Wise has seen its share price increase significantly over the past month, the gains further supported after releasing its Q1 2023 results (Q2 2022 in calendar time, which is how we’ll refer to it from now on). The UK-based money transfer player has had a successful quarter, marking not only substantial year on year growth but an uptick in its overall take rate for the first time since Q2 21.
Quarterly revenue grew by 51% YoY to £185.9m, in line with growth volume, while the company’s total volume sent across borders was more than $24bn – a 49% YoY increase. This volume growth was driven by strong customer acquisition across Wise’s Account and Business products, but also by increasing concerns about currency volatility causing customers to transfer money earlier in the year, according to Wise.
The company’s total customer take rate increased 4bps to 0.76% compared to last quarter, which Wise put down to price rises announced in March, as well as revenue increases in other areas. Pricing is always a tricky balancing item for Wise; for customers and its mission it wants to minimise pricing, but for investors they at least like to see stability in pricing (an area all our readers know we track very closely).
Volume per customer increased by 19% YoY for the business segment, compared to 6% for the consumer segment. This growth margin continues to climb with every quarter, showing how Wise’s investment in its business product is yielding higher revenues through high-volume business customers.
The company is also continuing to reduce transfer speeds, with more than half of payments delivered instantly for the first time. Wise said this was partly due to the rollout of instant transfers to Brazil, where it launched the Wise Account in February 2022.
Looking forward, the company remains confident in its projections, including anticipated revenue growth of between 30-35% in FY23 and greater than 20% (CAGR) over the medium term – very healthy numbers.
The company is also continuing to work on new products, most notably a new SWIFT Receive feature for its Wise Platform. This would allow financial institutions that aren’t connected to SWIFT to receive payments from around the world via SWIFT using their existing customer details.
How does Wise’s pricing, speed and capabilities compare to its competitors?