Fintech
Wise shares tumble 10% after fintech firm forecasts slower growth this year – NBC Los Angeles
- British payments firm Wise said it expects year-on-year underlying revenue growth of 15-20% for the full year ending March 2025.
- That’s lower than the 31% underlying revenue growth Wise reported in its results for the fiscal year ended March 31.
- The projection of weaker income growth is a result of price reductions implemented by Wise at the start of the current financial year.
Shares of the British money transfer company Wise fell Thursday after the company forecast weaker annual revenue growth in the current fiscal year.
The company’s shares were down 9.8% at 1.30pm London time, after falling nearly 21% earlier in the session.
The consumer payments company, which allows customers to send or spend their money abroad at cheaper rates, said it expects year-over-year underlying revenue growth of 15-20% for the full year ending in March 2025.
That’s lower than the 31% underlying revenue growth of £1.2 billion ($1.53 billion) that Wise reported on Thursday in its results for the fiscal year ended March 31.
Underlying income excludes benefits paid on customer balances or net interest income above the first 1% gross interest yield.
Underlying profit before tax, which Wise says takes into account costs and reinvestment, stood at £242m for the full year, up 226% year-on-year. Wise posted a pre-tax profit of 21%, the company said.
Price reductions
The projection of weaker income growth is a result of price reductions Wise implemented at the start of its current financial year.
Analysts at Jefferies said in a note released Thursday that the guidance announced by Wise was “at first glance disappointing, given the reduction in prices.”
At around 15-20%, Wise’s forecast for total revenue growth was 2% below consensus estimates at the midpoint, Jefferies analysts said. They added that they think Wise’s price cuts “strengthen confidence in medium-term growth.”
Wise said it ended the financial year with 12.8 million active customers, up 29% on the year. The company processed £118.5 billion worth of cross-border transactions, up 13% year-on-year.
Wise said many of its customers use their account to store cash, with the firm now holding £16 billion of customer deposits across cash and assets, the company’s investment account.