Slide 1: Half year results presentation FY23
Half year results presentation FY23 Money Without Borders November 2022 1
Slide 2: Our mission
Our mission. Money without borders instant, convenient, transparent and eventually free. Building the best way for people and businesses to move, manage and spend money around the world. 2
Slide 3: Agenda
Agenda 1 Progress against our mission Kristo Käärmann (CEO and Co-founder) 2 Our H1 FY23 financials Matthew Briers (CFO) 3 Q&A 3
Slide 4: What we're doing and what it means
What we’re doing… What it means… Solving a massive customer Huge addressable market problem opportunity Rebuilding the infrastructure… Deep competitive advantage …which powers products that Word of mouth driving growth; people and businesses love highly engaged customers And we’re sustainable: we fu
Slide 5: Wise: at scale, growing fast and highly profitable
5.5M 0.64% 50% Wise: at scale, Active customers in Q2 Average price for customers in Q2 Transfers are Instant. 90% within 24 hours growing fast and highly profitable. +49% +63% H1 Volume H1 Total Income £51bn £416m 22% H1 Adj. EBITDA margin £92m 5
Slide 6: Progress against our mission
1 Progress against our mission. 6
Slide 7: We're solving a big problem for customers
International Wise is building the banking is broken… solution… Slow Fast Up to 2-5 business days 50% Instant2 71% < 1 hr2 We’re solving a 90% < 24 hrs2 big problem for Expensive 3 Low cost 0.64% avg. fee1,2 3-7% avg. fee customers. Inconvenient Convenient Unfriendly customer Designed for experience
Slide 8: The problem exists in a massive market
Personal £2T+ ~4% Cross-border volume Wise market share The problem exists in a massive market. Small and medium-sized businesses (SMB) £9T+ <1% Cross-border volume Wise market share 8 Source: 2021 EDC Market Study; Internal company data.
Slide 9: We reached a milestone for speed: 50% instant
Speed of transfer We reached a 90% arrive in 24 hours milestone for 71% arrive in 1 hour speed: 50% 50% arrive instant. instantly1 H1 FY18 H1 FY19 H1 FY20 H1 FY21 H1 FY22 H1 FY23 Source: Internal company data. Note: 1Instant defined as 20 seconds or less. 9
Slide 10: We remain committed to mission zero
Average customer price (%) Min. of banks’ average price1 We remain committed to mission zero. Wise’s average price2 Notes: 1Defined by the median fee to transact 1,000 base currency across the following routes (GBP>USD, GBP>EUR, USD>GBP, USD>EUR, EUR>GBP, EUR>USD) - see slide 7 2 Average price elimin
Slide 11: We continue to invest in the infrastructure
Expansions Settlement account with Reserve Bank of Australia Payments from Japan went 24/7 Regulatory We continue to Wise Assets: received investment services licence in invest in the Singapore, and in Estonia in October infrastructure. Operations Increased operational headcount by c.1,000 and now o
Slide 12: We serve this massive market with 3 core products
We serve this massive market with 3 core products. 12
Slide 13: Wise Account, Wise Business, Wise Platform
Wise Account Wise Business Wise Platform 13
Slide 14: What people are using the Wise Account for
What people are using the Wise Account for “The best money travel buddy! Wise makes finances easier to deal with instantly” “I use Wise to pay a “Pretty clear, mortgage in a …traveller fast and different country cheap. You’ll each month. Superb. like it” That simple.” “Wise has been a lifesaver for m
Slide 15: Why businesses use Wise?
Why businesses use Wise? Receive & Send Convert “We make dungarees and use Wise to pay “We used Wise to for supplies. In a few clicks it’s done and the convert our USD money’s in an Indian bank account” …Lucy & Yak revenue to GBP and saved £75k in the first nine months after Spend switching from our
Slide 16: Now even easier to move and manage your money
Wise USD Account connects to over 6,000 finance apps like Venmo & Chime via Plaid Now even New home screen navigation easier to move and manage your money. Debit cards for US businesses Accept card payments for invoices 16
Slide 17: Customers are using us for more than sending money
Wise Account & Wise Business Account adoption (%)1 Customers are using us for more than sending money. Notes: 1Percentage of total active customers (personal and These customers… …made 3x as many …sent2x as much business) who have adopted more than one product in markets transactions… cross-border w
Slide 18: Customers are holding more balances with us
Wise total deposit balances (£bn) split1 88% YoY² H1 FY23 Customers are YoY² holding more Business 92% balances with us. Personal 84% Notes: 1Includes account deposits for both Wise Account and Wise Business customers and is the personal/business split as at the end of the period. 18 ²Comparison is
Slide 19: The power of Wise integrated into banks and enterprises
The power of Wise integrated into banks and enterprises. Strong progress with additional partners Now over 60 partners in total Financial Services Payroll & HR Platforms (expanded partnership) H1 FY231 (expanded partnership) Existing1 19 Notes: 1 Non-exhaustive list of platform partners.
Slide 20: We're onboarding at scale
>1 million new customers per quarter Key service metrics 85% 84% 55% We’re onboarding onboarding payments customer documents made on time1 queries reviewed answered on at scale. within 1 hour time2 … so we’ve scaled our operational teams to cater for the demand by c.1,000, +65% YoY growth Notes: Ope
Slide 21: Wise Account features
Growth through expansion and depth via additional features & regulatory integration. Local features WISE ACCOUNT FEATURES Account details Hold balance & top-up Send money from Authorized partnership Wise licence Reg. & partner’s Direct connection to limits removed payment system Debit Card available
Slide 22: It's working...
It’s working... Key product pillars... drive high advocacy... leading to more active and greater scale. customers…. Cheap 66 40% £51bn NPS 1 YoY growth Volume4 Personal3 Fast Convenient 70% 31% 49% WoM2 YoY growth YoY growth Business3 Volume4 Transparent Source: Internal company data. Notes: 1Net pr
Slide 23: Our H1 FY23 Financials
7wise © Our H1 FY23 Financials.
Slide 24: At scale, growing fast and highly profitable
At scale, growing fast and highly profitable. £51.3bn £416.1m £91.9m £51.3m Adj. EBITDA Volume Total Income Profit before tax 22% margin +49% YoY +63% YoY +52% YoY +173% YoY £78.3m Free Cash Flow +32% YoY 24
Slide 25: Our active customer base continues to grow
Active customers¹ (m) - Personal 37% 40% YoY² Our active customer base Active customers¹ (m) - Business continues to grow. 33% 31% YoY² Notes: ¹Active customer defined as a customer who has completed a cross currency transaction in a given time period. ²Q2 FY23 vs Q2 FY22 and Q1 FY23 vs Q1 FY22. 25
Slide 26: Our customers are sending more
Volume per customer¹ (£’000) - Personal 7% 6% YoY² Our customers are sending more. Volume per customer¹ (£’000) - Business 19% 18% YoY² Notes: ¹Volume per customer defined as the average quarterly transaction volume of active customers. ²Q2 FY23 vs Q2 FY22 and Q1 FY23 vs Q1 FY22. 26
Slide 27: Volume grew 49%
Total volume (£bn) 49% YoY1 H1 FY23 YoY Business 56% Volume grew 49%. Personal 47% 44% ² Constant currency growth YoY1 Notes: ¹Comparison is H1 FY23 to H1 FY22. ²Constant currency calculated on FY22 average exchange rates. 27
Slide 28: Wise Account features continue to support the take rate
Take rate (%) Wise Account Total take rate¹ Revenue features continue take rate² Cross-currency take rate to support the take rate. Other fees³ Notes: ¹Includes net revenue and net interest income on customer balances. ²Excludes net interest income on customer balances. ³Other fees refers to revenue
Slide 29: Revenue grew 55%
Revenue¹ (£m) H1 FY23 55% YoY² YoY² Business 58% Revenue grew 55%. Personal 54% Notes: ¹Excludes net interest income on customer balances. ²Comparison is H1 FY23 to H1 FY22. 29
Slide 30: Strong growth in all regions
Revenue¹ by Region (£m) 55% H1 FY23 YoY² YoY² 113% RoW³ 2,248 2,059 APAC 59% Strong growth 1,472 58% N. America in all regions. 40% 52% Europe Notes: ¹Excludes net interest income on customer balances. ²Comparison is H1 FY23 to H1 FY22. ³“RoW” refers to rest of world. 30
Slide 31: People and businesses are holding more balances with us
Wise total deposit balances (£bn) split1 88% YoY² H1 FY23 People and Business YoY² 92% businesses are holding more Personal 84% balances with us. Notes: 1Includes account deposits for both Wise Account and Wise Business customers. ²Comparison is H1 FY23 to H1 FY22. 31
Slide 32: Balances are safeguarded across various assets
Currency split of balances Allocation of assets Balances are safeguarded across various assets. Blended Average 1.1% Yield1 September 2022 Note: ¹Average yield on total average customer balances; balances as at 32 September 30, 2022; average yield is the return for month of September 2022.
Slide 33: Our approach to interest income
● Pass benefit directly to customers where we can Our approach to interest income ● Use interest to support the costs of is focused on the Wise Account, potentially reducing conversion prices and our customers other feature charges and long term growth. ● Use interest to provide for investments in gr
Slide 34: Total Income grew 63% YoY
Total Income¹ (£m) 63% H1 FY23 YoY² YoY² Total Income Business 76% grew 63% YoY. Personal 60% Notes: 1Includes revenue and net interest income on customer balances. ²Comparison is H1 FY23 to H1 FY22. 34
Slide 35: Gross profit grew 52%
£262.4m H1 FY23 Gross profit. +52% YoY Gross profit grew 52%. Gross profit margin: 63% -5 ppts YoY largely a result of higher fx volatility costs 35
Slide 36: How we invest in growth
Our investment choices Enhanced Increases customer Resulting in a volume and experience lower unit cost scale ++ Customers Invest in marketing How we invest in growth. ++ Features Invest in product & tech Invest in sustainably lowering price Wise reinvests back into the business in 3 major ways 36
Slide 37: The majority of our gross profit is invested in growth
Use of Gross Profit (H1 FY23) Product Operations and Development Corporate Overhead The majority of our (excl. vendors) (incl. vendors)2 & Marketing1 gross profit is invested in growth or flows to adjusted EBITDA. Adjusted EBITDA Notes: ¹Product Development and Marketing includes all employee related e
Slide 38: We've invested efficiently since inception
We’ve invested efficiently since <£350m ~£525m All time total investment in Current gross profit run inception. Product Development until end FY22. rate1 (2 x H1FY23). 38 Notes: ¹Half-year run rate.
Slide 39: We invested c.40% more in paid marketing
Marketing spend (£m) 40% YoY¹ We invested c.40% more in paid marketing, at consistently high returns. Paid channels payback is < 9 months … and improved in the period! Blended payback for all new customers is 3 months Notes: ¹Comparison is H1 FY23 to H1 FY22. 39
Slide 40: 70% of new customers join through word of mouth
But still 70% of new customers join through word of mouth. 40
Slide 41: Total expenses grew 41% YoY
Administrative Expenses (£m) 41% H1 FY23 YoY¹ YoY¹ Depreciation and (7%) amortisation Other administrative 4% expenses Consultancy and 42% Total expenses outsourced services Technology and 68% development grew 41% YoY. Marketing 40% Employee benefit 49% expenses Capitalisation of staff 6% costs Notes
Slide 42: We generated £92m of adjusted EBITDA
Adjusted EBITDA (£m) Margin (%)¹ 24% 20% 22% We generated 52% YoY² £92m of adjusted EBITDA… Notes: ¹Adjusted EBITDA as a proportion of total income. ²Comparison is H1 FY23 to H1 FY22. 42
Slide 43: ...which turned into cash
Free cash flow (£m) H1 FY22 H1 FY23 YoY¹ Free cash flow 59.0 78.3 33% Free cash flow conversion² 97% 85% (12%) ...which turned Working capital and adjustments³ 6.9 (6.1) N/A into cash. Free cash flow excl. working capital 52.1 84.4 62% and adjustments Adjusted free cash flow conversion⁴ 86% 92% 6% Notes:
Slide 44: And we're highly profitable on the bottom line
Profit before tax (£m) 173% YoY¹ And we’re highly profitable on the bottom line. Note: ¹Comparison is H1 FY23 to H1 FY22. 44
Slide 45: At scale, growing fast and highly profitable
At scale, growing fast and highly profitable. £51.3bn £416.1m £91.9m £51.3m Adj. EBITDA Volume Total Income Profit before tax 22% margin +49% YoY +63% YoY +52% YoY +173% YoY £78.3m Free Cash Flow +32% YoY 45
Slide 46: Guidance
Guidance. Total Income 55-60% >20% Growth in FY23 Medium-term growth (CAGR) Adjusted EBITDA margin Maintained at or above 20% over the medium-term 46
Slide 47: Onwards
7wise Onwards.
Slide 48: What we're doing and what it means
What we’re doing… What it means… Solving a massive customer Huge addressable market problem opportunity Rebuilding the infrastructure… Deep competitive advantage …which powers products that Word of mouth driving growth; people and businesses love highly engaged customers And we’re sustainable: we fu
Slide 49: Q&A
Q&A 49
Slide 50: 7Wwise
7Wwise
Slide 51: Disclaimer
Disclaimer This presentation does not constitute an offering of securities or otherwise constitute an invitation or inducement to any person to underwrite, subscribe for or otherwise acquire or dispose of securities in any company within the Wise Group (the “Group”). This presentation may include fo