Release Date: November 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Wise PLC (WPLCF, Financial) has seen a significant growth in its cross-border business, tripling its active customer base and cross-border volume over the past four years.
- The company has successfully reduced fees while increasing underlying income, demonstrating effective cost management and competitive pricing.
- Wise PLC (WPLCF) has expanded its infrastructure, now operating in 40 currencies and holding 65 financial services licenses globally.
- The company has enhanced customer support by offering 24/7 service via phone and chat, improving customer experience.
- Wise PLC (WPLCF) has secured strategic partnerships, such as with Standard Chartered, to expand its Wise platform and increase transaction volumes.
Negative Points
- Wise PLC (WPLCF) still holds a very small market share in the cross-border money transfer market, indicating significant competition and room for growth.
- The company faces long sales cycles when securing partnerships with large banks, which can delay revenue realization.
- Despite infrastructure investments, Wise PLC (WPLCF) is still in the early stages of capturing the full potential of its market opportunity.
- The company has experienced fluctuations in foreign exchange rates, impacting cost of sales and potentially affecting profitability.
- Wise PLC (WPLCF) has not provided specific guidance on the impact of recent price cuts on customer growth, indicating uncertainty in short-term revenue projections.
Q & A Highlights
Q: Can you explain the process and significance of the Standard Chartered partnership?
A: Kristo Kaarmann, CEO, explained that the sales cycle for large banks like Standard Chartered is lengthy, but the partnership is significant as it builds on the success with Mox, their digital subsidiary. This partnership will enhance customer experience by integrating Wise's infrastructure, which is expected to increase customer confidence and usage.
Q: What is your approach to guidance and operating leverage?
A: Emmanuel Thomassin, CFO, stated that the guidance reflects Wise's investment in product and infrastructure. He emphasized that the current guidance is aligned with their pricing strategy and investment plans, and he is reviewing the planning process to ensure it supports Wise's growth objectives.
Q: How does Wise view the competitive landscape and its investment strategy?
A: Kristo Kaarmann highlighted that Wise focuses on building a strong infrastructure to maintain a competitive edge. He acknowledged the presence of incumbents and potential new entrants, emphasizing Wise's strategy to invest in infrastructure and customer experience to stay ahead.
Q: What are the implications of the recent price cuts on customer growth?
A: Emmanuel Thomassin noted that while price cuts are aimed at long-term customer acquisition, the immediate impact on customer numbers is not expected. The elasticity of demand will likely result in increased customer growth over the medium to long term.
Q: How does Wise plan to expand its direct connections to payment systems?
A: Kristo Kaarmann explained that Wise aims to connect directly to all major payment systems globally. This strategy reduces costs and improves transaction speed and reliability, which are crucial for enhancing customer experience and supporting Wise's growth ambitions.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
