Welcome to Wise, and welcome to our Q1 FY27 results call. I'm Sarah Lewandowski, Director of Owner Relations.

I'm joined by our CFO, Emmanuel Thomassin Emmanuel going to run through our results before giving you the chance to ask questions. Before we start, we have a reminder that we'll be making forward-looking statements today, including statements regarding Wise's future performance.

These statements are not guarantees and can involve risks and uncertainties and other factors that may cause actual results to differ. Please refer to our SEC filings for more information on these risk factors.

All forward-looking statements made in this call are based on current expectations, assumptions, estimates, and beliefs, and we undertake no obligation to update any forward-looking statement except as required by law. With that, I'll now hand over to Emmanuel.

Hello, everyone. Thank you for joining us for Q1 results call.

I'm pleased to present our financial results for the first quarter of the financial year 2027. We've start the year with continued growth in customers and volumes.

Today, I'm going to take you through: first, our financial highlights in the quarter; second, the drivers of our revenue growth; third, our approach to pricing; and lastly, I'll cover guidance for the year before handing over for Q&A. Now, starting with our financial highlights for Q1 2027.

During the quarter, we continued to see significant growth in our performance metrics, as our customers accelerate their usage of Wise for more and not only for cross-border transactions, but also for everyday needs. Our active customer base increased by 21% year-on-year to almost 12 million.

Our cross-border volume increased by 26% year-on-year to $69 billion of dollars, with especially strong growth in Wise Business of 39% year-on-year. Customer holdings grew by 31% year-on-year to $21 billion dollars, including $10 billion dollars held through Wise Assets.

I will now take you through what this means for revenue growth in the quarter. In Q1, we generate $350 million dollars in cross-border revenue from customers sending or converting currency.

This represents a growth of 22% year-on-year. This increase is a little lower than the 26% growth in volume, reflecting a reduction of the average take rate from 52 basis points in Q1 '26 to 50 basis points in Q1 2027.

We also generate $191 million dollars in card and other revenues from customers using the Wise card abroad and at home, but also investing in our assets products and addition customer activity such as domestic transactions. This represents a year-on-year increase of 38%, with the increase mainly due to card revenue driven by the rise in business card spending in North America and growing personal card adoption in the US and APAC.

Taking together, transaction revenue totaled for $541 million dollars, representing a year-on-year growth of 27%. As I highlighted in our full-year results just a 2 weeks ago, customers are also trusting Wise more and more with their money.

At the end of June '26, customers held $31 billion dollars on the Wise account, up 24% compared to the previous year. As we invested this funds in liquid instruments, we generate $225 million dollars in interest income during the quarter, up 15% year-on-year.

Growth in customer balance didn't fully translate to interest income growth as we saw reduction in gross yield from 3.3% in Q1 '26 to 2.9% in Q1 2027 as a consequence of the central bank decisions during 2026. I just covered different layers of our customer activities, including sending and converting money, and growing with Wise Assets, but also holding balance with us.

Together with revenue from using the Wise card and other revenue streams, including the fees from asset, this drive our net revenue growth. In Q1, we delivered $714 million dollars in net revenue, up 25% year-on-year, with an increasingly diversified revenue base, with 51% of net revenue being driven by non-cross-border activities this quarter.

Moving to a reminder of our investment framework. Overall, we believe in driving growth through continuous investment.

Our investment framework is a clear evidence of this, and by targeting a medium-term 15% to 20% income before tax margins, assuming we are able to pay our target interest income back to the customers, we are able to invest in our growth and into our pricing. This, in exchange, drives more scale and operational efficiencies, providing us with additional margin for capacity for reinvestment.

With our investment framework alongside our direct investments in the business, we seek to invest into sustainable reductions in our prices. We do this always in a position of strength, intentionally.

This remained a long-term goal: driving down prices for customers while building a sustainable profitable business. In our full-year '26 results, I gave details on how we expect to reduce the take rate this year.

We expect to continue sharing efficiency with customers as we generate extra capacity for investments. This quarter, the take rate reduced to 50 basis points, down from 51 basis points like quarter, and down from 52 basis points a year ago.

As I said a few weeks ago for 2027, and depending on additional capacity that we can generate, we expect this to be reflecting in a reduction of 1 to 2 basis points in each of the following quarters. Our investments into pricing are a core feature of our business model, which supports the long-term sustainability of our business.

Finally, looking ahead, we expect to see a continuing trend of rapid growth and will continue to invest to achieve this. For this year, we continue to expect net revenue growth to be around the middle of a 15% to 20% range on the constant currency basis.

Due to the phasing of our investments into pricing, we expect this growth to be more pronounced in the first half of the year. We have seen this in Q1 with growth of 25% in net revenue year-on-year.

We also expect that the scheduling of our investments will drive a comparable trend in our income before tax margin. While we expect full-year margins to be around the higher end of a 20% 25% range, we expect this to be front-half weighted, delivering results slightly above this target in H1.

Now let's move to the Q&A session. Thanks, Emmanuel.

If you would like to ask a question, please raise your hand in the Zoom webinar. Our first question is from Mohammed Moawalla from Goldman Sachs.

Can you hear us, Mo?

Are you maybe on mute?

Hi, can you hear me, Sarah and Emmanuel?

Sorry. Can you hear?

Hi, can you hear me?

Yes.

Yes, I can hear you. Can you hear me?

Yes.

Great. Hi, Emmanuel.

Hi, Sarah.

Thanks for taking the question and well done on the results. I had two if I may, Emmanuel.

The first one, I know you've sort of have flagged that you'd be running kind of ahead of your kind of annual guide in the first half of the year. When you look at the kind of the growth in Q1, was that sort of in line or above your expectations?

If we sort of assume this robust trend in the first half, it would suggest that even for the 9 months, right, your kind of implied growth rate is kind of more to the low end of your guide for the remaining quarters. Does that suggest that maybe the landing zone is more likely kind of not at the midpoint, but more in the kind of upper half or towards the upper end?

If it isn't, what are the kind of factors we should consider? Then secondly, I noticed Business had a pretty strong performance.

Can you also give us a sense, I know you don't always give us quarterly breakdown of platform volume, and kind of unpack the kind of drivers around the strength in Business, please? Thank you.

Thank you very much, Mo. In terms of growth that we seen in 20 in our Q1 2027, obviously, we are very pleased with what we see.

This is in line with what we saw last year and also confirmed our strategy to invest and reinvest the efficiency in our business. We think the growth that we saw in Q1 is in line with our expectations.

Concerning the full year, as we expect to continue to pass the efficiency that we get also into pricing. This quarter in April, we lower our take rate by 1 basis point.

We announced 3 weeks ago that we will do 2 basis points reduction in the second quarter, followed by probably 1 and 1 in Q3 and Q4. The first part of the year is obviously not impacted or not so much by the price reduction, while the second half of the year will be.

On our projection, we guide the market that we would be at the middle of the range for 15% to 20%. It's fair to say that we're always take a conservative view, and we feel comfortable with this guidance as of today.

On Platform, as you can imagine, we're super excited. This is always we leverage our infrastructure.

This is the best way to acquire customers. We don't need to acquire them one by one, but then we provide this infrastructure to partners, which in reverse we gain then indirectly their customers using us.

We're extremely bullish. We have a nice pipeline, and I'm very happy to announce that today we are at 6%, roughly around 6% of our total cross-border volume generated by the partners.

As also Kristo mentioned 3 weeks ago, we have a nice pipeline, and yeah, we're looking ahead with confidence.

That's great. Thank you, Emmanuel.

Thank you, Mo.

Thanks, Mo. Next we have Aditya from Bank of America.

Over to you, Aditya.

Hey, Emmanuel. Sarah, can you hear me?

Yes. Yes.

Good evening. Or good morning.

Good evening.

Good evening, actually. Thanks for taking my questions.

Just a couple. Customer growth was quite strong, up 21%.

Could you just comment on how that maybe look like by region? Are you starting to see some of the benefits of the marketing spend you've been doing across some of those markets?

Second, you mentioned very strong spending on business cards in North America and growing adoption of the personal card in the US and APAC. Any color on that as well in terms of what's driving that and maybe is that more features or just part of the marketing push as well?

Thank you for your questions. In general, we have growth across the regions.

We invest in all regions, as because you mentioned marketing last year, we've done campaign in all segments almost. We're very pleased with what we see the evolution in APAC, but especially in America.

I mentioned businesses today, which are grow very nicely in terms of active customers and also volumes. That's fair to say that this region is benefiting from our investments that we've done.

We will disclose a bit more in half-year in terms of regional development, but APAC, as we mentioned before, and the North America, especially US, are overperforming. In terms of APAC card revenues, this is in line with customer activities.

I think the reason you could expect that APAC and also America's are performing extremely well here.

Thanks, Aditya.

Perfect. Thank you.

Thank you. Now we have Justin Forsythe from UBS.

Hi, Justin. Sorry, that wasn't working.

Good evening, Emmanuel and Sarah. Thank you so much for this.

A couple questions, if I don't mind. The first one here, I just wanted to talk a little bit between the relationship between revenue growth and the IBT guidance.

Both were confirmed here and you're pointing everybody to the midpoint of the revenue guide and reiterating the high end of the IBT guide. Should we think about it as the 17.5%, let's say the midpoint, equals that, call it 24%, 25% IBT margin?

Meaning, if you were to overshoot and do say 20%, the high end of the revenue guide, how does the correlation with margins work there? Would you then invest down to the IBT margin, say with price cuts, with additional head count, or something of that nature?

Then second question, you flagged personal card adoption in the US, and that's really interesting because I feel like in the past you've flagged actually challenges to winning in card adoption in the US, given all of the rewards from interchange that customers can get and spend. I just wonder if you could elaborate a little bit more on how you're winning in the US.

Is that expats that are spending elsewhere? Is it people that are spending in the US?

I assume you mean US domiciled people spending elsewhere on the Wise card. Maybe if you could just elaborate on that a little bit, if you don't mind.

Thanks.

Absolutely. Yes, within the guidance on IBT that we give today, this is assuming that we will be at the middle of the range on net revenue guidance, between 15% and 20%.

You mentioned if we overperform, what would be our reaction or what would be the consequence on IBT? We would first look at do we have space to reinvest at good return.

We will, as mentioned, invest, not spend, for us we will consider to accelerate this investments. If we don't find room to invest, then the consequence would be it could have a impact on our IBT.

It's too early to say. I think today we feel comfortable with this guidance, and we will always first look at reinvestment because these reinvestments are paying off.

We see the growth rate in all metrics, and then we feel like we have enough room to invest, and we're dedicated to gain more market share in terms of total TAM that is really, really large. In terms of card adoptions, this is correlated to our business customer growth.

Clearly in America, we see a very acceleration of this business customers, and accordingly, you have a correlation to the card spending and card revenue that we generate from this.

Got it. Emmanuel, thank you so much for that.

I thought you did also say personal card adoption in the US was strong as well, but maybe I misinterpreted that. Thanks again for the questions and congrats on a great quarter.

Appreciate it. No,

thank you very much. This is both, but obviously business will have larger volumes and hence we generate more revenue per customer, if you will, if you look at the business revenue on cards.

Great. Thanks, Justin.

Next question is from Cris Kennedy from William Blair. Hi, Cris.

All right,

thank you for taking the question and for the time. Historically, you've given some interesting statistics about the outcomes when you establish direct connections in certain countries.

Can you provide any color on kind of the benefits that you're seeing from Japan or Brazil, some of your more recent direct connections relative to history?

Thank you, Cris. In general, as this is core to our value proposition.

This direct integration makes us so unique. This is why we get partners joining us they're using our platform, our direct integrations.

In general, the direct integration are beneficial for our cost base. We generate efficiency with this.

This is true with servicing, direct instant payments. We had 77% of instant payment in Q1, we continue to increase this percentage from 75% to 77%.

Not only satisfy our customers, but also reduce the numbers of contacts that we have with servicing. This is a direct cost savings.

Without also direct integrations, we are avoiding to work with partner banks for certain countries because then we can provide the liquidity faster. That's have also some savings on the cost of sales.

In general, direct connection, and we see that with all direct connection are beneficial for efficiency that we can then decide to reinvest either in OPEX or in pricing.

Got it. Thank you for that.

Just to follow up, are the benefits in Brazil and Japan, in line with the other direct connections that you've had or any observations within those two markets? Thank you for taking the question.

No,

sure. Absolutely.

I think I'm not able to tell you right now exactly the amplitude of the savings. As you know in the past, we've seen the cost divide by 9 times in the UK.

It's too early to say right now for this, but we will give you more colors as we go through and then we can start with H1 results.

Understood. Thank you.

Thank you, Chris.

Thanks, Cris. Now we have Sven from Barclays.

Hi, Sven.

Good evening. Thanks for taking the questions.

Maybe first, can you comment what revenue growth was in the quarter on a constant FX basis and if there was any change in the underlying trends from where you exited the year? Then secondly, it's very encouraging to see that business active customer growth has accelerated again, and now accelerated for a few quarters.

Would be interested if you could share any color on how you see this developing from here. Thank you.

Sure. We don't give constant currency revenue, but what I can give you is basically the constant currency on volume.

We were at 26% as we defined today, and the constant currency growth rate for our cross-border volume would have been at 24%. That give you a bit the direction of travel, the difference between reporting currency and constant currency.

I must confess I forgot the second question if someone can help.

Maybe I can quickly check. In principle, should the volume and the gap between the constant FX and reported volume growth be similar, or, yeah, a good proxy for what net revenue was in the quarter?

Absolutely. It's a proxy, right?

To give you a very good direction of the difference that you will see between constant currency and reporting currency. Exactly.

On the business customer growth, because that was I think the second part of your question. I think what you see is the all investments that we've done in here.

If I may highlight one in particular, this is the benefit of having a dedicated team in servicing contacting the business customers proactively, making sure that not only we react to their questions, but we also look at the business and provide services that they might be not aware of or functions that they should use in their workflows. More and more, we see the benefits of being proactive, and the reward is the satisfaction of the businesses and them growing their business with us.

Perfect. Thank you.

Thanks, Sven. We now have Pavan from Citi.

Hi, Pavan.

Hi, Emmanuel and Sarah. Hopefully, you can hear me.

Thanks for taking my questions. Firstly, just on the elasticity of volumes, you reduced take rate slightly this quarter and plan to continuously cut through the year.

Could you maybe talk about the timing of when you expect to see the benefits of these? For example, have you already started seeing a benefit of the recent fee reductions within the quarter itself?

Then secondly, volume per customer growth has slowed in Q1. Appreciate that VPC is more of an output and there's a mix effect there, but is anything specific to kind of call out?

Okay.

On the elasticity volume, I think, clearly elasticity for us is a long-term game, if I may say so. We don't expect short-term benefits from this, especially when we reduce the take rate by 1 basis point.

We know that on a long term, that is the reason why you or businesses or even partners are choosing to work with us. The combination of the infrastructure that we provide at a very low take rate will always be the reason why people at the end choose to work with us.

That's why I will not expect a short-term positive impact or in terms of getting customers because of the price reduction. This is a long-term game, and this is for us part of our core of the mission.

We want to continue to reduce the take rate because we know that at the end, again, this is the reason why customers use us. In terms of VPC, I will not read too much into that.

This is not really due to the combination of retail, business, and partners. The VPC is less and less a KPIs that we use, also because of the diversification of our revenue structure.

Oh, yeah, indeed there's also a volatility component to that.

Thanks, Pavan.

Thanks.

Thank you. Thanks, Pavan.

Next we have Hannes from Jefferies. Hi, Hannes.

Hello. Good evening.

Appreciate the details around the take rate declines expected for this year. Can you just a little bit help us how we should think of the moving parts going from Q1 +25% growth to reach to the midpoint of the 15% to 20%, if I'm thinking you had quite a nice, resilient gross yield?

That was one part of it. Then the take rate should decline.

Should we expect card spend and other revenues to hold up, and thinking about the customer growth, do you think that can remain above 20%? Thank you.

Thank you, Hannes. In general, as you said, the take rate reduction will take part in Q2 with 2 basis points and then 1 basis point most probably in Q3 and Q4.

As I said, the vast majority still today or majority of our revenues is coming from cross-border volume, the impact on pricing will be perceived on our revenue, on the net revenue. That's why, when we forecast for the rest of the year, we think that the pricing impact will be on our growth rate, and that's why we guide to the 15% to 20%.

That's basically the philosophy behind it.

Maybe you can comment on the other parts like customer growth. Oh, yeah.

In terms of customer growth, I think you've seen that we are still have a very high KPIs. We're very happy with the customer growth, especially in business.

This is in line with what we saw last year. As we continue to invest in OPEX, in marketing, and increase the quality of our service, we expect basically this customer growth to continue.

Hopefully, we're really happy with the return that we get in terms of customer growth, especially in business that we saw in Q1.

Thank you.

Thanks.

Thanks, Hannes. We have Craig McDowell now from J.P.

Morgan. Hi, Craig.

Hi, good evening, Sarah. Good evening, Emmanuel.

Thanks for this. I just want to pick up on a point Pavan made on VPC and in particular on personal VPC.

I know a year or two ago you were talking about very deliberately targeting price reductions to generate higher-VPC customers. It feels like that's run its course.

Should we be thinking about stable VPC on the personal side of the business going forward, or even a decline if you're moving into APAC regions perhaps? If you could comment on that, that would be helpful.

The second question, just a brief tactical one: any kind of benefit that we should sort of discount in the Q1, maybe even Q2 performance just from World Cup? Presumably, quite a lot of activity happening in the US that you may well be benefiting from.

Anything to call out there would be helpful. Thank you.

In terms of

I start with the with the benefit of the World Cup. I think like is not that significant in our in our Q2 in our Q1 results.

I will more looking at events that happened, like, more geographic or political events. I mentioned briefly like, the 26% cross cross-border volume growth compared to last year, where we do we did have some political decisions around Liberation Day and so on and so forth.

I don't think that we have a massive benefit from the World Cup compared to the entire business. In terms of VPC, indeed, I mean like the VPC per customers might be different from region to region, depending on the GDP of the countries or the region itself.

That's, depending on where the volume will grow, we will see maybe VPC declining in a specific region. Overall, I think like, VPC is not the metrics that we use for the reasons that, I explained before.

The customer mix make it very, very difficult to to use this as a real KPI to measure the business. We prefer to look at the, the the deposits of our customers, which is a very strong sign of the trust that they have in Wise and them growing their money.

I think that's a very strong KPIs. This is true for retail, but this is true for businesses as well.

Understood. Thank you.

Thank you, Craig.

Thanks, Craig. Now we have Alex from BNP.

Can you hear us, Alex?

Can you hear me?

Yes. Hi, Alex.

Hi. Good evening.

Thanks for doing this. Just a couple of questions.

One is slightly technical, but just thinking of share buyback program that you talked about a few weeks ago, just curious if this has started already and if you're buying back shares on the UK line or the US line, how we should think of the cadence of a share buyback. That'd be my first question.

Second question, because you alluded to it just now, Emmanuel, sort of customer deposit growth, which was quite healthy in the quarter, I think on the per customer basis, it slowed down a little bit. How should we think about that?

Sort of customer deposit on a per customer basis slowing down, is it a function of say a fiscal Q1 that might be a bit travel-heavy with people who might have lower current balances in their accounts? Just curious how to think about that.

No,

thank you very much, Alex. In terms of buyback, we're in execution mode.

We do have, for the full year, the approval of our regulators, we are executing on this. Our aim is not to have any impact on the trading.

In terms of volume that we will buy per month, nor on which market we will buy. We aim to buy on both London market and New York market.

We don't want to have any impact on liquidity or on the share price. That's a kind of philosophy.

We will use, for example, ADTV as a metrics, we will look at what is the average and we will put a threshold so that we make sure that we don't influence the trading. We are in full execution mode, and that will last for the next 12 months.

In terms of customer deposit and the growth of it, I will not read too much into it at this moment. I would say this is a snapshot.

I think I would like to wait until we have a 6 months view in the year to give you more detail and to comment a little bit more.

Got it. Thank you.

Thank you, Alex.

Thanks, Alex. We don't have any more questions, thank you everyone for joining us.

Thank you for all your questions.

Thank you, everyone, for your support. Have a good evening.

Thank you.