Core Viewpoint - Voss Capital's third-quarter 2025 investor letter indicates a significant underperformance of its funds compared to major indices, while expressing strong conviction in Flywire Corporation as a key investment opportunity due to its improving fundamentals and growth potential [1][2][3] Fund Performance - Voss Value Fund, LP and Voss Value Offshore Fund, Ltd returned +5.0% and +4.9% respectively in Q3 2025, underperforming the Russell 2000 Index (+12.4%), Russell 2000 Value Index (+12.6%), and S&P 500 Index (+8.3%) [1] - The Voss Value Master Fund had a total gross exposure of 205.4% and a net long exposure of 95.8% as of September 30, 2025 [1] - The top 10 long positions accounted for 77.8% of the fund, while the top 10 short positions represented -43.5% [1] Flywire Corporation Analysis - Flywire Corporation (NASDAQ:FLYW) is highlighted as a significant investment, representing approximately 10% of Voss Capital's portfolio, making it the largest position [3] - Despite a one-month return of -0.22% and a 39.30% decline over the past 52 weeks, Flywire's fundamentals are improving, with an ~8% revenue beat in the most recent quarter [2][3] - The company is experiencing a divergence between its stock price and fundamentals, presenting a buying opportunity [3] Market and Growth Potential - Concerns regarding international student enrollment caps affecting Flywire's revenue are deemed overstated, with a projected 2% revenue impact from a severe 25% decline in first-year US students [3] - Flywire's UK business is growing at ~40%, countering claims of limited growth potential [3] - New integrations with major ERP systems are expanding the Total Addressable Market (TAM) for Flywire's Student Financial Services platform, enhancing revenue opportunities [3] - The healthcare segment is expected to accelerate significantly in 2026 due to large contract wins, and the emerging B2B business is growing over 70% for the second consecutive year [3]

Flywire FY Conference Summary Company Overview - **Company**: Flywire (NasdaqGS:FLYW) - **Industry**: Payments and Fintech - **Key Verticals**: Education, Healthcare, Travel, B2B Core Insights and Arguments 1. **Strategic Transformation**: Flywire has evolved from a cross-border, education-focused business to a unified platform integrating software and payments, with significant diversification into travel, healthcare, and B2B sectors [2][3][4] 2. **Profitability and Scale**: The company has achieved nearly 20% margins, with expectations to exceed this in the coming year, indicating improved profitability and operational efficiency [4][11] 3. **Software as a Differentiator**: Flywire emphasizes that its software capabilities are foundational to its competitive edge, allowing deeper integration into clients' systems and enhancing long-term relationships [5][7][8] 4. **Operational Leverage**: The company has seen operational leverage gains, particularly in go-to-market strategies and product engineering, leading to improved margins as revenue scales [9][10][11] 5. **Market Dynamics**: The UK has overtaken the US as Flywire's largest market, contributing approximately 25% of revenue, with the US at 23%. The company is also expanding into continental Europe and Asia [12][14][18] 6. **Growth in Education Vertical**: Despite challenges in the US market, Flywire's education segment continues to grow, with non-big four markets growing faster than the company average [21][29][30] 7. **Domestic Business Expansion**: The domestic business in the US is growing rapidly, with a revenue of approximately $30 million last year, driven by modernization and vendor consolidation in universities [49][55] 8. **Student Financial Services (SFS)**: The SFS platform is a significant growth driver, offering schools a consolidated vendor solution that enhances economic efficiency and client stickiness [60][70][72] 9. **Travel Segment Growth**: Travel now represents a quarter of Flywire's revenue, with significant growth attributed to effective sales strategies and product resonance in the luxury travel market [85][91][101] 10. **B2B and Healthcare Verticals**: B2B is still small but growing rapidly at nearly 70%, while healthcare is expected to ramp up significantly with major clients like Cleveland Clinic [113][118][120] Additional Important Insights 1. **M&A Strategy**: Flywire's M&A strategy focuses on acquiring software companies to monetize payments, which has proven effective in driving growth [4][115] 2. **Market Challenges**: The company faces macroeconomic headwinds, particularly in Canada and the US, but maintains a positive outlook for growth in other regions [30][36][42] 3. **Future Outlook**: Flywire anticipates continued margin expansion and revenue growth, with a focus on maintaining operational efficiency and client retention [128][136] 4. **Stablecoin Partnership**: The partnership with BVNK for stablecoin transactions is seen as an incremental opportunity to expand into new markets and offer clients more payment options [144][150] This summary encapsulates the key points discussed during the Flywire FY Conference, highlighting the company's strategic direction, market performance, and future growth opportunities.