Wise plc

Hi, good afternoon everybody. Thank you very much for joining us here today and for joining us on the call if you've joined us via Vimeo or Zoom today. So this is our first full year results presentation as a publicly listed company. So it's quite a special day for us. We have today for you a presentation of our full year results. So we've got Christo, our CEO and co-founder, who will talk you through the progress that we've made over the last 12 months on our mission. And then we've got Matt Bryars, our CFO, who will talk us through the financial performance for the last year as well. After that, what we'll do is we'll move through into a Q&A session. We'll start with questions from the room, and then we'll move over to Zoom. So when we get to that stage, if you are joining via Zoom, if you wouldn't mind just raising your hand within the Zoom app, then once we move through to that part of the Q&A, I'll introduce you. Thank you very much. Over to you, Christo.

Just checking how we are on the mics. And we're good. Thanks for coming over. Thanks everyone for joining. Before we go into the results, so this is our agenda for today, I wanted to touch on an announcement that we made to the market yesterday about my personal tax affairs and say that I will be working with, will continue working with the FCA on this issue. But unfortunately, I'm unable to comment more on this as these processes with the FCA are confidential. But now, why are we here? And not here in this room today, but more generally. I started this product called WISE some time ago, but now I'm joined with more than 3,000 people. to work out how do we make money work without borders. So how do we make it instant? How do we make it convenient? How do we make it eventually closer and closer to free to use your money across borders? And we built WISE, which is now already at scale and growing. We built infrastructure, which connects to more than 70 countries now. We built it to move money at a lower cost for people. So we're down to 0.61% that our customers have to pay for international transfers. And we built this infrastructure to move money much faster. So 49% of payments now arrive in less than 20 seconds. And that does resonate. So there's now 13 million people who have used that platform. including businesses, and their rate with a net promoter score of 71. And this translates into two-thirds, so 66% of people joining Wise do it because someone who experienced Wise has recommended them to do so. And then, looking back into the last financial year, it translates to numbers. Our customers moved 76 billion pounds of their money using Wise across different countries and currencies. And they paid us 560 million pounds in fees. And we had 22% of those as adjusted EBITDA coming to our balance sheet. Matt will talk a little bit more about the numbers, but I'll take you through what we did for our customers in the first full financial year being public. As a reminder, we started to fix the problem a long time ago now, 10 years ago, but unfortunately banks haven't gotten much better, so the experience for people in business using banks It's not hugely different than it was five, ten years ago, and it's still there to fix. In fact, two trillion pounds, roughly, people move across borders a year. And if you add small businesses, this comes to another nine trillion. And we already move quite a substantial bit of it, but it's still very small. Less than 4% of money that people move is coming through WISE, and only less than a percent for businesses. And how do the customers experience that? So what is it that they get from Wise? I already mentioned we've managed to build an infrastructure that's able to move money much faster. So 49% arrive in less than 20 seconds in less than a day. So that's a completely new experience for people. In terms of costs, we already started from a different price point than what banks are charging in hidden markups. But we've brought it down even further. In the last financial year, we've come down as far as 0.61%. And we've covered the world, so it's getting painted blue. We've brought wise to more and more countries. We've brought more features to more countries around the world. But we also globally got more efficient, which has... led us to be able to lower our own costs and pass these cost savings to customers. So that infrastructure across the world is getting stronger, cheaper to operate, and the ability to give customers more features and more scale. But we knew that customers are not here just to move money across borders. They actually need the full international banking experience. And today, we're serving it through three products. The Wise account for people, Wise business account, and then the Wise platform for banks and enterprises. So let me take you through each of those three in turn. The Wise account, people use it to hold more than 40 different currencies. They get local account numbers. So this works like a local account in 10 countries now. They get a clever debit card where they can spend without being subject to exchange rate markups. They can spend internationally. And they get the cheapest and fastest access to the Wise Transfer products through this Wise account. And in the last financial year, it has expanded. So we added Brazil. We launched Wise account for Brazilians in Brazil and in Malaysia as an example. But it's not only expanding, it's also getting better with more features. For example, in the UK we launched assets. The ability for people to hold money not just in all the world's currencies, but also invested in the world's largest companies. And we help our people to automate their financial life internationally, so here come the scheduled payments, and also auto conversions, so setting up thresholds where they want money to move from one currency to another. But there's still plenty of things to do with the Wise Account, both in terms of expansion, so growing to more countries, but also growing the features out to more countries, as we'll cover a bit later. but it has already resonated. So now we see 20% of our customers are taking advantage of the Wyze account, and the share of those is growing. What's maybe even more exciting is that this Wyze account is working for them, which means that the ones who use Wyze account use it for much more. So they do two times the volume that our non-Wyze account customers do on Wyze. And now moving into businesses, just to give you some context, when people move about 8,000 pounds on Wyze in a year, average businesses move 48,000 pounds. So the use cases are usually about eight times larger. And for businesses, they get all the same features as individuals do, as people do in Wyze. But with that, they also get a few extra tools. They can give debit cards to their employees, manage their spending experience. They can connect to accounting systems directly, do batch payments, do thousands of payments at once, and manage and control their team's accesses. Again, in businesses, there's plenty more to do to make this as a as an amazing tool that it already is for businesses in many countries, but to expand it further out. And again, the biggest feature that the businesses really use here is the ability to get local account numbers in 10 currencies, which means that they can invoice as a local company in many countries around the world. And again, we see this resonate. We see that the cohorts of businesses are growing. getting larger year by year, but they're also starting to grow now in their lifetime. And put the Wise business and the Wise account together, we see that the rate at which customers hold their money at Wise is increasing at the same rate as it was last year, so about 85% year near. Moving to platform, just as a reminder, there's three types of use cases generally where a platform comes to life for our partners. So first of all, challenger banks take the advantage of bringing wise to their customers to get an edge on their traditional counterparts. Then on the traditional side, of course, they have increasingly realized, our partners have realized that It's the customer experience that is now a standard expectation that they need to be able to serve in their own apps. And we're ready to help it there by bringing the WISE infrastructure into the banks' apps. So we see very traditional banks being now able to compete with their faster-moving competitors with the new features from WISE. And also in enterprises, it was quite unusual for us maybe five years ago that we would be making payments out of our accounting tools. This is going to be increasingly a reality. And doing this internationally is now something that accounting tools offer through WISE. And if we put this onto the map, we see that WISE platform, as WISE infrastructure, is very widely distributed across the map. So covering all of this, it's still for us quite a bit to do. We're now onboarding a million customers a quarter. And it also means we're hiring a lot. Matt will go more into the numbers. We brought some 950 new people to the team in the last financial year. And with a bigger team, with this demand that we're seeing, we can keep serving even more and more customers around the world. Now with what we've done is effectively setting a new expectation. Expectation to ourselves that transfers will get faster. It will get faster to move money across borders. We're 49% instant, but we know that we can move this forward. We set the expectation that transfers will get cheaper. Managing money internationally will get cheaper over time. And we've done this sustainably. So we have been profitable for the last five years and we've built a business that will do that for many years to come. So these expectations that we're now setting for people and businesses are not going to go away and they're going to be there for us, but they're also going to be here for traditional banks, digital challengers and others who come to solve the same problem At the end of the day, people are going to gain because everyone now has to offer a much, much stronger product. And our work's kind of cut out for us. I mentioned that we're connected to more than 70 countries. We built the infrastructure that connects to more than 70 countries. That's not all the countries in the world. There's more to do by connecting to more countries. But when we go slightly deeper, we're serving customers in about 49 countries and offering the Wise account and the card in a few less, while the account numbers are only available in 10 countries. So the journey that we're looking forward to is increasing all those bars on the screen while we also increase the reach of the Wise infrastructure. But putting this all together now, we talk through the three products that we operate, or how people use Wyze through the Wyze account, Wyze Business, or increasingly through Wyze Platform, which all in all, with the fundamentals of price and speed and convenience, gives us 71 Net Promoter Score with a vast amount of our customers joining through recommendation, which then translates into us having more and more customers every year, so 24% more active people this year and 34% more active businesses this year, which then again translates into 76 billion in volume, which is growing 40% year-on-year and giving us scale to be able to invest more and more as we move into this current financial year. With that, I'm handing over to go deeper into numbers to Matt Briars. Thank you.

Everyone hear me? Yep. Hey, everybody. Nice to see you all again. I actually see some of you for the first time properly. Let me talk you through quickly our financials, and then we can do some Q&A. So as Christo said, These are some key numbers that we think about. So the amount of volume that our customers move tells us how well our product's working, but it's also the main driver of our income. This 76 billion grew 40% year-on-year. I'll dive into a bit more of the drivers of this. That translates to 560 million of revenue growing 33% year-over-year. Importantly, as we spoke about at half-year, we've generated 43% growth in gross profit. And this $372 million I think about as the fuel that funds all of the investments we want to make as we think about what do we want to do over this year, five years, much longer to continue to drive the growth. How do we continue to compound what we're doing for our customers? And we've invested that over this year, as we said we would. We said after the year of 2021, which included our pandemic, we'd be investing heavily after this, and we have. But we've still maintained an EBITDA margin above 20%. And we'll talk about some of the drivers of this. And as you know, our EBITDA margin, just as EBITDA, is cash-generative. So the vast majority of that translates to cash, which obviously helps us from a company perspective. It's good cash flow and also helps us top up our balance sheet and our capital reserves. So let's go a bit deeper into each of these numbers. First, let's look at this active customer growth and how that's looked over the last year from a quarterly perspective. You can see, actually, as we finish the year, we've spoken to you, seen this in the earlier quarters, we've seen really strong growth in the active customers for people, but also businesses in the last quarters. And then if you look at what those customers are doing, The volume per customer that's come from our personal customers has recovered well after the pandemic. We saw that dip in April 2020. So year on year, we've seen some growth in this. But actually, if you look at the business customers, and I'll take you back to that slide Christo showed for the cohorts, you can see that actually this wise business account really resonates. They're using us more. And also, we have other factors happening in the world today. Clearly, businesses are using us to play their suppliers or accept money from their customers. So anything related to, we've seen an increase in this. The wise account is more useful. We get more of their cross-border flows. But actually, as well, obviously we're seeing inflation in the world. No doubt that's helping contribute to the volume per customer, which is therefore flowing through to volume. So when you put this together with the active customers, we see the volumes moving through the last quarters of the year, growing. Pretty fast. More than 30% now consistently in the growth we're seeing from people and almost 60% for businesses. So that means that across the year, we actually grew volume at 40% year over year versus 30% the year before. Yes, there was a pandemic comp in the year before. But that's almost 60% volume growth for businesses, as I said. But interestingly, if you look at this on a constant currency basis, so fixing the currency, there's many different currency dynamics in our business. But if you just look at this, actually that volume growth would have been 46% on a constant currency basis. growth dynamic we're seeing in the business. Let's track through to what does that mean through the P&L. First thing we look at here is actually what's happened to our marginal unit cost, because this governs what we charge our customers. We said at half year that we'd managed in the first half year particularly to engineer away, optimize away a bunch of these costs, whether it's what we pay our partners, how we manage our FX exposures, or our spreads. So we reduced that marginal cost of a transfer from 30 bps down to 25 bps. And that helped us in the first half of the year. I remember sitting here six months ago saying, we've managed to reduce these costs and pass that on to our customers. We did that in the first half of the year. The take rate's been relatively steady in the last six months, around 60, 61 bits, as Christa said. But actually, our overall take rate has been more stable. And why is that? That's partly because, as customers adopt the Wwise account, the other fees that we're getting are growing, partly upsetting that. So we saw a roughly three-bit drop in the take rate across this period. So then the revenue grew 33% year-over-year, £560 million. It's faster than we expected for the year. And we've seen that good momentum in the back half of the year. It's quite interesting what we show of revenue breakdown by geography. And we think of ourselves as quite a global business. Our customers are relatively global as well. Actually, if you look at the UK, where we got started first... And actually, we'd argue we've probably got the highest market share. It's still growing at 30% year on year, which is pretty encouraging, actually, if you think about it. So many of the markets have launched years after this. But actually, what this tells us is that our growth is rather driven by this rumble along of word of mouth growth. And it's continuing in the UK. So think about the market size. They get comfort and the sheer opportunity that's there in the UK, but also even more so maybe in some of the other markets. Got a lot of runway. So that revenue, as I said, translated into 372 million of gross profit. Gross profit margin increased 62% to 66. But this 372 is, OK, so what do we do? Where do we invest this? And as we've said before, we invest this in three areas. We've spoken about price. Where can we drive price investments sustainably over the long term? Second, where do we invest in marketing? And third, where do we invest in our products? Because all of these drive more volume, all of these drive more scale, and then drive more capacity to keep investing. And we did invest. You can see that actually, as we said, our OPEX during the pandemic grew more slowly. And we've invested through the back half of last year. And we've seen our costs grow. Some areas grew roughly in line with our volume. Some grew faster. Some related also to us becoming a public company is the reality of carrying more costs. Let's go into some of each of these areas. actually grew our team to almost 3,400 wisens by the end of the year. So end of the year to the end of the year was around 40% growth in the number of people. This was in our engineering and product teams, but it was also in our operational teams and in our functional teams as well. And all of these are important for our growth. Clearly, products is what we build, but actually operations are critical to actually serving that demand that we create. And as we hire finance people, people in the legal team around the world, that helps us open up licenses and helps us build businesses for the future as well. We've always talked in the past how we're very prudent with our return on marketing investment. We invest typically at a 12-month payback. Amazingly, we've kept that payback period and still grown the spend on marketing by 30% over the last year. What does that mean? Well, yes, we're getting more customers through marketing. But actually, as we said, we're onboarding a million customers in a quarter now. But still two-thirds of those are coming from word of mouth. So that means whilst we've grown our marketing spend, we're still getting the word of mouth growth. So our overall economics are still very compelling. It's a very low cost of acquisition as a business. And then partly we saw this at mid-year, and it hasn't really changed. If you look at our expenses, and I'm sure you'll look in detail through the reports, you'll see that the overall expense growth was higher. That's because when you add in the effects of capitalization, this pushes that rate of growth up. And I'll talk shortly around what that does as well to our EBITDA margin. So our adjusted EBITDA was above, we look at our above 20%, we hit 22%. We said 26% a year ago was an example of what happens when we slow down our cost growth. That's what happens to this margin. We said we'd have foot to the floor investing in our future, which is what we've done. So we had a 22% EBITDA margin, adjusted EBITDA margin for the full year. Let's look at that a little in detail around this capitalization change. If you look at that growth of 12%, and then if you were to add back the capitalization, so this is a capitalization of our expenditure into our engineering, for example. And then look at what that number would be growing. That number of the underlying EBITDA is growing in line with our revenue. So actually, the fundamental underlying profitability of the business is growing very healthily, as you can see. So to summarize... We're moving 76 billion pounds. It's quite hard to look at direct comparables, but I challenge people to find another standalone mover of money in the world that's moving more money than this. We've grown at 40% year over year. So if you think about roughly 25 to 30 billion we've added in the last year, there are not many standalone money movers that move that amount. So we're adding the quantum of volume that we're moving is actually significant. We're doing that profitably without having to invest and burn significant cash. And we're generating this $372 million of gross profit, which is funding all of the investments that we are making, which are going to pay off, as you know, in the long term, because what we're seeing today are the investments that we've been making in the past. We have a very healthy EBITDA margin, and we remain a cash-generating business. We've run the business this way for the last five years, very proud of that, and there's no need to change. We're very focused on driving growth sustainably with our business model, and this is a long game we're playing with Wise. So let's look going forwards. What does that mean? Well, next year we've seen really good momentum going into the last quarters. Expect revenue to grow between 30% and 35% in the next year. And if you look at the medium term, we still believe above 20% growth in the medium term is expected. And then we'll continue to invest. So we need to grow this volume. We've got a long way to go. Many trillions of volume moves not unwise today. And we found a way to invest sustainably, so we'll keep investing with an actor above 20% adjusted EBITDA margin as we go forwards. So with that note... I'll pause, I'll hand back to Christo, and then we'll take some questions.

Thanks. And in order to summarize, so what are we here today? We've built a new infrastructure, we've built a product that's addressing, we put here an opportunity, I would say for a lot of people that's a problem. So it's addressing a big problem. For us here, maybe it's an opportunity for us being the ones solving it. We're doing it through a superior product, one to use, on a sustainable financial model that Matt took you through, that's built here to stay in the long term, to be able to focus on solving that problem, which is going to take us a while to get to all of these trillions that Matt was talking about. But summarizing with that, happy to open up to questions. I see hands going up in the room. That's a good start. So let's start with the room. And then, as Martin said, once we get to the Zoom, put your hands up there, too. All right. Let's do our first choice first. You should shout. And we have microphones in the ceiling.

And we'll repeat, otherwise. A couple from me, then. So firstly, on the revenue guidance, which is, Pretty ambitious. It's the current run rate of growth. I wondered if you could just help us a little bit with the drivers of that, whether you're assuming anything material from the take rate, or whether really we should think about that being the sort of rate of growth of volume, revenue, and gross profit for the business. That's the first question. And then the second question is, is around the account balances of the business, which are becoming pretty substantial now. You're holding a lot of money on behalf of your customers. You've started to expand the product set with investments. I presume there's more to come. It's going up, so I wondered if you could comment around the opportunity for you and for your customers for you to do more with that account balance.

So, some of the first questions. The first question is true. What are the underlying assumptions around the revenue guidance for next year? Second question is, we've got big account balances. What's the company thinking about doing with these? Our revenue guidance is clearly a function of what do we think is going to happen to volume and what do we think is going to happen to tape rates. So we look at that together. We've got a very healthy trajectory on volume. We have a desire to drive down the cost for our customers whilst maintaining very healthy economics. So overall, I would say I would look at this revenue guidance as revenue guidance. There are different routes for us to get there, clearly, and we'll see how successful we are from a volume growth as well. I'll take that primarily as revenue guidance. That's what it is.

In terms of interest rates going up, we see this as being a relief to our customers because in some currency zones like Eurozone, we actually have to pay central banks to hold our customers' euros. And, of course, we charge our customers to hold euros with us, therefore. And thereby, as the interest rates hopefully go higher, we can... We can reduce the cost of using Wise and holding money in Wise for European customers. And maybe the industry environment will a little bit contribute also on the cost base generally going down for us.

Yes, Adam. Thanks. It's Adam Wood from Morgan Stanley. Maybe just first of all, could you maybe go into a little bit more detail on the OPEX side for this year, given the rate of revenue growth? There's also obviously a lot of OPEX going into the business. Could you give us a little bit more detail on where that's going to go in and maybe to help us on return? If you took a market like the UK, where I guess the offers are all in place, there's maturity, how different the economics are, some of the markets you're just starting off to give us a feel for the return on that OPEX that takes other markets closer to the UK, maybe, for example. And then secondly, just talk a little bit about platforms. I know primarily there's been a focus on banks. To what extent is it difficult to get banks to work with you because when they look at WISE, they see you becoming more bank-like over time. You're offering accounts, transfers, asset management, and so they're nervous about allowing you into their customer base. Is it easier maybe to work with some of the accounting vendors? I'd be interested to hear a little bit about Intuit and Xero and how much business they're driving for you, their platform. Thank you.

Great. I'll take first, Chris, then second. So just to check, I'll repeat the question. So it was a forward look from an OPEX perspective. Where do we expect that to go over the next year? And what kind of return are we expecting from this OPEX? So... Primarily, our primary driver of OPEX growth is people. And we definitely are a very product-driven business, so you'd expect we'd be hiring in our product teams, in our engineering teams. But we also, as I alluded, will be hiring across other teams, whether it's our compliance organization, our risk organization, and finance. Not purely because those are needed when we scale out new markets. And then as we create all this demand, we do need to scale up our operational teams, whether it's our customer service or verification, KYC teams, as you'd expect, to onboard these million customers, which is a nice problem to have, but it's a real problem to make sure we deal with. Where does the return happen? We showed actually before, these markets take a while to scale up. They do. And they scale up at a similar rate over time. But we rather know that actually, as we start these markets, we hire a few people into the local markets. But actually, if you think about our product engineering investment, I would say... if it's not two-thirds, it's around this number, is actually working on, you know, when we build something for the wise accounts, we build it globally. When we build something on our platform or our technology, we build it globally. So actually, like, these markets do piggyback and benefit off of all the infrastructure we're investing essentially, and a lot of the investment is still going into building out that platform. So we don't look at, like, market by market. What we rather know is we build up that infrastructure, it will pay back.

And to answer your question on platform, bank partners versus enterprise partners specifically, I would just comment on the context that most of the world's money today is stored in banks. Most of the world's cross-border transfers happen in banks today. And therefore, that's where there's the biggest current opportunity, I would say, for the banks to improve their services by using Wiser or something else, actually. On the enterprise side, these avenues are slightly newer. They could be... The world is moving very fast, so they could be It could be very interesting over time, but I would say that just kind of ground us to where the current volume is, and that's with the banks. And when we look at our list of partners that we're onboarding and working with, I would say they're still dominated with banks. Thank you. We're keeping on the first row still? Yeah.

Adam's question about your cost. You had a lot of cost increase in outsourcing and other admin expenses which you didn't elaborate on. Could you perhaps give us an idea? Because that's not hiring people necessarily.

Yeah, understood. So we had a bunch of costs come back this year that we didn't have last year around travel, office costs, which would have you just seen them dip and then come back. Then we also have just the processes we've run in the last year as we've established becoming a public company. We're having some increased costs associated with this. And between the return to office, the return to traveling, and then some of these outsource costs, we would have this. And we also do have some outsourcing of some activities with regards to some operational activities we would outsource as well.

So that's a big focus here going forward. This will grow. more in line with revenues, or will it also, like last year, grow faster?

So the question was, will that continue to grow at this rate, or will it grow more in line with revenues? Yeah, so we're forecasting a margin at or above 20% over this medium-term guidance. So again... We've kind of returned to office now, so those costs are here, or we've returned to traveling, so these costs are here. So I would rather like this is like a post-pandemic recovery or a listing-driven event rather than the expected trajectory of cost growth.

Thank you. Let's start with the second row. So I would say just my first question is on the B2B side of the business. Where do you see traction now currently, and what's your customer acquisition strategy in the B2B side? And long run, would you say that platforms and B2B will become your bigger chunk of revenues? Because on the personal side, you have a mission of reducing the cost, so the volumes will grow, but B2B, obviously the market is also much higher on the other side.

I'll take that. So the question was business customers. And yes, we see the market, let's say the volumes that small business customers move are higher than individuals. So we... We definitely see that there's an even bigger market to go into, but given that the first market is enormous, it's kind of hard to use that as a proxy to know how big they will be in five years on wise. In terms of the business growth, you saw that we had 34% more active customers among businesses this financial year than before. You saw the volumes are growing strongly by businesses, so we're seeing increased adoption among business users. And the segment of the customer profile hasn't really changed too much, as in we're still ranging from micro-businesses to very small businesses to slightly larger businesses. So over the course of time, what you should expect that Wise will be onboarding larger and larger business customers, and there are kind of small businesses who will get larger over time. So there's a gradual shift to slightly larger businesses, but you should think about this as relatively small businesses who use Wise.

When you think about marketing dollars, what mix of it goes to customer acquisition with this other platform? And does it mean that when you move to bigger businesses, the customer acquisition cost could be higher?

So the vast, vast majority of our marketing spend is digital spend acquiring people and very small businesses. So, and we manage that on a payback. When we look at our teams for our, we're building sales organization now. When we look at that, we also look at that on a payback. But it's very early days for this. So actually, we're able to scale the, we look at the payback similarly for people in small businesses as well. Small businesses have a longer, stronger economics, which itself funds the ability to pay more to acquire those. But the best way we're acquiring all of our customers, you've got to remember, is they're coming to us, these two-thirds. So actually, and that's true for small businesses as well as it is for people. So actually, the marketing dollar impact is primarily digital, and we're not seeing a big shift change in that mix yet.

Thank you. Mo? Thanks for taking my question. from Bank of America. Could you maybe give us an update on the twice debit card? I think at the time of the listing, you said there were about 1.6 million. Clearly, with the number of customers growing, is there an update on how that's grown as well, and maybe the sort of flows that come through there? Second, could you talk a bit more about the end market exposure as well within your flows, whether that's e-commerce or travel or any of the other sectors, and how that sort of spits out? Yeah, I'll cover those quickly.

So what's happened to the Wise Debit Card and then what are we seeing on end market flows? Wise Debit Cards, the growth in this 1.6 is actually roughly in line with what you're seeing on Wise Balances. The reason we show these Wise Balances growing 80% year over year, it actually gives you a good insight as to generally people using this account. So expect similarly for the Wise Debit Card we're seeing around the world. It's in many different markets now, as you see, and for people and for businesses in many places as well. And then end markets, actually very distributed. Like people's use for this is probably as broad as the uses you have in your own payments in your own bank accounts for people. And then for businesses, it's not just sending money, you have to understand, it's receiving almost as much money as they're sending. So it's billing customers, paying suppliers, paying employees. So generally it tends to look like the cash flows of any business, just inconveniently across borders for them, so they use us.

what's the level of extra investments or effort you need to launch back to all the countries where you are today? I mean, is that something which just takes time naturally, or is there anything else specifically that you need to do?

The question is, what's the marginal effort of rolling out the wise account to further countries? I would say this is mixed from that technological perspective. Of course, we built the platform globally, and it's now, I think, a year ago we announced that we were one of the first global issuers of Visa that are able to do this on the cloud. So we've set up the product and technology to be easy to roll out, but we have to appreciate that the regulations by which we operate in each of these countries are local. And thereby, I would almost color this as there's less of technical... marginal effort for a rollout, but it's more of the local establishment and the regulatory setup that would allow us to serve customers in more countries around the world. Thank you. Okay, we're moving to third row.

Thank you. Excuse me, it's Chris Hartley from Redburn. Just one on competition, actually. We see here in the headlines of people popping up trying to do similar things to you in a very often hits your share price accordingly. Do you feel any of that competition? I mean, sort of on the ground, does it impact your pricing strategies, your marketing spend? And then just sort of secondly, to help us try and, I guess, compare you to peers, you give us your average customer price, 60 basis points or thereabouts. Can you give us a sense of the range of that? Does it go from sort of five basis points to 500, or is it 55 to 65? And similarly, you give us the annual amount that a customer goes through you, but can you give us a sense of what an average transaction size might be, or is that too confidential?

I'll share a couple of those to start with. So actually, if you want to find out the range, you can go into our go into our app, and then you can find out the prices pretty quickly. But it goes from roughly 35 basis points up higher. For some of the other routes, it can go obviously above 1%. But for the larger routes, like the UK, Euro, et cetera, it goes down to this rate. Average transaction is interesting. I think the average transaction doesn't really exist. You've got people moving. You can pay back somebody $10 for your share of lunch conveniently with Wise without extortionate fees. You can move now millions on the platform. But it depends on the route as well, but it can be in the high hundreds and thousands for an individual as to the average transaction. But as people start using the Wise account, it's easier to do small transactions and you're just moving money much easier. And remember, like, We've got a lot of domestic transactions on the platform, which we don't really talk about. These can vary in size. The question around competition, how do we think about that? Do you want to take this?

Yes, for sure. We generally think our customers or generally people and businesses should use what's the best product for them. Therefore, sometimes we recommend them if there's something cheaper to use, to use an alternative. So therefore, we're kind of open to competition. But the biggest problem to solve, actually, is transparency. Most people, when they use a bank or some of the more traditional competitors, they don't know what they're paying. maybe going into this for free international transfers only to maybe find out if someone tells them or kind of shows them how the real revenue, the real fee is embedded in the exchange rate. So that education part is actually something that the world would benefit from if it was more transparent. And when we think about competition, to be honest, the way we think about it is how could we make this whole industry of moving money across borders slightly more transparent. Thank you.

Anyone online? Yeah.

I think we can move to questions on Zoom, if we have people on Zoom. Martin?

Yeah, so just passing over to Josh Levin, please.

Hi, good afternoon. Just a follow-up question on competition. More specifically, we saw HSBC is launching a low-cost border transfer product. It's also offering a no-fee cross-border credit card. HSBC is a relatively big player in the UK, your home market, and it does cater to more affluent customers who I would suspect are more wise customers. How do you assess HSBC as a competitive threat to wise? Thank you.

Sure, I can take that. Of course, we're excited to hear that. On this no-fee international debit card, I think the first question is, where is the fee? And what are the exchange rates that their users are subject to? I hope the regulators would also look into this, marketing regulators and others. But in terms of competition, I think there is an interesting dynamic if banks are starting to react to seeing their customers wanting a cheaper, faster, more efficient product and start bringing their costs down. So if HSBC sets a standard that this is what businesses and people should expect from their bank, I think that's a... It's a great improvement for the competitiveness of banks and also probably a great increase in demand for Wise Platform, where we can help banks quite easily to achieve that, to be able to compete with HSBC.

Thank you.

Thanks, Josh. The next question that we have here is from Mo Malwala from Goldman Sachs, please.

Great. Hey, Christo. Hey, Matt. I had two questions. Firstly, just to understand, I mean, on marketing grew at about 30%. I remember at the time of IPO, you had talked about a kind of viral model. But obviously, as you push into kind of SMB as well, how do you see that sort of pace of marketing growth? Should that be broadly in line with revenue? And then, Matt, maybe another clarification on the timeframe for what you define as medium term. At what point do you expect to see some leverage in the model? Is this sort of beyond the next five years, or could we see that kind of at the back end of the next five-year time horizon? And then lastly, sorry, one more is on product roadmap. You talked about a lot of product investments. Could you give us a bit more clarity around the roadmap and which other specific areas are you investing? Thank you.

Can I take the product one, though, very quickly? I don't have a link up here, but if you Google Wise Product Roadmap, you'll find there's a public roadmap that we now have for Wise Account, Wise Business, Wise Platform, with all the, not all the, but many of the near-term features that we're working or will be working on. And there's even a way to vote for the features. So if you have favorite ones, Mo, you should definitely leave your votes. That's on the Product Roadmap. You had another one on

So what do we expect on marketing? Right. And then second on what do we mean by medium term from a margin perspective?

Right. In terms of marketing, we would expect in the near to medium term the mix to be relatively stable. As we've seen, and I'm only saying this from empirical experience, that for the last year I would say half a decade. The mix hasn't changed a lot, and this is kudos to our marketing team that has been able to work on all the channels so that the paid marketing spend is able to keep up with the viral growth.

Yeah, and the team do a great job. Normally, to grow bargaining spend, companies would relax the ROI. We haven't done that, and they've managed to continue to grow on a consistent basis over time. And at the payback, we should continue to do that, given the 12-month payback and the IRR on this. The second question was then on margins. Actually, we... I'll hold the line on medium term, and we are going to invest. We've got a lot to invest in. You'll see on the product roadmap, but you've seen on this as well, like the number of markets we've still got to build out the wise account into. And you can see the benefit when we do. But actually, we've got a lot of things to build, a lot of things to roll out. So whilst we can continue to grow healthily, we see that actually we can invest at or around a 20% margin and still a lot of more things to invest in than we can find people and time for at the minute. So if we're successful, I believe we're going to continue to be at or around this margin for that medium term.

Great. Thank you.

One last call for the room. I think we're out of questions on Zoom.

Great.

That's it. Thank you so much for coming over. Thanks for dialing in to the Zoom call. We'll see you next year. Same time. Thank you.