Key Takeaways:
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- Earnings Miss: Wise Plc reported fiscal Q1 underlying income of £362 million $485 million), missing analyst expectations of £372 million, mainly due to higher foreign exchange (FX) volatility.
- Stock Reaction: Wise shares fell as much as 9.2%, marking their biggest intraday drop since January and erasing year-to-date gains, despite a recent boost from a partnership announcement with UniCredit.
- Full-Year Outlook Intact: The company maintained its full-year forecast for up to 20% income growth, signaling confidence in its longer-term trajectory.
- FX Headwinds: Analysts at Jefferies attributed the earnings miss to higher FX headwinds, which offset positive sentiment from Wise’s recent platform win with UniCredit.
- Strategic Shift: Wise recently announced plans to move its primary listing to the U.S., aiming to tap into a larger banking and customer base, a move that has been positively received by investors.
What Happened?
Wise Plc, the London-based fintech specializing in cross-border payments, reported first-quarter earnings that fell short of analyst estimates, citing higher-than-expected currency volatility as the main culprit. The company’s underlying income for the quarter was £362 million, below the £372 million consensus.
The earnings miss triggered a sharp selloff, with shares dropping over 9%—the steepest decline in seven months. This reversed gains made earlier in the week after Wise announced a technology partnership with UniCredit to enhance cross-border money movement.
Why It Matters?
The earnings miss and subsequent share slump highlight the sensitivity of fintech firms like Wise to currency market fluctuations, especially as they expand globally. Despite the setback, Wise’s reaffirmed growth outlook and strategic move to the U.S. suggest management remains optimistic about long-term prospects.
The company’s ability to secure major partnerships, like the one with UniCredit, and its decision to shift its primary listing to the U.S. reflect Wise’s ambition to scale and compete in larger markets, even as short-term volatility impacts results.
What’s Next?
Investors will watch how Wise manages ongoing FX headwinds and whether its U.S. listing and new partnerships can drive sustained growth. The company’s performance in upcoming quarters will be key to restoring market confidence and capitalizing on its expanded global footprint.
