Wise Plc to seek U.S. primary listing as earnings and volumes jump

Wise Plc announced plans for a primary U.S. listing while maintaining its London listing, aiming to broaden its shareholder base and increase liquidity. This announcement coincided with strong FY24 results, including a 15% increase in revenue to £1.21 billion and a 17% rise in profit before tax to £564.8 million, driven by growth in cross-border payment volumes and active customers. Despite a slight decrease in the average cross-border take rate, Wise reported a substantial increase in cross-border transaction volume, reaching £145.2 billion.

Analysis

Wise Plc has announced a strategic initiative to pursue a primary listing in the United States while retaining a secondary listing on the London Stock Exchange, a move designed to broaden its shareholder base, enhance trading liquidity, and potentially secure inclusion in major U.S. indices. This decision is supported by a strong financial performance for the fiscal year ended March 31, with revenue increasing by 15% year-over-year to £1.21 billion and profit before tax rising 17% to £564.8 million. These results were underpinned by a significant 23% growth in cross-border payment volumes, which reached £145.2 billion, and a 21% increase in active customers, now totaling 15.6 million. Underlying income, incorporating retained interest from customer balances, grew 16% to £1.36 billion, while underlying profit before tax was £282.1 million, indicating a 21% margin despite ongoing investments in operations. Basic earnings per share also saw an 18% uplift to 34.20 pence. Operationally, Wise demonstrated efficiency with 65% of customer transactions completed instantly, following investments in its payments infrastructure, and expanded its global footprint with direct connections to payment systems like Brazil’s InstaPay and a new operating license in India. Despite the robust volume growth, the average cross-border take rate declined by 9 basis points to 58 basis points in fiscal 2025. The company maintains a strong liquidity position with £18.6 billion in cash and highly liquid investments, and a capital position comfortably above regulatory requirements. A program to mitigate the dilutive effects of stock-based compensation has also been initiated. The overall sentiment surrounding these developments is strongly positive, reflecting optimism about the company's growth trajectory and strategic positioning.

Key Decisions for Investors

• Investors should view the proposed U.S. primary listing as a potential catalyst for increased stock liquidity and valuation, and monitor progress towards inclusion in U.S. indices.
• While strong growth in customer numbers and transaction volumes is positive,密切关注平均跨境交易费率的持续趋势，因为这可能会影响未来的盈利能力。
• Consider the company's robust financial health, significant cash reserves, and successful expansion into new markets like India as supportive factors for its growth strategy and investment thesis.
• Evaluate the impact of ongoing investments in infrastructure and the program to offset stock-based compensation on future profitability and shareholder value.