Wise shares slide after volumes dip in third quarter

By Scott Kanowsky 

Investing.com -- Shares in Wise PLC (LON:WISEa) dropped on Tuesday after the money transfer service posted an unexpected decline in volume in its third quarter.

Total cross-border volumes fell by 2% during the latest three-month period to £26.4 billion (£1 = $1.2284), reflecting a slowdown in the amount of money transferred by personal customers compared to the prior quarter. Analysts had expected the number to move up to £28.51B, according to data compiled by Bloomberg.

"[P]ersonal [volume per customer] was down 10%, primarily due to lower levels of activity in the high-volume cohorts of personal customers," Wise said in a statement. "This is consistent with the pull-forward we saw in Q1 and Q2 FY23 among these cohorts, which we believe was supported by higher foreign exchange volatility and strength in the USD."

In a note, analysts at Morgan Stanley suggested that the slowdown in volume may prompt concerns around the impact of competition on Wise's operations.

However, quarterly revenue was given a boost from a recent spike in interest rates, with the top-line figure coming in at £225.2 million, above estimates of £218.7M. As a result, Wise upgraded its full-year 2023 total income growth guidance to 68% - 72%, up from its previous outlook of 55% - 60%.

"As interest rates increase, our customers expect a return on the balances they hold with us, and we intend to share much of the benefit of higher rates with customers," said Wise chief executive officer and co-founder Kristo Käärmann.