Flywire Corp

Flywire (FLYW) operates at the intersection of payments and software, targeting high-value, complex verticals such as healthcare, education, and travel. The company has established a formidable moat through global payment capabilities and deep integration into core workflows, resulting in immense switching costs. Over 80% of FLYW's revenue comes from processing fees, making it resilient against competition. Despite its deep entrenchment and rapid scaling, FLYW trades at just a 6x multiple on 2027 consensus EBITDA estimates, presenting a significant valuation disconnect compared to competitors being acquired at mid-to-high teens multiples.

Our conviction in FLYW remains high. The company has gotten back on a 'beat and raise' cadence for three consecutive quarters now and we view the ongoing divergence between the company’s fundamentals and its stock price as a significant buying opportunity; while the share price has languished, estimates are moving sharply higher following a ~8% revenue beat in the most recent quarter. Our analysis shows that even a severe 25% decline in first-year US students would impact total company revenue by only ~2%, and we note that the UK business is actually growing ~40% despite some restrictions having already been in place. Furthermore, Flywire is combining their accelerated growth with rapidly improving profitability, with incremental EBITDA margins hitting over 40% over the last twelve months. Valued at roughly 3x EV/Gross Profit and under 10x EBITDA, FLYW compares favorably to vertical niche payment-oriented peers. Thus, we believe the risk/reward is still heavily skewed to the upside along with the decent probability that FLYW is a medium-term takeover target.

Our conviction in FLYW remains high (~10% position, the largest in the portfolio). The company has gotten back on a 'beat and raise' cadence for three consecutive quarters now and we view the ongoing divergence between the company’s fundamentals and its stock price as a significant buying opportunity; while the share price has languished, estimates are moving sharply higher following a ~8% revenue beat in the most recent quarter. Our analysis shows that even a severe 25% decline in first-year US students would impact total company revenue by only ~2%, and we note that the UK business is actually growing ~40% despite some restrictions having already been in place. Furthermore, the company is finding their operational groove in their other markets as well, with their healthcare business expected to significantly accelerate in 2026 off the back of multiple large contract wins.

Flywire, another new position, is a good example of this. Flywire contracts with universities to allow their international students to pay tuition easily, in whatever currency they’d like. This sounds at first glance like a simple, commodity business that should have a lot of competition. But the reality is quite different, and Flywire’s superior product for universities and students has resulted in huge market share for international student payments. Our conversations with Flywire’s university customers are universally positive, and in fact not just positive but effusive. Flywire also has one of our favorite business model characteristics, where the person selecting the product is a different person from the one paying for it.

We recently initiated a ~5% long position in Flywire and own ~5.6% of the company. FLYW is a capital-light cross-border payments and software platform trading closer to a secular decliner than a structurally advantaged niche leader in education, travel, and healthcare. Our core thesis is three-fold: 1. Despite short term disruptions, study abroad programs are not in secular decline and will normalize, likely in 2026. 2. Flywire has significantly better technology and execution than peers and will rebound decisively when the macro steadies. 3. The company has quickly broadened their revenue base beyond cross-border tuition payments and will be more insulated from any future disruptions going forward. The stock’s valuation (<2x sales, <3x gross profit, and <10x 2026 FCF) is compelling with limited downside. If Flywire merely executes on current guidance and macro doesn’t materially worsen, the stock could re-rate meaningfully.

We recently initiated a ~5% long position in Flywire and own ~5.6% of the company. FLYW is a capital-light cross-border payments and software platform trading closer to a secular decliner than a structurally advantaged niche leader in education, travel, and healthcare. Our core thesis is three-fold: 1. Despite short term disruptions, study abroad programs are not in secular decline and will normalize, likely in 2026. 2. Flywire has significantly better technology and execution than peers and will rebound decisively when the macro steadies. 3. The company has quickly broadened their revenue base beyond cross-border tuition payments and will be more insulated from any future disruptions going forward. The stock’s valuation (<2x sales, <3x gross profit, and <10x 2026 FCF) is compelling with limited downside. If Flywire merely executes on current guidance and macro doesn’t materially worsen, the stock could re-rate meaningfully.

We recently initiated a ~5% long position in Flywire and own ~5.6% of the company. Our core thesis is three-fold: 1. Despite short term disruptions, study abroad programs are not in secular decline and will normalize, likely in 2026. 2. Flywire has significantly better technology and execution than peers and will rebound decisively when the macro steadies. 3. The company has quickly broadened their revenue base beyond cross-border tuition payments and will be more insulated from any future disruptions going forward. Flywire's stock is trading at a compelling valuation with durable competitive advantages and relatively weak competition, presenting a temporary narrative-driven discount.

We recently initiated a ~5% long position in Flywire and own ~5.6% of the company. Our core thesis is three-fold: 1. Despite short term disruptions, study abroad programs are not in secular decline and will normalize, likely in 2026. 2. Flywire has significantly better technology and execution than peers and will rebound decisively when the macro steadies. 3. The company has quickly broadened their revenue base beyond cross-border tuition payments and will be more insulated from any future disruptions going forward. Flywire's stock is trading at a compelling valuation with durable competitive advantages and limited downside, making it an attractive investment opportunity.

We recently initiated a ~5% long position in Flywire and own ~5.6% of the company. Flywire is a capital-light cross-border payments and software platform that has broadened its revenue base beyond cross-border tuition payments. Our core thesis is three-fold: 1) Study abroad programs are not in secular decline and will normalize, likely in 2026; 2) Flywire has significantly better technology and execution than peers; 3) The company is diversifying its revenue streams, making it more insulated from future disruptions. Despite recent challenges, Flywire still delivered double-digit organic revenue growth and is on the cusp of narrative and financial re-acceleration.

We recently initiated a ~5% long position in Flywire and own ~5.6% of the company. Our core thesis is three-fold: Despite short term disruptions, study abroad programs are not in secular decline and will normalize, likely in 2026. Flywire has significantly better technology and execution than peers and will rebound decisively when the macro steadies. The company has quickly broadened their revenue base beyond cross-border tuition payments and will be more insulated from any future disruptions going forward. Flywire's stock is trading at a compelling valuation with durable competitive advantages and limited downside, making it an attractive investment opportunity.