Wise plc Reports Strong Q1 FY26 Trading Update
Why we think this is good
The trading update from Wise plc shows solid revenue growth, with underlying income up 11% year-over-year on a reported basis and 14% on a constant currency basis. The company also provided positive forward guidance, expecting 'strong growth in underlying income in FY26' in line with its medium-term targets. However, the report did note some near-term headwinds, including a reduction in cross-border take rate, suggesting the company is facing pricing pressure and margin challenges. Overall, the results appear to be a mixed bag, with the strong revenue growth offset by the margin pressure, resulting in a 'good' sentiment score.
Key Points
- Quarterly cross-border volume grew 24% year-over-year (27% constant currency) to £41.2 billion
- Underlying income increased 11% (14% constant currency) to £362.0 million
- Company expects strong growth in underlying income in FY26, in line with 15-20% medium-term guidance
- Cross-border take rate reduced by 1 basis point in the quarter, or 12 basis points year-over-year, to 52 basis points
- Focused on investing to target 13-16% underlying profit before tax margin in the medium term
Summary
Wise plc reported a strong start to its fiscal year, with quarterly cross-border volume growing 24% year-over-year (27% on a constant currency basis) to £41.2 billion, and underlying income increasing 11% (14% constant currency) to £362.0 million. The company expects strong growth in underlying income in FY26, in line with its medium-term guidance of 15-20% on a constant currency basis. However, the report noted a reduction in cross-border take rate, reflecting pricing pressure, and the company remains focused on investing to target an underlying profit before tax margin of 13-16% in the medium term.