 Wise reports results for the year ended 31 March 2024. The company increased the number of customers by 29% YoY to 12.8mn and transferred £118.5bn globally, a 13% increase from last year. Wise offers three products: Wise Account for personal customers, Wise Business for SME, and Wise Platform for banks and enterprises. The company reported 12.2mn personal customers, up 29% YoY in FY24 (compared to the expected 12.4mn) and 625.8k business customers, up 20% YoY (against a forecast of 650k). The volume per customer (VPC) decreased by 12% YoY to £7.1k for personal customers (expected £7.4k), primarily due to smaller ‘card-only’ transfers. VPC for business customers declined by 7% YoY to £50k (expected £49.1k). There was slower onboarding of new business customers in 2H24 due to operational capacity constraints during high demand in the UK and EU. The volume increased by 14% YoY to £87.2bn in the Personal segment (expected £90.3bn) and by 12% YoY to £31.3bn in the Business segment (expected £32.1bn). Customer balances increased by 24% YoY to £13.3bn in FY24. Wise reported revenue of £1,052mn, up 24% YoY (expected £1,070.3mn), including £815.3mn in the Personal segment (+24.2% YoY, expected £831.4mn) and £236.7mn in the Business segment (+24.7% YoY, expected £238.9mn). According to Wise, more customers have adopted multiple features with their Wise account and holding their assets through these accounts. In FY24, the company enhanced its infrastructure by connecting to the Australian domestic payment system (NPP), achieving a tier 1 licence in Japan, and collaborating with Swift to facilitate easier bank payments. Additionally, Wise launched Wise Assets ‘Interest’ in 5 more European countries and Wise Invoicing for business customers. Wise completed 62% of transfers instantly at an average price of 0.67% in 4Q24. The total company’s income reached £1,412mn in FY24, including net interest income on customers’ balances. Wise maintains good control over cost of sales, resulting in a gross profit of £1,092.4mn in FY24. Administrative expenses increased by 25% YoY due to higher headcount and salaries, while finance expenses rose 92% YoY to £20.5mn. The company reported a healthy profit for the year of £354.6mn, up 53% YoY reinforcing its profile as profitable and growing business.  Wise expects the underlying profit before tax margin of 13-16% and underlying income growth of 15-20% over the medium term. The underlying income includes revenue plus the first 1% gross yield on customer balances. In FY24, underlying income was £1,172.7mn, up 31% YoY, and underlying gross profit reached £852.8mn, up 51% YoY. The underlying profit before tax margin reached 21% in FY24, setting the benchmark for medium-term profitability. The company estimates underlying income growth of 15-20% YoY in FY25. However, this healthy growth and margin may be balanced by the company’s plans to reduce the average price for transfers from 0.67% in 4Q24 to 0.64% in 1Q25 to maintain its low-cost profile. Cross border revenue represented 67.8% in FY24 underlying income, followed by a 21.9% share of card and other revenue and 10.3% of underlying interest income. Additionally, the expected reduction of interest rates starting from 2H of 2024 makes it less likely to see higher income on client balances in FY25 and beyond, so the underlying basis provides a timely comparison for the future.  We have updated our estimates for Wise. The company’s forecast for a lower average price for customers leads us to adopt a more conservative outlook. While Wise has a strong market position to attract more customers, the price cut is challenging given that costs are already under control and investments are a priority. Expected interest rate cuts by central banks starting from 2H of 2024 on the back of lower inflation figures are likely to reduce interest income for Wise. We adjusted our DCF-based 12-month target price to GBp735 from GBp744. We rate the stock Hold.