TIDMWISE
RNS Number : 5072W
Wise PLC
18 April 2023
Wise plc
Q4 FY23 Trading Update
18 April 2023
Wise Account drives 33% customer growth YoY for Q4
and 73% growth in Total Income for FY23
"At Wise we are focused on our mission of building money without
borders and bringing faster, fairer options to more people and
businesses around the world. To deliver on this mission we're
building a resilient, profitable business that our customers can
trust to be here for them through good times and through the
challenges of a more uncertain macroeconomic environment.
"Customers continue to choose the Wise Account to manage their
finances around the world, with customers in the UK, EU and the US
now able to receive a refund on a portion of their fees or earn a
return while retaining instant access to their money. Too many
banks offer near-zero rates of interest on deposits and we don't
think this is fair. Our new features set a global standard in how
people and businesses can hold their money. Customers trust us to
hold GBP10.7 billion of their money, a 57% increase YoY.
"In March, we also launched a new look inspired by the millions
of customers we serve around the world. With accessible layouts,
and fonts that work across 146 languages, the new look matches the
ambition of our customers going international and supports our
continued global expansion.
"Our financial results this quarter show great progress on our
mission. Over 6 million people and businesses used Wise for moving
and managing their money internationally during the quarter; a 33%
increase YoY. And these customers moved nearly GBP27bn (+25% YoY).
This growth drove a 45% YoY increase in revenue, and when combined
with net interest income from the Wise Account, resulted in total
income growth of 83% YoY for the quarter and 73% YoY for FY23."
Kristo Käärmann, CEO & co-founder, Wise
Mission highlights Q4 FY23
Our mission is clear - to build 'money without borders' and make
moving and managing money faster, easier, cheaper and more
transparent for people and businesses around the world.
During the quarter, we helped 6.1 million active customers move
GBP26.7 billion in cross-border volume; an increase of 33% and 25%
YoY, respectively. Most of these new customers are joining to use
the Wise Account, proof of the increasing appeal for both people
and businesses around the world.
As a result, revenue for the quarter grew 45% YoY and total
income of GBP279.5 million grew 83% YoY. This brought total income
for FY23 to GBP964.3 million, which at 73% growth YoY is above our
most recent guidance of 68-72%.
Improving our product is key to how we grow and attract more
customers. This quarter we launched new features that allow
customers to take advantage of the higher interest rate environment
while retaining full access to funds in their Wise Account. There
are two main ways we've done this:
-- First, we have expanded the Wise Assets product to provide
more customers with access to interest earning assets. This
includes launches across Singapore, France, Spain, Austria, the
Netherlands, Finland and Luxembourg, in addition to the UK, which
launched in December 2022. These funds allow our customers to earn
returns in line with central bank rates.
-- Second, in Europe and the US ([1]) , we're now giving
customers a return on cash held in their Wise Accounts by sharing
some of the income we generate on these customer balances.
These new features enhance the proposition of the Wise Account
for people and businesses, by providing a return as central bank
rates rise, whilst continuing to make sure our customers' money is
safe and highly liquid.
Sustainably lowering prices for customers over the long run
remains core to our mission. We charge our customers what it costs
us to offer our service, plus a small margin, rather than what we
can get away with. So our price, which reflects our cost to deliver
payments, changes when our costs go up or down. At 0.65%, the
average price remained broadly stable when compared to the previous
quarter's price.
It is our underlying infrastructure that powers our products and
our customers' ability to manage their money and move it around the
world at rapid speed. FY23 has been a milestone year for speed;
with 55% of our cross-border payments completed instantly and over
90% completed within 24 hours in Q4. Now customers can expect
instant payments from Hong Kong, instant top ups in Brazil and 80%
of all payments to Poland to be delivered within the day.
Q4 FY2023 Q4 FY2022 YoY Movement Q3 FY2023 QoQ Movement
Customer price(1) 0.65% 0.61% +4 bps 0.66% -1 bps
--------- --------- ------------ --------- ------------
Instant transfers 55% 49% +6 pps 52% +3 pps
--------- --------- ------------ --------- ------------
1. Customer price is based on a fixed basket of representative
currencies which reduces the effect from route mix and other
factors, making it a more accurate representation of our progress
in reducing the cost of international transfers over time.
Wise Platform also went live with numerous new partners. This
marks continued momentum with tech partnerships and our early
progress in onboarding large banks to bring Wise-powered payments
to their customers. This quarter we integrated with Bank Mandiri,
Indonesia's largest bank by assets and one of the top established
retail banks in the country. We have also seen momentum in
integrating US-based business service platforms including: Brex,
Ramp, and Bluevine; automated global electronic broker, Interactive
Brokers; and global employment platform, Globalisation
Partners.
These product improvements, innovations and partnerships mark
continued progress toward our long-term mission to help more people
and businesses access fast, cheap, convenient and transparent
payments.
By operating a profitable and sustainable business, we have the
capacity and confidence to continue investing in future growth,
through the cycle, and continue building the products and features
our customers love.
As always, more detail on our mission highlights for the quarter
can be found on our website, including our mission roadmap , which
sets out future product improvements we have planned.
Growth and financial highlights
Q4 FY2023 Q4 FY2022 YoY Movement Q3 FY2023 QoQ Movement
Volume (GBP billion)(1) 26.7 21.4 25% 26.4 1%
--------- --------- ------------ --------- ------------
Revenue (GBP million) 223.5 153.8 45% 225.2 (1%)
--------- --------- ------------ --------- ------------
Net interest income on
customer balances (GBP
million) 56.0 (0.8) nm 43.5 29%
--------- --------- ------------ --------- ------------
Total income (GBP million)(2) 279.5 153.0 83% 268.7 4%
--------- --------- ------------ --------- ------------
Take rate (%)(3) 0.84% 0.72% +12 bps 0.85% -1 bps
--------- --------- ------------ --------- ------------
Total income take rate
(%) 1.04% 0.71% +33 bps 1.02% +2 bps
--------- --------- ------------ --------- ------------
1. Cross-border volume only
2. Includes revenue and net interest income on customer balances
3. Revenue as a % of Volume
4. Total income as a % of Volume
5. Not measurable
The appeal of Wise for customers around the world continues to
drive strong active customer growth of 33% YoY and 6% QoQ, with 6.1
million active customers in Q4 FY23, comprising 5.8 million
personal (+34% YoY, +6% QoQ) and 340K business customers (+27% YoY,
+7% QoQ). This growth primarily reflects customers joining Wise to
use the Wise Account.
Continued growth in active customers drove cross border volumes
higher in Q4 FY23 to GBP26.7 billion, representing 25% growth YoY
and 1% QoQ ([2]) . Personal customers moved GBP19.5 billion, 23%
growth YoY, while Business customers moved GBP7.3 billion, 30%
growth YoY.
The average Volume Per Customer "VPC" reduced by 7% YoY and 4%
QoQ. This was driven by Personal VPC which reduced by 8% YoY and 3%
QoQ as we continue to see a slower pace of growth in higher-volume
customer cohorts (>GBP10k). We believe payments amongst these
cohorts, such as for property purchases and investments, to be more
discretionary in nature and influenced by macroeconomic conditions
to a greater extent. For example, as seen at times of FX volatility
and USD strength like earlier in FY23 when we saw a pull-forward of
volume in these cohorts. This slower pace of growth in the
higher-volume customer cohorts (>GBP10k) combines with continued
strong growth among the more populous, lower-volume customer
cohorts (<GBP10k), resulting in the reduction of the average.
Business VPC grew by 3% YoY as we continue to see business
customers scaling their use of Wise as they mature, and decreased
8% QoQ reflecting seasonality.
Revenue for Q4 FY23 was GBP223.5 million up 45% YoY and down 1%
QoQ. Our take rate of 0.84% was up +12 bps YoY and down -1 bps QoQ.
Revenue growth continues to be supported by higher Other Revenues
generated from the greater adoption of the Wise Account, notably
higher debit card spend which drives interchange revenue.
The Wise Account and its value to customers has seen the cash
customers hold with Wise grow to GBP10.7 billion (+57% growth YoY),
excluding the growing balances that are held through our Assets
features, reflecting the trust customers continue to place in
us.
Balance growth, combined with higher yields on invested assets,
led to an increase in gross interest income, to GBP71.6 million for
the quarter. Interest expense increased to GBP15.6 million,
reflecting the progress in our plans to share this benefit with
more customers. As a result, net interest income was 29% higher
QoQ, at GBP56.0 million (equivalent to a c.2% net yield).
Consistent with our approach of sharing economics with customers,
which supports loyalty and trust, we are still working to share
more of this interest income with customers. This will likely
result in a lower net yield, and thus a smaller proportion flowing
to EBITDA, over time.
Total income, inclusive of net interest income, for Q4 FY23 was
GBP279.5 million, 4% growth QoQ and 83% growth YoY. This resulted
in total income for FY23 of GBP964.3, 73% growth YoY, and above our
most recent guidance of 68-72%.
We will update the market on our FY24 guidance at our full year
results in June 2023. Our previously provided medium term
forward-looking guidance remains unchanged:
-- Total income growth greater than 20% (CAGR)
-- Adjusted EBITDA margin at or above 20%
Please see the appendix for further historical financial
information.
Analyst & Investor call
A call hosted by Matthew Briers (CFO) will be available for
analysts and investors at 9:00am (UK) this morning, 18 April 2023.
Webinar details can be found here :
https://vimeo.com/event/3316362
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 / 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 money around the world. With Wise Account and Wise
Business, 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 16 million people and businesses use Wise. Today we process
on average GBP9 billion in cross-border transactions every month,
saving customers around GBP1.5 billion a year.
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 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 QoQ Q YoY FY2023 FY2022 FY YoY
FY2021 FY2022 FY2022 FY2022 FY2022 FY2023 FY2023 FY2023 FY2023 Movement Movement Movement
Customers
(million) 3.5 3.7 3.9 4.3 4.6 5.0 5.5 5.8 6.1 6% 33% 10.0 7.4 34%
------ ------ ------ ------ ------ ------ ------ ------ ------ -------- -------- ------ ------ --------
Personal
(million) 3.3 3.4 3.7 4.1 4.3 4.7 5.2 5.5 5.8 6% 34% 9.4 7.0 35%
------ ------ ------ ------ ------ ------ ------ ------ ------ -------- -------- ------ ------ --------
Business
(million) 0.20 0.22 0.23 0.25 0.27 0.29 0.30 0.32 0.34 7% 27% 0.52 0.41 27%
------ ------ ------ ------ ------ ------ ------ ------ ------ -------- -------- ------ ------ --------
Volume per
customer (GBP
thousand) 4.4 4.5 4.6 4.7 4.7 4.9 4.9 4.6 4.4 (4%) (7%) 10.5 10.3 2%
------ ------ ------ ------ ------ ------ ------ ------ ------ -------- -------- ------ ------ --------
Personal (GBP
thousand) 3.6 3.6 3.7 3.7 3.7 3.8 3.9 3.5 3.4 (3%) (8%) 8.1 8.1 0%
------ ------ ------ ------ ------ ------ ------ ------ ------ -------- -------- ------ ------ --------
Business (GBP
thousand) 18.1 18.6 19.4 21.6 20.8 22.2 22.9 23.2 21.4 (8%) 3% 53.7 47.7 13%
------ ------ ------ ------ ------ ------ ------ ------ ------ -------- -------- ------ ------ --------
Volume (GBP
billion)(1) 15.6 16.4 18.0 20.6 21.4 24.4 27.0 26.4 26.7 1% 25% 104.5 76.4 37%
------ ------ ------ ------ ------ ------ ------ ------ ------ -------- -------- ------ ------ --------
Personal (GBP
billion) 12.0 12.4 13.5 15.1 15.9 18.0 20.1 19.0 19.5 2% 23% 76.6 56.9 35%
------ ------ ------ ------ ------ ------ ------ ------ ------ -------- -------- ------ ------ --------
Business (GBP
billion) 3.6 4.0 4.5 5.5 5.6 6.3 6.9 7.4 7.3 (1%) 30% 27.9 19.5 43%
------ ------ ------ ------ ------ ------ ------ ------ ------ -------- -------- ------ ------ --------
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 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 QoQ Q YoY FY2023 FY2022 FY YoY
FY2021 FY2022 FY2022 FY2022 FY2022 FY2023 FY2023 FY2023 FY2023 Movement Movement Movement
Revenue (GBP
million)(1) 116.9 123.5 132.8 149.8 153.8 185.9 211.5 225.2 223.5 (1%) 45% 846.1 559.9 51%
------ ------ ------ ------ ------ ------ ------ ------ ------ -------- -------- ------ ------ --------
Personal (GBP
million) 93.7 96.9 103.4 114.7 118.4 144.4 164.8 173.7 173.4 (0%) 46% 656.3 433.4 51%
------ ------ ------ ------ ------ ------ ------ ------ ------ -------- -------- ------ ------ --------
Business (GBP
million) 23.2 26.6 29.4 35.1 35.4 41.5 46.7 51.5 50.1 (3%) 42% 189.8 126.5 50%
------ ------ ------ ------ ------ ------ ------ ------ ------ -------- -------- ------ ------ --------
Net interest
income
on customer
balances
(GBP million) (0.6) (0.6) (0.6) (0.8) (0.8) 1.2 17.5 43.5 56.0 29% nm 118.2 (2.8) nm
------ ------ ------ ------ ------ ------ ------ ------ ------ -------- -------- ------ ------ --------
Personal (GBP
million) (0.3) (0.3) (0.3) (0.4) (0.4) 0.6 9.1 23.2 29.8 29% nm 62.7 (1.4) nm
------ ------ ------ ------ ------ ------ ------ ------ ------ -------- -------- ------ ------ --------
Business (GBP
million) (0.3) (0.3) (0.3) (0.4) (0.4) 0.6 8.4 20.3 26.2 29% nm 55.5 (1.4) nm
------ ------ ------ ------ ------ ------ ------ ------ ------ -------- -------- ------ ------ --------
Total income (GBP
million)(2) 116.3 122.9 132.2 149.0 153.0 187.1 229.0 268.7 279.5 4% 83% 964.3 557.1 73%
------ ------ ------ ------ ------ ------ ------ ------ ------ -------- -------- ------ ------ --------
Personal (GBP
million) 93.4 96.6 103.1 114.3 118.0 145.0 173.9 196.9 203.2 3% 72% 719.0 432.0 66%
------ ------ ------ ------ ------ ------ ------ ------ ------ -------- -------- ------ ------ --------
Business (GBP
million) 22.9 26.3 29.1 34.7 35.0 42.1 55.1 71.8 76.3 6% 118% 245.3 125.1 96%
------ ------ ------ ------ ------ ------ ------ ------ ------ -------- -------- ------ ------ --------
Take rate (%)(3) 0.75% 0.75% 0.74% 0.73% 0.72% 0.76% 0.78% 0.85% 0.84% -1 bps +12 bps 0.81% 0.73% +8 bps
------ ------ ------ ------ ------ ------ ------ ------ ------ -------- -------- ------ ------ --------
Total income take
rate (%) 0.75% 0.75% 0.74% 0.72% 0.71% 0.77% 0.85% 1.02% 1.04% +2 bps +33 bps 0.92% 0.73% +19 bps
------ ------ ------ ------ ------ ------ ------ ------ ------ -------- -------- ------ ------ --------
1. Revenue for the periods Q4FY22, Q2FY23 and Q3FY23 have been
restated due to a reclassification of revenue type
2. Includes revenue and net interest income on customer balances
3. Revenue as a % of volume
4. Total income as a % of volume
5. "nm" indicates not measurable
6. FY data is the sum of the quarters.
Note: Differences between 'total' rows and the sum of the
constituent components of personal and business are due to
rounding.
([1]) (In Europe this applies to our customers in the EEA
holding GBP, EUR and USD, and is applied automatically. In the US,
customers opt-in and earn returns on their USD balances.)
([2]) On a constant currency basis, Q4 FY23 total volumes grew
25% YoY and 1% QoQ and 35% YoY for FY23. On a constant currency
basis, volume is converted to GBP using the average rates of the
prior financial period.
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END
TSTEAELXFLNDEAA
(END) Dow Jones Newswires
April 18, 2023 02:00 ET (06:00 GMT)
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