As we've built and launched more features to help people and businesses move and manage their money, adoption of the account has continued to increase. In Q2 FY24, 44% of active personal customers used multiple features of the Wise Account, up from 32% in Q2 FY23. For businesses, this adoption rate was 58%, up from 53% in Q2 FY23. Given the higher active customer base, the greater adoption means that we had 80% more multi feature personal customers and around 40% more multi feature business customers, compared with Q2 FY23.

More customers using the account features has led to an increase in the balances held with Wise too. As at 30 September 2023, customers held £12.3bn in cash balances, 33% higher than this time last year and, separately, over £1.7bn of funds in the 'Assets' feature³. This growth in cash balances is in line with growth in active customers.

In addition to the features and benefits that we offer to our customers, high quality support drives higher customer engagement. Whilst we've added more product features, we've also managed to improve our support contact rates (the percentage of customers that need to contact us for help). In fact, in the first half of the year we saw a 16% reduction in our contact rates compared to H1 FY23 by improving our payout processing and making it easier and more intuitive for customers to use the account for receiving money. Not only does this ensure we delight more customers, but is also hugely valuable in terms of operational efficiency.

Wise Platform continues to make good progress and we now work with over 70 Platform partners. So far in FY24, we have welcomed 9 new Platform partners and they represent how Platform has evolved to now offer a range of features that are common to our account customers. For example, we went live with two new partners, Prospend and Parpera, our first partnerships that will provide multi-currency accounts and digital debit cards. Amongst our new partners, we also signed a partnership with Saudi Awwal Bank, a subsidiary of HSBC, and we went live with IndusInd Bank in India, Bluevine investment platform in the US, moomoo investment platform in Singapore, and GMO Azora Net Bank in Japan.

We continue to invest in building a the network for the world's money

We're building the replacement infrastructure for the world's money that is international by default, enabling a global proposition that allows customers to easily manage their money and make instant international payments at a low cost.

In Q2 FY24 the average fee our customers paid on a cross-border transaction was 0.67%, marginally higher than the fee of 0.63% in Q2 FY23, but we remain committed to reducing these over time as we invest in our infrastructure. And 60% of all payments were completed instantly, 81% completed within an hour and 94% within 24 hours.

The question is: how do we do this? Our infrastructure is underpinned by us building the network for the world's money - made up of a network of licences and connections into payments systems; and in the operational capabilities that support this, comprising our technology and operations. As set out below, in the first half of the year we've made some great developments across these, and we've also overcome some challenges.

In H1 FY24 we call out two key successes in improving our network of connections and licences. First, we completed our integration into the New Payments Platform (NPP), Australia's domestic payment system which gives us full end-to-end control of the payment network into Australia. These are complex integrations, and it's taken us close to three years from initial conversations, but once fully rolled out to all of our customers, it will enable us to provide instant payments consistently and to reduce bank and partner fees significantly.

One of the many benefits of being directly integrated into local payments systems is that it reduces our reliance on third parties to access payment systems. But direct access isn't currently available to us everywhere, and where we don't have direct access we have built an extensive network of partners to support us. Having this network is critical, and this proved valuable in recent months as one of our banking partnerships in the US came to an end. We have been able to quickly commence the migration of customers to another of our partners, and whilst this will cause some inconvenience for our customers, the redundancy we had built into our network proved invaluable.

Our second success was the announcement of a collaboration with Swift. We call this Correspondent Services, which will provide a new solution for banks and other financial institutions to simply route their Swift messages to Wise and send payments through our network without the need to fully integrate into our API. Although it's early days, this is a fantastic opportunity to collaborate more easily with traditional banks and to solve the cross-border needs of many more people and businesses.

Elsewhere, our teams have been extending our network of partners across APAC to improve payment speeds, and have been working with existing partners in the US to enable faster payments. As an example, we've been working with JPMorgan to enable all payouts into Chase accounts to be completed within a minute, and elsewhere in the US we've been working with a partner to enable instant payouts for customers whose bank is connected to the Real Time Payment (RTP) network.

We continue to work with existing and new regulators around the world to extend and deepen our licence footprint, and in the past months we have been able to leverage our investment licence in Europe to allow the team to roll out the Interest Assets product to several more European countries.

Our network of connections and licences enables us to move money around the world, but to build great products and provide excellent service we continue to invest in our technology and operational capabilities.

Our technology reflects the ongoing investment of c.800 engineers, and features a single global treasury system and a machine learning powered anti-financial crime engine - both updating in real-time. These are critical to enabling us to grow at scale whilst making instant payments in a controlled way.

We uplift our systems constantly, evolving as the business grows in size and complexity. This is a critical ability when operating in an environment that can move quickly, leading to heightened risk, such as from fast changing sanctions lists to evolving behaviours from fraudsters.

As an example, as was reported in August 2023, we identified and self-reported a £250 ATM withdrawal in June 2022 that had been made by an employee of a business owned by a sanctions-designated individual. Our system caught the transaction early, and we took immediate steps to implement changes needed to avoid this type of transaction moving forward. Though we never want such instances to occur, when they do, we learn from them and come out stronger. Like all financial services companies, there is a risk that our services may be misused for financial crime. This is especially true against a backdrop of heightened geopolitical conflicts. To mitigate this risk, we are continuing to invest in maintaining robust anti-financial crime systems and controls, which allow us to spot, prevent and respond to risks quickly whenever needed. We also work closely with our regulators and banking partners to stop potential abuse of our services.

We shared with you last year how we had been making a significant investment in our operational teams. This led to a large increase in headcount and expenses last year, and continuing this investment will help us uplift our servicing capacity.

Whilst we have more to build as we scale across the world, we believe the global payment network that we've already created is becoming increasingly more difficult to replicate. And it enables us to continue to offer significantly lower prices than the alternative for many people and businesses, and payments that are now majority instant.

We're confident in the outlook for the second half of the year and beyond

We've made great progress against our mission in the first half of this year, and our investments continue to create the capabilities and products that are the foundation for our customer-led growth. And it's this customer-led growth that is driving the fundamentals of our financial performance. Active customers have continued to compound at around 30%, and this has helped drive a 58% increase in Income and even faster growth in our adjusted EBITDA, which increased to £241 million (equivalent to a margin of 37%).

This gives us confidence as we look ahead to the second half of the year and beyond, and we're very pleased to be able to signal this with our recently upgraded Income guidance.

Our focus remains on building products that customers love and building the network for the world's money. In doing so we'll continue to build out this generational company which over the long term will create massive value for customers and shareholders alike.

Harsh Sinha

A financial update from Matt, our CFO

The impact of compounding customer growth and wide adoption of the Wise account has led to another period of strong financial performance; driving both the top line and bottom line - supporting a 2.6x increase in adjusted EBITDA in the period.

Income growth driven by strong customer growth and greater adoption of more Wise Account features

In the first six months, over 30% more customers used Wise to send or convert money internationally. Of the 7.2 million active customers in Q2 FY24, 6.8 million were personal customers (+32% YoY) and 0.4 million were business customers (+28% YoY).

And more of those customers used multiple features of the account. In Q2 FY24, 44% of active personal customers (Q2 FY23: 32%) and 58% of active business customers (Q2 FY23: 53%) used their Wise accounts to not just convert and send money, but also to spend internationally with their cards, or to hold a balance with us. This means we had 80% more people using multiple features of the Wise Account and around 40% more businesses using multiple features of the Wise Business product compared to the second quarter of FY23. This has become increasingly supportive of income growth and profitability.

Our customers sent or converted £57.4 billion of volume in H1 FY24. This is a 12% increase on last year (14% increase on a constant currency basis), with growth in volumes continuing to be driven by higher numbers of active customers. Volume growth amongst customers that typically move less than £10k per month has been resilient. However, macroeconomic conditions remain uncertain, and in the first half of the year, this was one factor that has had an impact on the level of volume growth amongst our high transaction value customers, which resulted in a declining volume per customer, which we expect to continue throughout FY24 and beyond. Our growth rate also reflects a notably tough comparative period in H1 FY23, which benefited substantially from high activity related to the strength of the USD.

Revenue from cross border transactions grew 20% to £384 million for the period, and the take rate on cross border revenue by 5 bps to 0.67%, largely reflecting recent price increases as we made a strong investment in building more operational capacity to support our growth. Other revenue (predominantly interchange income) increased by 48% to £113.8 million. This growth was driven by higher take up and spending on the Wise card, but partly offset by an action we took last year to remove fees for same currency transactions. This led to a 5 bps increase in the other take rate to 0.20%. Revenue for the period increased by 25% to £498.2 million. This represents a revenue take rate of 0.87% (H1 FY23: 0.77%).

The higher active customer numbers and greater account adoption also led to a 33% increase in customer balances (excluding funds held in 'Assets' product) to £12.3 billion. Through the increase in customer balances, and the higher interest rate environment compared with H1 FY23, interest income net of the benefits paid to customers increased to £157.8 million (H1 FY23: £18.7 million), further supporting Income, which increased 58% to £656.0 million.

Gross profit is growing fast and creates significant capacity to invest for growth

Our gross profit for the period increased by 86% to £488.9 million, which led to an 11.5 percentage point increase in the gross profit margin, to 75%. Our variable costs (cost of sales and net credit losses on financial assets), increased by 9%, driven by the 12% increase in cross-border volumes, partly offset by the benefit of lower FX costs compared to H1 FY23. The majority of the gross margin increase was driven by the higher interest rate earned on the growing balances that our customers hold with us - and we're currently not able to return this interest to customers at the level we aspire to.

Given the favourable FX result (which could be only a temporary benefit), we do not expect the gross profit margin to remain this high throughout the remainder of FY24, but we do expect that, overall, our gross profit margin will be higher for FY24 compared to FY23.

Expense growth in line with underlying business growth

Our gross profit allows us to fund significant investment in growing our operational and corporate teams, and the investment in growth, such as product development and marketing, whilst remaining highly profitable.

Administrative expenses increased by 38% in H1 FY24 to £296.5 million. Our employee expenses grew 46% compared with H1 FY23, but 10% compared with H2 FY23. This reflects the strong hiring through last year and a slower rate of hiring since the end of FY23. Our headcount now sits at 5,353, as at 30 September 2023, which is 4% higher than at 31 March 2023, and 24% higher than 30 September 2022.

We will continue to grow our operational teams to support our customer driven demand for onboarding, servicing and compliance processes. And we'll grow our product engineering teams making smart investments for long term growth.

New customer growth continues to come predominantly through referrals, or 'word of mouth', which is extremely beneficial to our customer acquisition cost. We have also continued to invest in both established marketing activities and new mediums. We increased spend by 5% to £19.3 million in the first six months, and were able to acquire customers more efficiently, particularly in Asia-Pacific and the rest of the world, such as Brazil. As a result, we continued to grow our active customer base by over 30% whilst maintaining an attractive return on investment.

Expenses relating to consultancy and outsourced services increased by 37% to £39.5 million.

We have increased our usage of external vendors to support certain operational servicing activities where this can be done at a lower cost whilst maintaining high service quality. The increase also reflects the cost of audit and advisory services relating to regulatory and compliance requirements as we continue to expand our geographic coverage and build a more extensive product for customers.

Highly profitable with limited reliance on interest income

Our approach to profitability, and what we target over the medium term, is to take a significant proportion of the gross profit that we generate and commit this towards investing for future growth, and doing so with very limited reliance on income from interest rates. And we will do this whilst maintaining an adjusted EBITDA margin at or above 20%.

Our adjusted EBITDA for the period was £241.1 million, up from £91.6 million in H1 FY23. This is equivalent to an adjusted EBITDA margin of 37% (H1 FY23: 22%).

This higher adjusted EBITDA margin is primarily driven by interest income on customer balances; we generated a gross yield of 3.7% in H1 FY24. Our guidance on adjusted EBITDA margin has always been 'at or above 20%'. With our FY23 results we shared a framework outlining that we intend to use only the first percentage point of interest yield to meet our adjusted EBITDA margin guidance of 'at or above 20%', and that we'd aim to share 80% of the excess back with customers. As a result, with rates at c.4%, we would expect our adjusted EBITDA margin to be c.4 percentage points higher than our underlying guide.

The 37% adjusted EBITDA margin in H1 FY24 is much higher than this guided level, and a function of two major drivers. First, we weren't able to share the excess interest back with our customers at the 80% level we aspire to per our framework, partly a function of what our licences allow us to pay out in various regions; adjusted EBITDA margin would have been c. 29% if we had achieved this. The remaining outperformance was largely due to lower than expected cost of sales and administrative expenses.

Profit before tax for the period increased to £194.3 million compared with £51.3 million in the same period last year. Earnings per share increased by 3.7x to 14.1 pence per share.

As at 30 September 2023, we held £13.3 billion of cash and highly liquid investment grade assets, up 16% from £11.5 billion at the end of FY23. This includes assets in respect of the £12.3 billion of customer balances, which we hold in the form of various high quality assets. It also includes £911.1 million of Corporate cash (£671.1 million at the end of FY23), with the increase driven by the £228.1 million of free cash flow generated by the business (see definition in appendix). On this basis, our free cash flow conversion rate for H1 FY24 was 95% (85% in H1 FY23).

We are well capitalised for the future and as at 30 September 2023, our Group eligible capital of £467.5 million was significantly above the minimum capital requirements set by our regulators around the world. This has allowed us to continue our programme of purchasing Wise shares through the employee benefit trust to reduce the dilutive impact of stock based compensation. As we announced with our FY23 results, we have approvals for an additional £60 million of capital for this purpose in FY24, and as at 30 September 2023 we have completed £29 million of share purchases.

Our outlook for FY24 and beyond

We're building a business with world class fundamentals. Our growth is customer-led and we're growing fast to capture more of a large market. We're investing efficiently, in the build and marketing of the Wise account and our Wise Platform which is helping us power our growth with higher levels of profitability.

Our outlook, and financial guidance for FY24 and over the medium term are an outcome of what our teams have built over recent years.

With our Q2 trading update in October 2023, we upgraded our income growth guidance for FY24 to 33-38% (previously 28-33%), reflecting the strong start we have made to the year, and our higher interest income expectations. This is despite us aiming to return more interest to customers and the more challenging interest income comparative in the second half of the year.

Our medium term guidance remains unchanged:

·      Income to grow at a compound annual growth rate of >20% over the medium term

·      We are targeting an adjusted EBITDA margin at or above 20% over the medium term

Matt Briers

Principal risks and uncertainties

The principal risks and uncertainties that the Group faces for the rest of the financial year are consistent with those previously reported in the Annual Report and Accounts 2023. For a more detailed overview of how we manage our risks at Wise, please refer to the 'Risk Management' section on pages 72 to 80 of the Annual Report.

Responsibility statement of the directors in respect of the interim financial statements

The directors confirm that these condensed interim financial statements have been prepared in accordance with UK adopted International Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority and that the interim management report includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:

•      an indication of important events that have occurred during the first six months and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and

•      material related-party transactions in the first six months and any material changes in the related-party transactions described in the last annual report.

On behalf of the Board of directors:

Matt Briers, Director

Date: 14 November 2023

Independent review report to Wise plc

Report on the condensed consolidated interim financial statements

Our conclusion

We have reviewed Wise plc's condensed consolidated interim financial statements (the "interim financial statements") in the Unaudited interim results of Wise plc for the 6 month period ended 30 September 2023 (the "period").

Based on our review, nothing has come to our attention that causes us to believe that the interim financial statements are not prepared, in all material respects, in accordance with UK adopted International Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

The interim financial statements comprise:

•      the Condensed consolidated statement of financial position as at 30 September 2023;

•      the Condensed consolidated statement of comprehensive income for the period then ended;

•      the Condensed consolidated statement of changes in equity for the period then ended;

•      the Condensed consolidated statement of cash flows for the period then ended; and

•      the explanatory notes to the interim financial statements.

The interim financial statements included in the Unaudited interim results of Wise plc have been prepared in accordance with UK adopted International Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

Basis for conclusion

We conducted our review in accordance with International Standard on Review Engagements (UK) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Financial Reporting Council for use in the United Kingdom ("ISRE (UK) 2410"). A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

We have read the other information contained in the Unaudited interim results and considered whether it contains any apparent misstatements or material inconsistencies with the information in the interim financial statements.

Conclusions relating to going concern

Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis for conclusion section of this report, nothing has come to our attention to suggest that the directors have inappropriately adopted the going concern basis of accounting or that the directors have identified material uncertainties relating to going concern that are not appropriately disclosed. This conclusion is based on the review procedures performed in accordance with ISRE (UK) 2410. However, future events or conditions may cause the group to cease to continue as a going concern.

Responsibilities for the interim financial statements and the review

Our responsibilities and those of the directors

The Unaudited interim results, including the interim financial statements, is the responsibility of, and has been approved by the directors. The directors are responsible for preparing the Unaudited interim results in accordance with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority. In preparing the Unaudited interim results, including the interim financial statements, the directors are responsible for assessing the group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or to cease operations, or have no realistic alternative but to do so.

Our responsibility is to express a conclusion on the interim financial statements in the Unaudited interim results based on our review. Our conclusion, including our Conclusions relating to going concern, is based on procedures that are less extensive than audit procedures, as described in the Basis for conclusion paragraph of this report. This report, including the conclusion, has been prepared for and only for the company for the purpose of complying with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority and for no other purpose. We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

PricewaterhouseCoopers LLP

Chartered Accountants

London

14 November 2023

Condensed consolidated statement of comprehensive income

For the half-year ended 30 September 2023 (unaudited)

1. Income is defined as revenue plus interest income on customer balances, less interest expense on customer balances and benefits paid relating to customer balances.

2. Adjusted EBITDA is a non-IFRS measure comprising operating profit, less interest income from operating assets, and added back amortisation and depreciation, share-based payments and exceptional items. Refer to page 33 for the reconciliation of the adjusted EBITDA to the profit for the period.

All results are derived from continuing operations.

The accompanying notes form an integral part of these condensed consolidated financial statements.

The accompanying notes form an integral part of these condensed consolidated financial statements.