news

Wise shares plunge 10% after fintech firm projects slower growth this year

Pavlo Gonchar | SOPA Images | LightRocket via Getty Images
  • British payments company Wise said it expects underlying year-over-year income growth of 15-20% for the full-year ending March 2025.
  • That's lower than the 31% underlying income growth Wise reported in its results for the fiscal year that ended March 31.
  • The softer income growth projection came off the back of price reductions Wise implemented at the start of its current financial year.

Shares of British money transfer company Wise dropped on Thursday after the company projected weaker annual revenue growth in the current fiscal year.

The firm's stock was down 9.8% at 1:30 p.m. London time, after falling as much as nearly 21% earlier in the session.

The consumer payments company, which lets customers send or spend their money overseas at cheaper rates, said it was expecting underlying year-over-year income growth of 15-20% for the full-year ending March 2025.

That's lower than the 31% underlying income growth to £1.2 billion ($1.53 billion), which Wise reported on Thursday in its results for the fiscal year that ended March 31.

Underlying income strips out benefits paid on customer balances or net interest income above the first 1% gross interest yield.

Underlying pre-tax profit, which Wise said accounts for costs and reinvestment, came in at £242 million for the full year, up by 226% year-over-year. Wise had a profit before tax margin of 21%, the company said.

Price reductions

The softer income growth projection came off the back of price reductions that Wise implemented at the start of its current financial year.

Analysts at Jefferies said in a note out Thursday that Wise's announced guidance was "disappointing at first glance given the price reduction."

At 15-20%, Wise's forecast for total income growth was 2% below consensus estimates at the mid-point, Jefferies' analysts said. They added that they think Wise's price cuts "boost confidence in medium-term growth."

Wise said it ended its financial year with 12.8 million active customers, up 29% on the year. The company processed £118.5 billion worth of cross-border transactions, higher by 13% year-over-year.

Wise said more of its clients are using their account to store cash, with the firm now sitting on £16 billion of customer deposits across cash and Assets, the company's investment account.

Copyright CNBC
Contact Us