The
London-based cross-border payments company Wise (LSE: WISE), reported continued
growth in its customer base and transaction volumes for the second quarter of
fiscal year 2025, while also reducing fees for its users.
Wise Reports Strong
Customer Growth, Reduced Fees in Q2 FY25
The number
of active customers using Wise’s services grew by 23% year-over-year (YoY) to
8.9 million in Q2, driven primarily by existing customers recommending the
platform. This user growth contributed to a 20% increase in cross-border
transaction volume, which reached £35.2 billion for the quarter. The headline numbers also increased compared to the previous quarter.
Wise
continued its strategy of reducing fees to drive growth, with its cross-border
take rate decreasing to 59 basis points, down 8 basis points from the same
period last year. The company attributed 6 basis points of this reduction to
lower prices and 2 basis points to changes in its business mix.
“We
remain focused on our mission of building the best way to move and manage the
world’s money,” Kristo Käärmann, Co-founder and CEO of Wise, commented on the
results. “This will take time to fully achieve, but we are pleased with the
progress made during the quarter, especially the additional regulatory
approvals we have received in key markets.”
Despite the
fee reductions, underlying income grew by 17% YoY to £337.0 million in Q2. For
the first half of FY25, Wise reported 19% growth in underlying income and
maintained its full-year guidance of 15-20% growth.
|
Category |
Q2 FY25 |
Q2 FY24 |
YoY Movement |
|
Cross border volume (£ billion) |
35.2 |
29.2 |
20% |
|
Underlying income (£ million) |
337.0 |
288.4 |
17% |
|
Cross-border take rate (%) |
0.59% |
0.67% |
-8 bps |
|
Instant transfers (%) |
63% |
60% |
+3 pps |
New Licenses
The company
highlighted several regulatory achievements, including expanded capabilities
for outward transfers from India, an Australian Financial Services License for
Investments, and a Payments Institutions license in Brazil.
“Firstly,
in India, we secured approvals to further unlock outward transfers, removing a
previous USD 5,000 cap,” added Käärmann. “Secondly, in Australia, we have been
granted an Australian Financial Services License for Investments. And finally,
in Brazil, we were delighted to be given a Payments Institutions license.”
Wise’s
underlying gross profit margin remained elevated at approximately 76% for the
first half of FY25, reflecting the scaling of costs relative to volumes while
continuing to invest in growth initiatives.
The company
does not anticipate making further material investments in reduced pricing in
the second half of FY25, expecting its previous investments to move it closer
to achieving its medium-term target underlying profit before tax margin range
of 13-16% in the second half.
As Wise
continues to expand its global footprint and reduce fees, it aims to transition
from “moving billions to moving trillions of cross-border volume” in
the long term, according to Käärmann.
Wise’s Expansion and
Partnerships
The
London-based fintech company has been making strides in expanding its global
reach and enhancing its service offerings through strategic partnerships and
market entries.
In a recent
development, Wise Platform has joined forces with AbbeyCross, a platform
focused on improving connectivity and accessibility in global FX payments.
In another
significant partnership, Wise Platform has teamed up with Qonto, a leading
European business finance solution provider. This collaboration is set to bring
fast, transparent, and cost-effective international payment services to over
half a million SMEs and freelancers across Europe, further solidifying Wise’s
position in the European financial landscape.
The
London-based cross-border payments company Wise (LSE: WISE), reported continued
growth in its customer base and transaction volumes for the second quarter of
fiscal year 2025, while also reducing fees for its users.
Wise Reports Strong
Customer Growth, Reduced Fees in Q2 FY25
The number
of active customers using Wise’s services grew by 23% year-over-year (YoY) to
8.9 million in Q2, driven primarily by existing customers recommending the
platform. This user growth contributed to a 20% increase in cross-border
transaction volume, which reached £35.2 billion for the quarter. The headline numbers also increased compared to the previous quarter.
Wise
continued its strategy of reducing fees to drive growth, with its cross-border
take rate decreasing to 59 basis points, down 8 basis points from the same
period last year. The company attributed 6 basis points of this reduction to
lower prices and 2 basis points to changes in its business mix.
“We
remain focused on our mission of building the best way to move and manage the
world’s money,” Kristo Käärmann, Co-founder and CEO of Wise, commented on the
results. “This will take time to fully achieve, but we are pleased with the
progress made during the quarter, especially the additional regulatory
approvals we have received in key markets.”
Despite the
fee reductions, underlying income grew by 17% YoY to £337.0 million in Q2. For
the first half of FY25, Wise reported 19% growth in underlying income and
maintained its full-year guidance of 15-20% growth.
|
Category |
Q2 FY25 |
Q2 FY24 |
YoY Movement |
|
Cross border volume (£ billion) |
35.2 |
29.2 |
20% |
|
Underlying income (£ million) |
337.0 |
288.4 |
17% |
|
Cross-border take rate (%) |
0.59% |
0.67% |
-8 bps |
|
Instant transfers (%) |
63% |
60% |
+3 pps |
New Licenses
The company
highlighted several regulatory achievements, including expanded capabilities
for outward transfers from India, an Australian Financial Services License for
Investments, and a Payments Institutions license in Brazil.
“Firstly,
in India, we secured approvals to further unlock outward transfers, removing a
previous USD 5,000 cap,” added Käärmann. “Secondly, in Australia, we have been
granted an Australian Financial Services License for Investments. And finally,
in Brazil, we were delighted to be given a Payments Institutions license.”
Wise’s
underlying gross profit margin remained elevated at approximately 76% for the
first half of FY25, reflecting the scaling of costs relative to volumes while
continuing to invest in growth initiatives.
The company
does not anticipate making further material investments in reduced pricing in
the second half of FY25, expecting its previous investments to move it closer
to achieving its medium-term target underlying profit before tax margin range
of 13-16% in the second half.
As Wise
continues to expand its global footprint and reduce fees, it aims to transition
from “moving billions to moving trillions of cross-border volume” in
the long term, according to Käärmann.
Wise’s Expansion and
Partnerships
The
London-based fintech company has been making strides in expanding its global
reach and enhancing its service offerings through strategic partnerships and
market entries.
In a recent
development, Wise Platform has joined forces with AbbeyCross, a platform
focused on improving connectivity and accessibility in global FX payments.
In another
significant partnership, Wise Platform has teamed up with Qonto, a leading
European business finance solution provider. This collaboration is set to bring
fast, transparent, and cost-effective international payment services to over
half a million SMEs and freelancers across Europe, further solidifying Wise’s
position in the European financial landscape.
This post is originally published on FINANCEMAGNATES.
