Wise plc

And can I just check we live now on the web stream. Yes, we are great Thank you good morning, everybody, thank you very much for joining us here today for wise plc half year results for fyi 25. we've got some prepared slides which we will talk you through and then we'll move on to a Q amp a session where we'll start in the room and then we'll move to our zoom webinar for any further questions. So, we have our CEO and co-founder, Christo Karmann, who's going to speak to us a little bit about the progress that we're making, business and strategy at the infrastructure. And then we have our newly appointed CFO, Emmanuel Thomasson, who will share with us our financial results. So, with that, over to you, Christo.

Thank you. Obviously, we have Clicker. Great. Thanks, everyone, for coming in in person. Good morning. And... Before we actually go into the results and look at the progress that we've made in the last six months, I thought it's a good moment, again, to zoom out a little bit. So look at the period of, let's say, four years since we listed and now. So what's happened? So you see that compared to the four years back, our cross-border business, effectively the active customers, active cross-border customers and cross-border volume, has grown about three times over these four years. And the wise count, which back then was in its early days, the investments there have kind of started to show now. So over the four years, this has grown more than six times. But maybe... More interesting even on the slide is that when we look at the underlying income now, this has grown faster than the business that we're building. So the business has grown like three times. We've managed to reduce our fees over time, get a more aggressive price point, and yet still our underlying income is growing faster. It's a great proof that the mission that we're investing behind This doesn't make a difference to our customers. At the same time, it's producing many multiples larger business to our owners. So we believe that money should work without borders for businesses and people. But there still is a huge amount of friction, cost, and stress when we're extending our lives across borders as people or our businesses are trying to do business outside of their home country. So let's remind ourselves of the scale of this challenge. So firstly, When we look at people, we estimate they move about 2 trillion across borders. And it's growing pretty fast. We're doing about 5% of this. Small businesses move another 12 trillion. And that is where our market share is still in its very infancy. So we're less than 1%. And furthermore, additionally, larger enterprises, they move another 13 trillion. And while we don't intend to address them directly, actually as we serve banks through our platform and some of the large enterprises, we are gonna be seeing our infrastructure being used for that group as well over time. So while today we move about more than 100 billion last year, we're building a network to move trillions. And while we have a great start, we're still scratching the surface here. And while we saw on the first slide that our long-term strategy is bearing fruit in terms of the numbers, I'm going to take you through the things that we are investing behind today, right now, to get to the next $100 billion on the way to the trillion. So I'm going to talk through the infrastructure that we're building, which is powering the products that we serve for our customers. And then Emmanuel later is going to talk through the financial model and how this all hangs together and lets us invest for our future growth. So most people know why there's a smooth and convenient app. And many don't realize that what we're doing here with about 800 engineers is building the infrastructure that's powering this app. The apps are easy to replicate, but the infrastructure is really what makes the difference in the cost and speed and experience that we can offer through those apps or through the platform. So when we go in further, what does this infrastructure really mean? It allows us to operate in 40 currencies across many, many more countries. It is the unique combination of regulatory licenses, technical integration, and operational capabilities. It's powered by an operational team of 6,000 people, of which more than 800 engineers are probably one of the largest engineering teams that are working on a cross-border money movement problem anywhere in the world. So I'm only gonna show a couple of developments. This is a massive kind of thread of work that we're building, but I'm just gonna highlight a couple of developments from the last six months just to bring it to life for us a little bit. So first of all, the service, the customer support that we provide for our customers. That should be as instant as our transfers. So we've been supporting our customers 24-7 over email for some time. But now, a few months ago, we managed to get our phone lines to 24-7 support as well. And even more recently, we managed to bring back chat support, which, given all the technical developments, is a great interaction mechanism, and recently launched chats 24-7 as well. Secondly, our licenses. So we hold now about 65 different financial services licenses all around the world, ranging from making payments to holding and handling money to making investments. And in the last six months, we've added two more. In India, we secured approvals to improve our outward transfers, removing a previous $5,000 cap. And while we're already delivering about 10% of all the world's payments to India, according to the Reserve Bank, this is the first step of many to come for us to be able to serve Indians directly in India. In Australia, we've been granted an investment license, which opens up the opportunity to do interest paying assets feature for Australian customers later this year. That builds out the wise account for Australia that's already very popular, but I think this will make a substantial difference. Next up on the infrastructure story, direct integration. That's another thing that sets us apart. To move trillions, we intend to be directly connected to all the payment systems in the world without the middlemen, of which we now have six live with a further two on the way. And let me just remind us why that makes a difference. Direct connections are very hard, but they are fundamental to creating the experience that our customers want to talk to their friends about. Regulators rightly want to ensure that highly qualified operators can only have access to the usually nationally strategic financial infrastructure that these payment systems are. So we are now operating live in six integrations, and the sixth one was Philippines that was added this week. or actually a few weeks ago, but we announced this week as we opened up Instapay. And just to put some metrics in of how do we see that these instant connections are making a difference? When we launched the UK, that was the first and the hardest one. Our bank costs came down about nine times. So that was the effect of this. We actually talked to you about Australia last time. So now we've seen that the instant transfers to and from Australia have gone from 24%, which is already pretty decent, up to 83% now through this instant connection. And in Hungary, when we went instant there, we saw that because the money's already there before any customer can contact us, there was no reason to contact us and therefore our support costs went down and other operating operational costs. So now two more integrations are on the way. In Brazil, We're already bringing more transfers in and out of the country than any other bank, any other local bank, according to the central bank statistics. And the direct PIX integration is gonna make a difference there in terms of the experience and the reliability of the infrastructure. And we were the first bank to become a participant in Zengen. Quite recently, we announced that as well. So why am I still talking about infrastructure and these subtle proof points? Well, because 70% of our customers are coming to Wyze because someone recommended Wyze to them. And usually when someone recommends, the conversation goes about either how much money they have saved by switching to Wyze, by how they transfer, arrive instantly on the other side of the world, the transparency of the fees, the reliability of paying and getting paid. And a great indicator of progress of especially the infrastructure part is this chart here where we see our instant payments have come down to 63%. And as we flagged in June, we've been able to set the lowest price point so far as our efficiency gains in our unit cost have come through. And in the most recent quarter, our cross-border take rates on the cross-border payments was 0.59%. And we also know for the fact that 100% of our Wise platform customers are partnering us because of the infrastructure. So keeping on those price changes, the recent ones that we've made in the last six months period have actually made Wise more attractive than ever. We've seen that when customers send larger amounts of money, they are actually more likely to work out what the bank is trying to charge them in terms of the hidden fees they're trying to hide in the exchange rate. So this is a good moment when doing larger payments for people get educated and they start looking around. It is therefore also very helpful for us to be super competitive on those high amount transfers. So with the launch transfer customers, we now give a dedicated support experience. And thanks to our recent price changes, we can serve them at an incredible price point. So for example, here for the 2,000 pound payment to euros, we only charge 0.1%. And we're still operating these very profitably. The customer response to be reductions are changing pricing that we do will not be immediate so shouldn't be looking out for that but it's inevitably it's inevitable that the lowest price operator will win the scale needed to become the infrastructure to operate the trillions of cross border. cross border money. So. Our infrastructure, it powers the products that we serve. It powers three different verticals. We serve individuals through Wise Account, the expats, the travelers, people who have just moved countries. We serve small businesses through our Wise Business Account. And we serve banks and others through Wise Platform, banks and large enterprises. So let me touch on each one of those a little bit, just to give you some highlights of things that have gone live over the last six months. So first of all, the wise account adoption. We've been talking about this over time as we start with transfers and we're seeing more and more people migrate to, and businesses especially actually, migrate to the wise account. So we see about 53% now of personal customers using the wise account and 60% of businesses. And the voice account story continues. We were already delivering about 12 to 15% of all the money to Philippines, all the personal transfers to the Philippines. And we were merely serving the senders. So someone let's say in the UK or in Australia paying someone in the Philippines. But the freelance community and the outsourcing community there is enormous. Now we are live with a Wise account in the Philippines for the Filipino customers. And this comes right at the time of the Instapay integration. Remember a few slides back, I talked about direct integrations. The new one was Philippines. There's a couple of things that happened in Philippines. We added the integration. And we also went live for local customers with a Wise account. This is just the first step. So it solves for some of the freelancer use cases. But there's more to go on bringing out all the power of the Wise account in the Philippines. That's not all. A big difference, if I can get the clicker back, please, or go to the next slide. Ah, thank you. So in the last six months, we've been able to do quite a lot of work in the background. So it doesn't come out as new features. It just comes out that we're able to increase limits or remove restrictions that we've had on some routes. So we were able to increase transfer limits in India mentioned in Japan through the regulatory change. We went higher with Singapore, Pakistan, Vietnam, Israel, Turkey, and Indonesia. So it's a list of countries. But what that means is we can also have bigger payments, especially matters for businesses. It also means that it will affect our volumes that we can put through and give us more scale. And this matters more for businesses, actually, because they're usually the larger amount of transfers. So let me continue with businesses. Our strategy for Wise Business customers continues to be to serve the small and medium-sized businesses now. And over time, we're moving to larger and larger ones as both our customers grow and we're building out the more complex features that they need. An important part of running any business is to get paid. And getting paid internationally is why a lot of businesses come to Wise. So in the last six months, we made that easier. So for example, we noticed that 25% of Wise business customers actually get paid by other Wise customers. So that transaction already happens on Wise. And we now made it easier, so we made it easier for our business customers to invoice others and get paid with a QR code or a payment link through a feature called quick pay. This can network effect then boost the sender and receiver both being wise leads to faster cheaper and actually more convenient experience. For other business customers, those whose clients need to pay them over the traditional SWIFT method, we connected their accounts and we then were able to increase the number of currencies to more than 20 that they can get paid in. So again, the same use case, just expanding this to more businesses and more kind of individual circumstances where businesses can get paid. So we covered a couple of use cases, a couple of highlights on the person side, on the business side. And many of these are helped by the infrastructure that I was talking about earlier. And that infrastructure we opened to our partners and to banks through Wise Platform. So in Wise Platform, we talked about Nubank and Conto last time, so Latin America and Europe. These are two exceptional challengers who are growing at a very, very high speed. And yesterday, we announced a completely different partnership. We announced a partnership with Standard Chartered. This will allow Standard Chartered's customers in Asia and Middle East to send money in 21 currencies in a matter of seconds. And it's very cool to see that they will be transparent in pricing. So their customers will also now know what they're paying for these transfers. They're gonna get mid-market rates with no markups. And each new partnership, whether it's a fast-growing challenger bank or a forward-thinking tier one bank, creates a superior experience for end users. It opens up new volume on our infrastructure that gives a scale that we otherwise couldn't have easily reached. So we covered earlier our phenomenal growth over the first four years, tripling the size of the cross-border business. When we zoom out, this looks just like a beginning of a much, much bigger opportunity. So the things that we're building today that I talked about, we're building infrastructure to move the trillions. We're building apps to serve hundreds of millions of customers. and we expect the support coming from all banks. We'll be able to support banks all around the world who are switching over from the current foreign correspondence to Wise Platform. So in this context, we're really just here getting started. So to summarize before I hand over to Emmanuel, We're continuing to build the best way to move and manage the world's money through doing that for really large addressable market. We're creating the network, the infrastructure that's actually powering this doesn't exist. We're building products on top of that, that people love, they want to talk about, they want to recommend to their friends, because it's fundamentally better than anything else that's available out there. And by doing this, we're creating a really valuable company to our shareholders. So this is a massive opportunity ahead of us. But we're making progress every quarter, every half year. So I'll hand over to Manuel to take us through how we've done in the last six months.

Thank you, Christophe. Well, good morning, ladies and gentlemen, and welcome to our training update. It's a pleasure to have you here. My name is Emmanuel. I'm the CFO of Wise since October this year, so recently. I am the successor of Kinslay. We did a fantastic job over the months and make my onboarding extremely smooth. So thank you. Thank you for that. It's my pleasure to present the half-year numbers and the results for you. But before I do so, I would like to give you on a personal note some highlights why I joined Wise and also what will be my priorities for the next months or so. So why did I join Wise? Well, I joined Wise because I met the team and I found it fantastic. I love the culture and I love the ambitions. I also joined Wise because I saw a massive opportunity in front of us. And Christo touched on this one, and I will also elaborate on this in a few slides. And I also joined Wise because this is a brand that people love. And quite frankly, I didn't use Wise before. But the moment I announced that I will join Wise, it was phenomenal. I mean, a lot of relatives, friends, ex-colleagues of mine, they said, wow, I love the product. I use it every day. This is fantastic. So I was really amazed by the brand awareness already in the market. And also, I joined Wise because I think I can contribute. I mean, like, you know, with my price experience. So I think, like, well, this is maybe the moment to join Wise and to contribute to this fantastic way ahead of us. So that's my reasons. Now, after four weeks, I identified some points that I'd like to focus on. This is not exhaustive, and that will change probably over the time. The first one is I'd like to review our short, middle, and long-term planning, like just to understand it, to challenge it, because as a CFO, you want to make sure I can understand the numbers. But basically, this is what I would like to do. The second one is our capacities to invest. I like to see how can we invest at a very good return in the future. And the third one is more on our teams, is basically building teams together for the future. I mean, we had a tremendous journey in front of us and we want to enable the business to grow and to be ready for the growth. So before I jump into our financial KPIs, I also like to cover two slides that are non-financials to start with, and then go to our financial KPIs. The first one is about our vision, so why we're here every day, what we're building together. And the second is about our scale capabilities. So that's why I would like to start with the non-financial slides. And now let's start with our conviction. So you just saw the slides already, but I think, for me, it's important to repeat why we're here. And there's a tremendous opportunity, and we are building the network of world's money. And that's something that I think is really important. Over the last 14 years, we have been building this infrastructure. Please don't touch base on this. And this is the requisite. This is what is required in order to build this network. And from a financial point of view, and from my point of view, it's like this massive opportunity ahead. I mean, we touched base on how much customers and businesses are transferring every day. Cross-border volumes are around 27 trillion every year. And last year, as you know, we transferred 118 billion. So the massive opportunity for WISE ahead in the next decade and more. So now I'd also like to see how are we able to scale our business. So the growth of Growalance is coming from customers and activity of the customers. And what do we do for this? First, we invest in direct marketing, in targeted marketing at the very high return to unlock new customers, to have them join in the platform. The second one is we invest in infrastructure. You hit it, and you will hit it again, because this is core to our business. We invest in infrastructure. We invest in product. And thirdly, we invest in price. So we want to offer the service at the lowest price as possible to the consumer. And why we do so? Well, because this is a better customer experience. And because people love this experience, they come back, they use the products, and they refer to friends. They say, well, this is a great product. Imagine that you should be a wise customer. So basically, they come to us. So that's why all this is important, because they give us growth and give us skills. And the skills that we get at the attractive margin that we produce, give us a good PPT, or profit before tax, which is fooling actually the earnings. So the long-term earnings growth is there because of this firewall that we generate. That's why it's so important that we continue to invest. Now on the next page, I'd like to go to financial KPIs. As I mentioned before, I joined recently. So I will not take any credit of the numbers. They are fantastic. For CFO, it's like, wow, this is it. This is a fantastic set of numbers. I did the right choice. I mean, there is no doubt about this. So I will take no credit for that. What I like to, and I will go through every single pillars in the next slide. So I won't take too much time on every single items here. We will follow this in the next slides. But the company has changed dramatically since the direct listing in 2021. I mean, the growth is phenomenal. And when you look at the growth in terms of customers or active customers, in terms of volumes, in terms of results, all this is a result of the contributing investments that the company is doing towards a greater scale of the business as we see today. So this is the result of these investments that we're doing. Now I'd like to look at the customer growth and the activity. So the active customers is a combination of new customers and existing customers that are coming from our previous cohorts. Here you see that the private customers have been growing by 25% year-over-year and 29% CAGR over the last four years, while business grew by 28%. You surely recall that last year, the business growth had been a little bit lighter as we paused the onboarding in some geographics. But I'm happy to announce, and you know that for sure, that since the beginning of the fiscal year, we reopened this onboarding, and we see the improvement already. And this is a massive opportunity that we have with this business account. So that's why we're super excited at this point to re-onboard the business customers. The activity of the customers are also driving our volume. And this is what we get to see on the next slide. So again, logically, the numbers of active customers, the more engaged they are, this is driving our volumes. And we see in the first half year of 2025, a growth of 19%, up to 68 billion for the first six months, which is three times higher than what we had four years ago as the introduction. So if you break down the growth, the private customers' volume grew by 20%, while 18% for the business segment. And the growth of our customers and the activity of the customers is not only driving volumes. They also trust us and increase the holding balance. And we're going to see this on the next slide. So the adoption of Wise Account and you've seen the 53% for the private customers, the 60% for business, is not only driving our transfer, our core initial part of the business, but is also driving the proof that the crisis account was adopted, and this is also driving our debit cards. But the first thing that we see is that the customers are trusting us more and more. Every single quarter, they trust us more and they increase the balance. They increase the balance to now almost 15 billion. We've seen an increase of the holding balance by 31% and of the asset by 100% year-on-year for a product that is only two years old. So now I'd like to go to the next page and see the acceleration of what the customer's holding balance are also driving. So they not only drive or increase their holdings, but they also use other offering, such as the debit cards. And this has not come as a surprise for us to see that we come at 170 million pounds for the first half year in terms of revenues or incomes from the cards, which is like a 50% growth and a CAGR of 80% over the last four years. So now let's look at the pricing. In the first six months of 2025, we addressed the pricing. And after four weeks, what I realized is how complex transactions, sending money, receiving money is, and how deep in the detail you have to be in order to drive price adjustments. And this is what our teams are doing. They look at every single detail, understanding the cost in every detail before taking any decision on price adjustments. And when you do so, we decide we control the price adjustments because we want to make sure that this is sustainable long term economically for the company. So if you look at what we've done, basically over the last year, in Q4, we end up with a rate for the cross-border at 59 basis point. We reduce it. We started at 67, and we reduce it to 58. So it's a drop of 8 basis point. back to our price adjustment that we've done, and we give back the cost efficiency that we are generating back to lower the price. Let's look now at the evolution of the underlying income over the last four years. The underlying income increased by 36% and 19% year-over-year. This is due to our personal growing but also business growing accounts, as we saw before. And the customer adoption of their Wise account is impacting our revenue mix, our income mix. More than one third today of the income is generated by cards and orders. So more than one third. We saw an increase of 52% year over year. And one thing that you also see is that the impact of the price adjustments, especially on the cross border, where we grew by 9%. So this is directly an impact of these price adjustments. Now I'd like to go to the gross profit or underlying gross profit evolution. So we've seen that underlying income increased by 19%, but the underlying gross profit increased by 30%. So this is an improvement by 6% in terms of margin. Part of it is due to their underlying income but also this is coming from the cost of sales where we also are extremely efficient and we drop the price of the cost of sales during the first six months compared to the year before. But as you know part of it is also due to the ethics fluctuation. So we estimate that 3% roughly the impact of ethics on the cost of sales for the first six months. This gross profit that we generate give us space to reinvest, to invest in marketing, in infrastructure, and also in price to drive more customers. So that's why we focus on gross profit and also on VPT. Before moving to underlying VPT, I'd like to look at the OPEX evolution. For the first six months, our administrative expenses increased by 24% compared to the year before. And within the administrative expense, the third party part was growing faster than the employee benefit expenses. The reasons for this is because we choose to work with experts, consultants, external consultants, to externalize certain services that we give to the customers. Why do we do so? Because it gives us flexibility to scale up and down and also at lower cost. So here also we are looking for driving efficiency and to reduce the cost. So now let's look at the profitability and the reported BPT. So the BPT has grown as faster than any other KPIs that you saw on the first slide. So there's three times more active users, three times more volumes, but the BPT is growing by eight times compared to 2021. So this is a phenomenal increase over the last four years. And this is growing by 57% in the first six months compared to the year before. We generate a margin of 22% in the first six months of the year, which is above the range that we guide for 13% to 16%. But the range that we give, so we have now reinvest in a price offensive, as we did, and we're heading now towards this range that we guide the market for 13% to 16%. So the spark offensive will guide us to this margin. And lastly, I'd like to go through BPT. So I've been focusing on underlying BPT, which is basically for us a good representative of our financial performance. If you look here, as you are aware, the framework that we have in terms of interest framework, we retain 20% of the interest that we generate below the underlying BPT. And we aim to distribute 80% to our customers. In the first six months, we were able to distribute almost half of it, of the 80%, which means that basically the rest of it was passed to the BPT. And we ended up at 292 million pounds for the first half year. This is a growth of 51% compared to the year before. And this is a CAGR of 95% over the last four years. So again, as a CFO, it's just, numbers that you like 95 growth in terms of bpt and that translates into an aps of 21.1 p My next slide is about guidance. As we announced in the last training update, we are guiding or we expect underlying income growth between 15 to 20% for this year, but also in mid-term. And this is how we price our product today. And this results in a profitability margin that we expect to be between 13 and 16%, as I mentioned before. And now I am back to Christo for the final two slides.