Wise Group plc (WISE) Earnings Call Transcript & Summary

Hello. Good morning. I'm Martin Adams, I'm the Director of Investor Relations here at Wise. Thank you very much for joining us this morning for our FY '24 results presentation. We will have about 30 minutes of presentation, which I'll hand over to Kristo start in one second. After the slide presentation, we'll move on to Q&A. And as we always do, we'll start, and then I'll facilitate through Zoom as well for those joining via Zoom. So with that, I'm pleased to introduce Kristo. Thank you.

Thanks for joining in the room. Really good to see some all-time owners in the room. I'm Kristo, I'm today joined by our CTO, Harsh; and our CFO, Kingsley, for the other parts of the presentation. So first of all, let's kind of remind ourselves why the 6,000 people who come to work here, because we're here to build money that works without votes, building the best way to move and manage the world's money, minimum fees with maximum ease and at full speed. I started Wise because there's a huge inefficiency in how money works across borders. For many people and businesses, it actually feels pretty broken. And this is a large and worthwhile problem where we see our solutions are working. We built a profitable, fast-growing company to work on this mission. And the way we're doing this is we're building it through a completely new infrastructure for the world's money, so that it can flow across the borders efficiently, fastly, cheaper, as it now does domestically, but now across borders. And we're bringing this foundational infrastructure and technology to people and businesses through products that they love and they want to recommend, and there's so much demand for what we're building. Most of the people and businesses are still stuck with their slow, expensive bank, trying to hide their fees and made up exchange rates. And we've been hearing this from our customers. So first of all, people. People are telling us it's expensive and painful to pay someone in another country to move money between their family accounts. And we've been knocking down this friction. We're making transfers faster. We're making it cheaper, making it more convenient for people to move money. Businesses. Businesses are telling us it's impossible to operate internationally, because no bank can support their international activities. And we have created the Wise Account, which has turned out to be hugely popular for them. We'll hear quite a bit about Wise Account later. And finally, banks. Banks themselves are telling us, they know well that their customers deserve better, and they want better. But it's so hard for them to create the same kind of service through the traditional infrastructure. So they're coming to us, and we made our infrastructure available through Wise Platform for us to build out. In the end, we're actually seeing these solutions working because we see it in customer numbers and we see it in adoption. Last year, this financial year that we just finished. We served 12.8 million, 12.8 million cross-currency customers, moving GBP 118 billion and keep GBP 16 billion on their Wise Accounts across cash and assets at the end of the financial year. Yet, we're still in the very beginning of the mission. As you recall, we're touching less than 5% of cross-border flows for people and just scratching the surface for businesses. And our growth, as a reminder, comes from the products and experiences that our customers want to evangelize, they want to talk to their friends about. Growth give us scale, which lets us invest even more into these experiences into cheaper and faster infrastructure, which in turn brings more evangelical customers to us. And we now see the effect of this product like growth, the supply wheel and numbers. In the last 3 years, we have more than doubled the number of customers we serve, which in turn has more than doubled the volume we move across borders. We built in strong unit economics that lead to financial durable company with a strong balance sheet, adding nearly GBP 0.5 billion this year. With that, I'll hand over to our CTO, Harsh, who will take us through what we have been building in the last financial year and what we're building for our customers and partners going forward. Harsh?

Thanks, Kristo. Welcome, everybody. Good to see you all here, and thanks for those who join on Zoom. So as Kristo shared, we are building the network for the world's money. The experiences in cross-border money movement are so broken that we had to go and start from the basics to improve things, such that we can build amazing experiences on top of this network. And when we build on top of this network, this leads to amazing expenses that our customers love and rave about to others. So over the years, we've made significant progress on this infrastructure. Just calling out a few highlights through the last financial year. We moved GBP 118 billion cross-border through this network. 62% of our transfers were instant. This means they go from source count to destination account across borders in less than 20 seconds end to end. This is something we are very proud of and something that's very unique to Wise. Going back even 5 years, cross-border money movement within 20 seconds end to end, and consistently, this high percentages was unheard of. Our network operates in over 160 countries in 40-plus currencies across 65 licenses. Now also have 5 direct connections to local constituent. Where we don't have a direct connection yet, we operate with a robust set of partners, which amount to over 90 partners across the world. And we have over 800 engineers working on this problem globally. We believe this is one of the largest engineering teams in the world working on the problem of cross-border payments. So why do we do this? Why do we like this? All of this is an outcome of our fundamental learning over the last 13 years, that the company that really builds the best infrastructure will eventually take a large market share, and will build a very superior product to solve this massive problem of cross-border money management. And this is why we continue to invest with a longer-term view. Whether it's working for years on direct connections, continue to add more redundancy to our partner network, continue to add new licenses or opening up new countries and new products, or working closely with regulators to meet local requirements and also give them feedback to evolve requirements as the world is changing around us. Through the last year, we made significant progress on this infrastructure, but I'll call out three big ones. First, in Australia, we became the first non-bank to get direct access to the local payment system. This gives us instant payments in and out of Australia for our customers and also a lower price. But finally, it also gives us independence going forward in the Australian market. The other one that we're really proud of and is another big win is the Japanese market. So we got a type 1 license in the Japanese market. And we became one of the first non-Japanese firms to complete this multiyear process to get this license. So you should ask, why did you spend so many years doing this? Previously, we were limited to JPY 1 million per transfer for our customers. Now with this license, this limit has been removed. This not only helps existing customers who have been asking for a higher limit, but we believe it also opens up the product to a larger consideration set and a larger number of customers in, Japan who would actually not have considered us before. Finally, corresponding services in collaboration with SWIFT. There are over 11,000 financial institutions connected to SWIFT, mostly banks. And as we talk to these banks, we now hear from the business side of folks and business side of the banks, folks who're running transaction banking, correspondent banking, that they see the value of what we've built, and they want to connect to our network, and they want to provide our network to their customers. But it's my counterparts, like the CTOs and the technologists, who tell them that it's going to take not months, but years to upgrade the systems and do these connections through an API-based interface that we've had for a while. So we went back to the basics and figured out a solution where now through connecting with SWIFT, banks can change their correspondent to Wise, which allows them to start dipping their feet into using the Wise infrastructure and sending volume through us. And basically, it becomes similar to a conflict change that banks know how to do. From the perspective of building and servicing this infrastructure, we continue to invest in the tech that helps us scale. Our AI and machine learning models operate on a global data set that we see across our network to make fast and automated decisions, while fighting financial crime effectively. So this helps us keep costs low. Evidenced by lower prices over the years, while we still operate profitably and also provide a superior and compliant customer experience. Compared to the incumbents, who rely a lot more on manual processing, our ability to use this technology helps us reduce false positives for our agents, so that when transactions are flagged for reviews by the agents, the agents are focusing on the right things. Similarly, we focus and we apply machine learning to predict our liquidity movements and requirements to meet and move money around the world, so that we can do payouts fast. This is what leads to outcomes like the 62% instant transfer number that you saw before. We also continue to invest in the tooling to help our agents. So fin crime investigators, diligence agents, CS agents need to review transactions or may take customer calls. They have all the relevant information presented to them in a way that they can get their task done faster and with accuracy. We operate in over 160 countries, across 11 different languages and seamlessly serve these customers across our global data -- global centers 24/7. I'll give you a data point on how things have improved from a servicing perspective. So earlier at the start of the financial year 2024. For doing checks that needed humans to review folks when we are onboarding customers, it would take on average about 13 hours. With the automated work that we've done and the investments we've made in the tooling by the end of 2024, now for these manual checks, an average time of 2 hours is needed for these agents. So all this investment leads to outcomes this in speed and price. As I said before, the 62% instant transfer number. But what I'm also really proud of are the other two numbers on speed, 83% of transfers now go through our network in less than 1 hour and 95% of transfers complete within a day. This is unheard of numbers in cross-border payments. And on price, we've operated at 67 bps blended price for most of 2024, and we continue to put downward pressure on price, while still remaining profitable. We are really pleased to have been able to drive unit cost efficiencies in 2024, which leads to a price drop in Q1 of FY '25 of about 2 basis points. Now talking about the products we built for our customers. We create experiences today by investing in three core products: the Wise Account, Wise Business and Wise Platform. For the Wise Account, I would like to call out that we've rolled out now interest assets, enabling the ability for customers to receive a yield on their funds held with us as interest rates have gone up. And now this product is rolled out to 5 additional EU countries. We also rolled out stock assets to 11 more countries. For receiving, we made it easier for people to receive funds from their friends and from -- for business, too, and we've enabled a feature called Wisetag that makes it much, much easier to receive. We've also enables SWIFT details in more currencies. And finally, on the transfer side, we've improved the product for people, especially expats living in China, if you look at -- if you see the experience that expats living in China is very, very hard and a poor experience for them to move money out of China, and we've started dipping our feet in that market. It's still early. We've also enabled the ability for businesses to sign up a USD 10,000 in Brazil. On Wise Business, we reopened the European market -- the product for European business on board. Some of you may remember, which shows to slow down or stop on loading for EU and U.K. businesses for a period last year. This was to make sure our existing businesses and those who are already waiting for the product had a better experience onboarding. We worked through that demand and reopened for onboarding for U.K. and [ EE ] businesses in Q4 of FY '24. For assets, we have made the product available now to businesses in U.K., Europe and Singapore and actually this business holds GBP 1.4 billion in assets, that's 20% of business customer holdings are in assets. And finally, we continue to invest into making the experience of onboarding and using our product for businesses much easier. We made quite a bit of improvements on the onboarding and verification experience for businesses in the last year, and we'll continue to invest there. Finally, Wise Platform. We have 85 partners now connected to Wise via the Wise Platform. Calling out a few. We have now connected Mox, which is Standard Chartered's neobank in Hong Kong. Also [indiscernible], a large bank in Japan, which is now connected to Wise and using Wise as their platform to enable their customers to move money around the world. For nonbanks, we also have Agoda, which is a large travel platform in Asia that is now using us. And finally, I'll call out one interesting launch we did. So we built a new product. Some of you hopefully are customers in the room who use the Wise card. And we have now enabled others to issue cards over a Wise infrastructure. So Papara, which is an Australian neo bank, they launched this product on us, where cards are powered by Wise. But what we learned with that in FY '24, some of you might have seen, we launched -- announced our neobank integration, [ one ] of the big largest banks, fastest-growing banks in Latin America. The learnings of our Papara integration helped us then lead to the neobank and we'll be able to launch with them in this year. So that's the launches, and that's what we've done. I give it back to Kristo.

Thanks, Harsh. We're now going to get a bit more into numbers. We're going to start with customers. We're going to talk about volumes. We're going to talk about financials. But all of that wouldn't be here if we didn't have the segment that Harsh just talked about. The only reason that these customers show up, is the product that we built for them. And let's see how they show up. We added 5.4 million customers this financial year to Wise, cross-currency customers, of whom we estimate 3.5 million joined, because someone else recommended to use Wise. And this is a real testament to the products that we're building and the experiences that our share allows us to deliver. These customers come -- they really form stable cohorts and keep using Wise for years. And in fact, after some time, we see the volume from older cohorts become really, really durable. And we accelerated the addition of new customers and the existing users keep coming back. So we see the active customer base. So that's now those who used us in the last financial year, growing 29% CAGR for personnel and 27% for businesses. And that growth in active customers is geographically pretty evenly distributed with an extra boost in Asia Pacific and emerging markets. So this tells us, there is increasing demand for our services pretty much everywhere. So as we saw new customers lead to the growth of the active customer base, which in turn leads to more cross-border volume, which grew 13% in last year. But that is an early part of the story. As we've been reporting over the last few periods, we see an increasing adoption of the Wise Account. This adoption has now reached almost half of our personal cross-currency customers using the Wise Account, and 60% of businesses. And let me give you a few more data points why that is relevant. First of all, balances. Customer balances have been growing fast with people trusting us more and more of their money. We're seeing fast adoption in assets in the U.K. and Singapore and as Harsh covered, now Europe. And to be honest, we shouldn't be surprised. Not only is it expensive to hold money in traditional current accounts, but it's also unnecessarily risky. Like why would you take a risk on the bank's balance sheet when you have government-guaranteed assets and government and Central Bank are borrowing at these kinds of rates. Those balances and seeing our core customer segment really taking advantage of the Wise Account. But beyond this core segment, with the Wise Account, we've actually created a completely new segment of users who only use the card. A couple could be overseas travel or it could be cross-border purchases. This segment has really been growing fast. It didn't exist before we had the Wise Account. It's nearly double last year, and is now making up [ 17% ] of our active cross currency there. They contribute to our cross currency volume about the rate of GBP 800 per quarter. And this added another GBP 1 billion in cross-currency volume in the last financial year. They hold money with us, where it generates interest income, and they contribute to the fast growth in our card and other revenue segment. So this Wise Account adoption that we talked about and this new segment of card-only customers have grown this revenue, this other revenue line about 45% last year to GBP 256 million. And I'm not -- I haven't stopped talking about the impact of the Wise Account adoption, because beyond this completely new segment of card customers, the Wise Account also attracts larger use cases in our core segment. So we see the Wise Account customers doing more with Wise, moving bigger amounts and contributing in other revenue lines compared to our transfer-only original customers. So let's recap. We saw how our current customers are recommending Wise to more and more people for our new customer base is growing, bringing bigger groups of customers across the globe to Wise. Customers are adopting the Wise Account more, bringing more value to them, but also more income for us to reinvest in the product and services. And with that, I'll hand over to the CFO, Kingsley, to talk a little bit more about how it turns out in our financials.

Thank you, Kristo. It's great to see you all here. So let's start by going back to 12 months ago to the income guidance we gave them in order to give some context on our reason for changing our key financial metrics to an underlying basis. Twelve months ago, we set out our interest framework, and we gave guidance of 28% to 33% income growth for the year. Guidance was then increased twice during the year, and we ended up significantly above the original guidance at the end. The performance of our underlying business was a key contributing factor to this, but also important was the impact of interest rates and our ability to return the 80% of interest over 1% to customers. Because of the impact of the interest rate environment, obscuring our underlying performance of the business, we've decided to move to focus on underlying income and underlying PBT as our key financial metrics. Underlying income is the revenue we earn from our broadening range of products, plus the first 1% yield on the growing customer balances. Underlying profit before tax is then simply the profit before tax we earn on our underlying income. These will give us better insights into the health and growth of our core business, not distracted by external factors. So with this in mind, let's get into the financials. As Kristo highlighted, we're seeing ever increasing number of customers using Wise on a regular basis. This is evident in the active customers having grown by an average annual rate of nearly 30% over the last 3 years. This active customer growth is driving cross-currency volume, again up on an average by 30% a year over the 3 years, and balances up on average over 50% a year. This growth, in particular of Wise Account adoption and usage has led to average underlying income growth of over 40%, and underlying profit before tax growth of over 80% a year over those 3 years since listing. This is showing that our product investments are paying off. Coming to the next to the last financial year. Last year, our underlying income grew by 31%. This multiproduct growth applying equally across both personal and business customers. With the success of the Wise Account, this underlying income growth comes from a broadening range of sources. As you can see here, nearly 1/3 of underlying income in the last financial year was non-cross currency income. With a strong balance growth Kristo mentioned of 24% in cash balances, as well as the lapping the final period, where interest rates were not greater than 1% throughout the whole time, underlying interest grew by over 140%. Card and other revenue was also up over 50% as more customers adopted the Wise card and became more active and more loyal. The broad-based active customer growth that Kristo referred to regionally is leading to strong underlying income also in these regions. The growth is highest in the rest of world, particularly driven by Brazil, but of other regions, Asia Pacific is the fastest growing. Now sitting alongside North America and the U.K. as pretty equal contributors to underlying income. This shows the benefits of the long-term investments that we've made in the region, most recently with the completion of the integration into the new payments platform in Australia. And in this financial year, we'll start to see the benefits of the new license in Japan, removing the JPY 1 million limit. These are multiyear efforts, but will have a significant long-term benefit and help to drive active customer growth in the region. But even in our most mature market, the U.K., underlying income growth was still a very healthy 26%. We saw a reduction in our cost of sales in the last year as we saw lower FX and account-related costs due to charge-backs. This was in part due to the karma FX market, but also due to the continued improvement in processes and controls that we implement as we grow. This, along with the higher underlying income, led to a 10 percentage point increase in gross profit margin and underlying gross profit increasing by 51%, creating increased capacity for us to invest. So where did we invest last year? From a market we focused on the effectiveness of spend, we invested in our marketing team growing the head count by 27%, as we believe in the long term that will give the longest benefit. This allowed us to maximize the value of our external spend. And while that external spend was broadly flat last year, we acquired 20% more customers than the previous year. From a product and infrastructure perspective, as Harsh mentioned, we continue to increase our investment in the products and features, which our customers love, adding new features, improving speed, reducing cost. We have an engineering team of over 800 people working daily to achieve money without borders. From a servicing perspective, with new and active customer growth, we are seeing investment into our capability to provide exceptional customer service is key. As Harsh referenced, we had to pause business onboarding in the U.K. and Europe in the second half of last year. And we've learned from this slowly reopening the markets and ensuring we have sufficient capacity to deal with any spikes of demand. These products and customer experience investments continue to create loyal, evangelical customers using more of our products for longer. Finally, from a core functions perspective, we also continue to invest, although in a controlled way, investing in our risk management capabilities as the business continues to grow in size and complexity. This investment can be seen in the growth of operational costs for the year, which increased by 24%. Third-party costs increased, in particular, as a result of our choice to use a portfolio of specialist outsourcing providers for specific elements of servicing customers, allowing us to flex capacity up and down more quickly. This all results in underlying profit before tax up 226% on the previous financial year. As you can see, the adjusted underlying EBITDA margin was significantly elevated above our target of low 20%, in particular as a result of the lower cost of sales I mentioned earlier. This has allowed us to invest a significant price reduction in April. And therefore, we expect a lower profit margin in the current financial year, more in line with our guidance levels. Up to now, I've focused on underlying financial performance, which is the core of the business and has grown significantly. But switching to reported profit before tax, including the net interest income above 1%, this has grown even more and was GBP 482 million last year. Under our interest framework, we retained 20% of this additional interest for our owners. And of the remaining 80%, we were able to return 35% of this to customers, leaving an additional 45% that dropped to reported profit before tax. We were able to launch programs in Europe and the U.S. to return interest to customers. But in the U.K., the current regulatory framework doesn't allow us to pay interest. And this accounts for over half of the balance remaining. Overall, we end up with a reported profit before tax and earnings per share, 3x the amount from last year. Clearly, this was significantly impacted by net interest income, but also by us from customer-led growth in our underlying business. Reported free cash flow was GBP 486 million. This is a profit before tax to free cash flow conversion rate of 101%. Looking forward to the current financial year, we will continue our investment in the business, in particular, focused on lower prices and better allocation of costs. Off the back of our detailed analysis, we've already implemented a price drop of 2 basis points, and also have initiated a wider price rebalancing following our improved cost understanding. The aim is to continue our drive for lower prices for customers. We will continue to invest in customer servicing teams to deliver the optimal onboarding and growing customer experience we can, and to ensure we can deal with new customer demand. We will invest in increased and increasingly effective marketing spend, ensuring we spend incremental investment wisely. This includes kicking off a targeted expansion into brand marketing in two markets this year with the first campaign already kick off in Australia. Finally, we'll continue the rollout of more features in more markets, including the assets product as we referenced before. As you've heard from Kristo, the investments that we're making are generating strong product-led customer growth. More customers are adopting the Wise accounts, reflecting the value of this product to them. This generates more cross-border volume, more balances and more investment into assets, alongside also more use of the card and therefore, more underlying income across a broader product set. In this financial year, we expect underlying income to grow by between 15% to 20%. Last year, we had the capacity to invest in price, but we didn't reduce prices until we were confident that the reductions in FX and product losses were sustained. We executed these price drops at the start of this financial year. And the timing of this price reduction will have an impact on the year-over-year growth rate by about 5 percentage points. So let's reflect on where we've come to. It's 3 years since we listed on the London Stock Exchange in 2021, and the business is fundamentally different to the one then. Our underlying income has grown by nearly 3x, strong active customer growth of more than 2x. This has driven cross-currency volumes up 2x. We've also seen an acceleration in the adoption of the Wise Account and in particular, the fast-growing Wise card product with card and other revenue over 6x up in these 3 years. Alongside this, central banks have increased interest rates, turning the holding of balances from a cost as it was 3 years ago, into a growing source of additional underlying income. Those balances are up 3.5x from a cash perspective. But if you include the assets product, that's nearly 4.5x. This underlines what we have achieved, but the opportunity for us remains substantial. Many millions of people and small businesses move trillions of pounds across borders while overpaying for a poor service. To further unlock this opportunity, we'll continue to invest into our long-term growth potential. We'll continue to invest in marketing, to improve products and infrastructure, to price reductions and improved customer experience, driving growth in new customers and increased levels of customer activity. The market leader over time will be the provider of the cheapest, fastest and most convenient service with the broadest coverage. This will only be achieved through building the best global infrastructure. We will continue reinvesting back into growth each year over the medium term, whether it's investment into price, product, infrastructure, exceptional customer service or marketing. Investments into price will bring down cross-currency prices and will drive long-term growth for the business. Therefore, in the medium term, starting from an FY '24 base, we expect medium-term underlying income growth to be between 15% to 20% CAGR, as we continue to grow profitably and invest for the long term. This is growth on an underlying income base of nearly GBP 1.2 billion, which we had in FY '24. From a profitability perspective, we retain the same profit margin target that we had at listing, although we moved to an underlying rather than a reported basis, and because we see share-based compensation now as a cash cost as we decided to purchase shares into the Employee Benefit Trust rather than issue new shares, so to prevent dilution for shareholders. We've moved from an adjusted EBITDA earnings guidance to a PBT range. This PBT range of 13% to 16% is equivalent to an adjusted EBITDA margin of 20% to 23%. Clearly, with interest rates continuing to be above 1% for the foreseeable future, we expect reported profit before tax margin to continue to be higher than this, contributing both 20% of this additional interest that we retained for shareholders plus the part of the balance that we're not able to return to customers. So to close, and as Kristo covered earlier, the market is huge and never has it been more important to give customer's view. We know that success in the long term will depend on the quality and depth of our infrastructure. We'll continue to invest significantly to build our network around the globe, driving faster and cheaper payments. We continue to focus on building products that customers love, which in turn, fuels the growth from our [ agile ] customer base, and we will do all of this while remaining profitable and highly cash generative. Thank you, and now we move to questions, which I think Martin will coordinate.

Great. Thank you, Kingsley. So we just flip back a slide. Yes, great. Thanks. So yes, on to Q&A. Thank you very much for the presentation. So with Q&A, we'll start in the room. If you'd like to raise your hand, I see some of you have already. And we've got a microphone to you. If you could just start by introducing yourself, and then following that asking your question, that would be great. We'll start in the room, and then we'll move over to callers on Zoom shortly.

This is Justin Forsythe from UBS. A couple of questions from me. So maybe you talk a little bit about the margin guidance. I think you've pretty notoriously come in oftentimes above that over the last several years, despite I know some benefit from interest. But could you talk about the underlying PBT guidance for margins of 13% to 16%? Clearly, you exited the period at something higher than that. I mean you talked about spending down to those levels historically, but kind of haven't. So how should we think about that? And parse maybe between the different buckets of expenses. So is it mostly headcount growth driving that? Is it a marketing uplift? And then maybe you could talk a little bit about the top line guidance as well. So there's a component of that, which is the growth in the 1%, first 1% of interest as well as, the underlying operating expectations. So maybe you could just parse through the two impacts there. So what are you expecting that 1% to grow, which is effectively guiding balance growth in a way and the core part of the business?

Thank you, Justin. So I think we've done a really good, so kudos to the finance team. I think this was a really good move to go from the reported PBT to underlying PBT, profit before tax, because it really describes better the core business. And we don't know what the interest rates are going to do. We don't know what the regulatory environments tell us about what we can pass back. So that should give us much better guidance in the future, much tighter guidance in the future. So I'm really happy that we're doing that. But I think the questions are quite proper for Kingsley on.

I'll start with the profit margin. Like as you said, like it's always been our stated aim to target the same profit margin that we're doing now. And there's sometimes whereas we had last financial year, we saw costs come down, and we want to make sure it's sustainable. So sometimes, we will see slightly higher profit margin before we have the confidence to reduce prices. But we are targeting that margin, and that's what we expect to be the margin in the long term, and we will invest to that. And when by investment, what we're talking about, clearly, we will invest across all of the areas of investment that I laid out. I think we expect to have more opportunities to invest in price going forward, and to really reduce those cross-currency prices for our customers, because ultimately, what we see is that's the #1 reason why customers come to Wise, and it's the driver of, in the long term, the winner in this market is going to be whoever offers the lowest prices. So we expect more opportunities to us to invest in price, but we will continue to invest in marketing, products and excellent customer service. I think that was the first question. I think the second question, you were talking about the kind of, I guess, the makeup of underlying income growth. I mean, we expect a continuation of the strong active customer growth we've had. Clearly, off the back of that, we expect continued growth in balances that customers hold with us. Like the dynamic of whether those balances are in cash or will become more in assets, like it's hard to forecast. But we expect strong growth in those balances. We expect strong continued growth in card usage, Wise Account usage. And that all coming together is what effectively leads to the guidance we've given, also reflecting though that we expect to be dropping prices and that will have affected an impact in that growth.

It's Kim Berger from DB Numis. Just a couple of slightly more sort of higher-level questions. One is about competition. Can you talk about what is the competition environment looking like now? And also, if you could talk a little bit about sort of price elasticity. You talked about how being -- having the lowest price, how that helps. But how should we be thinking about it? Is it a couple of basis points, does that mean anything? So a little bit about price elasticity. And then secondly, on the Wise Platform. So as you mentioned SWIFT, mentioned also a neobank, which I think has about 100 million customers also and it's growing tremendously. How should we think about the sort of opportunity there? When are we going to start seeing sort of the effects coming through?

Thanks, Kim. I'll start, and then I'll hand over to Harsh. So your first question on maybe kind of continuing on what Kingsley just elaborated, we see the biggest driver of growth in the business being new customers. We're seeing the biggest driver of new customers being the word of mouth or recommendations. We're seeing the biggest driver recommendations being the fact that we're so much cheaper and more transparent than the banks so -- or anything else that is available. So that's why Kingsley, me, Harsh, we're all quite excited about remaining -- retaining that position and getting a head start, because we're setting now the benchmark of what the prices need to be, and we're making that available to our partners through the network as well. And you'll see we're able to do this in a sustainable way. We're growing fast. We're accelerating and then we're at the same time kind of retaining the profitability levels. So in that sense, over the long term, the price elasticity, if you call it, it does really matter. It really, really matters over the long term. What are the short-term effects? These are very hard to estimate, because the most important thing is the world travels, the world travels. People will know where to look. People will know how to -- will get more actually smarter of how they compare their options and kind of start figuring out what the banks actually charge. So this is all kind of moving in the right direction. But your further questions on investments and infrastructure platforms, specifically.

Yes. For Wise platform. So first of all, we are excited that we have now 85 partners globally, who think what we've built over the last 13 years can be used for their customers, right? So this is a testament to what we've invested in over the long term. I can tell you like even 4, 5 years ago, when we went to the banks, they'd be like I'm not sure, and now they're seeing that change. And they are seeing it because their customers are moving to Wise, and they're figuring out how to retain these customers in their own experience. So that's great. Specifically on neobank, like, yes, it's a flagship bank there now in LatAm, and it's still early days as we just launched the integration. But I have to remind you that the challenge that our Wise Platform team has is that the core business hasn't like the people come to wise.com and our Wise apps, that's still growing pretty healthy and very healthily. So as a percentage basis of what volume moves across partners, it's still early days, right? But I fundamentally believe and we fundamentally believe, again, this is a much more longer-term investment. Because if you think about from a bank's customer perspective and if the banks are doing the right thing for their customers, they should be plugging in the cheapest, best infrastructure into their own apps. And we are seeing this with the neobanks because they are faster to move. They may not have old relationships correspondence, so that's -- they're seeing that. And that's becoming an advantage for them that the incumbent banks are like trying to depend against. So still early days for Wise Platform. But overall, we're very excited on what's happening. Yes. So SWIFT, I think, again, like we just launched this product. Like there's more than just one thing that happens, which is like somebody goes and changes the code. Like of course, that's become easier. But a bank sales cycle is pretty long. So we're still working through that. But we have some very good interest when we announced it, I think, in [ CIBs ] last year. We've got a lot of interest in the industry on that. So that was good. Like at least we had conversations that opened up, which previously would have been harder to sometimes open up, because of technical integrations with us years. So that's been a good initial now for us.

Orson here from Barclays. Just two from me. First is on the gross profit margin. There was obviously a lot of details on sort of card revenue. I was wondering if you could quantify what the impact on gross margins is once card revenue becomes a bigger share. However, that should sort of be for of as a positive gross margin impact, or if it's more broadly neutral? So that's the first one. Second one then is just again on the timing of the PBT guidance. And obviously, you mentioned that's a long-term target. And I think you said before that, that you're looking to invest to bring the numbers to more in line with the targets. But could you give a bit more color on sort of the timing when you'd expect to be in that 13% to 16% range? Is it sort of something that will take a couple of years? Or can we already expect to be in that range, shorter term? And then maybe one quick final add-on is just on marketing spend. Obviously, you've committed to increasing that, do you expect volumes to actually see a bit of a rebound as a consequence of the increased marketing spend?

And most of the questions are for Kingsley. But I'll maybe -- can set the scene a little bit on the principles level. So on the principles levels, and actually, that's a good maybe a reminder of us doing a relatively large structural price adjustment over the -- we're still kind of in the middle of this over the last couple of months. The principles are that there's no -- unless there's a really good reason for some transactions less profitable than others, we've designed our products in a way that all of our -- all of the activity that the customer does has the same profitability margins. So we don't create some weirdness where part of the business is subsidized by the other part of the business. So on the principles level, and maybe Kingsley will come in more specifically, we expect all the revenue or all the income that we're reporting be the same quality, basically. There's no difference in the quality of the income coming from one source or the other. But then maybe more specifically on to you.

I think in relation to kind of card and specifically, as Kristo echoed like all of our products are profitable, but we haven't taken the decision yet to break out cards as a specific standalone. Like clearly, we've talked about this card only kind of a subset of customers, but they effectively also like they're not doing cross-currency transactions outside of card, but they do have balances. They do have interest income. So I think we decided not to specifically break out the cards kind of economics at the moment. But going back to the point, all of the products are profitable, which is key to our kind of core. I think you talked about then the profit margin. I mean we this isn't a kind of we expect to get this in the future. This is the margin that we're targeting. So kind of in relation to timeline, we're expecting to be in this kind of sooner rather than later. And then that's what we effectively, when we look at the capacity to drop prices more recently, that's what we're taking into account. I think then finally, you asked about marketing. I think we -- yes, we expect -- we are increasing our investment in marketing. Clearly, we expect that to have a positive impact on growth of customers. And -- but also, clearly, this is alongside that 2/3 of our customers still come from word of mouth. So from a portfolio perspective, yes, we can expect to continue to see healthy new customer growth.

This is very fascinated actually on the marketing side, is what Kingsley mentioned earlier, that we are a media spend, they stayed the same, but for the same spend, we managed to bringing 20% more customers from that media spend. So the driving efficiency in marketing, actually, that's actually the very valuable thing that we've been able to do.

It's Gautam Pillai from Peel Hunt. Can I come back on the cost base again? So on the gross margin side, are you working on any direct connections in the near term, which can lower the partner fees and hence, have a positive impact on gross margins? Secondly, on the investments. Despite the margins going up quite a bit, you have made significant investments in fiscal '24, which is showed in one of the slides. So when we think about cost growth in FY '25, should that be in the range of 15% to 20%. But if you're going to the 13% to 16% EBITDA margin, it implies that cost growth is going to be quite ahead of the top line growth. Is that the right understanding?

I guess this is again for Kingsley. We are working on direct integrations eventually everywhere. And this is really the, I'd say, the ideal goal or the ideal in state, almost of our infrastructure where we get to connect to the instant super low-cost independent local rails, as we have just reported in Australia. So we're at 5 today, there's a lot more to go. So there's going to be more of that happening. Again, Kingsley maybe wants to comment more on the cost base. But I would say we kind of expect the structure of our unit economics be relatively stable, again, by design. So kind of on a broad level, I wouldn't expect gross margin expansion necessarily from that to be too significant.

I think that's true because I think it was the -- with the direct connection and reduction in those costs, it gives us capacity to increase investment. So rather than seeing that as an opportunity for expansion of gross margin gives us the ability to reflect those costs into the price that we're charging customers to continue this growth [flywheel]. So that's, I guess, in -- your first question, that's actually kind of what we expect to see as we see these costs come down with new direct integrations, et cetera. I think for the second part of your question, where should you look for FY '25? Well, as I kind of set out, we continue to expect to invest, increasing our marketing spend, increasing the kind of like consistent with last year around investing in our servicing and in looking to continuously improve the customer experience that they get. So the onboarding experience and the kind of ongoing kind of customers. Because fundamentally, with 2/3 of our customers coming from -- new customers coming from word of mouth, the quality of the service that we provide to our existing customers is driving our kind of biggest acquisition tool. So I think kind of something similar from a kind of operational expense kind of growth perspective that you saw in FY '24 is kind of reasonable.

Alex Short from Berenberg. Just going back to the guidance, actually, the volume is and customer growth has been very strong. And if you look at the web tracking data for Q1, it looks like it's been extraordinarily strong so far this fiscal year. Could you just comment on the VPC element, particularly with regards to the cyclically low high VPC transfers versus the structural, geographic product mix element?

Sure. Again, I hand over to Kingsley. Kingsley seems to be getting most of the questions, which is great. So you're asking about -- you're really asking about the changing or shifting customer mix, and you're right to do so. That's the reason we also pointed out that we have these new segments that we had no right to before -- are starting to go up in our customer base and are actually growing very fast, because the product really works for them. So you're asking how you think about the customer mix growing -- going forward, the speed of development in each of these segments. These are all the good questions. I think there's probably limited guidance that Kingsley can give you on that. But kind of...

I think like clearly, what we try to bring out with this card-only segment is to highlight the success of the -- we've effectively got this customer base. We didn't kind of design it for specifically, but we have. That's growing fast and has a relatively stable but lower VPC. So that dynamic we expect to continue. There's nothing to tell us that people aren't going to adopt the card as a product to use when they travel, et cetera. And that's their kind of back cross currency use case. So from a VPC dynamic, that will continue. The adoption of the Wise Account and more products will continue to continue. So I think those elements. You then asked on the other piece that we talked about before is the slower growth in the higher value transactions. I mean, clearly, that started from around the time interest rates started to rise. We -- with our recent kind of rebasing of our prices, what we do see is we are reducing prices most for the customers, who are transacting at higher volume value. And we hope that has a positive impact on that. That's it. But exactly how and when and whether there's also the macroeconomic dynamics to that, where we can't tell. But as we continue to invest in price and other things, we hope to have an impact.

And just one more if that's okay, maybe to Harsh. The one cost line seems to be growing out of OpEx in line with underlying income is the servicing or the servicing headcount, let's say, what potential is there going forward to reduce that or reduce the rate of growth below the rate of underlying income growth?

Yes. I mean I think, as Kingsley said before, the reason why people are joining is -- 2/3 of the people are joining because of word-of-mouth growth, right? And we saw this when we had businesses who wanted to join, but we couldn't service them like last year. So we had to take some mix of hard costs. So we will continue to invest, making that experience to be really, really good. It helps us then drive toward more growth, more active customers in the longer run, this is where we will invest. So we'll continue to do this, including and then also investing in product engineering and also using the newer technologies that exist now, and this will evolve like what's happening with LLMs and machine learning. We hope in the mid- to long term, we can use those technologies to reduce the spend, where we're doing maybe more automated manual work where we can automate stuff. So -- but it's still early days. So predicting that like when that spend and stuff will go down, it's a bit harder. But obviously, we're working on these things. And as I said before, we fight financial crime way better with automated technologies, and only alerting stuff that our agents really need to review, and the scale at which we're moving, then like other incumbents. So I think this investment is showing that it's been coming to fruition over the years.

This is Aditya from Bank of America. A few from my side. Firstly, if you could just comment on the active customer dynamics. If you look at Q4, there was some sort and especially in Business around probably pausing customer onboarding with that, now back on track. Can you just comment on what you've seen since then? Second, on the cost on the OpEx side, one of the things I think you highlighted that the Wise Connect event was how you could add a large number of transactions with very minimal increase in the operations team of the compliance team. So that shows me that you have a lot of scale, but now you're saying you're going to have 1,000 [ people ] this year. So could you talk about where you're hiring what sort of roles, regions, and what's driving that sort of ramp-up in the headcount growth this year?

Sure. I'll maybe start with the second one, actually, and then we can come back to the kind of customer dynamics. So you're totally right that there are elements in servicing and our cost base that respond very well to scaling. Payments -- Harsh keeps telling me, payments is a scale business. But the vast scale is the thing that really sets up different economics than those who only come on the small scale. But when we talk about servicing, so there's two things in play. One is for sure, we have scale effects. But the other is what Kingsley described before is that it's worth the investment. So the level of service is increasing. So our ability to increase the level of service, so the experience that customers get is worthwhile. So we might not take all the scale effects and then rather invest more. So you're right about both basically, there are scale effects, but there is also worthwhile investment. And your first question, I don't know if I fully understood, but it was more about, so what the new customer dynamics? Do we see a lot of demand? Yes, we see a lot of demand. We see that should being geographically really distributed, in the same way we see new pockets of demand as well. So we saw that this card example is a good one here. That product wasn't really available of working for a set of customers, a set of use cases that it now is. But if you had a, please do.

I think it was a bit more specific on business customers where you had some issues maybe on the onboarding side in Q4. I guess you have resumed that, as have you seen back to normal levels of activity on business customer growth?

Totally. The demand hasn't gone anywhere. So we see the demand is there. And you could work out. It was only a really close for European businesses, right, but we see businesses elsewhere like all around the world. So maybe the numbers, in fact, were when you start modeling it, it might -- it should be thoughtful about that. But yes, the demand is totally there. Thanks, Aditya.

It's Adam Wood from Morgan Stanley. Sorry to come back to the PBT guidance, but maybe if I could be very direct. You've given underlying income guidance for '25, but you haven't given guidance for PBT. It's a midterm guide. Does that suggest that we shouldn't be in the range of 13% to 16% in '25, but we should be there shortly afterwards? Secondly, when we look at the midterm guidance on top line, you're now saying 15% to 20%, I think, at the half year last year, the income guidance was above 20%. You're lowering pricing and putting quite a big investment into headcount. I think we all appreciate with pricing that limits your growth this year. But could you just help us understand a little bit about why you're bringing that guidance down in the midterm, despite the investments you're making in those areas. I think the specific concerns I've had from investors this morning, would be around competition and would be around penetration, particularly of that large volume customer segment. So you forced to bring on why is account users or why is card users, sorry, why is card users specifically that bring on a lot of customers but don't bring on a lot of volume. And so you're kind of running fast to not bring on the same volume that you would have been doing when it was the large use case cross-border transactions? And then maybe just finally on the business adds. Could -- is it possible to give us a kind of what it would have been had you not frozen or alternatively, what your capacity to onboard business customers is now versus where you were freezing those adds last year?

Okay. Adam, thank you. I know you were waiting, you had a lot of questions. So let's try and take one by one, and please do remind us if we forgot. So your -- I think your question -- the guidance, I think that was really easy. It's midterm guidance. I think...

Because we've only ever given profit guidance in the midterm. Clearly, that's where we kind of like target be, but we only have to give that in the midterm. I think the second question you were talking about was investments in price and other things. I guess, like why aren't we -- why is the midterm guidance 15% to 20% if we're expecting these? I mean, ultimately, throughout our history, we've invested in price. We've tried to be the lowest price. And clearly, we really believe that that's going to be the -- what wins in the end, and that's going to be the business that's successful in this place, is going to be the one that's the lowest cost. When we make these investments in price, it's hard to say exactly when that kind of positive impact. We've seen it over the last 13 years, but it's not something we can definitely measure in the next week, month, or even kind of in the first couple of years. And we expect as we do see that uptick, though, to continue to invest in price. So this isn't a one-off investment in price. This is a continual investment in trying to bring down costs for those cross-border transactions to the lowest we can and that we expect that to continue to drop over that medium term. So that's kind of the fact you're seeing as we have capacitors, effectively you might see an uptick based on increased volumes, we then would create more capacity to reduce our prices further and invest across the business.

Yes. But maybe just to reassure, it's not because you're seeing increased competition, or you're seeing issues around penetration, particularly of high-volume customers that slow the growth is pricing that is the delta?

This is what we've always done. This is the continuation of our mission to be the lowest cost we can be, while being profitable highly cash generative. So we want to be sustainable doing this at the but we -- this is -- we want to continue to invest in this huge opportunity. But you saw how we've just scratched the surface really in relation to how far we've come, but we're still pretty big already. There's so much more to go after, and that's why we continue to invest in the medium term.

The units economics, so the economic model pretty much hasn't changed for the last 6 years, I would say. We've gone smarter in places. We're attributing what actually does cost us and what cost us less so that we can pass on that. So we're basically are always ultimately competitive in every transaction that we operate. So that's the -- that you can see some shifts in pricing, some things get more expensive, some things get cheaper, but that basically aligns better with the cost base, which we believe we have the best cost base of anyone in the world, thanks to the world that Harsh's team is doing. But -- and then you take it forward, Kingsley's team is kind of modeling how to take the same economics forward. We are not planning to change that. Like how do we expect -- from what we know, be the guidance that we can give on the underlying growth.

Sorry, the final was just on the business customer adds in terms of possible to give an underlying number or a capacity of adds for this year?

I think the way to look at this, Kingsley told me before -- is you can basically look at what is the rate that we've been adding business customers -- we report the active business customers in the past. So you can kind of figure out what it was in the past. And from there, you can, I think, work it out forward. Right. One more from the room from the -- I think we...

Just sneak in there. Daniel Sykes from Redburn Atlantic. I was just wondering if we'd touch on the business customer capacity again. I mean, obviously, we saw a slowdown in H2 of '24. And as you flagged, that was for operational reasons and a choice. We then got strong profitability for H2 '24. And I'm just wondering why that wasn't really invested in increasing that service capacity and being able to stop the closure of Europe in the first place? And I guess, when we look forward to 2025, it seems that there's more of an investment in price rather than increasing that capacity in those customers? And then secondly, obviously, very well capitalized, very strong cash balance, and we expect strong cash flow yield helped by NOI looking forward. I mean, what are the plans with the capital as well?

Can I pick up the first one, and I don't know, Harsh, if you want to add. It was invested in capacity and being able to onboard customers, we totally want to. We welcome customers on the platform. We just want to give them the service that they deserve. And it takes time to build up capacity so we just didn't get there fast enough. Just a small reminder of kind of numbers that we're talking about. We're -- we onboarded last year 5.4 million financial services customers across the entire globe in all these jurisdictions, with all of these different requirements. I don't think there's many companies that can do something similar. So it's -- once you get to the bottom, how do you onboard customers in Japan versus onboard them in Australia versus onboard them in Canada and Brazil. It gets quite interesting. And 5.4 million, let me just translate this back into months, right? So this is -- it's almost 0.5 million a month now, that we're onboarding to Wise. So there is a huge operational machinery supported by all the technology that Harsh is building. And our job is to make sure that, that machinery is able to serve as many customers who want to join us, in most places around the world. And I think we've actually done pretty incredibly, being able to securely bring these customers onto Wise. And even the -- in the [ pause ] that we had cleared up pretty quickly.

Yes, I think that's it. And sometimes you predict demand, it'll be off maybe so you have to hire the team. So basically, the shutdown was -- we like these customers waiting. Do we give them and everybody else will come after them a poor experience and drive down word of mouth or we just make this choice and then we bring it back when we had better service levels. That's what we said, and that's it.

And then just on capital allocation?

Yes. On your second question, you're right, we've got a strong capital and cash base. We have to remember, we're a highly regulated financial institution, and we [promise] to maintain this level of capital and liquidity. And we clearly, on top of that, have an extra amount that we want to from a management perspective, to kind of increase safety and allow us to take the opportunities of growth into new markets, into new licenses, which have their own capital requirements. So I think -- and we design the level of profitability we're looking for to make sure we do generate the capital we need and liquidity we need to meet our requirements. Clearly, there's a potentially short-term kind of additional amount that's come from net interest income, that we can't control how much that's going to be and how long -- we don't know how long that's going to last for. So we're comfortable with the level of capital base we have. We've clearly taken the decision to use a small amount of that to purchase shares into the Employee Benefit Trust, to prevent the kind of dilution impact of new share options that we [ access ]. That's kind of all we decided to for now we want to kind of retain this, because it gives us maximum flexibility to take opportunities, going forward.

Thank you. I think we can go to the stream, Martin.

Yes. Great. So I'm just moving over to Zoom for a few questions now. I will start with Deepshikha at Goldmans, please.

Deepshikha from Goldman Sachs. So just quickly, I think a lot of questions have been answered, just one -- clearly, the margin and the growth given the targets that are there, they imply like continued growth investments, and you have talked about the areas that you plan to invest in. So how basically are you thinking about payback? Like you talked about like the marketing, the efficiency that was like the efforts that were done in terms of building internal efficiency and marketing, the payback was less than 6 months. So, if we are talking about these investments where you have things like external marketing, et cetera. How are you thinking about payback? And what does the duration for that look like?

Deepshikha, it's a really, really great question. And again, if you allow me, I'll give a nonfinance answer to that. So there are indeed parts of our operations that are relatively easy to model. So we should only invest in media spend, where we know it turns at a certain time. So these can be really well modeled and gives us very good guidelines how to operate. If we look at our engineering spend or operations spend, on one end of the spectrum, you could argue that all of the customers, all of the volumes that they're moving, all the profitability that we're talking about, is a payback from the spend that we have been making over the years. So that, at a very high level, give us an enormous amount of confidence that what we're working on has resonated, has built an ever larger business, which doubled and sometimes triple in size compared to when we started trading at the exchange. So it's hard to pinpoint down on what did this year's product or servicing investment going to contribute to the overall package. But our confidence at the global level is just relying on the experience that we've seen over the 13 years. I don't know if there's some more finance or more specific finance answer to this.

I think it is the same thing. Effectively, we continue to invest -- and if we -- where we see the fruits of that investment coming back gives us the ability to invest further and exact paybacks on our kind of price reductions or on investments intake, it's hard to measure. But we know that it works to date, and we know that where we're trying to get to is the right place to get to.

Thanks, Deepshikha. So moving now to Hannes, please, at Jeffrey.

Yes. I have also a couple of questions. So just one would be good to understand with all those investments, what do you think is the growth rate in active customer going forward? Do you think that this should stay stable around 29%, 30%, or you think that you can accelerate that even if you then also consider like, for example, new partnerships and other partnerships. That's the first one. The second one is, thanks for reminding us that margin guidance is a medium-term guidance on PBT margins. So maybe, you can just give us some indication what you expect 2025 will be as a starting point? And then overall, what is your confidence as this guidance is set as a starting point as of now? And what would be the influencing factors to be at the high end or the low end? And then the last thing is on our investment in headcount. Should we expect that is the same mix of people you add as you did this year, like 150 people in product, 150 in marketing and the rest in operations? Or is there a different split?

Okay. Let me maybe try and reflect on the first one and the last one, and then Kingsley cover the guidance again. The -- on your first question on the...

Customer growth.

Exactly active customer forecasting. I think what we're trying to articulate here through this presentation is, give you a better insight that as our products are expanding, as the use cases are expanding, then from the analyst community, you probably also want to start modeling or forecasting at more use case basis. So I think that is the -- those reasoning or that's the insight that we're hoping to pass on. Of course, we haven't given any guidance on customer growth, and we would find it very hard to do. But hopefully, it's only underlying dynamics have been helpful [ too ]. And on the last one, which was...

Headcount split.

Yes. So headcount split, really, it's the overall spend that we or the overall investment into growth, we're very thoughtful about or spend growth, if you like, we're very thoughtful about. But how it splits is a little bit more driven by what looks like the most useful and most immediate thing to invest in. So that mix will change. I don't necessarily expect or we don't foresee any drastic changes. But you might see some change in the mix of our head count or headcount employee expenses are growing.

I think that's why we put up the slide that Kingsley talked through, just to give you a color on where we are investing, but like top line should not change as much, but the mix may change depending on what's happening in the business, what may be happening at macro levels. So that's how we think about it.

And I think going back to the guidance, we -- and I said before, we give a medium-term profitability guidance. That's where we aim to be, and we don't give guidance on a kind of a more short-term basis.

And the guidance hasn't changed?

Yes. And it's the same guidance we've had since we listed.

Great. Thanks, Hannes. Moving now to Josh, please, Autonomous.

Just you mentioned you were ramping up marketing spend, and I wanted to know if you could provide more detail there. Are you spending more in marketing because you're going into new geographies, or because you're looking for new customer segments, or because competition is intensified, or for some other reason altogether? Any detail you could provide here would be helpful.

Again, I'll give you the high principles view. The principles, we invest marketing, where we have confidence that it pays back. That is the -- that is almost the most important thing, how we think about marketing and media spend. And when we see that there's an opportunity that we can amplify our product experience through marketing channels, through paid marketing. We will do that if it pays back. So the amping up of customers, amping up of marketing spend, I think if you translate back, actually means we think we've found places where it's going to pay back. And that's the reason why we intend to spend more.

Thanks, Josh. Moving to Andrew, please, at Wells Fargo.

Andrew?

Yes, just moving to Andrew, could you just check mute.

Sorry, I was muted there. Just wanted to move to price once again. I know that part of the strategy is the ongoing lowering cost for customers, and that's well appreciated. It does appear that the pricing changes you're making this year are slightly larger than what you made in the past. So I just want to get a sense, is this a level that from a price perspective that you plan to operate it for multiple years? Or how should we think about the level of price on a multiyear basis? Is this something that we can anticipate each year or just kind of think of the cadence of it over time?

Again, I'm not going to repeat everything i've said -- over the years is we should expect the total cost or the effective cost for customers to go down. We expect ourselves to get huge benefits from the scale effects and reducing the cost to serve. We are operating a cost-plus model. So the reason why the prices wouldn't go down is if we make no progress in, or if we make a very limited progress in scaling or improving our efficiency. So the short answer is, yes, you should expect the cross-currency take rate or the cross currency fees that we report to our customers, to go down year by year. But one thing that hasn't changed is our underlying unit economics. That hasn't changed for many, many years, and we don't see this changing in the future either. So all of the actions that we're going to take on these to customers are going to come from the basis of profitability and sustainable forward-looking operations, with plenty to invest in the infrastructure and even more scaling in the future.

Understood. And then my follow-up is how -- can you just talk us through the education process and really getting the word out. Is it via marketing investments that you're making to really just kind of showcase how you are the lowest cost product in the market? Or how do you kind of see that education process evolving? I'm sure it's something that you've been dealing with for years now, but if you're making changes of this magnitude, maybe if you want to kind of beat the drum a little bit louder?

For sure, for sure. In fact, actually, I think it's not only our job to kick the drum louder. One thing that's that I've seen progress on and has been very welcoming is the regulators, policymakers are also starting to pick up that it's really weird, we're letting banks hide their fees that they charge from their customers and not give the public an ability to compare that if I'm using HSBC to move money, then I'm paying extra or if I'm using somebody else than paying, why? So our customers have waken up to this. So they've kind of figured out what the banks do. We're seeing some of the lawmakers, the regulators catch up to this as well. So European Union was the first one. So commission installed a local cross-border payments regulation in 2021, which demands the European banks to disclose what they're charging against the real exchange rates, not against -- not just the made up exchange rates that they use. So this is starting to get some traction, especially in the card space, actually. European banks are slightly better at showing what it cost you when you use a card abroad, which is another place where the banks tend to make up exchange rates. So I'm glad that we're not alone in beating this drum. This drum is worthwhile drum to beat for everyone. And we're seeing the regulators kind of pick up on that. You might have noticed actually in the U.S., the Consumer Financial Protection Bureau also issued a pretty stern guidance to their banks on what is okay and what isn't okay.

I think Kristo was saying like this education takes time, but as customers tell their friends that, hey, this is actually the real cost of moving money using a cheaper option, and then pushing regulators to also first move these laws and chase these laws, but also then start enforcing it, it takes time. But we hope pressure from both sides leads to this better understanding what the real cost of moving money is.

Thanks, everyone, on the call. Thanks, everyone, who joined us in the room, and we will talk again in 6 months.

Thank you.

All right. Thank you. Thanks, Kim.