Wise plc

Hello from WISE and welcome to our FY26 results call, our first time presenting financial results since the completion of our dual listing. I'm Martin Adams, Head of Owner Relations. Joining us today are our co-founder and CEO, Kristo Kaarmann, and our CFO, Emmanuel Thomassin. We'll start with opening comments from the team and then we'll be happy to answer your questions. If you'd like to ask a question, then please raise your hand in the Zoom webinar. Before we begin let me quickly cover the safe harbour. During this call we will be making certain forward looking statements that involve risks, uncertainties and other factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors are detailed in our results materials and our SEC filings. All forward-looking statements are based on current assumptions, estimates and beliefs, and we undertake no obligation to update any forward-looking statements except as required by law. Thank you, and now I'll turn it over to Kristo.

Thanks Martin, and hi everyone. Hi everyone, thanks for joining us. I'm going to start with financial and customer highlights from the year. and then I'll hand over to Emmanuel who will go into the detail of the numbers. So starting with financials, our net revenue grew by 19% to $2.5 billion in financial year 26. After allowing for the cost to serve our customers and the investments in future growth, the income before tax margin was 26%. These numbers are in line with the median term guidance ranges we set out ahead of the US listing. So, let's take a look into what's driving this growth. In FY26, we helped 19 million customers to move $243 billion internationally. This was 31% more cross-border volume than the year before. and our customers are using us for more than just cross-border transfers. Last year, they spent $44 billion on their Wise cards. It's up 37% compared to the year before and they trusted Wise to hold $39 billion on their Wise accounts. That's 40% more than the end of the year before. So thanks to To this unique and powerful financial infrastructure we're building around the world, now 75% of transfers are completed instantly. That is in less than 20 seconds. Our direct connections into domestic payment systems, in addition to our large payments network, help lower our unit costs over time. So that we can price each cross-border transaction profitably, and yet charging customers just 0.52% or 52 basis points on average over the year. We've also seen more customers trusting us with holding their money. Our Wise Assets product lets customers earn a return that closely matches the central bank rate for the currency they hold. In US dollars, for example, customers can earn 3.4% on the dollars they hold with us. Our speed, price and convenience are all thanks to the investments we've made and continue to make into our infrastructure and products. We build on our investments in the infrastructure. Over this last year, this allowed us to launch new features and partnerships. We went live with direct connections into the Japanese and Brazilian domestic payment systems We also added multiple new financial services licenses, for example in South Africa, the UAE, and Thailand. In servicing, AI automations are increasing our bandwidth. For example, 50% of support chats are now resolved without a human. On the product side, we made the Wise account more useful to people and businesses in many ways, including launching Wise Assets in Brazil, and making it easier for businesses to pay and get paid through new invoicing tools. More banks and financial institutions also started using our infrastructure. We were excited to announce Raiffeisen, Unicredit, MBSB in Malaysia and Capitec in South Africa joining Wise Platform in FY26. We will expand our infrastructure and build more products on it. to create even better outcomes for larger numbers of customers over time. And while we're really pleased to help 19 million customers in FY26, there are many more people and businesses around the world we still want to reach. As you can see on the next slide. So looking at our share of total cross-border payments, we moved around 5% of the world's money cross-borders for individuals last year. and just less than 1% of the small and medium businesses volumes. So, we have a huge opportunity ahead of us in this $43 trillion market. In just 15 years, we've grown from zero to now moving a quarter of a trillion across borders. We remain focused on this opportunity and our mission of building the network to move and manage the world's money. And with that, Emmanuel, please take us through the numbers.

Hello, everyone, and thank you, Kristo. Well, we appreciate you joining us for our first earning calls as a dual listing company. I am pleased to present our financial report for financial year 2026. It has been a year defined by robust growth, which provides the opportunity to strategically reinvest back into the business. and during my session today, I take you through first, our growth and net revenue drivers. Second, our investment framework and how we are focused on creating investment capacity by driving efficiencies and key areas of investments. Third, our margin and outlook. And lastly, I'll provide an update on capital allocation. Starting with growth. During the year, We achieved significant growth in our main performance metrics as our customers are using WISE more and not only for cross-border transactions but also for everyday needs. Our active customer base increased by 21% year-on-year to reach 19 million with over 7 million new active customers joining WISE in 2026. Our cross-border volume increased by 31% year-on-year to $243 billion with stronger growth from Wise Business and Wise Platform. The latter represent around 5% of volume for the year. Our customers spent $44 billion with a Wise Cart, a growth of 37% year-on-year, and customer holdings grew by 40% year-on-year, totaling $39 billion. including $9 billion held through Wise Assets. I will now take you through the different drivers of financial performance, starting with home customer activity to have stop-time growth. In 2026, we generated around $1.3 billion in cross-border revenue from customers sending or convincing currencies. This represents a growth of 17% year-on-year. This increase is lower than the 31% growth in volume, reflecting a reduction to the average take rate from 58 basis points in 2025 to 52 basis points in 2026, which I will cover in more detail later. We also generated $392 million in crowd revenue from customers using their card abroad and at home. And this represents a year-on-year increase of 40%, mainly driven by strong adoption in the European Union, in Australia, and in the UK. Lastly, additional customer activity, such as domestic transactions and investing in our asset products, generate $245 million in other revenue, up by 26% year-on-year. And this increase was on the back of stellar growth in the full year 2025, where other revenue grew over 60% as a result of increased pricing for domestic transactions. So, taking together these different streams of revenue from our customers, total $1.9 billion in transaction revenue. representing a year-on-year growth of 22%. The increased adoption of the WISE account has driven faster expansion in our known cross-border revenue source. These now account for around one-third of our transaction revenue, which helps to further diversify our overall revenue profile. As I highlighted a few weeks ago at our listing presentation, Customers are also trusting Wise more, and more with their money. At the end of March 2026, customers held $30 billion on the Wise account, up 36% compared to the previous year. As we invested these funds in liquid instruments, we generate $806 million in interest income during the year, up 6% year-on-year. and growth in customer balance didn't fully translate to interest income growth as we saw a reduction in gross yields from 3.9% in 2025 to 3% in 2026. I'd now like to remind you of our interest income framework under which we would seek to first use the first 1% yield to cover the cost of the wife account. and second to retain 20% above the first 1% yield as a profit. And third, we distribute 80% back to the customers. We've built this framework to avoid cyclical movements of the interest rates set by the central banks like the Fed was making the account interesting to customers. In our financial year 2026, we were able to pay $197 million Out of the year, $806 million back to customers. So roughly half of the 80% target. This is still below our target due to geographical restrictions, like in the UK, which represent over 50% of interest income unpaid to customers, and where as of today, we are not able to pay interest on customer balance. Overall, I just covered the different layer of customer activity. sending and converting money, spending with a wise card, growing with wise assets, and holding balances with us. Together, these drive our net revenue growth. In the full year of 2026, we delivered $2.5 billion in net revenue, up 19% year-on-year, with an excessively diversified revenue base. Moving to our investment framework, and the key areas of investments for long-term value generation. If you've been following WISE for a while, you will have seen a similar version of this slide. Overall, we believe in driving growth through continuous investment. And our investment framework is the clear evidence of this. By targeting medium-term 15% to 20% income before tax margins, Assuming we are able to pay our target interest income back to the customers, we are able to invest in our growth and into our pricing. This, in exchange, drives more scale and operational efficiencies, providing us with additional margin capacity for reinvestment. In full year 26, we proved again that we can operate efficiently while simultaneously investing in the infrastructure that powers our future growth, redeploying profits into long-term capabilities and growing our teams. During the year, we increased our direct investments into the business through growth in operating expenses of 39% year-on-year to $1.9 billion. We were able to achieve this as we successfully recruit and onboard over 2,000 new WISERs And this is the result of a combination of lower attrition, which allow us to focus on resources into finding new roles and through refining our recruitment processes. For the coming year, we expect to continue investing back into the business, applied at the slightly lower pace, as we aim to combine this with investments into our pricing. I would like now to cover the different areas of investment in more details. In 2026, our transaction expenses, as well as transaction and credit losses, were $527 million, about 35% year-on-year. This reflects the cost of providing our services. We are continuously seeking efficiencies in this area, making sure we get the best terms from our partners as we grow in scale, while also becoming more efficient in how we deliver our products to our customers. Transaction expenses as a percentage of net revenue increased to 21% as many as a result of a one-off U.S. gap adjustment in relation to ethics on certain government bonds of around $70 million, which increased transaction expenses. And this was offset in other comprehensive income. Excluding this impact, operating expenses increased by 17%. lower than transaction revenue growth. And going forward, we have changed our investment strategy to take into account the US GAAP implications. For the year 27, so 2027, we're expecting to see further efficiencies in transaction expenses during the year. This is part of our business model, which allows us to create increased capacities for investment. Moving on to our investments to acquire, Onboard and service our growing customer base. In 2026, we increased our marketing spend by over 60% to $172 million. We are focused on new channels and increased brand marketing investments. And we have also increased the size of our wise platform and wise business sales teams. And we are pleased with the return that we are seeing from these efforts as we continue to lean into marketing investments while targeting a minimum 20% return on these and also supported by a strong 70% customer acquisition through word of mouth. We are also investing in offering the best onboarding experience to our customers while complying with regulatory requirements around the globe. With around one-third of our employees in functions related to compliance, we invest in developing robust processes to drive customer trust. And we are combining our efforts with increased automation as we seek to improve customers' outcomes. In the full year 2026, we increased our servicing spend by 38% to $397 million, mainly driven by our employees' hard work. We believe these strategic investments are vital, especially considering the vast opportunities ahead, as we focus on acquiring new customers, while we also foster deeper long-term loyalty with our existing base. In the full year 26, more than 7 million active customers completed their first cross-border transaction with Wise. And this represents a growth rate of 20% year-on-year, and gives us confidence in the value of our investments. The increased adoption of our products is also a function of our investments in technology. In 2026, we invest $434 million, up 38% year-on-year, into tech and development to launch new products and also maintaining our existing products and rolling them out in new regions. We are not just growing our tech teams to achieve this, We are also implementing AI tools to increase their efficiency. We now have over 1,000 engineers deploying code 6,000 times per month on average. And finally, we are also investing into our core functions. In 2026, we increased our spend by 40% year-on-year to $382 million, driven by our preparation for the dual listing and introduction on NASDAQ, with a one-off expense of $45 million, as well as growth in regulatory and hiring costs. Within our investment framework, alongside our direct investments into the business, we seek to invest into sustainable reduction of our price. This will mean long-term, driving down price for customers while building a sustainable, profitable business. In 2026, While the average take rate reduced by 6 basis points from 58 to 52 basis points, this mostly reflects price change implemented in the full year 2025. We finished the year with a take rate of 51 basis points in Q4 2026 versus 53 in Q4 2025, reflecting a 2 basis point reduction during the year. Looking forward, we expect to continue sharing these efficiencies with customers as we generate extra capacities for investments. And for the year 2027, depending on the additional capacity we can generate, we expect this to be reflecting in a reduction of 1 to 2 basis points each quarter. Our investments into pricing are a core feature of our business model, which support the long-term sustainability of our business. I'd like now to cover our margin and outlook. We deliver strong margins alongside these strategic investments, including pricing. In full year 26, income default tax was $660 million, with a margin of 26%, as we seek to deliver margins in line with our medium-term targets. This margin demonstrates that we can offer customers the best price while investing into building a highly profitable business. And the two objectives are complementary, not contradictory. Our investment framework is focused on demonstrating our financial projections for the medium term and the upcoming fiscal year. Looking first at the medium term, we are maintaining our target of 15 to 20% compound annual growth for net revenue using 2024 as our benchmark. We also target income before tax margin of 15 to 20%, assuming our goal of returning 80% of interest income to customers is met. Otherwise, we anticipate margins to range between 20 and 25%. And this assumes no material changes to interest rates by the central bank. For 2027 specifically, We expect net revenue growth to be around the middle of a million-ton guidance of 15-20%. In terms of the shape of the year, due to the phasing of our investments into pricing, we expect this growth to be more pronounced in the first half of the year. Similarly, we expect that the scheduling of our reinvestments to the business will drive a comparable trend in our profitability. While we aim for full year margins around the high end of the 20 to 25 range, we expect this to be front half weighted, delivering results slightly above this target in H1. Our full year 27 guidance reflect the latest rates published by the central banks, such as the Fed, the UK Central Bank, and the ECB. So before we conclude, I'd like to provide an update on our capital allocation framework. This is underpinned by our business strategy, which aims to deliver strong profitable growth, which then translates to strong cash generation. Under our framework, we seek to continue making prudent financial decisions in the best financial structure to deliver our long-term mission. This starts with prudent management of our strong level of cash. We maintain a strong capital and cash position to cover regulatory requirements, but also to ensure resilience and flexibility for future plans. And as such, we seek to maintain the buffer above regulatory requirements to allow for this flexibility, for example, for future product expansion or license applications. Well, the next step is returning capital to you, our owners. To allow for the flexibility I just mentioned, review our approach to shareholder return on a yearly basis. So in 2026, we allocated over $450 million to the repurchase of nearly 36 million shares into our employee share trust program, including the purchase of around 25 million shares related to historical share options. And today, we are announcing our intention to commence a new share purchase program, which we expect to be over $500 billion, of which around 40% will be allocated to our recurring employee share trust program and the remaining 60% will be used to buy back shares into treasury. Well, to conclude, we continue to execute on our strategy with discipline and we are seeing strong results. We grow our customer base, increasing customer engagement, diversifying revenue, and investing for the future and all of these who are delivering on our growth and profit targets. The fundamentals of our business are very strong and we believe that we are uniquely placed to tackle the huge opportunity in front of us that Kristo mentioned at the very start of the presentation. And now we move to Q&A. Thank you very much.