Wise reported a return on equity (ROE) of 18.9% for FY2025, marking a headline profitability metric that aligns with the company's broader earnings growth. The ROE figure is underpinned by a 17% increase in underlying profit before tax to £282.1 million and a reported profit for the year of £416.7 million, up 18% year-over-year. This performance reflects Wise's ability to translate rising customer engagement and transaction volume into sustained shareholder returns, even as the company continues to reinvest aggressively in growth initiatives.
The reported profit before tax reached £565 million (FY2024: £481 million), representing a 17% increase, while underlying profit before tax rose at the same rate to £282.1 million. The gap between reported and underlying figures is primarily attributable to interest income above the first 1% yield, which contributed £443.9 million, and benefits paid relating to customer balances of £161.2 million. This structure demonstrates how Wise's balance sheet—specifically its growing customer holdings, which reached £17.1 billion in customer balances—amplifies reported profitability beyond the core operating business.
Underlying Profitability and Margins
Wise's underlying profit before tax margin reached 21% for FY2025, comfortably exceeding the company's medium-term target range of 13% to 16%. This outperformance provides management with additional capacity to reinvest in long-term growth while maintaining financial discipline. The reported profit before tax margin stood at 34%, reflecting the inclusion of interest income above the first 1% yield and other non-underlying items.
Underlying gross profit rose 20% to £1,025.1 million, outpacing the 16% growth in underlying income, which reached £1,362.3 million (18% in constant currency). This margin expansion was supported by cost discipline: cost of sales and net credit losses increased only 5% to £337.2 million, significantly below the 15% revenue growth and 16% underlying income growth. Administrative expenses increased 25% to £768.6 million, reflecting deliberate reinvestment in product development, customer acquisition, and geographic expansion—consistent with management's stated strategy of deploying capital where return on investment is highest.
Exhibit
Wise FY2025 Profitability Metrics vs ROE
Percentage values for key profitability indicators.
Percentage (%)Source: Orionmano Industries
Customer and Volume Growth Drivers
Active customers rose 21% to 15.6 million in FY2025, with 5.9 million new customers completing their first cross-border transaction during the year. This customer acquisition drove cross-border volume growth of 23% to £145.2 billion (25% in constant currency), as personal volume increased 22% and business volume 24%. Importantly, business customer growth sequentially accelerated in Q4 FY2025, following the resumption of onboarding for business customers in the US and UK after a pause in H2 FY2024.
Underlying income growth of 16% (18% constant currency) to £1,362.3 million was driven primarily by volume expansion, partially offset by deliberate price reductions. Wise lowered its cross-border take rate by 9 basis points to 58bps, a move that saved customers an estimated £2 billion in the year. This pricing strategy is consistent with Wise's long-term approach of passing cost efficiencies to customers to drive volume growth and market share gains in the $43 trillion cross-border payments opportunity, as estimated by Edgar, Dunn & Company research covering January to December 2025.
Revenue Composition and Interest Income
Revenue increased 15% to £1.21 billion in FY2025, while total interest income grew 22% to £594.3 million. The interest income component reflects the benefit of higher yields on customer balances, which grew to £17.1 billion during the year. Within the underlying income framework, Wise separates interest income into two components: interest income above the first 1% yield (£443.9 million, up 22%) is treated as non-underlying, while the portion below that threshold is included in underlying income.
Net interest income from corporate investments rose 69% to £33.3 million, reflecting both higher cash holdings and improved yields. This line item remains relatively small but demonstrates the incremental earnings potential from Wise's own treasury operations. The cost structure supporting these revenue streams remained well-controlled: cost of sales and net credit losses increased only 5% to £337.2 million, reinforcing the operating leverage that enabled underlying margin expansion. Wise's underlying free cash flow (UFCF) reached £332.7 million, representing a 34.7% increase and a UFCF conversion rate that supports continued reinvestment capacity.
Wise management has indicated it will retain its return-led approach to investment, targeting long-term market share gains in the $43 trillion cross-border payments opportunity. The company's ability to deliver an 18.9% ROE while simultaneously reducing take rates and investing in product development positions it as a compounder in the payments infrastructure space, though management expressed disappointment that strong financial results did not translate directly to stronger market returns in the near term.
