TIDMWISE
RNS Number : 2139B
Wise PLC
29 September 2022
29 September 2022
This announcement contains inside information.
Wise Plc
Growth momentum continues; financial guidance upgraded
Wise's mission on transparency and lowering the cost of
international money movement is resonating strongly, with more
customers using Wise each quarter. And as interest rates rise, we
will share back much of the benefit with customers.
Strong start to FY23 has continued:
- Volumes have grown c.47% and revenues at c.54% for H1 FY23 vs prior year.
- Revenue growth for the year will be further supported by
increasing levels of interest income on customer balances, which we
will now present in 'total income' alongside Revenue.
- We plan to share much of the benefit from this interest with
our customers, through lower prices, but we'll also invest in our
growth.
- We now expect total income growth of between 55% and 60% for
FY23 vs prior year; we maintain our guidance for medium-term
adjusted EBITDA margin to be at or above 20% of total income.
In the second quarter of this year, we have continued to see
strong growth in active customers as an increasing number of
customers use Wise each quarter. We estimate total cross-border
volumes for Q2 FY23 to be approximately 46% higher than in Q2 FY22.
As a result, revenue (excluding interest income) for the second
quarter is expected to be between GBP208 million and GBP210
million, taking revenue for the first half of the year to between
GBP394 million and GBP396 million, approximately 54% higher than
the first six months of FY22. The currency markets continue to be
volatile as we know, which has meant we have seen a gross margin of
60-62% year to date.
Alongside continued growth in balances in the Wise Account and
Wise Business products, we have also seen interest rates increase
across the major currencies our customers hold with us.
As interest rates have increased globally, we have started
generating interest income on our customers' balances, whilst
ensuring that they remain safeguarded and available to our
customers. The net interest income associated with this activity is
now expected to be approximately GBP17 million for the first six
months of FY23, and if rates were to persist at these levels or
increase further, the interest income has potential to grow over
the remainder of the financial year.
We believe our success to date is thanks to our sharing economic
benefits with customers as well as our investors. So as we've said
previously, we will look for ways to pass much of this benefit
through to our customers through pricing and the development of our
product and infrastructure. This means that the growth in interest
income will be at least partially offset by reductions in prices
for our customers as well as contributing to funding growth in
operating expenses as we invest in our business for the long
term.
As this interest income becomes more meaningful, starting with
our H1 FY23 interim financial report, we will be presenting the
components of "total income" which will comprise: revenue (as
previously defined); and net interest income from customer
balances. Our adjusted EBITDA margin will now therefore be
calculated as adjusted EBITDA as a percentage of total income.
Previously, interest income from customer balances and operating
assets was included in EBITDA but presented between gross profit
and operating profit. This will be a change in presentation in line
with IAS 1. The interest income from operating assets will remain
unchanged in terms of presentation.
Whilst there is much uncertainty in today's markets, and our
major economies face challenging months ahead, the stronger than
expected performance on cross-border revenues combined with the
interest income from customer balances means that we now expect
total income to be between 55% and 60% higher in FY23 compared with
FY22 (GBP557 million, unaudited re-presented). We previously guided
to FY23 revenue growth of 30-35% vs FY22. We continue to expect to
grow revenue above 20% (CAGR) over the medium term.
Our strategy to share and invest this interest income, combined
with the change in accounting presentation of total income means
that our expectation and guidance for medium-term adjusted EBITDA
margin remains at or above 20% (adjusted EBITDA as percentage of
total income).
Briefing call
Our CFO, Matthew Briers, will be hosting a brief call from
3.30-4.00pm (UK time) to discuss the key points from the
announcement and to provide an opportunity for questions. Please
use the following link to access the call:
https://transferwise.zoom.us/j/97215842443?pwd=RWhPY3R1N2dSTUJjTTZ4blh1dkRpQT09
We will provide more of our mission, growth and financial
highlights with our Q2 trading update, which will be published on
Tuesday 18 October 2022. Our half year results are scheduled to be
published on Tuesday 29 November 2022.
Enquiries
Martyn Adlam - Head of Owner Relations
martyn.adlam@wise.com
Sana Rahman - Global Head of Communications
press@wise.com
Brunswick Group
Charles Pretzlik / Sarah West / Nick Beswick
Wise@brunswickgroup.com
+44 (0) 20 7404 5959
About Wise
Wise is a global technology company, building the best way to
move money around the world. With the Wise account people and
businesses can hold over 50 currencies, move money between
countries and spend money abroad. Large companies and banks use
Wise technology too; an entirely new cross-border payments network
that will one day power money without borders for everyone,
everywhere. However you use the platform, Wise is on a mission to
make your life easier and save you 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.
Over 13 million people and businesses use Wise. Today we process
over GBP8 billion in cross-border transactions every month, saving
customers over GBP1 billion a year.
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