Wise Group plc (WISE) Earnings Call Transcript & Summary

Good morning, everybody. Welcome to Wise's Q4 2023 trading update. My name is Matt. If I've not met you before, I'm CFO of Wise. I'm going to talk you through the results, which is what we do on a quarterly basis. We talk about growth, what we've been doing and how we've been growing. And then just as a reminder, we have our full year results coming later at the end of June where we'll meet again. I'm going to talk through the results, then we're going to open up some Q&A. I've got Martin Adams here who will manage in the Q&A. So as per normal, if you've got a question, raise your hand virtually and hopefully, we have kind of a good discussion. So just in summary, as you know, we're on a mission here at Wise to build money without borders and we're very much so in it for the long run. We're investing and building a great business that attracts millions of people and businesses around the world, whilst building a resilient, diverse and profitable business that our customers can trust. And you can see this in our numbers. We saw a 33% growth in active customers in the quarter, driving a 45% growth in revenues and actually over an 80% growth in the total income. And this growth drives our growth in our capacity to invest. It highlights the strength of the proposition that we've built, the diverse and quality nature of the business model and actually sets us up really well to keep investing in the long run because there's a long-term massive opportunity and we can keep investing through the cycle, whilst remaining highly profitable. So before I go into the results and all the drivers of those results, it's just worth sharing a bit more on the great product progress that we've made in the quarter. First, as you know, we care about price and speed. It's fundamental to what we do. Actually, price didn't change that much, but speed has improved. 55% of payments in our instant, that means that 55% of payments arrived useful in the recipient's account within 20 seconds, which is pretty amazing. That's increased and is now consistently above more than half. And actually, 9 out of 10 payments now arrive on the same day, which is also quite unheard of in any payments infrastructure. And we've made great progress in countries like Brazil, where it's not a surprise that we've been growing really fast and also places like Poland. But a big change and one that's really relevant is that our customers can now earn a return in this environment. We focused on ways to help customers take advantage of the higher interest rate environment and makes our Wise account much more useful and valuable to both people and businesses. So you know that we launched Assets. We've been launching this over the last year or so. And actually, after launching in the U.K. and we're also now live in Singapore, we're in France, Spain, Austria, Finland, Luxembourg and the Netherlands. That's on our Assets product, we have our interest product like. And we're also giving customers a return on their money if they just hold it in their Wise account. We've done that in Europe and actually now we're doing that in the U.S. as well. So importantly, customers now trust us to hold GBP 10.7 billion of their money in our accounts. That's up 57% year-over-year. So it's proof that the product is resonating. And actually, amazingly, balances continue to grow, that's inflows, not outflows throughout these past months of turmoil that we've seen in the market. And then there's Wise platform, where we've seen actually some really promising progress with some numerous new partners. We've seen tech firms start adopting Wise over the last years and we've seen some really amazing progress there. We've got Brex, we've got RAMP and Bluevine. We've got interactive brokers and then global employment platform, globalization partners, all live now, which is like almost an entire vertical of these products that help companies make payments, make payroll, pay expenses, manage expenses, all now integrating Wise, which is a huge stamp of approval. And we've also made some early progress on integrating larger banks, which we know is going to take an awfully long time. But in this quarter, Bank Mandiri, which is for those that don't know, Indonesia's largest bank by assets has gone live. It shows it's going to take a long time to integrate these large banks, but this is really promising that actually it's possible. And we can do it far afield from where we're operating here in the U.K. Oh, and we've got a great new look, although we couldn't make the [indiscernible]. We've got an amazing new brand for Wise. We changed our name to Wise, now we're evolving the brand and really refreshing what the Wise account is and we're seeing that in our growth. So let's talk about some of these results. So we saw a 33% growth in the number of active customers using Wise, really solid momentum, particularly in today's environment. So the momentum continues for the number of new customers that are choosing Wise in many countries around the world. And that's driven by word of mouth. It continues the same mix. We've not radically increased or changed the marketing mix, continuing people recommending Wise to their friends and family as a great product to use. And interestingly, when you look at the mix of the customers joining, more than half of those that now join are joining directly to use the Wise account, which really reflects the shift in our product over this period of time and that's shown in the nature of our financials. These customers that are active moved GBP 27 billion in volume, as cross-border volume only. And when you combine that with other revenues from the Wise account, that's what drove the 45% increase in revenues year-over-year. So what's happening with volume? Well, volume -- the volume trends, the cross-border volume trend was really a continuation of the trends we've seen in the past quarter. So underpinning this is strong growth in Wise account and Wise business and that's supported by new customer signup, but also solid behaviors in the cohorts. But we do see also the continuation of the trend we saw with this pull forward impact from last summer where we saw really strong volumes, particularly for high amount payments. And that was impacting the volume per customer that we saw, the VPC. And that's continued what we saw last quarter into this quarter. So that you can see that in the personal VPC. But we should also reflect now that when we look at the nature of these larger payments, these are payments typically above 10 -- customers moving more than GBP 10,000 on a monthly basis. The core use cases for these are paying for or payments relating to properties, so maybe it's buying a property or the proceeds from selling a property or shifting or moving or making investments around the world. So we shouldn't be surprised in the current macro environment that those things will have had some impact. But we know that that's cyclical and ultimately, over some period of time, short-term. But fundamentally, when we look at the makeup of our customers, we see a lot of new customers joining Wise, that's growing. We see really solid performance in the cohorts. It's actually a no real mix change in what people are doing on Wise. So we remain really confident in the fundamentals over the medium to long term. So when you look at this volume and you say, right, well, what's happened to take rates? So it's the price we charge for cross-border volume. And I said it's relatively stable in the last quarter. And then the income we're seeing from Wise account and Wise accounts growing, so we're seeing more fee income. Actually, that take rates, combined with the volumes driving this 45% growth in revenue. So an increasingly diverse set of revenue from a strong growing customer base. Let's talk about balances quickly as well because I know there's a bunch of questions on this, which is driving the net interest income, which is the difference between the revenue and the total income. So fundamentally, our balances have grown, and that's driven by Wise account adoption. So customers joining us and moving to use Wise account and bringing their balances to Wise. And that reflects the trust in the product that we've built. GBP 10.7 billion or 57% year-on-year growth, this balance has continued to grow and actually, that excludes -- that excludes importantly, the money that customers are holding in their assets product. So some people have moved balances out of that number into assets. We haven't split that number out yet. It's still relatively small, but it is growing fast. And obviously, in today's environment, it's got great product market fit. So of these balances, we earned GBP 72 million in interest in the quarter and we returned GBP 16 million or shared GBP 16 million of that with our customers. So that's about a 2% net interest yield. Now that varies quite a lot by market. So some markets, we simply can't pay interest. We're not allowed to. We haven't kind of implemented an approach yet and we'll keep working on that. But in a market like in Europe, we can get a sense as to how much we're sharing. We're retaining roughly 1% of the interest for our own means and sharing the rest with our customers, which means our customers are getting a great deal. We continue to see these balances grow. They're coming to Wise and ultimately, we're building a really strong relationship with that customer. And you can see a sense of that as to where like how much we -- that 1% gives us all the funding we need to have a very profitable business for our European customers. So then when you take together, we've talked about customer growth revenue and then this income. When you put all that together, we saw income of GBP 280 million total for the quarter. That's 83% year-on-year growth. And so when you add that up, this is the fourth quarter, so that across all 4, we had GBP 964 million or nearly GBP 1 billion of total income, which was 73% year-over-year, just ahead importantly, of our most recent guidance. So in summary, as you know, we're on this mission and we're very much in it for the long run. We continue to invest in building great products. We're investing heavily in our product, our engineering teams and that's attracting millions of people and businesses around the world to Wise every year. And we're doing that, though, importantly, whilst building this resilient, diverse and profitable business, which you can see in our financials, you can see this customer growth is driving very healthy diverse set of revenue and income. And that then is funding all of our investment in the future in the proposition and continuing to build this Wise account and this sets us up to keep investing heavily now despite the macroeconomic conditions whilst remaining really [Technical Difficulty] and investing behind the long-term opportunity. So I'm going to pause there and then hand over for some questions. I'm sure, as you said, Martin is here take the questions, just raise your hand virtually and do my best to answer them.

Thanks, Matt. Just a reminder, if you do want to ask a question, raise your hand virtually and I'll open you up. First question comes from [ Olson Route ] at Barclays.

So for me, just in terms of the account balance development with SVB and everything we've seen, can you just talk a bit about how that's trended over time quarter-on-quarter? Have you seen sort of changed behavior from your customers and maybe a bit more color around that? And then just secondly, around the interest income related to that sort of interesting in the way you present the European net yield at the 1%. Can you just talk a little bit about the U.S. product, how that compares to, say, the U.K. or Europe from the sort of opt-in perspective, also seeing that you're, I think, returning some fees in the U.K. to people. So just a bit more color in terms of how you're negotiating in the U.S. and the U.K. towards that sort of European level?

Thanks for the question. So it's been a really interesting quarter from -- really tough quarter for the industry. So what do we see customers do? Well, if you look at the start and the end of the quarters, it's actually pretty steady. We've seen just sustained and steady growth in our balances over time. And when I say balances, I'm just going to talk about the on balance sheet balances that we have. And across all geographies, we've seen that in key areas where we have balances, we've seen that continue to grow. And we actually look at inflows or net -- inflows, outflows, net inflows, and they've been very steady over a period of time. If you look at over the weekend or the week of -- when we saw this challenge with -- in the banking industry, we saw quite a bit of noise and we definitely saw some -- lots of businesses try to bring their balances to Wise, smaller businesses. And we help them actually. And we made it very clear that as to how you -- if and how you want to bring your balances to Wise, how would you do that? And we tried to help as many customers as possible. And we did see balanced growth. But I wouldn't say that's a onetime kick because I'm sure as many businesses would tell you, like some of those balances came in and many of those balances would have found their natural home in another bank by the end of the following week. So what we did see is we just saw very strong growth in the number of businesses using Wise. More than ever, people appreciated what Wise is about. We were very clear that your money is safe. It's available and you earn a great yield on this money whilst without having to lock it up over a long period of time or let us lend it to somebody else. So actually, that's really resonated now. And whilst I know many companies have started to see outflows, many highly reputable companies are seeing outflows, we've actually seen inflows, which I think just talks to the nature of our proposition. So then you ask some question around interest income. So in the U.S., we offer a product. It's a pretty awesome product where you can opt in if you hold U.S. dollars to actually get interest. And also you get an element of deposit insurance as wellness, which is really interesting for our customers. And we do that through a partnership we have in the U.S. And we're hoping to spread that from just -- from customers holding dollars. So there are other currencies which our U.S. customers might hold, but it's going to take time. And customers are opting into that. And we see the opt-in, we won't disclose it here, but all of that is all on balance sheet today. And actually -- so the customers that are really sensitive to rates and really interested in this are opting in and earning a rate not far off the central bank rate in the U.S. on the dollar. For the rest of the balances in the U.S., we can't yet offer interest. So we're actually keeping that interest and that's what contributing to the higher net interest yield. In Europe, I think you understood this one. I can talk then in the U.K., we're actually not allowed flat to pay interest to our customers. So what we do there is we look at like how can we use some of that net interest income to reward customers for using Wise and essentially pay -- choose for some customers to operate. And hopefully, some of you on the line, there are some of these customers that will have received a feedback. We've had great feedback from our customers for this. So in some markets, there's quite clearly a hurdle that we may be able to get over to share this income with our customers and others, there's definitely ways we can do this and we've shown we can be innovative to do that. But when you step back from this, like we have an account, which is interest is really helpful in helping fund and cover some of the costs up. But we're very cautious around using too much of that interest income to use that. So I want to stay very balanced in keeping really strong unit economics that are super resilient, come whatever we see on our interest rates going forward.

Yes. Super helpful. And just quickly, just on the outlook for the year. I mean, did you just feel you needed to wait to disclose profitability to really give a full outlook for the year? Or is it some of this uncertainty in terms of the level of net interest income that you will earn that's just holding you back from providing it at this slightly earlier stage? I'm just curious.

So we're in the process of closing the financial year FY '23, I think you're talking about here. So we'll report our results. As we said in the last quarter, we talked about the second half of the year having a higher profit -- EBITDA than the first half of the year. And the interest income you can see now is the interest income. So there's no more of that to flesh out [indiscernible].

So I mean the '24. Sorry, I meant the guidance for '24.

Yes. That's right. Well, we normally do this in June. So we'll follow up in June with guidance for '24.

The next question comes from Kim Bergoe at Numis.

Just needed to unmute myself. Just one sort of question for me on the volumes per cost and obviously, you're going to -- probably have been asked a lot about that. But the trends that you're seeing there, is that -- and I guess it's difficult to find the sort of industry data. But how much would you say is that a shift in sort of customers using you for higher transactions? Or is that just sort of a general trend or slowdown in the sort of transaction? So how much is Wise-specific and how much is sort of industry-wide or macro-economically driven?

Great question. And I can only -- obviously, there's not perfect data in the market to answer this question. I guess what do we know, what do we see versus what do we believe or what can we -- what can I help you look at from this perspective. So what we see is we see -- we saw a very big increase in the number of high-value payments in the summer of last year and then we've seen that fall away. We've seen that quite internationally. And when I say that we've seen it across a lot of geographies. We saw a lot of FX volatility and that's kind of reduced somewhat. So when I see it across a lot of geographies, I believe it's unlikely to be -- highly unlikely to be competitive because we just don't have any global competition. And when we do look at certain players and operators, we don't see anything that's changed at all really in the propositions that are being offered by our competition. So I feel it's definitely not competitive or we don't believe there's anything competitive there. Rather, in fact, we see it as the combination of -- we're coming off a very tough comp before. And then also, when you just look at the macro and you look at what the customers are using for these high-value payments for, as I said, property and flows of investment funds, so maybe flowing into an asset manager. If you look at the market data for that, I believe that those are definitely suppressed quite a lot in the last quarter, 2 quarters versus what we saw before. And I can only -- when I observe that, I'm sure when you observe that, you would look at it and really not be surprised actually that we've seen a reduction in this. And then the question is, when might that return? And that's a judgment call that you obviously will take and you'll take a view on when that -- how that macro will come back. So to answer the question, really, I don't think this is Wise-specific, but rather macro-specific and FX in the nature of how people used Wise over the last year in this period [Technical Difficulty]. So if you think about it, like we're not worried about it. We look at it and think, okay, I've always said there's going to be volatility on a quarter-on-quarter basis in our VPC. But if you flip it around, you'd say, well, kind of it's only 3, 4 years ago, this was the primary driver of all of our revenue and income and profitability. Actually, now we're way more diversified. This is one factor. We're still seeing 45% revenue growth of 33% customer growth during this period. Volume is just one of our drivers now.

Next question comes from Aditya, Bank of America.

So a few from my side. Firstly, on the -- just going back to the VPC, you spoke about the macro impact on higher-value cohorts. Could you just talk about what you're seeing on the lower value cohorts? You've said that's still strong. But if you could just give us some color on how maybe that's been trending Q-on-Q and how you see that as you've entered FY '24? And same thing for business customers as well, how those -- how they're spending and their behavior? Any -- maybe any impact of macro, especially on maybe smaller businesses that you work with? Second, on the point of margins, I know you're not giving anything today, but we know, as you said, 2H margins are going to be higher. Can you talk about what you've been -- have you've taken this windfall from interest income and maybe been reinvesting that into the business in terms of hiring? What you've been sort of been investing in and maybe that's new features and new products? And when do we start to see that maybe becoming more visible in terms of growth for next year? And then finally, you've -- talking a lot about the platform wins over the last few months in tractor brokers and a couple of banks. Can you talk about what's the contribution of those platform customers today in terms of volumes, maybe how that's been growing and again, how you see that trending?

That's cool. Thanks for the questions. Let me [indiscernible], make sure we got through. So on VPC, on the low -- on the -- so on the kind of core of the Wise account and Wise business, we've seen very strong Wise account customer growth and pretty stable VPCs here, which basically means that we've seen -- if you kind of took the -- I always think if you took the dates of the axis and just looked at the trend, it's very steady and very strong. And actually, this shows the loyalty, the kind of relationship we have with these customers. I'm just talking about the personal here through this period where they kind of use Wise, very core to people's lives increasingly. And so actually, that's a really dependable core and that's really what we've been investing in isn't a surprise of what people are using the Wise account for today. So it's very consistent and very stable growth in this group. And it's pretty much the same for Wise business as well, where you actually see kind of just Q-on-Q sequential growth in the active customers for people and businesses. And that's driven by this core populous volumes. And then for businesses, like we don't see so much of this high amount impact because businesses do move more, but actually, they're paying staff or they're paying their suppliers. So these things are less -- way less discretionary. We did see a drop Q-on-Q in the VPC for businesses, but actually that was within the realms of seasonality. We typically see that from our Q3 to the Q4. So rather I just see this in the noise. But actually, we're just seeing very healthy signups from businesses and this is continuing to drive growth behind what is a massive opportunity. So any question about margins. Like I will talk more about this in the half year. And you're right, we did guide that this is slightly higher. We invest across our teams. We -- obviously, people think, oh, you're investing in products, you're investing in marketing. But actually, one of the things we're really investing is in our servicing teams, the service that we're offering our customers. So you'll see these growing, the head count of Wise continue to grow. And actually, that does really help our growth. So we know that if we can offer customers a much better service, shorten the queue length if they've got a challenge with Wise, onboard customers faster. We know that that's a huge return from a growth perspective. So actually, that's where we're putting this first. We really prioritize. We won't actually invest in growing our products, so we can offer a really great service. And I think that speaks volumes as to how we treat our customers, which ultimately is what drives this word of mouth growth in our products. So we are continuing to grow our product teams, but these are investments that we'll make over the longer term. And the last one, on platform. We haven't split this out and we won't like the platform -- number of platform partners continues to grow and that business is growing very well. It's very early. Really, we're just continuing to build momentum with the partnerships we've got. And when we look at the return on the investments that we're making there, we have confidence to just keep scaling that team and really building our infrastructure to work for the world's biggest institutions.

The next question comes from Justin Forsythe at Credit Suisse.

A couple from me as well. So first, I want to talk a little bit about engagement on the platform. So can you talk a little bit about going from kind of top of the funnel through to kind of becoming quarterly active? So you download the app. How long does it take typically before customers become active? And is there a difference between cohorts? Meaning, are these say, 2018 and before cohorts typically higher or lower engagement, maybe on average, understanding that the '22 or '21 cohort might, of course, not be super-engaged, given how recent it is to current day. And then how long is it typically before like a customer cohort becomes active, meaning from when I download the app, how often -- is that within 6 months, 12 months, et cetera? And then lastly, on this engagement piece, can you maybe give us a little bit to quantify whether assets or any of these newer initiatives have helped increase engagement on your existing download base? That's kind of the first set of questions, I suppose. And then I just wanted to talk a little bit about the net interest income disclosure and appreciate some of the detail you've given there. I guess that maybe changes a little bit the algorithm for margins, although we're basically, as we talked about in the past, back solving to a 20% EBITDA margin. So maybe you could help us understand what you believe the core margin of the payments business, if you will, on an ex-interest basis is, is that we've been up in that low to mid-20%s at some point in the past. I think we've implied a little bit lower than that recently. Can you just talk about what the longer-term margins of the core payments business is?

Cool. Thanks. So great question on engagement. So it's worth expanding first like what is an active customer for Wise because I think it's going to be different to some of the other businesses you look at and we try and keep a really honest metric for this. So actually, an active customer is a customer who's come to the app or the website, registered, downloaded, got a card. They may have made a domestic payment. But if that's not been cross-border, they're still not an active customer. It's only when you've made a cross-border payment or a conversion that actually we include you in the active customer base. So actually, a lot of that engagement time that you're talking about upstream is kind of going on now, like without it showing up in our numbers. Actually, we'd be paying for it. It's in our servicing costs. But actually, it's -- we don't include customers that don't make cross-border payments. And that keeps us really honest to attract the right kind of quality customers to our business. That said, it does take customers time. They'll register, they'll try -- they'll check us out. They might even try and order a card or open an account. And that does take a bit of time in some cases. Some people need it instantly and they can start using Wise really quickly, which is why we get great feedback. I guess the one thing I'm trying to explain is maybe the difference between what we used to see with TransferWise or our transfer product versus our accounts. And with the account, we do see people sign up, start using us, maybe start spending overseas. And then their usage might grow more over time. We see this for businesses. Whereas for transfers like they start using us and that's the use case that they might use us for. So we do see more of a ramp in our Wise account businesses. But overall, when we look at the cohorts, it's -- we do see an improvement in the quality of the cohorts as we shift towards Wise accounts. But just to be clear, our data is customers that are already engaged and active, if that makes sense. The question is what are these new products doing? Well, all of the products that we're launching from -- on top of the transfer, like the Wise account, the card, account details, all of the features and then assets are all continuing to drive use of the Wise account, which drives ultimately more engagement. People make many more transfers. They make domestic payments. They hold their balances. And therefore, we see, as we've reported stats on Wise account, ultimately through their lifetime, using Wise more paying -- we earn greater fees, we see them move more volume. Generally, all of these things steadily increase that engagement over time.

Matt, just a quick clarifier there. Because this is a quarterly statistic, that means if they hadn't done a cross-border transfer, then they would fall off of that statistic, right?

That's right. So if you transacted with us in November, but then didn't transact with us in this quarter, you're not in our active customer base.

Yes. All right. And then on just the margins.

So on margin, we do look at this in aggregate. So we have a cost base. Our core product is our account and our account has a wide range of costs. So our account helps people move money across borders. It helps people hold money. It helps people send money within the country and also make payments on their cards and even receive payments into their account. So actually, we look at the profitability of our core is the profitability of that account, which we're going to manage to the 20%. Now from an interest income perspective, that can and should help, some of that should help contribute to the cost. So we don't want to subsidize everything that we offer to our customers with our conversion income because that sends us down a pretty bad road of how banks have offered free banking, but have hidden the fees in effect. So we look at how much of our cost base should be covered or is fair to be covered by interest income that we would keep versus share back with our customers. And obviously, like we have to be very cautious that we don't become too reliant on interest income from a margin perspective. So if you take just the European business as an example, we're using 1% of that to support the profitability of the business and the costs related to running that account that aren't related to the conversion product. And that first percent, we feel very happy and reliable on that as a sustainable, reliable, resilient income off of the balances that customers are holding and also sharing back for dollars, maybe 3% or 4% with our customers, which keeps them on the platform. So I think when you look at profitability, we look at it as a whole because we look at the Wise account as a whole and we make sure that we have profitability in all of our product lines.

Sorry, I just want to make sure I heard that correctly on the 20%. So do you say you're managing the core account product, if you will, or a suite of products to be more or less 20% margin longer term? And is that what the target relates to? Because then you then -- at the end, they were talking about a comment around interest playing into that, but not playing into it. I just want to make sure I understand that clearly. So the core account business ex-interest should be 20%? Or is that -- or am I misunderstanding that?

So we will use -- we use some of the interest, as you can see in some markets where we can, we retain some of that interest. And that interest will contribute to our overall margin.

Okay. Okay. Got it. So yes, in theory, the core business will operate as it may and that can fluctuate based on how you fund kind of the same way it had been talked about in the past?

As we said, in a time where we are yet unable to return all of that interest or how much we want to our customers, that's why we've seen elevated margins over the current period, which is what we said last quarter. So we're cautious not to become too dependent on interest income, but we'll use some of that interest income to support our margin objectives.

The next question comes from Josh Levin at Autonomous.

Just 2 questions. It looks like personal VPC is now below where it was in your 4Q '21. So that would be the first quarter of 2021. And in the press release, you attributed this to higher growth in lower VPC cohorts. How much of that growth in lower VPC cohorts is due to geographic mix? And where do you think personal VPC might bottom? And then along that, why is business VPC dropping? Is that also a pull forward? Or is that something else?

Cool. Thanks for questions, Josh. So personal VPC is that like the primary driver of Q-on-Q from the summer is actually the reduction in the contribution from the higher amount. Payments which we expect to be somewhat cyclical given the use case of these, we just can't predict what that cycle is. So definitely, that's lower than we've seen over the -- that contribution is lower than we've seen over the recent quarters and periods. In the more volume it's kind of -- the growth that we've seen, actually, we check this really hard to look for like is this route mix? Like is it -- you'll have seen in app downloads quite a healthy robust growth in accounts down in places like Brazil. But actually, like this is not a dilutive impact. It's not driven purely by a dilutive impact. We're actually seeing a pretty healthy contribution to growth across all of these geographies. But actually, we are -- we do -- the ramp and the underpinning growth in the business by this core of Wise account, which we're seeing through the period. And then we do see the volatility of the noise driven by the movements in this high amount contribution. On business, Josh, actually, we saw like a step down in VPC quarter-on-quarter a year ago and before this on the business VPCs. So actually, really, it's not so much driven by high amount, but rather just driven by what we expect on seasonality within these businesses. Nothing really to report on business, I would say, at this stage.

And just one follow-up, if I might. In the U.K., I believe that's where you rolled out your interest product first of all your markets. I think it was in December. Can you talk about the adoption rate so far? What percentage of customers in the U.K. have -- are using the interest product?

We haven't disclosed that. But I would say it's growing quite healthily. It's not -- it's a long way from being anywhere near majority, but like we do see customers increasingly using this. In particular, with the launch of the interest product, as we call it, where you can hold money, it's instantly accessible and you earn, whether it's the Bank of England or the ECB or the Fed rates on your funds. And that's starting to -- I think a couple of quarters ago in these calls, we really were asking like what is this product or why have we shipped this product? I think now like particularly in the last month, we've seen some steady growth on that. We just -- we expect this to be -- we'll see how this grows over the coming quarters and periods before we start disclosing that. I think current events could skew this. But please try it out.

Matt, the next question comes from Soomit Datta at New Street Research.

Just a couple from me, please. Firstly, just on net interest income, again, sorry to kind of return to this. But just to check, you talked in Europe about sort of retaining 1% as a net yield. As we then sort of try to model this across the group, bearing in mind, you can't offer this product in the U.K. Is it then fair to say that we should be thinking about you targeting somewhere between, say, 1%, 1.5% or 1% to 2% on a group-wide basis because again, of those regulatory issues in the U.K. Is that the right way to think about it? And then secondly, just on personal volumes again. Thinking about the kind of phasing of TPV. I think we saw the pull forward it seems in the first half of fiscal '23. Is it possible to disaggregate dollar strength and broader cyclicality in that, by which I mean I think initially it felt like it was a temporary FX issue, which was driving some of the volume trends and now it sounds maybe it's a bit more like broader macro cyclicality, which will take a little bit longer to recover. So any granularity there would be great.

Well, thanks for the questions. We won't be guiding on like what we're targeting. For now our goal is to share a -- a fair share of this interest back with our customers whilst maintaining a really healthy, profitable Wise account that we'll use some, but not a reasonable amount of this interest income. What you see in the Europe is what we -- where we have full control over how much we can pay that kind of gets us to the level that -- that's basically what we choose to do. Our economics -- it could be higher than that. And you can make a judgment on where you want to -- where you think this will land. But in some markets, we simply can't yet or we won't ever be able to pay that back. And we'll continue to work on that. So I think if you're looking at this really over the longer run, it's going to -- we're going to have to work really hard to like to manage that net interest income down. But bear in mind, we're always going to do that whilst maintaining a really profitable -- a fundamentally profitable business. So too soon to give guidance. There's plenty of moving parts in terms of the products we can offer and also the regulatory environment. So I'm afraid just watch the space. But I think you've kind of got some of the bounds of the equation there. On TPV, it's really hard to disaggregate this actually between this FX impact and the more fundamental macro household income impact. Definitely, we're definitely confident that we saw this volatility over the last year because we've seen this go up and then come back down. The reason I talk about the macro is, I think we should just all be very cautious around and very mindful of what's going on in the outside world. And the primary driver for these large payments has been these 2 use cases. So it's very hard to disaggregate it, but I think the rate at which this will recover will not be simply just a pull-forward impact, but is likely and with the best crystal ball is likely to be somewhat weathered by the rate at which people start moving money for property and investments again. So I share this in the context of helping you think about that dynamic rather than in the past when it's purely pull forward, we see it bounce back very quickly.

Matt, the next question comes from Hannes Leitner at Jefferies.

I've got 2 questions. One is on the take rate. We know that the customer pricing has been resilient for different reasons. Your overall take rate increased. Can you maybe disaggregate that difference given you receive on the current account interest product you received there some facilitation fee. I assume that this goes into the normal take rate and not into net interest income. Is this right? And then the second question is just around the momentum of additional businesses coming on, on the platform. Do you expect this to accelerate? It seems like to take along around the 20,000 per quarter cadence? I think that would be quite interesting to understand the underlying trends. Also maybe is this a net interest -- so what are the levers and the reasons for customers leaving and what are the dynamics there?

Okay. Cool. So on take rates, just to clear up, yes. So I don't think that's a fee rather than interest. So for example, if we charge customers a fee to onboard or we charge them for card or we earn a fee on the assets they would hold in our assets products, all of that goes into other income, which goes into the revenue take rate. If it's charging for a cross-border payment, it goes into the cross take rate. And if it's net interest income, obviously, it goes into the net interest take rate. Where -- importantly, when we've offered in the U.K. where we've offered people, customers a fee refund that comes off of the cross take rate. Like, so if we could offer them interest, we would and it would come off the net interest income. So really, what are the dynamics in sustaining that take rate? So excluding the net interest income element of it, it's -- yes, it's our changes in prices, which we didn't really have any major price changes Q-on-Q. It will be supported by growth of Wise account, where customers continue to adopt the Wise account, use us for spending on their card or opening Wise account. But actually, some of that -- some of that's gone where we might in some markets have offered the same currency rate. So the use of the Wise account is growing really healthily and we're -- and that other take rate is -- that other element of the take rate has continued to support the overall take rate. On business momentum, you're right, actually. So we do see continued growth and steady growth in the number of businesses incrementally active on Wise. And that's driven by a very stable set of cohorts, a very stable, like they're already -- the majority of these, as you know, are using the Wise account, core to what they do. And that's growing because we see just a steady increase in the number of new businesses active with us every quarter. And that's grown in this quarter as well as we saw no doubt some people wanted to move to Wise, they felt we were a good place to -- good place to operate. So really good steady momentum on businesses. It's quite steady and slow burners and there's a massive opportunity, which we're growing into. It's primarily driven by word of mouth and we continue to see that grow over time. And then, I think you asked the question on why do people leave Wise. The primary reason why someone would stop using Wise is actually the use case goes away. So it would really be because maybe you're funding your -- one of your kids overseas at university, they're going to come back at some point. Now they might take out a loan and continue to be the customer themselves. But actually, the primary reason why someone might stop using Wise is typically a use case would go away. That's less when people open a Wise account because we can become stickier and they use us for what they use us for, for longer. But this is the primary reason.

Matt, I just wanted to maybe drill down into the take rate, the composition. So these other fees, could you give us the sense of feeling how is this composed? I mean, we understand that you charge various fees. But I'm really interested in that facilitation of interest product. We know it's only early days, but clearly, this could give quite a big tailwind to take rate.

Actually, it's very small and it's -- if you do the math on what it would need to be, it's -- the fee we're earning from interest is roughly 20 bps of the balances under management. So really, like yes, that can -- as that -- if that really scales, that can help contribute to the take rate, but it's 20 bps on the balance is not 20 bps to the volume, right? So it's very early days on that and we're not splitting out. So it's not a major contributor to the take rate at the minute. The primary -- we don't split out the take rate in this report. But as we've said before, the primary driver of the other take rate is actually the interchange we're seeing on card spend as one of the primary drivers. And that's really like when people use the Wise account, that's the primary thing that's driving that at the minute. Clearly, assets is really relevant for our customers. It's driving balanced growth. Sorry, it's driving the balances that the people are holding with us, but also just the reason we launched this and the reason we launched the account is really to just to retain our -- have a broader relationship with our customer, which means they move and manage all of their international money through Wise.

Matt, the next question comes from Mohammed Moawalla at Goldman Sachs.

I just had 2 quick questions. Firstly, just as you -- I know you're going to give us sort of the guidance in June at the full year results. I'm just trying to understand the dynamics around the comps because obviously, you had a very strong volume numbers in the first half of fiscal '23. You've got that -- some of that kind of FX wall unwinding, but then you talked about this increased cyclicality on the kind of higher cohorts. So just trying to get your perspective on how we should think about sort of that growth evolution across both the first half and second half, but are there any specific things we need to be wary of across the quarters as well? And then secondly, in terms of some of the platform customers you talked about, can you talk a bit about the kind of ramp-up rate? Because I know when you had signed Shinhan Bank, it was kind of a legacy bank, but perhaps it takes a bit of time to ramp up. I noticed you signed Indonesian bank customer. Just trying to kind of understand on the platform side, the time it takes between kind of announcing some of these customers and the volume ramp? And are there any kind of noticeable differences in the type of customers that would affect that ramp?

So on guidance, I wouldn't give you guidance now and I don't plan, but I think, Mo, you talked about it right, which is we've got a bunch of things happened in the last year on different line items, which will affect things. So for the first half of this year, we had very strong volume growth. In the second half of the year, we've had very strong interest income growth. So if you look at total income across the year, its growth is coming from different parts, which means we'll lap different parts of that. I guess -- so stepping away from the optics element, I guess, what does this mean is like really as a -- as a company that's investing in long-term growth for the company, like we've built a diverse business that's got many streams that are contributing to this gross profit, which enables us to continue to invest. Now yes, there's going to be different turbojets from different elements of that through the period. But given the way we manage the business, means that we've got a very steady stream of cash flow, which means we can continue to invest beyond the end of next year and into the following years and maybe for the coming decades without having -- I think if you -- we will manage to this bottom line. And I think you can depend on -- you can depend on us to be as predictable as we can be, whilst managing this business, managing the fundamentals of the business for the very long term whilst delivering these results. And I think, yes, you're going to see some noise in some of these upticks, but they're top of the optics. And really, we've got solid underlying fundamentals, which means we can continue to invest at scale over the next decade. On platform, you're right. Actually, these things do take a while to ramp. The hard thing for this platform business is the rest of the business is pretty big and growing fast still. So if you think about we're moving well over GBP 100 billion on an annualized basis now. And I don't believe there are that many banks in the world themselves that are moving this much money. So when we add a bank, even a bigger bank, we have to ramp and I know any bank that's sizable will have us start on certain routes typically or in certain geographies and it's only responsible for them to test us and learn over a period of time. And then these tech firms that we're integrating are growing fast, but they're relatively small to start with. But we know that the businesses that we're integrating today are going to be [Technical Difficulty] which ones, otherwise it's not our game to invest in them. But over time, we expect these things to grow and ramp. But they've got to do that relative to a very large business that's growing quite fast itself. So we're not splitting it out now, but it is contributing and we're confident in the investments we're making in platform are paying back as well as any other investments in the business actually.

Got it. And so just -- can I come back on the first one? So when we saw the kind of the interplay between the VPC and the take rates, I guess, on the volume side, obviously, as you lap the tougher comps, should we think of sort of similar offsetting -- some degree of offsetting dynamic in terms of the VPC trend versus the take rate trend given the movements in the kind of higher cohorts?

It's very hard and not going to predict what's going to happen on this. I think it's probably a complicated spreadsheet to sit down and talk through, Mo. So I think there's going to be a bunch of moving factors, some things that we're lapping and some things that will change. So as we move forward with net interest incomes may be more under our control, but we'll -- on VPC is -- we try to share with you today some of the drivers of that and I think we will make a judgment call on how that evolves. And we'll talk more about this and share some guidance with you as well in June.

Matt, the next question comes from Grégoire Hermann at AlphaValue.

Sorry to come back on that, maybe a bit redundant, but I try to ask the question differently. On the take rates, just trying to understand because over the past quarters, you said that the take rate had been increasing, both on the back of higher customer price, but as well, I think, of a wider adoption of the Wise products. Right now you -- this quarter, you're actually breaking this kind of dynamics with lower customer price, which is great for your story. But just trying to understand here what has changed suddenly compared to previous quarters. Is this the different routes of money transmission that have made the take rates and the customer price decreasing? Or has there been management actions or increasing integration into different schemes to decrease this customer price? And then on the customer growth, just trying to understand whether there has been a different kind of pattern in terms of geographies as per the previous quarters? And that is it.

On customer growth [indiscernible], like no radical shift in the patterns. We always see slightly up, slightly down on some geographies. But fundamentally, the contribution to growth is really balanced across all of our geographies, which kind of isn't a surprise because we -- in places like the U.S., it's large, it's growing, but we've got a lot of headroom to continue to grow and also in places like Brazil, it's actually really significant number of customers joining us. But actually, the overall mix isn't changing that radically in terms of the overall active customer growth. So pretty healthy across, we're not overly dependent on any geography and pretty healthy growth in all of the core areas. Now back to your first question on take rate, the primary -- we control the -- so we set the prices. And the overall take rate is therefore a function of the prices we set, the route mix and then maybe the customers' adoption of various features. And the primary thing in the last quarter is we didn't -- and just so you know, when we look at price, looking at some of our team here who do this, that essentially we're looking at the unit cost and then adding a margin on top of this. We don't react to competition. We're just trying to work out like what do we need to charge our -- what do we need to charge rather, what we -- what can we get away with charging our customers. And when we look at that on a monthly and a quarterly basis, we will adjust the prices. And over that period when prices went up, it's because primarily we pushed through price increases. And last quarter, we've not had to do that. Now we might firm forward, we might, yes, over time, this will go up and it will come down or go down and come up, and it will vary by route. But we've invested heavily in our product teams and also in our servicing teams. And over the last year, that's what's driven some of this increase. We've also seen volatility in things like FX drive the need to recover some of that cost. But over the last quarter, we've not done any of that. And actually, all of the impacts of the past have now kind of washed through, which is why it's been stable like it will move up and it will move down as we manage our unit economics to make sure that we're profitable and charging a fair and transparent price. There's no metronomic impact that's just continuing to -- in build that continues to drive up the take rate other than maybe adoption of the Wise account, which is driving up some of the other income.

Matt, we have no more questions. So I'll hand over to you now to close the call. Thank you.

Cool. Thanks very much. So I'll -- thanks for all the questions. Thanks for the engagement. I'm sure there'll be more questions and please feed those into the gang here at Wise. We will -- we'll catch up again in June when we have our results. And if I don't speak to you before then, I'll see you then. Thanks very much.