Wise: Interest Income Continues to Boost Performance

Wise reported a fourth-quarter trading update, showing continued good momentum from higher interest income as well as active customer growth (up 29%). For its full fiscal year of 2024, which concluded at the end of March, Wise flagged that its income growth came in at 46% versus the previously guided 42%-44% and our 48% estimate. It also highlighted that adjusted EBITDA margins remain elevated relative to its long-term guidance of at or above 20%. We forecast Wise to retain adjusted EBITDA margins above 26% over the next decade, but the market appears to be even more optimistic than us. We leave our GBX 560 per share fair value estimate unchanged. Shares look expensive.