Wise shares jump more than 10 per cent as it slashes money transfer costs and revenue soars
- Growing customer base drives money transfer app’s revenue 33% higher
- Customer transfers grow 44% to £34bn as customer numbers grow to 3.9m
Shares in money transfer app Wise soared this morning as higher customer numbers drove revenue 33 per cent higher.
The UK fintech, formerly known as TransferWise, posted revenues of £256.3million in the first half of the year, as customer numbers grew to 3.9million.
Wise said it had transferred £34billion on behalf of its customers in the six months to 30 September, 44 per cent higher than the same period last year.
Co-founder and chief executive Kristo Kaarmann said Wise has continued to invest in its infrastructure to make transfers cheaper
It has said its full-year revenue guidance could be as high as 30 per cent.
Wise, which specialises in cross-border money transfers, has also cut the costs on the average paid by customers by 7 basis points to 0.62 per cent, with payments also becoming speedier.
The fintech unicorn revealed 40 per cent of all transfers delivered instantly in the second quarter.
Chief executive Kristo Kaarmann said it was part of Wise’s ‘mission to make moving and managing money across borders faster, easier, cheaper and more transparent’.
‘Over the first half of this year we’ve improved our products and engineered away substantial points of friction in the payments process, enabling us to sustainably lower prices while continuing to invest in growing the business for the long term.
‘So a virtuous circle of investment continues, and our service gets faster, better and cheaper than ever for our personal and business customers.’
Despite lower costs, the company’s gross profit margin grew from 62 per cent to 68 per cent which helped gross profits rise by 46 per cent to £174million.
However investment in its infrastructure, a recruitment drive and the cost of its IPO all ate into its pre-tax profits which slipped from £20million to £18.8million.
‘This level of profit was slightly lower than the previous year as we continue to reinvest the majority of the additional gross profit delivered in the period while also incurring exceptional costs in the completion of our direct listing,’ said chief financial officer Matt Briers.
Administrative expenses increased 56 per cent to £152.5million in the first six months of the year, while employee costs jumped 25 per cent to £84.8million as the team’s headcount grew by 688.
Shares in Wise are currently up 11.53 per cent to 842p, its highest point in nearly a month and back above the 800p mark they listed at.
It is Wise’s second trading update since its blockbuster direct listing in July, in which the fintech was valued at £8billion.
#Wise #shares #jump #cent #revenue #soars