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Investing.com -- Wise (ST:WISE) reported preliminary FY25 figures on Thursday, showing strong total payment volume (TPV) growth but a slowdown in underlying Total (EPA:TTEF) Income, raising concerns about margin compression, sending its shares down by 7%.
TPV accelerated in the fourth quarter, rising 27% year-over-year to £39 billion, 3% ahead of expectations.
However, underlying Total Income growth slowed to 12%, reaching £348 million, aligning with estimates but reflecting some take rate compression.
For the second half of the fiscal year, Wise reported an uPBT of £125 million at an 18% margin, 4% ahead of expectations and above its target range.
Jefferies analysts noted that active customer growth for FY25 stood at 21%, reaching 15.5 million users, slightly below the consensus estimate of 15.8 million.
Volume per customer (VPC) increased by 1% year-over-year to £9,400. Wise also reported customer deposits of £20 billion, with approximately £4.5 billion categorized as off-balance sheet assets under custody and £16.5 billion held in Wise Accounts.
The company also confirmed a share buyback program worth approximately £250 million, representing 2.5% of its market capitalization.
The move aims to neutralize previous share issuances and was widely expected, though some analysts argue that Wise’s strong balance sheet—with over £1 billion in core cash—could have supported a larger buyback.
Wise addressed its ongoing consultation regarding potential FTSE 100 inclusion, stating that an update will be provided in the coming weeks.
For FY26, Wise anticipates 15-20% growth in underlying Total Income, projecting a range of £1.56-1.63 billion.
This aligns closely with analyst expectations, including the VA consensus estimate of £1.614 billion and Jefferies’ forecast of £1.641 billion.
Wise also expects its uPBT margin to be "around the top-end" of its mid-term guidance range of 13-16%, implying a figure closer to 17%.