Wise’s fortunes have been shattered by disappointing revenue and a slowdown in growth of the volume of transactions made on its platform.
Payments company announced that their fourth-quarter revenue had increased by 24 percent year-on-year, to £277.2 millions. However, this was less than what had been predicted in the City. Wise’s volume of international transactions grew by 14% to £30.6 Billion in the three-month period ending March. This was lower than the £31.6 Billion that analysts had predicted and a slower growth rate than the 16 % enjoyed by the group during the third quarter.
The shares of the financial technology company fell by 9.9 percent, or 90 1/2p to close at 8221/2p. The stock is currently above the 800p mark at which it debuted on the London Stock Exchange in July 2021. However, since Wise went public via an unusual direct listing, instead of an IPO, its stock price has fluctuated and briefly dropped below 300p.
Wise, a company founded 13 years ago, was created by Kristo Kármann and Taavet Hnrikus. The Estonian founders, who were living in Britain at the time, started their business when they saw an opportunity to offer a cheaper alternative to international bank transfers. The company has about 395,000 active business clients, 7.5 million personal customers and generated an annual profit of £146.5 in 2023.
Kaarmann was under scrutiny in 2021 when it was revealed that HM Revenue & Customs had fined him £365,651 for failing to pay a £720.495 tax bill from the 2017-18 tax period. Wise reported in 2022 the Financial Conduct Authority (the City regulator) had opened an investigation against Kaarmann. The investigation is still ongoing.
Investors were also upset by the decision of Wise’s finance chief Matt Briers to resign last year after a bicycle accident. The announcement came less than two weeks after the company announced that Kaarmann would be taking a 3-month sabbatical in order to care for his infant son.
Kaarmann stated that Wise enjoyed “another strong quarter.” Active customer growth was strong at 29 percent as both personal and business clients find our expanding set of features and services increasingly useful to help them move and manage money.
Hannes Leitner is an analyst with Jefferies the broker. He called the figures a “mixed bag”.