Slide 1: H1 FY24 Results Presentation
H1 FY24 RESULTS PRESENTATION 14 November 2023 1
Slide 2: Welcome
WELCOME Harsh Sinha Chief Technology Officer and Interim CEO
Slide 3: Money Without Borders
MONEY WITHOUT BORDERS We’re building the best way to move and manage the world’s money. Min fees. Max ease. Full speed.
Slide 4: £2t+ moved cross currency annually by people
£2t+ moved cross currency £9t+ moved cross currency annually by people annually by SMBs 4
Slide 5: 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 6: 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. 6
Slide 7: But we're growing fast and increasingly profitable
But we’re growing fast and increasingly profitable Active Adj. Volume Income customers EBITDA 7.2m £57bn £656m £241m Last 3 2.3x 2.4x 3.4x 4.6x years Notes: Actuals based on H1 FY24, with the comparison against H1 FY21. Except for active 7 customers based which is based on Q2 FY24, comparative perio
Slide 8: 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 9: We have evangelical customers
WE HAVE EVANGELICAL CUSTOMERS
Slide 10: We are investing in three products
We are investing in three products Wise Account Wise Business Wise Platform 10
Slide 11: We rolled out Account features in more places
Assets “Interest” rolled out in Germany, Norway, Sweden and Estonia Assets “Stocks” feature introduced in 11 EU countries We rolled out Total AuC in our Assets product of £1.7bn1 Account features in more places. Launched a service for expats in China to send money home Removed charges for holding ba
Slide 12: Multi-feature adoption
Multi-feature adoption1 44% 58% Wise Account Wise Business (+12% YoY) (+5% YoY) Notes: ¹Adoption defined as Percentage of total Q2 FY24 active customers (personal and business) who have adopted more than one product; where a product is defined as one of Send, Spend, Receive, Hold & Convert. 12
Slide 13: Evangelical customers drive our growth
>67% Evangelical customers drive our growth. New customers joining through word-of-mouth (H1 FY24) 13
Slide 14: We have a diverse set of partners across all geographies
We have a diverse set of partners across all geographies 14
Slide 15: Our portfolio of Platform partners continues to grow
Our portfolio of Platform partners continues to grow New partners in H1 FY24 >70 15 Cumulative number of Platform partners by launch date in respective Wise financial year. FY24 represents total partners as at H1 FY24
Slide 16: We're building the network for the world's money
WE’RE BUILDING THE NETWORK FOR THE WORLD’S MONEY
Slide 17: Our infrastructure enables fast, low cost payments
Our infrastructure enables fast, low cost payments. Significantly Paymentfaster Speeds payment speeds Low cost and Average cheaper than banks Cross-border Price Significantly cheaper than the average bank at 67 bps 17
Slide 18: This infrastructure is increasingly difficult to replicate
This infrastructure is increasingly difficult to replicate Licencing and connectivity Operational capabilities Expansions Regulatory Technology Operations ● Direct connections into 5 payment ● c.800 engineers systems ● One single global treasury system ● 70+ banking partners ● Machine Learning power
Slide 19: We're building the network for the world's money
We’re building the network for the world’s money Licencing and connectivity Our network provides competitive advantage Successes in H1 FY24 Direct connection to payment systems giving full control of end-to-end payment network Integration into Australia’s Expansive network of banking and card partne
Slide 20: Our operational capability allows us to build great products and protect our customers
Our operational capability allows us to build great products and protect our customers Operational capabilities c.800 engineers globally Localised product solutions One single global treasury Lower liquidity and FX costs system >1,300 internal customer 24/7 ‘follow the sun’ customer support agents s
Slide 21: 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 22: Growing fast, investing & profitable
GROWING FAST, INVESTING & PROFITABLE Matthew Briers Chief Financial Officer
Slide 23: H1 FY24 Summary Financials
H1 FY24 Summary Financials 7.2m £57bn £12.3bn £656m £241m Active customers Volume Customer balances¹ Income Adj. EBITDA +32% +12% +33% +58% +163% 23 Notes: Comparisons H1 FY24 vs H1 FY23 other than active customers is based on Q2 FY24, compared with Q2 FY23. ¹Does not include customer funds invested
Slide 24: Active customer growth has compounded at over 30% YoY
Active customer growth has compounded at over 30% YoY Personal active customers (m) Business active customers (000s) Q2 FY24 Q2 FY24 YoY1 YoY1 3yr 3yr CAGR CAGR 34% 34% 3yr CAGR 31% 28% 32% Notes: ¹Comparisons Q2 FY24 vs Q2 FY23. 24
Slide 25: And multi-feature customers are driving this growth
1 And multi-feature customers are driving this growth Personal active customers (m) Business active customers (000s) YoY 3y CAGR 80% 3y CAGR YoY 39% 82% 52% 15% 19% Multi-feature adoption Multi-feature adoption 16% 21% 32% 44% 39% 46% 53% 58% Notes: ¹Multi-feature customers defined as Percentage of
Slide 26: Multi-feature customers are driving Income
Cross revenue Cross border +12% £384.4m volume (+14% constant currency1) +20% Multi-feature customers are Card spend Other revenue driving Income (xccy & +90% £113.8m +48% domestic) growth. Customers Balances2 +33% Interest Income £211.1m Notes: ¹Constant currency is defined as current period result
Slide 27: Volumes have compounded in line with customer growth
Volume2 (£bn) H1 FY24 YoY¹ 3y CAGR Volumes have Total 12% 34% compounded in line Business 13% with customer growth. Personal 11% 4.2 4.6 4.9 4.0 VPC (£k)3 Notes: ¹Comparisons H1 FY24 vs H1 FY23. 2Volume is defined as a XCCY transfer amount received by recipients and is known as converted volume. 3VP
Slide 28: Account feature adoption is driving up our take rate
Revenue Take Rate¹ (%) 0.89% Account feature adoption is driving 0.67% up our take rate. Notes: ¹Revenue take rate comprises the cross border take rate plus the take rate on other fees. 28
Slide 29: Revenues grew at 25% YoY
Revenue (£m) H1 FY24 YoY1 498.2 25% 3yr CAGR 37% 397.4 48% Revenues 256.3 grew at 25% 192.2 20% YoY. Notes: ¹Comparisons H1 FY24 vs H1 FY23. ²Other fees is predominantly card interchange income, but also includes management fee on assets product, account set-up fee, card issuance fees, same currency
Slide 30: Our revenue growth is thriving across regions
Contribution Revenue H1 FY24 Region to YoY revenue (£m) YoY¹ growth APAC 102 39% 29% Our revenue Europe 152 18% 23% growth is thriving across regions. N. America 103 21% 18% UK 96 19% 15% ROW 45 53% 15% Total 498 25% 100% Notes: ¹Comparisons H1 FY24 vs H1 FY23. 30
Slide 31: Customer balances are growing >30%
Customer balances2 (£bn) H1 FY24 YoY¹ 33% Customer balances 3y CAGR 62% are growing >30%. Notes: ¹Comparisons H1 FY24 vs H1 FY23. 2Includes customer balances held on balance sheet and not amounts invested in the “Interest” Assets and “Stock” Assets products, where available. 31
Slide 32: And the gross yield on balances increased to 3.7%
£m Q4 FY23 Q1 FY24 Q2 FY24 H1 FY24 Interest income £72m £96m £115m £211m Customer benefits paid & £(16)m £(24)m £(29)m £(53)m interest expense Interest income net of £56m £72m £86m £158m customer benefits And the gross yield on balances Yield % Q4 FY23 Q1 FY24 Q2 FY24 H1 FY24 increased to 3.7%. Inte
Slide 33: Interest income drives 58% Income growth
Income2 (£m) H1 FY24 YoY¹ 58% 3y CAGR Interest income 50% drives 58% Income growth. Notes: ¹Comparisons H1 FY24 vs H1 FY23. ²Income is an alternative performance measure and is defined as revenue plus interest income on customer balances, less interest expense on customer balances and benefits paid
Slide 34: Gross profit margin higher thanks to interest
Income (£m) H1 FY24 YoY¹ Gross profit COS3 9% margin higher thanks to interest. Gross Profit 86% Gross Profit Margin2 62% 68% 63% 75% Notes: ¹Comparisons H1 FY24 vs H1 FY23. 2Gross Profit Margin is Gross Profit as a % of 34 Income. 3Includes net credit losses on financial assets.
Slide 35: Expense growth driven by last year's investments
Administrative expenses (£m) H1 FY24 vs H1 FY24 vs H1 FY23 H2 FY23 Total 38% 6% Expense growth Other driven by last administrative expenses 26% 0% year’s investments in our teams. Employee benefit expenses 46% 10% Headcount² 2.9K 3.4K 4.3K 5.2K 5.4K Headcount 24% 4% Notes: ¹Comparisons H1 FY24 vs H1
Slide 36: We have a highly profitable business model
Adjusted EBITDA (£m) We have a highly profitable business model. Adj. EBITDA Margin¹ 27% 24% 22% 37% Notes: ¹Adjusted EBITDA Margin is Adjusted EBITDA as a % of Income. 36
Slide 37: Our approach to interest income utilisation. Recap FY23 results
Our approach to interest income utilisation. Recap FY23 results ● Over the medium-term our adjusted EBITDA margin will be ‘at or above 20%’ … including only the 1st percentage point of gross interest yield ● We aspire to return 80% of the remaining yield to customers ● Of the remaining interest yiel
Slide 38: Adj. EBITDA margin is structurally higher
Adjusted EBITDA margin (%) ~8ppt 37% Adj. EBITDA ~4ppt margin is 29% 25% Guidance: structurally higher “At or above 20%” in current interest rate environment. Adj. EBITDA: Adj. EBITDA: Adj. EBITDA: As reported If we returned 80% If interest of interest back to yields were customers only 1% 38
Slide 39: Continued customer-led growth drove a 3.7x increase in PBT and EPS
Profit before tax (£m) Continued customer-led growth drove a 3.7x increase in PBT and EPS. EPS (p) 1.6 1.3 3.8 14.1 PBT as % of 10.4% 7.3% 12.9% 39.0% Revenue 39
Slide 40: We recently upgraded our FY24 Income growth guidance
We recently upgraded our FY24 Income growth guidance 33-38% Income growth (FY24 YoY) (upgraded from 28-33% in Oct 2023) Medium-term guidance 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 inve
Slide 41: 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
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Slide 43: Appendix
APPENDIX
Slide 44: Sensitivity to gross interest yields
Sensitivity to gross interest yields Based on interest returned to customers per framework Based on actual % of interest returned to customers aspiration 1 Gross yield on customer balances 1% 2% 3% 3.7% 4% 1% 2% 3% 3.7% 4% Average customer balances (£bn) 11.4 11.4 11.4 11.4 11.4 11.4 11.4 11.4 11.4
Slide 45: Disclaimer
Disclaimer FORWARD LOOKING DISCLOSURE DISCLAIMER This report may include forward-looking statements, which are based on current expectations and projections about future events. These statements may include, without limitation, any statements preceded by, followed by or including words such as “targ