Wise Q2 2025 Earnings Report
Wise delivered outstanding results for Q2 and H1 2025, significantly surpassing expectations. The company’s strong growth in revenue, robust cost management, and increased profit margins have positioned it as a rapidly growing leader in the financial services sector for cross-border payments.
Financial Performance Highlights
- Revenue : $591.9 million, representing a 19% increase year-over-year.
- Cost of Sales : $152.9 million, Down 5% year-over-year, indicating improved operational efficiency.
- Gross Profit : $505 million, up 30% year-over-year, driven by both higher revenue and lower costs.
- Operating Profit : $156.5 million, a significant 52% increase year-over-year.
- Interest Income : $145.4 million, up 44% year-over-year, reflecting Wise’s ability to capitalize on interest-bearing accounts and investments.
- Reported Profit Before Tax : $292 million, marking a 51% rise year-over-year.
- Profit After Tax : $217.3 million, up 55% year-over-year.
These financials underscore Wise’s ability to grow while maintaining operational efficiency, enabling profitable returns. Wise’s net margin for the quarter was 22%, above its target range of 13-16%.
Operational Highlights
- Faster Payments : 63% of cross-border payments being instant, which has contributed to reduced customer support costs by minimizing transaction inquiries.
- Expansion in India : Wise obtained a license to remove the $5,000 outwards transfer cap, opening opportunities for larger transactions in the market. Wise also facilitates 10% of all payments to India globally, according to the Reserve Bank of India, further solidifying its presence in one of the world’s largest remittance markets.
- Philippines Integration : Wise launched direct integration with the Philippines this quarter.
- Customer Growth through Referrals : 70% of new customers reportedly join Wise based on recommendations from existing users, highlighting strong customer satisfaction and loyalty.
- Wise Business Impact : 25% of Wise Business customers receive payments from other Wise users.
- Partnership with Standard Chartered : Announced in November, this partnership strengthens Wise’s position in international banking, with a partnership with a tier 1 bank.
Strategic and Growth Insights
Wise is growing its card and other revenue at 52% year-over-year, and up 16% quarter-over-quarter. This is approximately 1/3 of their revenue. This shows that Wise can convert customers from one section into another section and drive revenue growth.
Cross Border Revenue is only up 9% year-over-year but its suppressed by Wise lowering their prices twice in the last 6 months. With Cross Border Volume up is up 19% year-over-year.
Customer Holdings are up 31% year-over-year. Which has driven the underlying interest income up 23% year-over-year.
During the Q&A, James Britton from HSBC questioned Wise’s approach to leveraging its strong margins to drive additional top-line growth. Wise responded by affirming its commitment to disciplined investments, emphasizing the need to ensure every investment generates clear returns. This cautious approach to growth reflects Wise’s focus on long-term, sustainable expansion rather than rapid scaling at the expense of profitability.
Things to Watch
- Card and other revenue: This revenue growth rate has been accelerating with it having 10% growth QoQ from Q4 to Q1 and now 16% growth QoQ from Q1 to Q2.
- Net Margin rates : Company is aiming to drive Net margin to 13-16%.
- Direct Connections: They currently have 6 with 2 new ones announced. How fast can they get into new markets?
- Cash\Income: Other than share buy-backs how are they planning on utilizing this asset.
Conclusion
Wise’s Q2 and H1 2025 results reflect a well-executed growth strategy focused on expanding its global footprint, enhancing payment speeds, and driving down costs. With new opportunities in India, Japan, Indonesia, increased direct integrations, and key partnerships like the one with Standard Chartered, Wise is well-positioned to capture more of the global remittance and cross-border payment market. The company’s emphasis on responsible investments suggests Wise is aiming to balance growth with sustained profitability, making it a compelling player in the financial technology space. With a P/E of 19.5 and a 52% revenue growth in their card and other services. After listening to the conference call, I added to my position.
Drew,
Long Wise (WPLCF)