Wise Shares Surge as Quarterly Transaction Volume Hits £24B
Wise shares jumped sharply on Tuesday after the company’s earnings surprised investors. The embattled stock surged by more than 10% and reached its highest level since May 3rd. The shares have climbed by more than 40% from their all-time low.
Wise user growth accelerated
The money transfer industry has come under intense pressure in the past few months as inflation has surged to the highest level in decades. As a result, the volume of money being sent abroad by both individuals and companies has declined.
Therefore, shares of most companies in the industry like Wise, Remitly, PayPal, and Western Union have crashed by more than 50%.
In its report on Tuesday, Wise said that the volume of funds sent using its ecosystem surged in the second quarter. This growth happened as the number of active users in the quarter rose to 5 million. The firm’s volume of transactions surged by 49% to over £24 billion. In a statement, the firm’s CEO said:
“The average price that our customers paid for cross-border transactions reduced from 0.67% to 0.61% in Q1 FY23 compared with the same period last year and was unchanged compared with Q4 FY22.”
Wise’s total revenue rose to £185.9 million in the quarter from £123.5 million in the same quarter in 2021. It continued to experience losses as the cost of doing business rose. In the 2022 FY, the company’s revenue rose to 559 million pounds from the previous 421 million pounds.
Tough operating environment
Wise and other money transfer companies are operating in a difficult environment. For one, with competition rising, companies in the industry have struggled to raise prices. As such, the cost of transfers has grown at a slower pace than inflation.
The stronger US dollar is also having impacts on remittances. Many people in non-dollar countries are struggling sending the currency because of the expensive exchange rate.
Further, many cash senders are expected to slow down their cross-border transactions this year because of the rising cost of living in key countries like the US and UK. According to the World Bank, remittances to low- and middle-income countries is expected to increase by just 4.2% this year to $630 billion.
At MoneyTransfers, we have developed a great technology that saves users money when sending money to other countries.