Flywire Corporation shares drop 27% as Q3 profit impacted by FX headwinds

Flywire Corporation (FLYW) dropped significantly Wednesday on the back of its latest quarterly results, which saw it miss consensus earnings expectations.

After the close Tuesday, the company reported Q3 EPS of $0.08, $0.02 worse than the analyst estimate of $0.10, while revenue for the quarter came in at $123.32 million, up 29.5% YoY and above the consensus estimate of $119.32 million.

FLY shares are down around 27% at the time of writing, trading close to the $20.20 per share mark.

Total Payment Volume increased 26% to $8.9 billion in the third quarter of 2023, compared to $7.0 billion in the third quarter of 2022.

FLY’s profit during the quarter was impacted by “significant foreign exchange headwinds” compared to when the company previously provided its outlook.

“We are pleased with our third quarter results, where we generated our highest quarter of revenue and adjusted EBITDA, ever,” said Mike Massaro, CEO of Flywire. “Our third-quarter results were driven in part due to the ongoing optimization of our go-to-market strategy globally, where our sales and marketing teams continued to deliver new client wins and client expansions across all verticals.”

Looking ahead, the company sees Q4 2023 revenue from $91.5 million to $96.5 million, versus the consensus of $87.93 million, while FY2023 revenue is expected to be between $394.1 million and $399.3 million, versus the consensus of $378.2 million.

Following the report, analysts at RBC Capital said that FX and modest delays were a headwind for the company. They maintained an Outperform rating on the stock but lowered the price target to $41 from $43 per share.

“Although a combination of FX (less of a benefit from prior guidance) and modest timing delays from clients (primarily in Education and Healthcare), we believe underlying growth drivers remain intact,” the analysts said. “FY23 guidance assumes $1.6M organic outperformance and $1.0M from the acquisition of StudyLink, offset by $3.8M of FX headwinds relative to original expectations.”