Wise Reports Third Quarter Revenue Growth

“I’m delighted that, for the first time, we’ve helped over 4 million customers make cross-border transfers in a single quarter. We’ve moved over £20 billion; 38% growth vs. last year and 15% growth compared to the previous quarter.

We did this while continuing to make good progress in our mission to make moving and managing money across borders faster, easier, cheaper and more transparent for everyone, everywhere. We’ve lowered prices, accelerated payments, and expanded access to Wise products and features in more countries and through more partners.

Most notably, 45% of transfers were instant this quarter, and we launched the Wise Card in Canada, Brazil and Malaysia, with the Wise Account also launching in Malaysia.”

In line with our mission, increasing volumes and reducing costs allow us to sustainably reduce prices for our customers while generating gross profits to reinvest. Over the past year, we have lowered prices in 50 currencies, including 5 currencies in the last quarter. Our client price is now 0.60% on average, 9 basis points lower than a year ago and 2 basis points lower than the previous quarter.

Wise customers also benefit from faster payouts with 45% of all transfers completed instantly this quarter, up from 40% in Q2. This is partly due to a constant focus on improving how we operate, including speeding up security checks and resolving technical issues that were causing delays in payments being sent to India.

In the third quarter, we launched the Wise account and card in Malaysia, and the Wise card in Canada and Brazil. Business customers can now make payments in China from 8 currencies, while Alipay users will now be able to send money to China from any supported Wise currency to an Alipay recipient.

Convenience is about providing access to Wise where it best suits our customers and we made further progress in serving more customers through platform partners during the quarter. New partners include music royalty manager Eddy, armed forces credit union Andrews Federal, and billing platforms Bilingo and Libeo.

1. Customer price is based on a fixed basket of representative currencies which reduces the effect of route mix and other factors, making it a more accurate representation of our progress in reducing the cost of international transfers at over time.

The third quarter of fiscal 2022 was a strong quarter with over 4 million customers transacting on Wise. The number of active personal customers increased 26% year-on-year to 4.1 million, while the number of active business customers increased 39% to 250,000 from a year earlier.

Volume increased 38% year-on-year and 15% quarter-on-quarter to £20.6 billion, driven by growth in active retail and business customers and higher average volume per customer (AVC) raised. Mail order from our professional customers is seasonal in the third quarter, but has nevertheless increased by 13% year-on-year. This reflects the fact that as our customers grow, so do their VPCs, along with the growing adoption of the Wise account and card.

Revenue increased 34% year-on-year and 13% quarter-on-quarter to £149.8 million, broadly in line with the volume growth rate. Our continued efforts to design and optimize travel costs to support sustainably lower prices for customers resulted in a lower underwriting rate as expected at 0.73%, down 2 basis points year-over-year and 1 basis point quarter on quarter. This reflects price declines that are partially offset by additional revenue from sources other than cross-border transactions.

Looking forward, we continue to expect the acceptance rate to be slightly lower in the second half of fiscal 2022 compared to the first half due to price reductions. This should be more than offset by higher volumes as we now expect revenue growth of approximately 30% for fiscal 2022 compared to fiscal 2021. We continue to expect gross margin for fiscal 2022 by approximately 65 to 67%, provided that the costs related to exchange rates remain broadly stable.