief that any loss would not be material.
What to watch
Whether stabilizes near 53% or declines further in the seasonally larger Q3, and whether the company quantifies the domestic vs. cross-border mix shift.
The trajectory of education growth as international student visa caps remain in effect across Canada, Australia, the U.K., and the U.S., and whether the company reports any stabilization.
The outcome of the motion to dismiss the securities class action and whether the company recognizes a provision or discloses a potential loss estimate.
The pace of additional share repurchases and whether the company draws on its $300 million , given the cash balance of $282.4 million.
Operating loss narrowed to $2.8M from $9.1M, helped by the absence of $1.4M in ; however, a $2.9M loss swung from a $3.9M gain a year ago.
Net loss was $8.1M compared to $12.0M, with the improvement partly offset by a $6.8M swing in and lower interest income.
Liquidity remained strong with $282.4M in cash and an undrawn $300M , though $59.5M was deployed for share repurchases during the first half of 2026.
Management flagged significant headwinds from tightening international student visa policies in Canada, Australia, the U.K., and the U.S., which are expected to continue dampening education growth.
Quantitative and Qualitative Disclosures About Market Risk
Interest rate risk is immaterial; FX risk from cross-border payments and intercompany loans is actively hedged, with a 10% rate shift potentially impacting pre-tax income by ~$24M.
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A 10% shift in interest rates would not materially affect financial position, results, or cash flows, and the had no outstanding balance as of June 30, 2026.
Cross-border payment FX exposure arises from a 1–4 day window between booking and settlement, and the company uses in-house hedging algorithms and non-deliverable forwards to mitigate this risk.
Since July 2025, the company has used foreign currency forward contracts to economically hedge exchange rate variability on certain intercompany loans, with one such loan hedged as of June 30, 2026.
A hypothetical 10% adverse change in FX rates on remeasured assets and liabilities would have impacted pre-tax income by approximately $24.0 million as of June 30, 2026.
USD weakening against the British Pound and other currencies increased reported by approximately $9.4 million for the six months ended June 30, 2026 on an FX Neutral basis.
Inflation did not have a material effect on cash flows or results of operations during the period.
Flywire states no material proceedings, but discloses OFAC sanctions review and a securities class action.
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Flywire is not currently a party to any legal proceeding it believes to be material, individually or in the aggregate.
An internal review identified sanctions compliance issues, including payments possibly from sanctioned jurisdictions or persons.
Flywire made voluntary submissions to OFAC and is engaging with the agency to resolve the apparent violations.
Based on the internal investigation, Flywire does not believe any loss from the OFAC matter would be material.
A securities class action (Hickman v. Flywire) alleges the company overstated growth and understated the impact of government permit and visa policies.
The class period is May 21, 2024 to February 25, 2025; Flywire filed a motion to dismiss on June 15, 2026, and cannot estimate potential loss.
Flywire faces material risks from international student visa restrictions, U.S. education policy shifts, and competitive pressures that could reduce payment volumes and revenue growth.
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Government caps and policy changes on student visas in Canada, Australia, and the U.K. are reducing international student enrollment, directly lowering Flywire's education payment volumes.
U.S. policy proposals, including the 'One Big Beautiful Bill' Act eliminating Grad PLUS loans and a new $100,000 H-1B visa fee, threaten both education demand and Flywire's talent costs.
The company's February 2025 restructuring and ongoing operational reviews may not yield intended efficiencies and could strain resources or slow strategic execution.
Flywire's reliance on a proprietary banking network exposes it to partner terminations or instability that could disrupt payment processing in key corridors.
New competitive dynamics, including stablecoin payment methods and AI-driven fraud, present operational, regulatory, and risks.
A securities class action lawsuit alleging overstated growth and understated policy impacts is pending, with Flywire filing a motion to dismiss in June 2026.