UK fintech Wise is facing repercussions after its latest quarterly results fell short of analysts’ expectations, leading to a significant drop in its share price, despite reporting solid financial performance across most metrics.
Wise reported an underlying income of £362 million for the months of April, May, and June, reflecting an 11% increase but missing analysts’ average estimate of £372 million. Consequently, the share price plummeted by 9% during early trading on Thursday, marking its most substantial decline since January.
This downturn occurred despite a notable 24% increase in quarterly cross-border volume, reaching £41.2 billion. Additionally, customer holdings rose by 31% to £22.9 billion, and the active customer base expanded by 17% to 9.8 million.
CEO and co-founder Kristo Käärmann remarked, “We have had a strong start to our financial year, progressing on our journey to moving trillions with more people and businesses around the world using Wise.”
Wise has reiterated its full-year outlook, aiming for an underlying profit before tax margin of 13-16% in the medium term. Valued at £12 billion, the fintech had seen its share price gain earlier in the week following a deal with Italy-based UniCredit, which will utilize Wise’s cross-border payments platform.
However, equities analyst Jeffries indicated that the first-quarter results might negate those gains, citing “higher FX headwinds” and a 12 basis points decline in cross-border take over the past six months as contributing factors to the missed forecast.
These results come shortly after Wise announced its decision to shift its primary listing from London to the US, a move intended to “significantly enhance [its] profile” and align more closely with major growth opportunities. This decision raised concerns about the UK’s fintech sector and prompted calls for measures to strengthen its market.