Wise cuts prices for money transfers as revenue surges

Wise said it transferred £34 billion on behalf of customers in the six months to 30 September. That was 44% higher than the same period last year and helped revenue rise 33% to £256 million.

Revenue grew at a slower pace than volumes as Wise cut its prices. The company said it cut the average cost of moving money internationally on its platform fell by 7 basis points in the period. CEO Kristo Kärmann said it was part of the company’s “mission to make moving and managing money across borders faster, easier, cheaper and more transparent for everyone, everywhere.”

Despite lower prices, Wise’s gross profit margin grew from 62% to 68%. CFO Matt Briers said margins were rising due to increased operational efficiencies and negotiating lower bank fees.

“We’re just reducing away this friction between us and our customers,” Briers told the Standard.

High gross margins helped gross profits rise by 46% to £174 million but pre-tax profits slipped from £20 million to £18.8 million due to greater investment in hiring and product development. The company recently crossed 3,000 employees and is hoping to hire another 1,000 in the year ahead, with many of those positions planned in London. Briers said Wise was recruiting for roles in operations, engineering, and product.

Wise said it now expects revenue growth in the “mid-to-high” 20 percent range for the full-year as price drops encourage more people to use its platform. Gross margins for the full year should be between 65% and 67% thanks to “larger than anticipated” cost savings.

Shares rose 69p, or 9.1%, to 825.4p.

Briers wouldn’t go into detail about the issue today but said: “Obviously we take this incredibly seriously as a business.”

He said there had been a “thorough review by the board” and Kärmann had been advised to work with tax consultants to ensure his personal affairs were in order.

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