Wise PLC Class A ((GB:WISE)) has held its Q2 earnings call. Read on for the main highlights of the call.
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The latest earnings call from Wise PLC Class A paints a picture of robust customer growth and engagement, driven by strategic investments in technology and partnerships. While the company shows promising potential, it faces challenges such as pricing pressures, high operational costs, and significant one-time expenses that could impact its financial performance.
Customer Growth and Engagement
Wise has made impressive strides in expanding its customer base, adding 2 million active customers to reach a total of 13 million users. This growth is reflected in the cross-border volumes, which have surged by 24% to nearly GBP 85 billion in the first half of the year.
Increase in Customer Trust and Holdings
The level of trust customers place in Wise is evident as they now hold over GBP 25 billion in cash, whether as deposits or investments through the Wise Account. This marks a significant milestone in the company’s journey.
Revenue and Profit Growth
Wise’s financial performance is on an upward trajectory, with underlying income growing by 16% to GBP 750 million annually. The company has also achieved the top of its target margin range for underlying profit before tax, between 13% and 16%.
Wise Platform Expansion
The Wise Platform is gaining traction, now accounting for 5% of cross-border volumes. The company aims to double this figure in the medium term, bolstered by partnerships with major banks like UniCredit and Raiffeisen Bank.
Investment in Technology and Customer Experience
Significant investments in technology have resulted in 74% of payments being processed instantly. The focus on AI and automation has also improved customer service, as evidenced by a Net Promoter Score of 69.
Pricing Pressure
Despite the positive growth, Wise faces pricing pressures, with the cross-border take rate decreasing by 10 basis points year-on-year to 52 basis points. This has limited revenue growth to just 5% compared to the previous year.
High Operational Costs
Operational costs remain a concern, with administrative expenses projected to reach around GBP 1 billion for the full year. These costs are primarily driven by investments in compliance, risk, and infrastructure.
Significant One-Time Costs
The company’s profitability has been affected by GBP 35 million in one-off costs related to a dual listing project, highlighting the impact of such expenses on the bottom line.
Forward-Looking Guidance
Looking ahead, Wise is focused on sustainable growth, with plans to continue investing in infrastructure and international banking features. The company remains committed to maintaining a profit before tax margin between 13% and 16%, while strategically managing pricing and customer retention to support long-term success.
In summary, Wise PLC Class A’s earnings call reflects a company on the rise, with strong customer growth and strategic investments driving its performance. However, challenges such as pricing pressures and high operational costs need to be addressed to sustain this momentum. The forward-looking guidance suggests a focus on sustainable growth and strategic investments to navigate these challenges.