Some finance companies are struggling to make ends meet, and others post substantial revenue growth. Either way, there is a chance investors will not respond kindly. For example, Wise has seen its shares plummet by over 15% despite massive revenue growth.
Investors Aren’t Impressed By Wise
It is remarkable to see so many finance and fintech providers struggle in the past few months. Most firms survived the COVID-19 pandemic without too many issues, yet they struggle to note growth when things return to normal. Wise, the popular money transfer app, noted strong revenue growth of 33%. Any company would sign up in advance for such growth, yet the company’s investors aren’t satisfied.
Wise went public about a year ago and unveiled its first set of full year results. It is always a fearful moment for investors and the company itself. Many companies struggled badly in their first year of going public, yet Wise noted strong momentum. Its annual revenue is just below 560 million GBP, up from 421 million GBP in 2021. Additionally, gross profit rose by 43%. On the other hand, the company invested back into their teams, products, and marketing. Earnings before interest, taxes, depreciation, and amortization (Ebitda) dropped from 26% to 22% as a result.
Furthermore, Wise is one of the few companies to expand into new territories in the past year aggressively. The firm also rolled out new products and services, hitting over 4.6 million active customers in Q4 2021. That, too, is a 29% yearly increase. With strong future growth ahead, the investors and shareholders should be over the moon.
Unfortunately for Wise, things are never straightforward with investors. Its shares tumbled by roughly 15% earlier this week after announcing these stellar figures. The reason for the market dump is uncertain, although various finance and fintech companies are forced to lay off employees. Investors have been spooked and will exit positions across the market, regardless of how individual companies perform.
