WSE Q2 FY2027 earnings call

• Financial Growth: Active customers grew 20% YoY to 12.5 million; cross-border volume increased 22% YoY to $72 billion; customer holdings reached $44 billion.
• Revenue Drivers: Cross-border revenue rose 16% to $355 million despite a take rate reduction from 52 to 49 basis points. Cards and Other Revenue surged 34% YoY to $206 million, driven by U.S. business and APAC personal card adoption.
• Interest Income: Generated $238 million, up 18% YoY, though gross yields declined from 3.1% to 2.9% due to central bank decisions.
• Operational Expansion: Launched Wise account and card in Thailand, added assets in New Zealand, and achieved ninth direct integration in Malaysia.
• SME Strategy: Proactive servicing teams and integrations with local accounting software (e.g., Visma, Sage) to embed Wise into SMB workflows.
• Platform Partnerships: Onboarded new partners like Oakmark and Vivid; platform revenue target is 10% of correspondent volume mid-term, currently at 6%.

The transcript does not provide a breakdown of financial performance by specific product segment (e.g., Retail vs. Business) in terms of absolute revenue or contribution percentages. However, it highlights that transaction revenue totaled $561 million, driven by cross-border revenue of $355 million and Cards/Other Revenues of $206 million. Interest income was $238 million.

• Net revenue growth for the full year is expected in the upper half of the 15% to 20% range on a constant currency basis.
• Full-year FY27 income before tax margin is expected around the top of the 2025 range.
• H1 net revenue growth was approximately 22% on a constant currency basis.
• H1 EBIT margin is expected to be around 23%, including one-off expenses equivalent to ~2 percentage points (circa $15 million for dual listing).
• Management does not include potential future interest rate increases in their guidance but notes they benefit from recent Fed/ECB hikes.

• Regulatory Compliance: Wise has completed remediation for consent orders related to 2024 state actions but is awaiting authority feedback; timeline for reapplying for an OCC charter remains open.
• FX Volatility: Geopolitical events and FX movements are difficult to predict, though volatility generally benefits transaction volumes.
• Interest Rate Dependency: Management emphasizes discipline to avoid dependency on cyclical interest rates when reinvesting excess interest income.
• One-off Costs: Significant administrative and listing-related one-off expenses (~$30 million total impact on H1 margin) may recur during restructuring or listing activities.

Q: Cris Kennedy asked about geographic trends in high-value sends and SMB investments.

A: Emmanuel noted U.S. high-volume transactions slowed slightly due to dollar depreciation, but the U.S. remains the fastest-growing region. For SMBs, Wise is investing in proactive servicing and integrating with local accounting platforms (Visma, Sage) to embed into client workflows.

Q: Gus Gala inquired about price elasticity and marketing sensitivity regarding the U.S. license.

A: Emmanuel stated pricing follows a cost-plus logic, with reductions only made when efficiency gains sustain margins. Marketing builds awareness, while the license would allow lower take rates and greater efficiency long-term, but current business strength doesn't depend on immediate licensing.

Q: Gregor from Morgan Stanley asked about one-off costs and take rate phasing.

A: Emmanuel clarified that $15M in one-offs relates to the U.S. listing, with additional small admin costs totaling ~2% margin impact. The take rate is targeted to drop ~1bp per quarter if efficiency allows, depending on volume mix and investment capacity.

Q: Justin Forsythe sought updates on bank licenses, consent order remediation, and platform partner progress.

A: Wise has completed all remediation for past consent orders and awaits feedback. Regarding platforms, they onboarded Oakmark and Vivid, with platform revenue at 6% of correspondent volume, aiming for 10% mid-term, citing strong win rates against competitors.

Q: Mohammed Moawalla asked about the size of non-listing one-off costs and H2 growth drivers.

A: Non-listing one-offs are comparable in size to the $15M listing costs, distinct from administration/legal fees. For H2, growth will be driven by active customer acquisition and new features (eSIM, travel cards), with interest income benefits expected as rates rise, though management avoids relying on this cyclicality.