Wise Reports Strong Growth in Revenue and Profit for FY2025
Why we think this is good
Wise has delivered a robust financial performance for FY2025, with significant growth across key metrics. Revenue increased by 15% to £1.21 billion, while profit before tax grew by 17% to £564.8 million. The company's customer base expanded by 21% to 15.6 million active users, driving a 23% increase in cross-border volume to £145.2 billion. Cash position and liquidity remain strong, with free cash flow improving to £615.4 million. The outlook is positive, with expected underlying income growth of 15-20% CAGR over the medium term. However, the high valuation (P/E ratio of 26.8) and share price near 52-week highs suggest much of this good news may already be priced in. While the company plans significant investments for future growth, this could pressure margins in the short term. Regulatory risks in the fintech sector also remain a consideration. Overall, Wise's performance and outlook are encouraging, but the current valuation and potential risks temper the enthusiasm to some degree.
Key Points
- Revenue up 15% to £1.21 billion
- Profit before tax increased 17% to £564.8 million
- Active customer base grew 21% to 15.6 million
- Cross-border volume rose 23% to £145.2 billion
- Free cash flow improved to £615.4 million
- Cash balance strengthened to £13.98 billion
- Underlying income growth of 15-20% CAGR expected over medium term
- Plans to double annual spend on growth initiatives
- Targeting underlying profit before tax margin of 13-16%
- Intention to dual list shares in US and UK announced
- High valuation with P/E ratio of 26.8
- Potential regulatory risks in fintech sector noted
Summary
Wise plc has reported strong financial results for FY2025, demonstrating robust growth across key areas. Revenue increased by 15% to £1.21 billion, while profit before tax grew by 17% to £564.8 million. The company's customer base expanded by 21% to 15.6 million active users, driving a 23% increase in cross-border volume to £145.2 billion. Wise's financial position remains solid, with free cash flow improving to £615.4 million and a strong cash balance of £13.98 billion. The company maintains a positive outlook, expecting underlying income growth of 15-20% CAGR over the medium term. Wise plans to double its annual spend on growth initiatives, while targeting an underlying profit before tax margin of 13-16%. The company also announced its intention to dual list its shares in the US and UK, which could bring strategic and capital market benefits. Despite the strong performance, investors should note the company's high valuation (P/E ratio of 26.8) and potential regulatory risks in the fintech sector. Broker targets range from a "Sell" rating with no price target (Citigroup) to a "Buy" rating with a 1,240.00p price target (Berenberg Bank).