Slide 1: FY23 Results Presentation
FY23 RESULTS PRESENTATION 27 June 2023 1
Slide 2: Kristo Käärmann, Co-founder and CEO
Kristo Käärmann Co-founder and CEO 2
Slide 3: Money Without Borders
MONEY WITHOUT BORDERS We’re building the best way to move and manage the world’s money. Making it faster, cheaper, easier and more transparent for people and businesses. 3
Slide 4: ~£2t+ moved cross currency annually by people
∼£2t+ moved cross currency annually by people 4
Slide 5: ~£9t+ moved annually by SMBs
∼£9t+ moved annually by SMBs 5
Slide 6: What customers are saying / what we're doing about it
What customers are saying Sending money International Underlying across borders banking technology Traditionally slow, International bank Infrastructure has expensive and hard accounts don’t really not evolved in to do exist decades What we’re doing about it We’ve made We’re creating the We’re build
Slide 7: We're building a valuable product. FY19 to FY23
We’re building a valuable product. FY19 3.3m £27bn £179m £26m Active Volume Income Adj. EBITDA customers FY23 10.0m £105bn £964m £239m 3.0x 3.9x 5.4x 9.3x 7
Slide 8: Personal and SMB market share
5% Personal <1%SMB market share market share Source: Market size based on EDC study (2022); SMB includes small and medium sized businesses. 8
Slide 9: What makes Wise a generational company?
What makes Wise a generational company? A massive We have We’re building the Wise is growing problem for people evangelical network for the fast and profitable and businesses customers world’s money International Large addressable Word of mouth Creating a bank accounts do market led growth valuable
Slide 10: Evangelical Customers
EVANGELICAL CUSTOMERS 02 10
Slide 11: We create virality led growth
We create virality led growth. 66% of customers join through Word of Mouth 11
Slide 12: We build products customers love
We build products customers love What customers say about their traditional options (e.g. their bank) X X X X Slow Expensive Opaque Inconvenient Wise Instant Low cost Trusted Convenient Low-friction 12
Slide 13: We are investing in three products
We are investing in three products Wise Account Wise Business Wise Platform 13
Slide 14: It's expensive to hold money in a traditional UK current account
It’s expensive to hold money in a traditional UK current account 14
Slide 15: Read more from our Mission Updates
Read more from our Mission Updates 15
Slide 16: New customers using multiple features
>50% >80% of all new customers …for new now joining to use Brazil-based multiple features... customers 16
Slide 17: Wise Account and Wise Business
36% 55% Wise Account Wise Business (vs. 24% FY22) (vs. 49% FY22) 17
Slide 18: 3x more transactions
Customers that use multiple features send more money 3x 2x more more cross currency transactions volume 18 Compared with ‘send’ only customers
Slide 19: And this creates true virality led growth
And this creates true virality led growth. 66% of customers join through Word of Mouth 19
Slide 20: Active customer growth is the main driver of volume
Growth FY19 to FY23 Personal Business Active customer Active growth is the main Customers 3x 4x driver of volume growth. Volumes 3x 6x 20
Slide 21: FY24: What's next?
More FY24: What’s next? customers New Markets New Features Better Experience More benefits 21
Slide 22: Building a network for the world's money
BUILDING A NETWORK FOR THE WORLD’S MONEY Harsh Sinha Chief Technology Officer 03 22
Slide 23: Our global infrastructure powers our proposition
Our global infrastructure Price Speed Convenience powers our Low prices is key to why more 55% instant1 | >90% within 24 Fast and easy onboarding; customers switch from their hours excellent customer service existing provider Speed is a key reason we proposition retain customers >90% of customers ha
Slide 24: An infrastructure that redefines what's possible
An infrastructure that redefines what’s possible. People onboarded <1hr 8 - 10x cheaper than banks Faster payments SMBs onboarded <24hrs Proof points Payment speeds: end to end payments in <20 seconds One single, global, real-time view of data Full control of the What’s so powerful end-to-end paymen
Slide 25: Unmatched payment speeds
Speed Unmatched payment speeds. 25
Slide 26: This will be very difficult to replicate
This will be very difficult to replicate ● Direct connections into 4 ● >700 engineers payment systems ● 250 releases per day Technology Expansions ● 70+ banking partners ● One single global ● Mastercard/Visa card treasury system issuing partnerships >1,300 customer service 69 licenses across 45 agen
Slide 27: Wise Platform Partners
>60 >25m More people have access to Wise Platform Partners Wise through their Bank* 27 *Additional customers with access to Wise services via Wise Platform partners for FY23
Slide 28: Wise Platform: gaining traction globally
Wise Platform: gaining traction globally, in multiple verticles. 28
Slide 29: Building the replacement infrastructure for the world's money
We’re building the replacement infrastructure for the world’s money. Underlying We’re building the network for the world’s money technology International by default; enables the scaling of a global proposition Infrastructure has not evolved in Allowing customers to make instant international decades
Slide 30: What makes Wise a generational company?
What makes Wise a generational company? A massive We have We’re building the Wise is growing problem exists evangelical network the fast and profitable customers world’s money needs International Large addressable Word of mouth Creating a bank accounts do market led growth valuable company not reall
Slide 31: Growing fast, investing, and profitable
GROWING FAST, INVESTING, AND PROFITABLE Matthew Briers Chief Financial Officer 04 31
Slide 32: FY23 Financial Results
FY23 Financial Results. 10m c.£105bn £10.7bn £964m £239m Active Customer Volume Income Adj. EBITDA customers balances +34% +37% +57% +73% +97% 32 Comparisons FY23 vs FY22
Slide 33: A business with world class fundamentals
We’re building a business with world class fundamentals. Wise Account True customer led Hyper efficient features powering growth into a huge growth investment growth and higher opportunity economics profitability Growing fast… … investing for long term … and highly profitable 33
Slide 34: Active customer growth drives volume growth
Active customer growth drives volume growth. Active customers (m) CAGR Volume (£bn) CAGR (FY19-23) (FY19-23) 32% 44% 40% 56% 31% 36% 34
Slide 35: More customers join each year, and they stay with us
More customers join each year, and they stay with us. Volume (£bn) 4.5m customers joined in FY23 (+c.40% YoY) >100% volume retention (average FY19-23)1 1 Volume retention measured as the volume moved in a fiscal year by existing customers who joined Wise before that year, compared to the 35 total vo
Slide 36: VPCs: stable long term but more volatile short term
VPCs: stable long term but more volatile in the short term. Reduced number of larger transfers eg property purchases, investments VPC (£ thousand) VPCs very slightly lower as we enter FY24 VPC rose from exceptional USD strength 36 Notes: 1Average central bank rate calculated as simple average of ECB
Slide 37: Customer growth underpinned revenue growth
Revenue(£m) Customer growth 51% YoY1 FY23 YoY1 underpinned 51% 33% YoY1 Other 109% YoY revenue growth. Cross 42% Take rates: Cross 0.70% 0.63% 0.65% Other fees 0.07% 0.10% 0.16% Notes: 1Comparison is FY23 to FY22 and FY22 to FY21. 37
Slide 38: Revenue growing across customer segments and geographies
Revenue by Segment and Region (£m) FY23 YoY1 FY23 YoY¹ 108% RoW 50% Business 60% APAC Revenue growing across customer 53% N. America segments and 51% Personal 37% UK geographies. 45% Europe Notes: 1Comparison is FY23 to FY22. 38
Slide 39: Customer balances continue to grow
Customer balances (£bn) 16% 35% HoH1 HoH1 FY23 YoY¹ Customer Business 54% balances continue to grow. Personal 61% Notes: 1Comparison is Mar-23 to Sep-22 and Sep-22 to Mar-22. 39
Slide 40: We exit FY23 with a 2.8% gross yield
£m FY23 Q4 FY23 Interest income £140m £72m Customer benefits paid & We exit FY23 with interest expense £(22)m £(16)m a 2.8% gross yield; Interest income net of £118m £56m customer benefits2 we returned 0.6% to customers. Yield % Gross interest yield1 1.6% 2.8% Customer benefits paid & (0.2%) (0.6%)
Slide 41: Income, which includes interest, grew 73% YoY
Income¹ (£m) 73% Income, which YoY² 32% FY23 YoY² includes interest, YoY² grew 73% YoY. Revenue 51% Interest income net of customer benefits³ Notes: 1Includes revenue and net interest income on customer balances. ²Comparison is FY23 to FY22 and FY22 to FY21. ³Interest income net of customer benefits
Slide 42: We generated £638m of gross profit
Gross profit (£m) Gross profit margin 62% 66% 66% FY23 YoY¹ We generated COS² 73% £638m of gross Gross profit, +73% YoY. Profit 73% Notes: 1Comparison is FY23 to FY22 and FY22 to FY21. ²This includes Cost of sales 42 and Net credit losses on financial assets.
Slide 43: We invest a significant share of gross profit in our growth
Use of FY23 Gross Profit We invest a Product Servicing and Development Corporate significant share of (excl. vendors) & Marketing1 Overhead (incl. vendors)2 gross profit in our growth. Adjusted EBITDA Notes: ¹Product Development and Marketing includes all employee related expenses allocated to Produ
Slide 44: How we invest
How we invest Investment Impact Marketing ● 1.5m new customers from marketing in FY23 c. £37m, +33% YoY ● High return investments: Payback < 12 months Product Development ● 3m new customers from word of mouth in FY23 +33% headcount YoY1 ● New geographies and products launched ● Increasingly competit
Slide 45: We grew our team to invest in growth and service
Administrative expenses (£m) 54% YoY1 FY23 YoY¹ We grew our team 47% YoY1 Other admin 46% expenses² to invest in growth and service Employee customer demand. benefit expenses 60% Notes: 1Comparison is FY23 to FY22 and FY22 to FY21. ²Other admin expenses comprise Marketing, Technology and development
Slide 46: Adj. EBITDA margin was higher due to interest income
Adjusted EBITDA (£m) Margin 25.8% 21.8% 24.7% 1 97% YoY² 12% Adj. EBITDA margin YoY² was higher due to significant interest income. PBT £41.1m £43.9m £146.5m Notes: 1Margin is adjusted EBITDA as a percentage of income. ²Comparison is FY23 to FY22 and FY22 to FY21. 46
Slide 47: Stepping back: world class fundamentals
Stepping back: We’re building a business with world class fundamentals Wise Account True customer led Hyper efficient features powering growth into a huge growth investment growth and higher opportunity economics profitability ● Highly viral customers ● 66% gross margin ● >50% new customers on ● >10
Slide 48: Looking ahead: Time to double down
Looking ahead: Time to double down Product and infrastructure Continue to invest in Product Development teams and Marketing (not funded by interest) Sustainably disrupt cross border Continue to run our cross border volume at a ~20% pricing margin, dropping prices where we can to ‘extend the moat’ (n
Slide 49: So how will we utilise this interest income?
So how will we utilise this interest income? Flows to EBITDA resulting in higher margins 20% 80% Use interest income to power a better Wise Account proposition 49
Slide 50: So how will we utilise this interest income?
So how will we utilise this interest income? Flows to EBITDA resulting in higher margins 20% 80% The first ~1ppt yield covers account feature costs and helps us avoid/reduce ~1ppt any account fees (e.g., subscription, domestic payout fees) 50
Slide 51: So how will we utilise this interest income?
So how will we utilise this interest income? 20% Flows to EBITDA resulting in higher margins Provide Wise Account incentives: ● Reward customers on their balances: live in EU, and US. Will extend to other countries but will take time 80% ● Provide account incentives: cashback on cards, discretionary
Slide 52: So how will we utilise this interest income?
So how will we utilise this interest income? 20% Flows to EBITDA resulting in higher margins Flows to EBITDA (where we cannot return this as interest per below) Provide Wise Account incentives: ● Reward customers on their balances: live in EU, and US. Will extend to other countries but will take tim
Slide 53: This interest dynamic will drive higher adjusted EBITDA margins
H2 FY23 Adjusted EBITDA margin This interest dynamic will drive As reported 27% higher adjusted EBITDA margins. … with 1ppt interest 20% yield 53
Slide 54: Continuing growth and profitability in FY24
Continuing growth and profitability in FY24 28-33% YoY Income growth in FY24 Considerations Key Driver: ● VPCs very slightly lower as we enter FY24; soft/uncertain macro outlook Strong active customer ● Interest: Increasing rates, more growth returned to customers; EBITDA remains elevated 54
Slide 55: Lapping material trends from FY23 as we move through FY24
Lapping material trends from FY23 as we move through FY24. VPC (£ thousand) Cross Take Rate Gross and net interest income (% of Volume) (£m) 55
Slide 56: Medium-term guidance reiterated
Medium-term guidance reiterated Income growth >20% (CAGR) Supported by active customer momentum into a huge market opportunity Adj. EBITDA margin at or above 20% Sustaining our levels of investment in the long-term growth Maintaining discipline on price for competitive advantage 56
Slide 57: A business with world class fundamentals
We’re building a business with world class fundamentals. Wise Account True customer led Hyper efficient features powering growth into a huge growth investment growth and higher opportunity economics profitability Growing fast… … investing for long-term … and highly profitable 57
Slide 58: Kristo Käärmann, Co-founder and CEO
Kristo Käärmann Co-founder and CEO 58
Slide 59: FY24: What's next?
More FY24: What’s next? customers New Markets New Features Better Experience More benefits 59
Slide 60: What makes Wise a generational company?
What makes Wise a generational company? A massive We have We’re building the Wise is growing problem exists evangelical network the fast and profitable customers world’s money needs International Large addressable Word of mouth Creating a bank accounts do market led growth valuable company not reall
Slide 61: Sustainable and Profitable / Q&A
Sustainable and Profitable - There are lots of things that can drive value, but right now customer growth is what we’re focused on as the driver - Resilient and highly quality income - Super efficient allocation of capital - Rule of 60 for now and medium term confidence driven by customer growth Q&A
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