Wise: Profit upgrade sends shares jumping as fintech firm revels in rising interest rates
Wise shares have jumped this morning after the fintech firm hiked its profit guidance for the year on the back of a boom in customer numbers and bumper income from interest rates.
Wise, which offers a current account to customers and allows them to ping currency overseas, said in a trading update this morning income grew 51 per cent to £345m in the second quarter while active customers jumped 32 per cent to 7.2m. Revenues rose 22 per cent to £258.7m.
Wise has been among a host of firms to rake in cash on the back of rising interest rates this year. The firm said today the gross yield on balances held in its accounts was 3.8 per cent, with £12.3bn now stashed away by customers.
The quarter has allowed the firm to lift its profit guidance to 33-38 per cent, up from the previous guidance of 28-33 per cent.
“Our business performance, progress against our mission and the investments we’re making give us great confidence, and we’re pleased to signal this with our upgraded financial guidance for FY24,” said Harsh Sinha, chief technology officer and interim chief executive officer.
Sinha has taken over the reins of the firm while boss Kristo Kaarmann takes extended paternity leave.
In its update today, Wise warned however that sluggish economic conditions had put a dampener on volume growth among its higher value customers.
“Macroeconomic conditions remain uncertain and we continue to see slower volume growth amongst high value customers, whilst increasing Wise Account adoption has supported revenues and an increase in the take rate,” bosse said in a statement.
Shares in Wise jumped over two per cent at market open this morning. The fintech firm has shrugged off some of the downturn of the past 18 months with its market capitalisation climbing some 33 per cent since the start of the year.