Wise reports HY profit increase as customer volumes surge

By Scott Kanowsky 

Investing.com -- Fintech Wise PLC (LON:WISEa) has posted a rise in half-year earnings, as customer volumes surged, average transfer costs ticked higher and interest income from account balances spiked.

Profit before tax during the six-month period ended on September 30 jumped to £51.3 million, up 173% compared to the same timeframe in the prior fiscal year.

During the second quarter, the number of active customers on Wise - which aims to offer users low-cost money transfers between different currencies - grew by 40% year-on-year to 5.5M, while recent volatility in foreign exchange markets contributed to an increase in average transaction fees to 0.64%.

Net interest income on customer balances also came in at £18.7M, recovering from an expense of £1.2M in the first half of its FY2022 period, when negative interest rates in Europe limited returns.

“In the first half of this financial year, our payments got faster, hitting a key milestone with 50% of all transfers now instant," said chief executive officer Kristo Käärmann.

"And while we had to increase prices on some routes, we were able to decrease fees on others, enabling us to limit the impact of more volatile markets."

Looking ahead, total income is seen expanding by 55% - 60% annually in 2023. Wise added that it expects adjusted earnings before interest, tax, depreciation and amortization margin to register at or above 20% over the medium term.

In a note to clients, analysts at Citi said that while the latest profit figure "looks strong," they had hoped for a "clearer" rise in full-year growth guidance.

London-listed shares in Wise fell on Tuesday.