REG - Wise PLC - Wise Plc Q3FY24 Trading Update

WiseAnnouncement

16/01/2024 07:01

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RNS Number : 7627Z  Wise PLC  16 January 2024

Wise plc

Q3 FY24 Trading Update

16 January 2024

 

Customer momentum continues to power growth; FY24 income guidance upgraded

Customers love the Wise Account features, and this is driving active customer
growth

●     Active customers grew 30% YoY to 7.5 million, driven by increased
adoption of the Wise Account and multi-feature usage.

●     Active personal customers increased 30% YoY to 7.1 million, and
active business customers increased 23% YoY to 392k.

●     46% of Personal customers and 60% of Business customers now use
multiple features (e.g., using their Wise card as well as sending money across
borders).

●     And this is important, because we know that customers that use
multiple features transact more often and have higher retention levels.

 

This growth in multi-feature customers is driving the fundamentals of our
financial performance, leading to a 40% increase in Income to £375.1m

●     Cross-border volume was £30.6bn, an increase of 16% YoY (18% on a
constant currency basis).

○     Volume growth remains strong among customers sending <£10k per
month, continuing to grow significantly faster than customers sending
>£10k per month; as a result personal VPC for Q3 was 1% lower QoQ.

●     Revenue increased 23% to £276.6m, supported by a 7bps increase in
the 'other take rate' as a result of increased card spend.

●     Wise Account balances increased 28% YoY to £12.9bn; gross yield
on balances was 4.2% in Q3 FY24 (vs 3.8% in Q2 FY24), of which 1.1% (vs. 1.0%
in Q2 FY23) of balances, or £33.7m, was returned to customers.

 

FY24 Income growth guidance upgraded to c.42-44% from previous guidance of
33-38%

●     Reflects the continued strong growth in active multi-feature
customers, and higher levels of interest income.

●     We continue to expect our adj. EBITDA margin in FY24 to remain
elevated relative to our medium-term guidance of at or above 20% given the
high net yield on customer balances.

 

"I am pleased to report another quarter of progress as we work towards our
mission of building the best way to move and manage the world's money. We've
sped up global USD payments by optimising payouts with one of our banking
partners and expanded our Wise Interest Asset offering in seven European
markets including France and Spain. Customers in these markets holding USD
with Wise can now opt in to earn a return on these balances too. We also
progressed with more platform partners, adding UK business bank; Allica Bank,
leading digital travel platform; Agoda, and global spend management solution
Payhawk among others. This progress speaks to the strength of our
fundamentals, leading to continued strong financial performance. We saw our
customer base grow by 30% supporting a 23% growth in revenue, and a 40%
increase in Income.

These results are also testament to the depth of expertise of both leadership
and the teams at Wise. I want to thank Harsh for leading the business while I
took a sabbatical from September to December to spend time with my growing
family. I'm excited to be back and to continue progressing on our mission."

-Kristo Käärmann, Co-founder and Chief Executive Officer

 

                         Q3 FY24  Q3 FY23  YoY Movement
 Volume (£ billion)      30.6     26.4     16%
 Revenue (£ million)     276.6    225.2    23%
 Income (£ million)      375.1    268.7    40%
 Average customer price  0.67%    0.66%    +1 bps
 Instant transfers       61%      52%      +9 pps

 

You can read more about our progress in our quarterly Mission Updates on
wise.com.

 

Please see the appendix for further historical financial information.

 

 

Enquiries

Martyn Adlam - Head of Investor Relations

martyn.adlam@wise.com

 

Crystal Obuck - Senior Manager, Investor Relations

crystal.obuck@wise.com

 

Sana Rahman - Global Head of Communications

press@wise.com

 

Brunswick Group

Charles Pretzlik / Sarah West / Nick Beswick / Daniel Holgersson

Wise@brunswickgroup.com

+44 (0) 20 7404 5959

 

About Wise

Wise is a global technology company, building the best way to move and manage
the world's money. With Wise Account and Wise Business, people and businesses
can hold over 40 currencies, move money between countries and spend money
abroad. Large companies and banks use Wise technology too; an entirely new
network for the world's money.

 

Co-founded by Kristo Käärmann and Taavet Hinrikus, Wise launched in 2011
under its original name TransferWise. It is one of the world's fastest growing
tech companies and is listed on the London Stock Exchange under the ticker
WISE.

 

In fiscal year 2023, Wise supported around 10 million people and businesses,
processing approximately £105 billion in cross-border transactions, and
saving customers over £1.5 billion.

 

FORWARD LOOKING DISCLOSURE DISCLAIMER

This report may include forward-looking statements, which are based on current
expectations and projections about future events. These statements may
include, without limitation, any statements preceded by, followed by or
including words such as "forward looking", "guidance", "target", "believe",
"expect", "intend", "may", "anticipate", "estimate", "forecast," , "project",
"will", "can have", "likely", "should", "would", "could" and  any other words
and terms of similar meaning or the negative thereof. These forward-looking
statements are subject to risks, uncertainties and assumptions about Wise and
its subsidiaries. In light of these risks, uncertainties and assumptions, the
events in the forward-looking statements may not occur.

Past performance cannot be relied upon as a guide to future performance and
should not be taken as a representation that trends or activities underlying
past performance will continue in the future, and the statements in this
report speak only as at the date of this report. No representation or warranty
is made or will be made that any forward-looking statement will come to pass
and there can be no assurance that actual results will not differ materially
from those expressed in the forward-looking statements.

Wise expressly disclaims any obligation or undertaking to update, review or
revise any forward-looking statements contained in this report and disclaims
any obligation to update its view of any risks or uncertainties described
herein or to publicly announce the results of any revisions to the
forward-looking statements made in this report, whether as a result of new
information, future developments or otherwise, except as required by law.

Appendix - Historical Financials

 

 Quarterly                          Q3 FY2022  Q4 FY2022  Q1 FY2023  Q2 FY2023  Q3 FY2023  Q4 FY2023  Q1 FY2024  Q2 FY2024  Q3 FY2024  QoQ        Q YoY      QoQ        Q YoY

                                                                                                                                       Movement   Movement   Movement   Movement

                                                                                                                                                             Constant   Constant

                                                                                                                                                             CCY        CCY
 Customers (thousand)               4,348      4,588      4,997      5,484      5,793      6,125      6,670      7,232      7,512      4%         30%        -          -
 Personal (thousand)                4,095      4,319      4,711      5,182      5,475      5,784      6,307      6,847      7,120      4%         30%        -          -
 Business (thousand)                253        269        286        302        319        340        363        385        392        2%         23%        -          -

 Volume per customer (£ thousand)   4.7        4.7        4.9        4.9        4.6        4.4        4.2        4.0        4.1        1%         (11%)      -          -
 Personal (£ thousand)              3.7        3.7        3.8        3.9        3.5        3.4        3.3        3.2        3.1        (1%)       (10%)      -          -
 Business (£ thousand)              21.6       20.8       22.2       22.9       23.2       21.4       20.4       19.8       21.1       7%         (9%)       -          -

 Volume (£ billion)¹                20.6       21.4       24.4       27.0       26.4       26.7       28.2       29.2       30.6       5%         16%        4%         18%
 Personal (£ billion)               15.1       15.9       18.0       20.1       19.0       19.5       20.8       21.6       22.3       3%         17%        3%         20%
 Business (£ billion)               5.5        5.6        6.3        6.9        7.4        7.3        7.4        7.6        8.3        9%         12%        8%         15%

 Customer balances (£ billion)      5.8        6.8        7.7        9.2        10.1       10.7       11.5       12.3       12.9       5%         28%        -          -

1.     Cross-border volume only.

 

Note: Differences between 'total' rows and the sum of the constituent
components of personal and business are due to rounding.

 

 

 

Appendix - Historical Financials (continued)

 

 Quarterly                                                Q3 FY2022  Q4 FY2022  Q1 FY2023  Q2 FY2023  Q3 FY2023  Q4 FY2023  Q1 FY2024  Q2 FY2024  Q3 FY2024  QoQ        Q YoY      QoQ        Q YoY

                                                                                                                                                             Movement   Movement   Movement   Movement

                                                                                                                                                                                   Constant   Constant

                                                                                                                                                                                   CCY        CCY
 Revenue (£ million)                                      149.8      153.8      185.9      211.5      225.2      223.5      239.5      258.7      276.6      7%         23%        6%         26%
 Personal (£ million)                                     114.7      118.4      144.4      164.8      173.7      173.4      186.4      200.8      213.1      6%         23%        5%         25%
 Business (£ million)                                     35.1       35.4       41.5       46.7       51.5       50.1       53.1       57.9       63.5       10%        23%        9%         26%

 Interest income on customer balances (£ million)         1.0        1.4        3.9        18.4       46.4       71.5       95.7       115.4      132.2      14%        185%       -          -
 Personal (£ million)                                     0.5        0.7        2.0        9.6        24.9       38.7       53.1       65.6       76.0       16%        205%       -          -
 Business (£ million)                                     0.5        0.7        1.9        8.8        21.5       32.8       42.6       49.8       56.2       13%        161%       -          -

 Interest income net of customer benefits (£ million)¹    (0.8)      (0.8)      1.2        17.5       43.5       56.0       71.4       86.4       98.5       14%        126%       -          -
 Personal (£ million)                                     (0.4)      (0.4)      0.6        9.1        23.2       29.7       39.0       48.7       56.9       17%        145%       -          -
 Business (£ million)                                     (0.4)      (0.4)      0.6        8.4        20.3       26.3       32.4       37.7       41.6       10%        105%       -          -

 Income (£ million)²                                      149.0      153.0      187.1      229.0      268.7      279.5      310.9      345.1      375.1      9%         40%        -          -
 Personal (£ million)                                     114.3      118.0      145.0      173.9      196.9      203.1      225.4      249.5      270.0      8%         37%        -          -
 Business (£ million)                                     34.7       35.0       42.1       55.1       71.8       76.4       85.5       95.6       105.1      10%        46%        -          -

 Revenue Take rate (%)³                                   0.73%      0.72%      0.76%      0.78%      0.85%      0.84%      0.85%      0.89%      0.90%      +1 bps     +5 bps     -          -
 Cross-Currency (%)                                       0.62%      0.61%      0.61%      0.63%      0.69%      0.67%      0.67%      0.67%      0.67%      +0 bps     -2 bps     -          -
 Other (%)                                                0.11%      0.11%      0.15%      0.15%      0.16%      0.17%      0.18%      0.22%      0.23%      +1 bps     +7 bps     -          -

 

1.         Comprises interest income on customer balances, interest
expense on customer balances and benefits paid relating to customer balances.

2.         Comprises revenue and interest income net of customer
benefits.

3.         Revenue as a % of Volume.

Note: Differences between 'total' rows and the sum of the constituent
components of personal and business are due to rounding

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