AUS
NZ
UK
CA
USA
IND
Key Points:
- Wise saw a 23% year-over-year growth in active customers, reaching 8.9 million in Q2 FY25.
- Cross-border volumes increased by 20%, driven by competitive pricing and customer recommendations.
- The company’s underlying income grew by 17% YoY, and Wise expects full-year income growth of 15-20%.
Wise PLC (LSE:WISE), a leading global financial technology company, has reported impressive results in its Q2 FY25 trading update. The company saw a significant rise in active customers, cross-border volumes, and card revenues, reflecting the impact of strategic investments and competitive pricing.
Customer Growth Driving Strong Performance
Wise continues its progress toward its long-term goal of becoming the preferred network for international money transfers. In Q2 FY25, the number of active customers using Wise increased by 23% year-over-year (YoY), reaching 8.9 million. This surge was largely driven by customer recommendations, showcasing Wise's reputation and customer satisfaction.
The rise in customer numbers directly contributed to a 20% YoY growth in cross-border volumes, with transactions reaching £35.2 billion. On a constant currency basis, this growth was even stronger, standing at 23%. The volume increase was further complemented by a 20% YoY rise in customer deposits and a remarkable 49% increase in card and other revenue streams. Wise’s efforts to encourage Wise account adoption and broader service use have clearly paid off.
Pricing Restructuring and Impact on Revenue
In Q2, Wise also focused on optimizing its pricing structure to drive sustainable growth. This restructuring led to a reduction in cross-border pricing, which contributed to an 8 basis point (bps) reduction in the cross-border take rate, bringing it down to 59bps. The reduction in take rate was attributed to two key factors: a 6bps decrease due to lower prices and a 2bps shift due to a changing mix of services. However, 2bps of this reduction was offset by increased pricing on non-cross-border services, allowing Wise to maintain its underlying income levels.
This strategic reduction in pricing, while lowering the take rate, is part of Wise’s broader objective to boost customer volumes and strengthen its competitive edge in the global money transfer market.
Revenue Growth and Profitability
Despite the pricing adjustments, Wise's underlying income for Q2 FY25 grew by 17% YoY to £337.0 million. For the first half of FY25, this growth reached 19%, positioning the company well for its full-year expectations. Wise continues to anticipate underlying income growth for FY25 in the range of 15-20%.
The company's gross profit margin remained strong at approximately 76% for the first half of FY25. This high margin reflects the efficient scaling of Wise's costs relative to the growing volumes of transactions, even as the company continues to invest heavily to support further growth.
Investment Strategy and Future Outlook
Wise's investments in pricing through the first half of FY25 are expected to move the company closer to achieving its medium-term target for underlying profit before tax (PBT) margins of 13-16%. The company believes these investments in reduced pricing will help maintain competitive advantage while supporting long-term growth. As a result, Wise does not currently foresee the need for further material pricing reductions in the second half of FY25.
Looking ahead, Wise remains focused on continuing its growth trajectory. The company’s strategic investments in technology, product development, and pricing are set to drive further customer growth and increased transaction volumes. With strong results in the first half of FY25 and an optimistic outlook for the remainder of the year, Wise is well-positioned to achieve its financial targets and strengthen its position in the global money transfer market.
