Wise plc

Good morning, everybody. Thank you so much for joining us for our financial year 2023 for your results presentation. Usual format today, we're going to have Christo, Harsh and Matt taking through the results and key highlights for the year. And then we'll follow this with some Q&A, which we'll take from the room first. And then we'll also take Q&A on the live web stream. You can do that just by raising your hand virtually. Before we hand over to Krista, Harsh and Matt though, I'd just like you to hear actually from our customers.

So my name is Athena. I'm the founder and creative director for No Names People. I think that the most special thing for me about being born and raised in Colombia was that I got to really absorb and experience all of the cultural richness that we have back home. So No Names People's mission is to foster economical and social development within indigenous and artisanal communities in Latin America. preserving the culture of all of these amazing communities. These traditions have been passing from one generation to the other for a century, and I just believe it's really important to preserve that. One of the biggest challenges of having your production and all of your logistical team happening overseas is you have to deal with the wire transfers from the bank, and that implies a lot of fees and also a lot of time waiting from when you actually do the transfer and people receive it. And when I came across WISE, it really changed the whole way in which I handled the business. Having access to an app like WISE has made our lives so much easier. it has really become the backbone of our business. Having a platform like this is allowing people really to create job opportunities all around the world.

Thanks, Athena, and welcome everyone to our second full-year annual results as a public company. It's the Financial Year 2023. Of course, we're going to get to share the detailed numbers and financials, but it's also the time for us to check up on the progress we're making on our mission and what we've been shipping. So before we're going to hear from Matt going through the detailed numbers, you're going to hear from me and from our CTO, Harsh, on what we're shipping and why. So every day, we come to work at WISE to work on a mission, to build the best way to move and manage the world's money. Because as we've talked about before, the international banking, the traditional ways of doing this is broken. It's so expensive and often a frustrating experience. And it's not a small challenge because there's a lot of demand for it. A lot of people are hoping for better. There's about 2 trillion pounds moving across borders and looking for a better way to do this for people. And it's even worse for businesses. It's 9 trillion pounds. 9 trillion moving across borders annually, and the experience that the small businesses are getting from their banks is usually even worse than people. So our customers and people are telling us that it's expensive to move money, that there's no real banking services for their international business, and banks are saying it's impossible to build better experiences on the infrastructure that is there, on the technology. This then summarizes what we're solving. We've already made a ton of progress on making transfers fast, cheap, convenient, and go around the world. We're building a wide account, a new solution to international banking. And this is going to transform how people and businesses think of handling their money across borders. And we have created new infrastructure. Because the current one doesn't work. Mike is telling us that. And that's what enables us to build these other two products. And now we're opening this up to our partners so that they can build their own bank accounts on top of it. And it turns out what we've been building resonates with the demand, and it's paying off. So if we look over the last four years, we've seen us triple the number of customers that are using WISE. using our products, and we've seen us quadruple the volume. So clearly what we've been working on is resonating, hanging off. And all that time, I think it's now the seventh year that we're operating profitably. That's one way to look at it. The other way to look at it is we're still scratching the surface. We're only serving about 5% of the total market for people and less than a percent for businesses. So we have a long way to go. So let's set the scene for today. It kind of talks a little bit about the problem we're solving, the things that are broken, the things that we're here to fix, and the demand for it on the lesson side. And I'll give you a glimpse of what the numbers of the results have been over the last four years, and Matt's going to go deeper into that. So this is clearly working. We've gone from the problem to the solution. The question is why. So what makes us a special company that is able to solve this enormous problem and achieve our mission? I think it really boils down to two things. First of all, it's our obsession on customers. We are one of the few financial services companies that have evangelical customers. And this is not by accident. I think I'm surprised when I hear people loving their bank. But our customers do that and they tell their friends. We can't stop them telling their friends. And this is because of the products and the experiences we create. And we can only do this as the second block by creating the new infrastructure that enables this. Fundamentally, a different experience. And Harsh will talk a little bit more about the second. I will cover the first. So let's go into the evangelical customers. And I'll start with a number. I love numbers. 66%. Two-thirds of our customers join because someone recommended wise. This is an awesome stat. The important question is, why did they recommend? Why are they recommending wise to their friends? And this is because of this radically better experience that we create. Because that's what our customers are seeing, or used to be seeing, and that causes the frustration, which is now replaced with instant transfers. 55% of our transfers arrive in less than 20 seconds. Five to 10 times cheaper than using your bank. And we're not hiding fees. Tell you what you're getting charged. And it's actually a delightful experience when you get your business account going, any less than a couple of hours. And we do this by investing in three products. WiseCount for individuals, WiseBusiness, and the WisePlatform for banks and our enterprise partners. So not to go into everything that we covered over the last year, but I'll just give you one highlight of how we think about developing these experiences. As we see the WISE account getting more traction and we're building out the experiences our customers have, not just sending, but also invoicing their customers internationally, spending across borders and holding money with WISE, we realized that coming to holding money, the problems are not pretty similar than what we see in cross-border transfers. Turns out that it's also quite expensive to hold money in a UK traditional current account. When the inflation goes up, the central banks are paying 4% to 5% interest rates, and of course the current account pays nothing. And we found a way to solve this. Over the last couple of quarters, we launched Wise Interest, which is a Wise Assets product that allows our customers to hold government-guaranteed assets in the UK and now rolling out in Europe, that beyond being 100% with a government guarantee, but also they paid interest close to what you'd expect from the central bank. So that's slightly older data now, from I think the beginning of June, but in the UK our customers are earning 4.12 on the pounds and a little bit less in euros. So this is just one example of how the experiences that we create are creating evangelical customers because now being one of the highest earning current accounts in the UK, of course everyone's talking about it. I'm not going to go through more of those, but I would recommend just click into the quarterly mission update. This was one of the, I think, 23 highlights that we brought up and things that we shifted in the last quarter. And without going through this, these changes or these improvements that we're making to the voice accounts and voice business, they are resonating. Because we now see about 50% of new joiners starting to use the account. It's going beyond just sending money We're using it for spending, for proceeding. That's across the world. But if we click into some markets, like Brazil, this is the majority of customers now using Wwise as an account rather than just a transfer product. And, of course, it's placed through to our entire base, which is then growing on the business side. It's more than half of the users using Wwise as their business account. And why this matters? From the financials perspective, the customers who use us for more fully, for whom we can satisfy more of their international banking needs, they do three times more transactions and bring two times the volume just to send money to customers. So this does translate into our results as well. But bringing this all together, while we're talking about this, These are the experiences that create evangelical customers. This is what will drive our customer growth, and the customer growth in turn drives volume. We see our customers growing 3x over the last year. We see the volume following that. On businesses, it's even more. Customers are growing faster, but the volume is growing even faster. So that's kind of setting the scene on evangelical customers. And going into what's next, there's going to be the same similar investments that we're seeing bring that result over the last four years continuing. So just to give you some examples, Matt's going to talk through some of the benefits that our customers are seeing, for example, from the heightened interest rates and the interest income. We will have... improved servicing and onboarding so that the net promoter score can go even higher. Our customers can get more evangelical. We're talking about new features such as assets, but there's more around spend, experiences, and some of these features are yet to be rolled out around the world. So we start in UK and Europe and then roll out around the world. And then we're after the footprint. of where we operate. We're bringing on not just individual features, but the entire footprint to more and more people and businesses. And all of this, all of what we're shipping, is leading to more customers, more active customers. And that's not just this year. Actually, the improvements that we're making today are going to bring the customers over the next four years. Both the three times customer growth that we saw over the last four years We won't have to continue because we're really only scratching the surface with what we started. And now going more deeper into the infrastructure that enables all of this, I'll hand over to our CK.

Thank you.

So as Krista said, people love WISE for a variety of reasons, but a few of them are price, speed, and convenience. It is our global infrastructure that really towers this proposition. And on top of this infrastructure is what we build are these amazing experiences. So the WISE account, truly international account for people and businesses, and then also WISE platform, on top of which other enterprises and the banks are building on the top of this infrastructure. I'll go a little bit deeper into explaining what this infrastructure can do. And there's a lot more this can do, but I've kind of tried to call out a few things here. First of all, when I talk to bank partners, some of our competitors, things that they're wowed by or things that really blow their mind on what we can do are these things. It's cheaper than banks. The speed at which we can move money across our network and also how quickly and how efficiently we can onboard people and businesses and be compliant across such a large geography of licenses we run. So talking about cost and speed, a big part of our infrastructure and what we've built over the last 12 years is this network of direct connections to different local payment systems. Currently, we are integrated directly into four countries with more coming, but also we have a very large partner network that's very stable, which allows us to control the end-to-end experience and then allows us to have lower costs consistently and control the speed on which you can move payments. I'll give you an example. The first direct connection, we were the first ones to get directly connected to the UK payment system as a non-bank. It took us about five years from working with regulators and working through getting the access and the settlement account because it was the first time being done in the UK. And through that, we learned on how to do this and launch this integration and connection It's a learned muscle. And the last one that we did was in Singapore, which took us about six months. Anybody else who has to come and go through this journey would have to follow the same process. And then it's not only the connections and the partner network we have. There's another aspect of what makes us special in the way we've built the systems, which is WISE is global. The way the tech has been built, every payment, every document, Every data set that comes into voice is globally viewed in one place. Compare this to banks, where usually, if you are in a large bank, one division of the bank does not see the text of data on the other side, which does not let them make certain decisions that we can. To make payments move faster, you can make treasury decisions with our ML-based models. Fifty percent of our money movement on treasury is predicted by machine learning. Similarly, when we're onboarding documents, we are seeing, we're onboarding a million documents a month now on our system. And we can do that very quickly with machine learning models and automated processes that we've built. And all of this is because of this global data set and global view we have of data. That allows us to move money faster for liquidity movements to make things instant. And it's hard for competitors to keep up. Just using feed as an example, even for us a few years ago, we were about 20% instant payments. In four years, we've completely moved the needle and set a new gold standard in the industry for what global product payments should look like at 55% instant. The money goes from source account to the destination account usable by customers in less than 20 seconds. And as part of this, we're doing all our financial checks within those 20 seconds that are required by law. And all of these things are done because of the technology infrastructure we've built. And this is hard to replicate. People ask me, like, okay, so why couldn't somebody else do this? First of all, we have about 700 engineers working on this problem. I think we are now the biggest engineering team in the world working on this one specific problem of cross-border transfers. If you go to other institutions, even banks, they have a team, but it won't be this big just on this problem. We move fast. We are moving at the speed of 250 releases per day. Most banks and the larger firms will launch their apps in six months or three months. But then it's not just the tech. Somebody would ask me, how can a big tech company who has a lot of engineers and can move fast do this? It's this collaboration between tech, regulatory, expansion, and operations which makes this infrastructure special. We maintain 69 licenses across the world. try asking a big tech company to maintain two. That's the difference, right? It's not just the idea that you can just ship code. It's how do you build the regulatory framework. Example I gave of convincing regulators to get access to the global payment systems. Those are all learning muscles. And anybody who else has to come and do this, they have to follow the same process. So that's why I feel this is going to be very hard to replicate and scale it because it's not just the tech, but regulatory, expansions, and operations, how we serve our customers to create those wild moments. It's not just our direct customers who come and use the apps who are seeing the power of this infrastructure. We have over 60 wide platform partners now who see the value we are creating and are teaching old rails and wanting to connect over our API to our infrastructure. Through the last year alone, through these integrations, we have now enabled 25 million more people to be able to access this infrastructure. These apps are not connected, and if they want to use WISE, they can. WISE platform is still a small part of our overall volume that we move to WISE right now, but it's growing. And what's notable here is the logo that keeps popping up every year. So now we have Tier 1 banks, which are starting to integrate into WISE. So over the last year, we have Bank Bandiri, Shinhan Bank, in South Korea, and last year, one bank in Japan, all integrated into WISE. But also in the U.S., we have all the major neo-banks who are doing business banking, also running across water rails on WISE. So going back, fundamentally, one of the problems that we have in this industry is that the underlying technology that is used to move money around the world and access your funds is broken. And that's why we are rebuilding the infrastructure and will continue to invest in going deeper and broader. Whether we are going to invest time in bringing in Australia over the next few months, directly integrated into the WISE infrastructure, or PICS in Brazil, or using the data mode that we've built to fight financial crime faster and make decisions faster. As Krista said, we're working on a massive problem, and we want to have WISE here for a long time and be a great company. So we have the market size and we have eventually the good customers who love what we build and are wowed by the experience they get. And these wow moments are created by the underlying infrastructure and that's what we continue to invest in and we have over the last five years and we'll continue to in the long term invest in this. And we'll do it in a fast growth and profitable manner. Talking about profitability and numbers, give it to Matt.

See you all again.

It's pretty amazing around, hopefully it explains a bit more on why we think we've kind of got traction in the results that we've got. So let me talk a little bit about these results. The topic takes my heart. So if you look at our results for this first year, of course this is last year, there's obviously a set of results we can be very proud of. And they reflect quite an exceptional year for a number of reasons. As you can see, and we've heard a lot today around how this drive's fundamental momentum in the customer base is what's really driving this growth. You can see with 10 million customers, that's grown not just at 3x over the last number of years, it's grown 34% in the last year. That's led to volume growth, which when you combine that with the balances that customers are holding and the interest, which has been quite a change this year, that's led to almost a billion pounds of income, which is 73% growth for a year. And we proudly, we've always run across the business, and that continues to compound. We've actually doubled the ETH in the business this year. I'll talk a little bit on this around a bit. So you can kind of pause there and think, this is a great set of numbers. But actually, I'd like to just think beneath that, and like, what can you really take away from this as a business that we're building? I believe we're building a business with kind of world-class fundamentals when you look at what's inside and driving these financials. So why is that? Well, first, This growth that we're seeing in our customer base, which is led by word of mouth and organic growth, which is a function of the proposition. Obviously, it's very exciting from a growth perspective, but it really also impacts us financially. It hits us all the way through the P&L. It really helps us. It's split up by the fact that we invest incredibly efficiently. When we say this, I mean we invest in product that has an impact. We're very focused on the problem that we're solving. and making sure everything we do has an impact. And we follow up with marketing that has an incredible payback. And what's emerging or what's new that you're seeing that compounds on this, because we've always followed those first two, because now we have this wide account, which is really driving traction in the growth, but it's actually structurally supporting the growth. It's also structurally supporting the profitability in the business today, which also lets us continue to double down on the growth of the future. So we're going fast, investing, and profitable. These are really important nuances for me as to how to bring this to life. Let's dig into some of this. It's always good at earlier results. We talked to you on a call today. It's always good to be able to dial back and say, right, what does this look like over the long term? And what you can see here on the left is the active customers. These are people who are active. And remember, the wisest means have made a cross-border transaction in that period. It continues to compound, and it's actually grown pretty fast in the last year. And it's this that is driving the volume that you see. This is cross-border volume on the right-hand side. For people and for businesses. Compounding 30% customer growth leads to 40% compounding volume. This is the primary driver. It has in the past, and I'll talk through why I think that. I'm going to continue in the future. But let's look underneath this, around what's really underpinning this growth. As I said, how does this customer-led growth really drive through and underpin the growth? First off, the light green that you can see here is the volume we get each year from customers that join us that day. And the dark green is the volume that we have from customers we had before that day. And what you can see, just a simple map you can kind of see here, is actually that volume, when the number of customers that join us each year grows, it makes them more volume with us. And then when they join us, that volume sticks around. So actually, it's a really healthy business dynamic. Customers join us. They love the experience. They tell their friends. That grows. And then they also stick around. This helps us grow. It underpins the compounding growth rate of active customers that we're going to have. And you can see that coming through volume. Four and a half million customers joined us in the last year. That's pretty exceptional because it grew 40% year on year. And this is, I think, exceptional. We're seeing very healthy momentum going into this year. But then this volume retention, which is, frankly, the simple math you can almost do yourself here. which is how much of the volume we had previously translates into the existing customers for next year. Over time, that's been just over 100% across our customers. Some years it drops below, some years it goes higher. This noise is probably in the VPC. Over the long term, you see this dynamic. And it's this that's driven by the products we build. And we're sticking to these fundamentals of how we build our products to give you confidence that we can translate this going forward. Because you know these dynamics are consistent when we've spoken to you over the last years, and maybe even much longer for those of us who know as well. And yet, in the short term, we've seen some noise on BPC. If you look at BPC, which is the translation from active customers to volume, over the long time it's been quite stable, maybe even increasing over time. But actually, if we look at this last year, we've seen that it's been quite volatile. We saw exceptional strength from USD in the summer of last year. And then as the macro environment shifted and the interest rate environment shifted, we've seen a reduced contribution to this PPC of larger transfers. And I've hopefully signalled that and telegraphed that to you over the last month. That's not really changed now. And we're a few days short of finishing this first quarter of 2024. And actually, we've seen that broadly stable, that VPC going into the first quarter. I would manage expectations marginally down, but actually broadly consistent in the noise. So we just remain cautious with macro and what's to come here. But if you just step back to the broader context, this is really our own customer-driven growth. Over the long term, that's what's going to drive the growth of the business. Yes, there's going to be some volatility on this in the short term, but we need to look through that. So what does it mean? The customer growth has underpinned 51% revenue growth over the last year, which is an acceleration. We need to remind ourselves. And why is that driven by customer growth? One is the active customers, which has driven this cross-border income. You can see 42% growth in revenue from cross-border transactions over the years. But actually, you see other income, which is the income that we get relating to the wider accounts, whether it's for those who've got accounts in the room, You know, you're spending on your card, we earn interchange, or you might pay a fees for the account for your personal business customer. So actually, it's the customer growth, and as Christo mentioned, the increasing adoption of our WISE account, which is actually driving the structural increase in growth in revenues over time. Remember, remind ourselves as well, growing revenues at 50% year-on-year is pretty exceptional. And we're seeing this dynamic of people and businesses, but we're also seeing it around the world. So I see personal business customers growing revenues at 50%. And even in the UK, we're growing revenues almost 40% year over year. And then in some markets where we're getting great, really early traction, this is near 100%, which is quite distributed across customers, distributed across geographies. There's lots of headroom in this market to continue to grow this number. And the customers don't just send or receive money with it. The whole balance is up. And this has grown, as you know, to 10.7 billion of customer balances we were holding at the end of March. That grew really fast in the past. It's actually still growing very healthily, but we should manage expectations around what that might grow going forward. The law of large numbers, and also, we've launched our assets products, which means some of these balances are opting in to an assets product in places like the UK, where you can earn a really, really good percent. But it's been growing around 50% to 60% here every year. And on these balances, we've been earning interest income. We earn £140 million of interest on the balances we hold for customers, £72 million just in the last quarter. We return some of that, and we'll talk. You shouldn't be surprised. We've talked around how we return some of this interest to our customers where we can. We've paid a proportion of that, an increasing proportion of that back to our customers. So if you think about that, the growth yield as we exited the year was around almost 3%. And we were returning around 0.6% of that to customers. We were successful in Europe in returning balanced cash back. We started that in the US. But we've still got work to do in some of the other markets where it's harder.

And we're not allowed yet to pay our regulators to pay this interest. This net interest, or this interest after these balance-related benefits, comes through to income.

And this income grew 73% year-on-year. Pretty exceptional. Because we saw this emerge as stronger amounts, but changing the interest environment really drove this. So let's switch here and think about how that tracks through down to the bottom line. We saw gross profit of over £600 million, a consistent year-on-year gross profit margin, but actually that meant that gross profit also grew north of 70% year-on-year. And then let's think about what we do with that. It gives us fuel for our growth. You can see here that actually the vast majority of this gross profit either goes back into investment in products and marketing or actually flows to EBITDA. And this investment in product is pretty critical for us at this juncture. Christo mentioned and Harsh mentioned all the things we've got to build and all the opportunity ahead of us and our confidence and track record on how we've made those investments gives us confidence to keep scaling this product. So we've grown those product teams this year. And we've also grown our marketing organization. Let me talk a little bit around what do we spend money on. So we spend money on marketing. As you see in the accounts, we spend 37 million pounds on marketing. That grew roughly 33 cents year over year. So why do we do this? Well, with that 4.5 million, 1.5 million customers came through our marketing. It's not through the word of mouth. Actually, a pretty efficient payback. So just on the paid marketing alone, we capped that historically at a 12-month payback, fully loaded payback. Very efficient. If you were to blend that across all of them, I think it's the envy of many companies trying to grow their business. We won't give up on this discipline. It's what kept us growing strongly over time. We invest in our product teams. In Hosh, we've got part of the engineering team, but around that, we've got all of the product compliance operations and teams that really focus on building and taking our products around the world. And what is the return here? The return here is actually probably the first pound that we spend. This is... 3 million of those 4.5 million customers are coming through word of mouth. And that word of mouth, as you've heard, is a function of the time we spend building these products. And when those products go live, it's not just one time like you make it to marketing. You're actually getting that stream of customers from the product that you're shipping year after year after year. This is like very efficient spend on marketing. Spend on products, my apologies. That's launching new features, new geographies. But a significant proportion of that time we spend goes into building the infrastructure, which is what enables this over time and deepens the moat around the products that we offer. We've also this year grown our service teams quite a lot. It's been a pretty amazing year in our ability to do that. Partly we had to do that. We had to onboard 40% more customers this year. The right thing to do was to do that. But we've also, if you follow Chris Daly's mission updates, you'll see that the quality of service that we're giving our customers through the year has improved. Actually, we see it's right. If we're going to spend a pound, where would we put this? It's quite easy to see that actually giving customers a better onboarding experience and a higher NPS actually is pretty high payback in terms of where we're going to spend it. And our customers tell us this. Okay, we see this in NPS, we see this in priority, and we see this in retention. This is a good use. It's been a year of scaling those things. Of course, we grow the functions. As we open new licenses around the world, we become larger, and we invest in that footprint, it takes people, it takes controllers, it takes lawyers, in order to really build that infrastructure from a company perspective, which helps to kind of scale for many years to come. So when you add all that up with what's happened to our tech space across the year, you see it grow just over 50%, almost 500 million pounds now. That's not a pin, or kind of given the employees that I've explained, our tech accounts grew around 50% and then with some salary inflation, that's the, you can see the employee benefit expense across the year.

So, what does that mean?

Yeah, we've seen this cost grow pretty fast. It's a function of tailing the teams. It's been 10 of a year, candidly, on growing those teams and being able to do that. So I expect now, hopefully, those hard yards are behind us and this cost growth going forward is going to be different. When you put this through to EBITDA and profitability, we saw a higher EBITDA margin in this year than we saw before. Roughly 25%, almost £240 million of EBITDA, which almost doubled year over year. And I'll talk a bit more about the drivers of those. But we know that that's due to the significant increase in interest income flowing through to the bottom line. But importantly, that actual bottom line of profit before tax as well, if we look at this as well and care about this as well as Insta, almost 150 million of profit before tax.

So bottom line, profitable company. So let's step back a minute, again, before we dig into where we're going next.

Building this business is world-class fundamentals. I'll just share with you the proof that hopefully you've seen it already. This customer-led growth, you've seen the viral customers, you've also seen in here this high retention of when customers join, they stick around and that helps us grow. It's really efficient in how we invest. This gross profit margin that we generate invests in high ROI product investments that build our infrastructure, that fund this proposition, and then kind of continue to fuel this customer-led growth. And that's supported by best-in-class marketing payback. Now, the new thing here, I would say, is this wide account, which is structurally structurally supporting this active customer growth, but also keeps our customers more engaged. And it gives us this, currently, this much higher profitability, which asks the question, how do we invest that? Both for the benefit of building a much better, stronger business, and obviously in doing so, helping our customers. So what do we do? How do we invest going forwards? It's time to double down. How have we done in the past that's going to help us in the future? and keep investing in our products and our infrastructure. The product development teams and also the marketing is really what's driving the underlying growth. We'll do this, and this is really funded by our conversion process. We're not going to use this incremental interest to keep doing this. We don't want to become dependent on that interest to fund these investments. We'll continue to sustainably disrupt cross-border pricing. Over the last 10 years of what we've done, this is what's really built an amazing franchise of customers that trust and recommend us. We've done it profitably. So where we can do this, we'll continue to run our business with lower prices wherever we can, and actually continue to run that business, that product at a 20% margin. Drop prices where we can, and this continues to extend this way. Again, we'll not drop those prices using the Pinterest income. But we will use the Pinterest income to power our growth and build a much better wide account proposition. If you're a wide account customer, hopefully, So definitely if you're in Europe, you already get interest income or cash balance cash back on your product. So I'll share a bit more now, but to be clear, we'll use up to 80% of the interest income to build a much higher proposition for our customers. And we'll use the remaining 20% will actually flow down to either top. So we can talk through the implications of this. But fundamentally, when we're building a business, it's not going to be dependent on interest income. And actually this interest income is only going to power this wide account proposition. So how are we going to use it? I've talked about this 80-20. Let's try and make this really clear. I know there's a bunch of people in the room that are going to go away and work out how to model this. So just bear with me. 10% will flow through to be the top. But actually 80% we're going to build out the proposition. How's that going to work? So the first 1%-ish point. So imagine we're running at a 3%-ish point margin. The first 1%-ish point will actually cover Give us income that will result in a 20% margin on these account features. So if you imagine what this does today, it avoids the need for us to charge you a subscription. We've already reduced the end currency fees that you might need to recharge in the past while making payments in and out of your account. Customers love that. Or rather, customers really didn't want to pay those fees. So actually, we're using interest where we can to do that. Essentially, we're trying to avoid doing that to fund OPEX. It's rather funding the profitability of those features on top of the profitability of the commercial.

This is good for customers.

And then for the rest, where we've done that, which is, as you can imagine, a significant portion of the interest income, we're trying to reward customers for actually holding balance. You can do this in the EU, as you know. And we're also live in the U.S. for the product here, which is customers love on our opt-in instance. It's a great rate if you're holding dollars in the U.S. We'll try and extend this to other countries over time. We'll keep working with the U.K. and other countries around the world, but that's going to take time to scale. We'll also, where we can't do that, where we see opportunities to start, we may offer other incentives that you might specifically see with an account. Maybe we've started looking at cashback on card bets. or other fee refunds that are discretionary and purely linked to the account, but not really building this drop price percentage. So we're not going to use this drop price as an all-time general offer. The challenge we'll have is actually this is going to be really hard to do to scale up to the same expense. So in the short term, more of this is going to flow through the DAO. As you can see, we're only giving 0.6% of that 2.8% back to customers at the list. It's actually going to give us elevated EBITDA margins whilst we scale that. But we'll do it with caution, with discipline, and strictly principles that are hopefully clear to you. Let's just check where this is in the numbers. As you can see, for those of you who've done the math on the H1 and H2, you can see that we ran a 27% EBITDA margin in the second half of the year. But this was really a function of these elevated EBITDA margins. And if we just used 1%, one percentage point of the interest that we got, we'd run the, effectively, the profitability of the account features would run our factor of up 20%, which would equal the profitability of the conversion business, which actually brings us to a 20% margin at all. So actually, we're minimizing this dependency on interest income and maximizing the use of that into our proposition, which should then maximize growth, also leading to a higher profitability on top of that. What does that mean for guidance? Because all this fundamental is obvious over the next year. Our guidance for the year on income is a 28% to 33% growth for this year. And the key driver that underpins that, or gives me confidence in this, is the growth in the number of active customers that we're going to see, that we've seen in the past. We've seen a healthy momentum this year. But we need to be cautious around a few things. One is what's going to happen with VPCs. This impacts the short-term dynamics, of course. These are slightly lower, as I said, as we enter the year, and definitely down on the average for last year. And we have a faster and uncertain macro outlook, I'm sure you see across your other companies that you're looking at or cover. And then interest, we will see, well, rates have already increased since the end of last year, and we can only look at the yield curve. And we also, but also countering that, we hope to be able to return more and invest more in our proposition for our customers. So either dollar is a result of those, likely to remain somewhat elevated throughout the year. It's worth us just pointing to what are some of the dynamics we're going to be lacking? I'll just put these up now because we'll look at these shortly when we're thinking quarterly. So the first, as we enter the year, we're actually at a lower VPC than we were this time last year. So we're lacking a kind of a higher VPC dynamic. But then that's counted when we look at the overall revenue dynamics, what's happening on take rate. The actual cross-border take rate now is slightly higher than it was a year ago. So these things have different impacts. Let's look at these in the whole. And then at the moment, we've got a very relatively high kind of interest earned on our balances and maybe relatively low interest returns. And we're lapping that with basically no interest income this time last year. So income growth at the moment is quite high.

But that will change as we go through the year and start to maybe normalize as we get towards that.

So over the long term, or medium term, sorry, this is just really what's happening the next year. It's just another data point on our road. I know we focus on this. So it's this active customer growth that gives us confidence to effectively extend this medium-term guidance. We set this initially when we listed in 2021, this medium-term. Actually, every year we've moved that forward, which actually gives us confidence that we're continuing to invest in the product and actually able to continue to extend this rate at which we think we can compound income above 20%. And the chapter leaders are No real change. It's just structurally how we're really running the court. You know, we've seen harsh talks about building this network for the world's money and how the profitability on the transaction turnaround, that really doesn't change. However, when you look at these dynamics, at least over this year and beyond, whilst we're having elevated interest rates, you're likely to have elevated e-payment margins as well. Well, let's step back and step back to these things. What are we seeing in our financials? Obviously, a set of results we're proud of and a pretty exceptional year. The fundamentally true thing is all the way down through the results, you're seeing this customer-led growth having a massive impact. And we're doing that as a huge opportunity. We're growing fast. We're really efficient in what we invest in. The investments we're making in product are thoughtful, focused, and have an impact. So we're backing that up with super high return marketing. And then this account is what's really powering our growth. And it's interest dynamic is letting us double down on that significantly. Following our principles of sharing these economics with customers also will lead to higher profitability in business. On that, I'm going to say thanks and hand back to Christo before we take any questions. Thanks, Matt. And I'll very quickly zoom back even further up because the investment strategy that Matt is working over the middle of this section is working. So over the last four years, it has worked We're doubling down on this. So as a reminder of what's going to happen, we're investing in those same things that are going to drive the new customer growth over the next three, four, five years to come, which will then be driving the volume engagement and our results. We're going to be bringing the benefits. We're going to be improving the experiences, adding the new account features. We're going to be extending our footprint, and that will lead to new to new customers, more customers. And as a reminder, this is how it all stacks together. We're solving a large problem. We're evangelical. We're obsessed, and our customers, therefore, end up being quite evangelical about our products and what we do. And this is all enabled as a secret sauce by this infrastructure that we've built. We've replaced how the money moves now with infrastructure that harsh took us through. And as we saw from Matt's presentation, it all turned up on our P&L and balance sheet thanks to the social constraints that we set on ourselves in a sustainable, profitable, growing, fast-growing business. So with that, close here and look for questions. I think over to Martin or Sudha. Thanks guys. We'll start by taking Q&A in the roots. If you could raise your hands. You won't need a microphone when you get picked up by the ceiling mics, but if you could just raise your voice, that'd be great. And then we'll take some Q&A online shortly after. Okay. Matt, do you see the people? I don't know everyone by name. That's my point. All right.

All right. Thank you. First, maybe help us a little bit with how you think about the competition of income between interest and what's coming from revenue and just how to think about how it all flows through. And then just secondly, anything you can say on the outlook for pricing as you see it today.

Great, thanks. So I'm assuming everyone online can hear. So the competition of income you can see this year has changed so that we have an increasing share from interest. But really, I think Just stepping back from this, we expect this active customer growth to continue. But if you see from where we are at the end of the year, we're cautious around assuming that's going to recover and mindful where the macro is. So how could that go through the year? Overall, that should give us a volume dynamic, which I'm going to answer the second question in here. So our pricing, we haven't... Actually, pricing has gone up slightly higher to the second half of the year in cross-quarter pricing. So that should support, like, pretty steady revenue dynamics throughout the year. Yeah. And then, of course, we're going to see continued interest income throughout the year. But actually, like, kind of set balances, you know, balances will continue to grow at a slower rate. So I feel this interest income will be a meaningful element of the income through this year. So, James?

Yes?

Thanks a lot, James. I'll go for a couple as well. Just to follow up on the account balance's point, you were quite clear that we should anticipate a slightly slower development because of the law of large numbers and because of also the increasing popularity of some of these other products. I don't think we know exactly how much money is being held in those other products, so I wondered if you could give us a bit of a sense of how much money you are seeing flow to things like the fixed income products and the share products and how you think that's developing through the first quarter on the account side. Then I'll come back with the second one.

Yeah, so we haven't guided on these balance growths. We haven't disclosed either just how much money is flowing into assets. What we can say is, like, this interest price has gotten pretty... I mean, remember we just really only got this purely live in the UK and it's growing in other jurisdictions. And it's actually very early to disclose that. We've seen that's become more relevant than ever in the last three or four months. I think that's what's been going on in the world. People's trust... in a product like this, as well as the ability to earn interest and get instant access to your money is pretty cool. But it's very early to, like, kind of record these numbers and explain that. We'll come to this. And I'm sure we'll throw it out in the coming months and quarters and years. Well, that will be as much impacted by launching that in new countries and new geographies with new products over time. So it's got many, many years to develop this product. But it is having an impact on our, you know, you can see this in our balances. We do see a reasonable amount of money moving from customers that either had balances, myself included, that have opted into our assets product. It's a very awesome product. It's definitely all tried out. And then, obviously, new customers joining and moving straight to the high base. And I think where people are is they're absolutely in the right place. And, you know, like, so... So I do think, you know, just if you look at the incremental billions added, you know, like you can't be thoughtful on this as you look at that through this year.

The other question I have is a bit of a more general question about just the strength you're starting to see or have been seeing in some areas like the rest of the world. I wondered if you could drill into that a little bit. Is it Brazil and society was causing such success there? And I guess more generally, you know, I've often thought about why there's quite a developed market. But it seems like you're all the time increasing your geographic reach, so perhaps you can just comment on the evolution of the infrastructure and the customer proposition.

I'll give the number and then I'll give the context. In the rest of the world, Brazil is having a pretty healthy impact. It's not just Brazil, there are other markets. Whilst Brazil is having an impact today, there might be other markets that are earlier on that journey. Yes, there's a lot of fronts for this that can have an impact on this over time, but Brazil's certainly been an interesting, fun, successful one to watch.

Actually, we don't see our product to be a developed market product. We actually think this problem exists for the whole world. It exists in different price points, different speeds, and it is, again, going back to infrastructure. when we build this and launch it in a new market, there is a drastic difference in what big companies can provide versus what they can provide. So to give you, talk about Brazil, like we've seen very good growth in Brazil. Brazil is a very viral market. It's a big market. And when things work, it really works. And people tell a lot of friends. So we see a lot of people who buy there. But also, we are also heavily investing. We are, as I mentioned, directly integrating to the central payment system there, which is called PIX. Forget about just cross-border. If you look at what's happened in Brazil in domestic in the last year, PIX was launched about two or three years ago. And the story there is very similar to what happened in India with UPI, where suddenly it's just gone berserk. Everybody is using a lot of payment methods, and they're just using PIX because it's instant and it's cheap. So then we tag on to that revolution, and then we get access, and we build on that. So just an example. It's not just a – it's like we see the problem existing everywhere. and it's just the quality of the infrastructure and the products we can put on top of it, which can really drive the growth.

I'm just actually for the telecast, like Kim, to come to you next, can you just say Australian and where to come from, just so that we've got the benefit of those on the listening end.

I think a question that sort of follows up on this, how much of current flows of the 105 billion that you how much goes via your own rails and how much is using, I guess, effectively the switch system. And another question, maybe you mentioned somewhere you're building that sort of new infrastructure. Is that basically sort of a replacement for the switch system that you're building? Is that the way to think about it?

Do you want to say how much?

I think if they're rounding our calendar system. I mean, we have an integration system. It's a

Fine. Customer-facing flows, I would say, as Matt said, is not an error. And that's why we can build this amazing proposition where it's instantly, you can't do this stuff otherwise at scale with Swift. And yeah, I mean, the way we think about it is, Swift's a great partner, don't get us wrong. But generally, I think, first of all, the market's big enough where there'll be different solutions. But we do think by controlling rate, end-to-end, pay-in, pay-outside, and running the networks where we are, and building a deep integration into every local payment system, we basically can control that full end-to-end experience, which gives us a big edge on what has existed so far. So that is basic. And that's why we talk about, when we talk about what we're building, we believe that we're building the new networks for money.

Just one caveat of correction. I think we ended up using Swift as a shorthand for corresponding backings. Just to be really clear, the thing that's not broken necessarily is not, the thing that's broken is the corresponding banking model underneath that we're replacing.

We're not quite replacing it with the other thing. Exactly, it's just the messaging system. Eventually the money moves to part five. Thank you. Cool.

Thank you. Hi, it's Mark here from Investor. You've been very clear that you don't want to be sort of reliant on the AP, I just think, and the challenges in some instances of sort of returning that to customers. How important is it to you to hang on to those customer balances? So, for instance, if customers became more rate conscious, started jobbing around, you know, why does it always need to be the best rate in town? Is it very important for you to hang on to those cash balances given the problems in some instances you have actually returning those to?

That's a good question. I'll try and answer it. Actually, I'll just say probably I'm passionate about this. having cash balances is a byproduct in the first place. We never intended to, but it's a byproduct of people using the Wise account, and especially businesses using the Wise account to receive money. So you kind of need to put it somewhere. And soon they realized that having this, like Anita talked about, having this international operating system, international operating system, it's just so convenient where you can take money and keep it in any whatever currencies and have the fastest way of distributing it wherever you need to. So, Cash balance is a side effect. And then it's an important side effect so people care about where they hold money and whether they're losing while they're holding money or they're gaining while they're doing it compared to the central bank rate. So it does matter for us to do it well and it does matter for us to provide that operating system, but we're not reliant on the income received from that. And in fact, the more of that we can... that the customers can access directly through the assets product, we believe this increases the evangelical nature of the customers so much that it's so much more valuable for them over the longer term through what amounts to the experience that they're getting. So, no, we're not reliant on it at all, but we see the benefit of customers being able to and being willing to hold their transitory cash in place.

Pete Anderson from Libram.

Two questions, but I don't have time to respond. First of all, could you just talk us through capital allocation plans? Obviously, corporate cash and balance sheets are going very strongly. I noticed you picking up a bit on the share price, that's the EPP. You're also still paying a lot for the RCS, so maybe a similar element there. What are the plans for that cash that may be returning to shareholders at a later date? And also, do you need to renew the RCS in two years?

So we have, that's right, we are generating a healthy capital base and cash flow from the company. And we've also, so really we're trading two things here at the moment, at our point in time. So one is we've built already and are continuing to build a really strong balance sheet for a company with healthy cash flows and very healthy liquidity. And we're very early in doing this. We've done very well over the past and we'll continue this. So on the flip side, we also really care about dilution for our shareholders. So the thing we started doing was saying, well, actually, we can definitely afford to, from this cash flow, offset the dilution from our stock competition. And that was the very first step into this foray. So at the moment, we don't have plans to radically change that capital allocation. But what you can see is we've got increasing capacity as you can see out of this period for those choices. And to your point on RTF, I think the rate we get on the offset is a very modest rate over the SOMIA. So actually the rate we get on that, the reason we, actually the normal question I get is why do you use an RTF and not like a bond or something like this? Actually the rate we're seeing there is pretty efficient. pretty effective as a rate and supported by our good supportive club of banks which we appreciate. We'll review that over time whether it's replaced or whether it's a different mix but right now it's we don't disclose the rate on it but it's an efficient use of cash. It's an efficient source of funding which we use and it's continued to scale actually. Both of those we'll review from time to time.

And then the second question, if I may, is obviously, you know, core part of the mission statement, ultimately making cross-border transfers free.

Yeah.

But then it looks at another way, over the last five years, cross-currency takeover, you know, especially to give us a broadly stable, I guess, and volumes are up fivefold. So I guess the question is, when should we start to see scaling effect?

You know, it's going to be material quantum change in that pricing dynamic.

I... So from a scaling perspective, we have seen this. If you look at some of our currencies, they've definitely got cheaper over time. And also, there's a dynamic in there where we've added currencies that have grown at higher techs, and it's definitely a mixed fact. But over time, we've seen these time horizons we're talking about today. We've definitely seen, we've continued to put downward pressure on these prices over time. But that path is not going to be linear, particularly if we've done the discipline of How do we charge the lowest we can rather than what we can get away with? Which means as we manage to scale those costs, it will go down. But actually, as you've seen initially, like where we know we need to grow our operational team to improve the experience, our customers really value that. And that takes pressure on for us. I think those are some of the dynamics. And we're also surprised that we continue to invest significantly in our growth, which we think is really valuable. I think it's, Chris, there's a question close to your heart as well. It's probably worth sharing your view on this. We go as fast as our unit economics allows us to. The important thing is, in many markets, we've achieved more. I think Brazil is a good example. Prices have come down through multiples over the last few years. In other markets, it's gone up a little bit as our cost base has increased, or we've gotten better at attributing our costs. So it's a mixed story. I expect that the stories are down the drain. I think fundamentally, what do we know in years? People are going to want faster, cheaper alternatives than they have today. We're already radically cheaper than the banks. And our challenge is how do we just keep down with pressure on that over the long term? So that's what people come and love us for. And we've got a commitment to doing that as well as we can. We think we're doing it. Relative to competition, though, a pretty strong job today.

That discipline and that focus is not going to leave the business. Hold it properly. Thanks. DJ. Okay, from Bank of America.

So, especially on the macro, you talked about, are there any, apart from the higher value cohorts, are there any other products or customers and job opportunities or segments where you're maybe seeing some change in behavior If you just comment on that.

I'm going to see quarter-on-quarter movements. We'll see that at the last quarter, and I'm sure we'll see that over the coming years. I would encourage us to step back from this, from what are we seeing. We're seeing more and more customers adopt. Obviously, there's more and more customers joining WISE every year. That's growing pretty consistently. They're sticking around, and they're using our WISE account. Even the structural trends that we see in our customer base that are driving this systemic compounding growth in the number of customers. We'll see, just like we all will, see volatility on a daily, quarterly basis on how much money people are moving. And there's certainly enough drivers of that with macro today. If you just look in the longer run, like this stuff is how we invest and where we focus, especially these systemic drivers of active customer growth is where it gives us this focus. Nothing's really changed in what our customers are doing, I think. They're doing more on the wide account. We'll see ups and downs, but I think what we'll see by the end of the year is continued growth in the number of active customers, more using our features and those features supporting our growth. That's it.

Then as part of the topics where you spoke about the investors you've already done, do you think that you're sort of past the peak in the OPEX growth that you've done? a lot on the operations side of things, on the development side of things.

From here on, incrementally, it should be... Well, last year was a pretty tiring year from onboarding and hiring people. That was a pretty phenomenal, amazing, we pulled it off. But, you know, like, we planned those yards and we leaned into that, so... definitely the rate at which we're hiring going forward, or growing across base at least, ultimately this aligns to the rate at which we grow our, sustainably fund that with the rate at which we're growing our volume closer. So that's right, and you can trust us to keep ahead of what we're seeing and plan very carefully and continue to run a profitable, sustainable business all the time.

I'm wondering, this might be a question for Chris, I mean, how do you sort of see that change in the competition-wise on the infrastructure ? Yeah. The key thing here is like, what, are you going directly or are you going with partners? As you said, there's a lot of people who are in partnerships, some are using PSPs, some are using aggregators. Eventually, the quality of your network and what you can control end-to-end is based on what you control, right? And I think our thesis is that the more we own stuff directly and the more we have it for the longer term, we get independence from others. And then we control that speed, cost for the longer run, right? And that's shown for us, at least, the way we've invested the last 12 years. This has come true, and that shows in the proof points we have with the 55 cents and other numbers we have. I think that's a big differentiation where we actually want to own the entire rails through to the pain in the payouts. And that's a big business strategy. One other thing I will share is when I talk to a lot of my platform partners, right, and everybody else too, One of the things that's coming up now is people are realizing that actually the consumer business we run has been an asset for us in understanding there's more to running cross-border than just the rails also, right? So we've understood, oh, when we get on these rails, these products up, how does that impact contact rates? How do we onboard customers better? How do we build in better experience to get the document uploaded? And that translates into helping our partners build better products which have lower contact rates, better onboarding experiences, right? versus if you go with some of the other players who are just B2B, they say, here's the rails, everything else you have to sort. And we do see that sometimes they'll go with somebody else and then they'll come back to us. I don't know how to run cross-border. You know how to run cross-border. I think those learn examples of B2C product is helping us. But on the interplay, we believe we should own full end-to-end. I think that's the big differentiation with this partnership. We do have bank partners where we have right now, and they're very stable ones, so that helps us.

Thank you. Thank you. Just going back to the net interest income policy I think investors are obviously pleased to see the 20% being sort of fed through to EBITDA but at the same time I'm curious why not hand that back to customers by way of fees because obviously the long term mission is to reduce fees it would be a good opportunity for that to play out that way so just curious on that that's the first question

So there's obviously a number of things to factor in that.

So if we're going to offer a radically lower fee at some point over the long term or the future, the company that can do that successfully is the person that can do that at the lowest possible unit cost and survive with minimal oxygen at that point. Think about take it to its longest. If we're dependent on interest income in the short term, kind of avoid the need. You know, our team's got, in this building, maybe in London, 1,000 people, 5,000 people around the world, pretty religious around driving down the cost, the price is cost. Clearly, this topic's come up. If we do that without reducing down the cost and sustaining a profitable business over time, it just delays, it really just delays the the need to actually build a leaner faster machine. And actually if you hook up to a cyclical revenue stream, actually it can be quite dangerous. It's the same as maybe raising a load of venture capital and spending it on free payments whilst you try and get yourself, you're actually building a profitable business. We took a very different path for doing this a long time ago. It's a very successful in helping us build this business. So our principle is like, you think this, but actually it's very... you know, it's actually much, much smarter and more robust from a, you know, how can we guarantee for our customers we're going to be able to do this in five years or in ten years? Actually, to take the hard part now, which is what we've done always, build a stronger business over the long term. So we are aligned that we should pass this back to the finance holders rather than people who transfer, but people who hold balances. And it's the magic of how we're able to do that. We'll get care over the next

I just want to follow up as well please, different topic, just on the speeds and the dividend payments up to 55% from 20% in the last four years, so super impressive. Where does that go from here? What are the kinds of things you need to move that on and how can that kind of drive the business for the next two, three years as well?

We will continue to connect to other systems. There's quite a few of them we're still connecting to. We can access that quite a bit right now. I see there's a natural evolution right now happening in the overall ecosystem of payments. A lot of payment systems are getting upgraded. We can see that has happened, for example, in the U.S. The U.S. has been behind on instant payments for a long time. They've launched RGP, which is a consortium of banks, private banks, a private set up with CCH. But that's also been going live this year. As that gets sold out, expectations and payments will go up a bit more in the U.S., right? So other markets are going to come up along the way over the next five, six, seven years. And we'll be at the table asking for major taxes, right? And again, one of the things that I tried to explain in the presentation, I don't know if it landed, was if you're a regulator, think about if you're the U.S. Fed. or if you are Singapore, you control the payment system and access to it. Your job is to make sure there's financial stability and low risk in the payment system. But you want some competition. But they don't open it to everybody. Then when they say, let's add some banks for access, let's add some other people in there, usually they look around the world to see who else has done this, and usually we're standing there. raising a hand and then you should get access. That's kind of like this question that I get asked, like, why can't a new person raise a lot of money and just get access and do the same thing? That's where they look for experience also. And this is where we see, I mean, I think I can totally see the numbers going very, you know, over the five, six, seven years, close it, another 10 cents, and then it gets hard, like the 80-20 rule gets much, much harder.

Martin, another question for the room.

How's, are you getting things? for the folks online. Thanks, Matt. We'll take some questions online now. We're going to start with the first question from Justin Forsythe at Credit Suisse. Justin, over to you.

Hey, guys.

Can you hear me?

Yeah, we got you.

Hey, good morning, everybody. Thank you so much. A couple for me as well, if you don't mind. First one for Christo. So I think we've heard a little bit about the kind of alternative rails, but I want to ask a question a little bit in a different way. So I think in the past you mentioned that you would potentially leverage different rails on the back end if they could be cheaper, faster, et cetera. I'm just kind of interested, and maybe this is a question for Harsh as well. Like, in the case, let's say blockchain became that, you know, how would that work mechanically? Meaning, do you have the setup to be able to nimbly move to another rail in the back end? That would be my first question. The second question was for Matt. I just was wondering if you might be able to parse through a little bit the kind of drop-through slide that you were showing with interest income. So I think what you were talking about is how you were going to spend the proceeds were a little bit different. Just walk through, because it seems like some of the stuff that was tagged for spending with interest income, some of that would be cause-related, some of the interest and payouts and benefits, but also some of that would be topics-related. So is there going to be a way, I guess, to... evaluate whether those numbers are being hit or not. And does that just mean that the core business is going to do 20% EBITDA margins? As we've kind of asked in the past.

Thank you. Cool.

Okay. So on the blockchain and alternative... methods of moving money. So, yes, I think we definitely are nimble enough and fast enough that it actually came to a place where it was cheaper to use other technology, whether it's using a specific crypto or coin to move money and move ownership of funds across borders, or if there was some other way we could use blockchain, we could easily take that into our system. I mean, actually, if this were to come to fruition, it first of all has to be cheaper, much cheaper than what we are running today. moving from fiat to fiat, and that's what we've seen. It's not really happening yet. But if it were to happen, you know, practically, it would be just adding another asset class to Y's account for consumer, and then you'd be able to transfer that ownership to anybody else's. Pretty standard stuff you could do. But right now, it's actually much cheaper to do what we're doing and much faster, and we control that into an experience. From a regulatory perspective also, it is actually less hassle.

So let me answer the question on use of interest. So as we said, there's a few principles here that we first apply. One is like how do we avoid becoming overly dependent on this business? And the second is how do we use this to say the other questions you've asked, like can we power this account? Because it also drives this structural profitability. So how are we going to use that? The first is we'll try and pay – the first is actually one percentage point that we're using, as you can see. is actually making the wide account features at a 20% margin. That's what we've always had in this cross-border business. And we don't expect that to increase. So if you think about that, that basically covers the marginal costs. We have income on the account, revenue on the account, but this tops that up to make sure we get over this 20% margin. And then the rest of it will be used purely for, primarily for account-based incentives or however we want to talk about it. So ideally we can pay interest. or it's cashback in Europe, it's the same thing, on balances. In the US, we can pay interest. In the UK, we will have to try some other things around incentives. We've already started things like cashback, but these will be like discretionary incentives relating to the account activity rather than funding significant levels of OPEX, which we become dependent on, or plus what I've been calling quarter pricing. This is quite an important distinction, and so to the earlier question, it's very tempting to do one, but actually it's very important that we say discipline and stick it out as we've outlined. We'll kind of slip it out for you so that you can understand what's happening, because some of these might turn up as contrary revenues that are just contrary interests. But actually, we expect a few things. We expect to limit that to 1% response. And then we'll work towards this 80%. It's going to take us time to get there as well because we're going to be quite thoughtful in what we're going to do, you know, with scaling where we can pay interest or operationalizing other ways to offer rewards on the account, as Chris said.

Got it. Real quick follow-up there, Matt. The 1%, sorry, that's a percentage of gross interest income. Or could you just quickly walk through what that was?

Exactly right. Exactly right. So that's one percentage point. So if we're earning 2.8%, I believe, at the end of the year in the quarter, the first one percentage point. So 1% or 1.8 left rather than 1% of the gross interest. So what it practically means is rates at 1% would mean our wide account features are actually running at a very healthy profitability. which helps us avoid customers paying a fee or reduced levels of fees or reduced level of account charges on the account. And this is at a rate that is very low. I mean, historically or long-term, where rates are and where rates are expected to be, this is a very low level of dependency in our view. It's worth taking because it gives us, it gives customers a great experience and really addresses some of the bunches of the questions. All right, 1% of balances.

All right, thank you so much, guys. Really appreciate it. Thanks for the question.

Thanks, Justin. Next question comes from the line of Hans Liebner at Jefferies.

Morning, Hans. Morning, everyone. Thank you for letting me on. I have a couple of questions. So on slide 44, you stated this extension of the onboarded services. Basically, you onboarded 4.5 million customers growing at 40% year-over-year. Given you stated that you have at the moment 10 million active customer, could we think that five and a half million of those customer, existing customer and the other one come on new? Maybe you can talk a little bit about those moving parts. The second question is on VPC. You talked about basically the current trading trends are slightly lower. Could you disintegrate that between personal and business? And then just thinking over the long term, you want to expand into new geographies. You referenced with a nice video around Colombian users. Average monthly income is around $1,000 in Colombia. In Brazil, it's closer to $2,000. So how should we think that how they translate into VPC going forward? And then maybe I have a short follow-up.

Okay. I will go to the first one.

Thank you.

But I might just get mine in to repeat the question. So on the first question, yes, we did have a really healthy number of customers joining us last year. And then when customers join us, they use us, and then some of them come back every month, some of them come back every year, some of them come back less frequently. So actually, we talk about the people. That's the number of people who made their first ever transaction during the year. The active customer base includes those that are continuing to repeat. You see we have this 6 million even on a quarterly basis. So, they're a slightly different currency. So, fundamentally, what it tells us is that cohorts, you know, if you go back to the volume chart I showed you, I think it was the same chart, actually. It's like 44, if I remember. It showed that actually the volume that we're getting from new customers over time has continued to grow, and those customers stick around. So, basically, that just continues to grow through this volume retention over time. The number we showed you shows you the dynamic of those cohorts continuing to grow over time. It's just this contribution to growth. I think the second question was around the trends of BPC. We'll talk more in a couple of weeks when we talk about our Q1 numbers, but broadly the dynamic, and it's too soon to close the quarter now. We're not there yet. So there's some ups and downs dynamics across geographies and segments, but broadly we've seen this BPC increase. I would look at it as roughly maybe slightly down quarter on quarter. We'll share more on that dynamic in the coming months, in the coming weeks. Broadly, I think we need to remind ourselves of the longer term trends of active customer growth. And then there's another question for I think that was the second question. Yeah, that was. Was that our first? Yeah, the final one.

No, there was the second part. The second part of the VPC question is, are customers in different jurisdictions in different countries? And what the impact is on the VPC?

We do have a different mix of customers joining us over time. But actually, the impact on... There might be an impact on VPC of this, but the primary impact we've spoken about is that over the last four years of different payment volumes. That's the dominating impact we've seen. You know, these customers, you know, we're launching this customer around the world, but the problem's the same. There's problems with fast, slow, expensive payments. These customers move volume through us, and they get a great deal. Actually, the economics of all these customers that we're launching and the way we price, they're all profitable. We don't subsidize the crossroads. Actually, it's pretty healthy profitability wherever we're going. And also to keep in mind, I'm glad you referenced Anita. I think she's a business customer in the United States, actually. The reason why she can run her business and why is that we reach many, many corners of the world. And that's why it's worth expanding the infrastructure into maybe lower GDP economies.

Great. And then just a quick follow-up on personal expenses and then basically related on the job hiring aspect. The whole personal expense is quite increased substantially in the hiring. This year, I think 1,700 people. Can you maybe give us a little bit of the idea where you need to grow the headcount base to have the business set up and for consistent operational leverage going forward?

Yeah, maybe I can start and then Matt can add. So, yes, we have invested quite a bit over the last year, mainly driven by continuing to invest in our operational servicing teams because we have a lot of demand coming in from this customer growth that we are seeing already. And we want to make sure they have a great experience. If they need to call us, if they need to onboard and have issues and things like that. So we have invested in that. And also, in product engineering, like some part of my organization, a lot of that is, like, continue to build and opportunistically invest in these different long-term projects that we've done, for example, investing in Australia and others, which requires us to have people from the ground to basically do the direct integrations. We know that this last year was a lot of investment, and we onboarded a lot of people as fast as before. We're hoping through the next year and onward, this trend will be slower. We've done a lot of investing last year.

We've given our guidance to you. We're committed to running this profitably, so that should tell you we'll manage our cost base if we need to. We can talk more about this in six months.

Thank you. Thanks, Hans. The next question comes from Josh Levin . Hi, Josh. Hi. Can you hear me?

Got you. Hi. Great. Two quick questions. So, it looks like the other fee take rate, other fees divided by volumes, looks like that was around 15 basis points in 1H last year. Then it increased to 17 basis points in 2H. Can you talk about what's driving the increase in the other fee take rate and where that 17 might be headed to? And then separately, in today's press release, you talk about direct connections to four payment systems. I think that number used to be five or six in previous presentations. If that's correct, can you just explain what's going on there? Thank you.

It's basically four. So I don't know if that was... In Europe, actually, we have a lot of access to it, kind of, you know, We basically have UK, Europe, Singapore, and Hungary. And then we are very close to launching in Australia. That would be the fifth. That's directly connected.

Exactly. So we've got permission to integrate into Australia. We're just in the process of doing it.

Maybe it was test releases. Maybe we got the permission. Maybe that's what you read.

Yeah, so it's not gone backwards, Josh. I haven't heard back from him, which is good. So the first question is what happens to this other take rate? Well, the first thing on this is actually our cross take rate is actually we almost set this because we set a price and it reflects the price we set on the volume. This other take rate is actually the price this way per se. So this reflects the interchange we may get on cars, the fees we may get on domestic volume, actually not on cross-border volume. So actually the take rate is an outcome, if you like. And what you're seeing there is the absolute pounds, millions of revenues growing year on year. And the reason for that is it's just usage of the accounts. You can see that in the balances as well. It's continuing to grow. The question is, where is that? So how many pounds of fee income on the account will we get per pound of volume? It has been increasing. It's actually, despite us actually starting to give things like 10 currency payments for free, it's still managed to go up. But I would just keep taking those considerations as we go forward. It's been increasing. We expect it to continue to increase. But, you know, at a steady rate going forward.

Thank you.

But underlying, it really reflects the account section for growth, and that's what's actually driving the revenues.

Thanks.

Thanks, Josh. Thanks, Josh. And the last question of the day comes from Mohamed Mwala at Goldman Sachs.

Oh, hello. Thanks. Great. Hi, Matt, Christo, Harsh.

I had to, firstly, Matt, you talked a lot about kind of driving, you know, the kind of the volume, but also kind of adding added services. So as you think about sort of that existing customer business, could you help us kind of decompose the kind of the margin structure on, you know, existing customer versus a new customer? And as you build that kind of lifetime value, kind of how that sort of margin on existing customer kind of evolves? And as we think about kind of the long-term sort of shape of Wiser's margin, I know you've sort of given us current guidance in the kind of, you know, low 20s, but how should we think of the shape of how that margin can evolve given these dynamics? And then the second question, and maybe for Crystal and Harsh, is on the platform business. I increasingly hear more and more you guys talk about this business, how this contributes kind of the vast majority of your medium to long-term revenue. Has there been specific kind of catalysts? I know you had the platform event that kind of gives you kind of that increased confidence, and how should we think of some of the kind of partner additions? I know you've made some good additions in Asia, but how should that sort of evolve and when this has become a kind of meaningful driver around the growth rate? Thank you.

Let me answer the question first. The thing about our unit customer economics, actually, as you can see from the payback on our marketing, what you can learn from this is that actually if we didn't, you know, the customers before we spend the marketing money, they're actually very profitable in the first year. So we don't wait for them to pay back. And we do that because we've got very healthy economics on the first transfers that they're operating, that they're running on. Yes, we have an onboarding cost up front. But actually, even that is paid back relatively quickly. Typically, most are onboarded pretty automatically, very, very quickly. So it's not like a... And the underlying e-commerce customers, they're very good from the early days. Yes, we spend marketing money up front. Yes, we spend onboarding money up front. But this is structurally very profitable early on. The question on long-term marketing or medium-term margins is fundamental as to how we run all the payment volume and the infrastructure is had a robust 20% margin. What we're seeing that's new is how does this interest dynamic track through to margins? And as you can see, whilst we have higher interest rates, the 20% that will flow through will track through to higher EBITDA margins over time. So maybe those interest rates are not permanently high. But whilst we run with this model, which we're going on that journey, and we expect that through this year, Definitely in this mid-term, it's going to track through to higher margins. Five years ago, I was just thinking about this, five years ago, we were really focused on cross-border and predicting five years in the future what our margin structure is going to be. I know it's a hard thing, but what we do know is that we're going to keep moving more and more money for people, more and more money for more and more people and businesses around the world. We're going to do that with an underlying, very profitable business, and that will keep us going. I know the West African, I think there's There's no specific catalyst. There's two groups that Harsh mentioned, which were we've seen more traditional banks, especially selling in Asia. I guess they're slightly faster moving. So for banks, it's always a change is hard and slow. So we see the Asian banks actually go faster, the Shinhan Bank, Mandiri, etc. And we see the US challenger banks, generally challenger banks, go faster as well in the wide platform adoption. I think one of the catalysts I just wanted to add to that is as the years go by, banks do see their customers using WISE. And for them, it's increasingly valuable to bring these customers back to their own platform, which is their own apps, which is what we're supporting with WISE Platform. So the logic for our bank partners a lot is they see the customers using and getting benefit of WISE, and they would much rather, and we would much rather them have that in their own apps. Thank you. I think that's it. So thanks all for, especially those who come to the office. It makes it really special for us having you in. It does. Hopefully you get to know each other better. Thanks for all the questions online. An exceptional year with a lot to learn and we're quite excited about the future. Thanks very much. Thank you.