Remitly Global, Inc.

Good day, and thank you for standing by. Welcome to the remotely fourth quarter 2024 earnings conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please limit yourself to one question. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Stephen Shulstein, Vice President of Investment Relations. Please go ahead.

Thank you. Good afternoon, and thank you for joining us for Remitly's fourth quarter 2024 earnings call. Joining me on the call today are Matt Oppenheimer, co-founder and chief executive officer of Remitly, and Vikas Mehta, chief financial officer. Results and additional management commentary are available in the earnings release presentation slides, which should be found at ir.remitly.com. Please note that this call will be simultaneously webcast on the investor relations website. Before we start, I'd like to remind you that we will be making forward-looking statements within the meeting of the Federal Securities Laws, including but not limited to statements regarding Wurman Lee's future financial results and management's expectations and plans. These statements are neither promises nor guarantees and involve risks and uncertainties. They may cause actual results to vary materially from those presented here. We should not place undue reliance on any forward-looking statements. Please refer to the earnings release and SEC filings for more information regarding the risk factors that may affect results. Any forward-looking statements made in this conference call, including responses to your questions, are based on current expectations as of today, and we readily assume no obligation to update or revise them, whether as a result of new developments or otherwise, except as required by law. The following presentation contains non-GAAP financial measures. We will reference non-GAAP operating expenses and adjusted EBITDA in this call. These metrics exclude items such as stock-based compensation, acquisition, integration, and restructuring, and other costs, and foreign exchange gain or loss. Beginning in Q1 2025, we will also be excluding from adjusted EBITDA the payroll taxes related to stock-based compensation. For context, we recorded approximately $6.4 million of payroll taxes related to stock-based compensation in 2024. We plan to reflect this change on a go-forward basis and we'll update our historical periods for consistency. Starting this year, we will be making our pledge 1% contribution in quarterly increments, rather than all in the third quarter, which was our prior practice. This will result in the corresponding expense being recognized in each quarter rather than in Q3 alone. For reconciliation of non-GAAP financial measures to the most directly comparable GAAP metrics, please see the earnings release and the appendix to the earnings presentation, which are available on the IR section of our website. And now I will turn the call over to Matt to begin.

Thank you, Stephen, and thanks, everyone, for joining us today. I am thrilled to share that Q4 was an exceptional quarter and we ended 2024 on a strong note, as you can see on slide four. With record revenue and adjusted EBITDA exceeding $40 million for the second consecutive quarter, we are surpassing our own high expectations. These results demonstrate customer loyalty and increasing scale across the business. We are redefining the future of cross-border financial services. We are not merely strengthening our position, we are setting new industry standards. We have saved customers hundreds of millions of dollars by disrupting the traditional remittance industry with a digital-first approach, transparent fee structure, and customer-centric innovation. These innovations have allowed Remitly to challenge long-established players in the $2 trillion market while empowering global citizens around the globe. We serve almost 8 million quarterly active customers in over 170 countries and across more than 5,100 corridors. In 2024, our customers sent more than $50 billion to their family and friends in a much easier, reliable, and cost-effective way using Remitly. The impact will just get larger as we scale, delivering more savings and a better customer experience for our customers while delivering durable growth and sustainable profitability for our shareholders. Turning to slide five, our audacious vision to transform lives with trusted financial services that transcend borders creates significant value for our customers, communities, and shareholders. There are three building blocks to our vision that I will unpack. First, transform lives. Second, trusted financial services. Third, transcending borders. Let me start with how our services help transform lives with a customer example. Jigyasam moved to the U.S. from India as a student in 2018. She wanted to send money from the U.S. to India to her parents and was looking for a convenient and fast solution. She found out about Remitly from her friends who had great experiences. she started sending small amounts for birthdays and special occasions. Over time, as she experienced seamless and fast transfers with Remitly, she started sending larger amounts to show her gratitude and bring joy and happiness to her family. As she became more financially independent, she had the need to hold funds in both the U.S. and India, and she used Remitly to diversify her savings between those accounts. Her story is one of millions. that illustrates how we improve the experience one customer at a time. We are obsessed with making every part of the customer experience as easy, reliable, and frictionless as possible. Customers prefer a digital experience where they can complete a transaction in a few clicks rather than the hassle of visiting a physical store. From the moment a customer signs in, to the time the transaction is initiated and ultimate completion, our systems are built to prioritize speed, convenience, and reliability. Customers don't have to enter their payment or recipient details every time they initiate a transaction. And not only that, they get a promise delivery date and time. In Q4, a record percentage of transactions were dispersed in less than an hour and proceeded without a customer support contact. These were just some of the ways that we dramatically innovated the customer experience in 2024 as you can see on slide six. Moving to the second building block of our vision, let me share how we create trusted financial services and drive efficiencies across our business, which allows us to deliver significant value for our customers and shareholders. With customer centricity as our core value, we work tirelessly to improve customer experience and build trust. With higher trust, customers use our services consistently, share their positive experience with others, and increase repeat behavior. We earn trust one customer at a time. now with over three million reviews and a 4.9 star rating on the ios app store and nearly 1 million reviews and a 4.8 star rating on the google play store these are category leading customer ratings that create word of mouth for others to learn about and try remotely in 2024 deeper customer loyalty led to strong retention higher frequency of transactions driving LTV to cax to approximately six times and helping payback periods remain well below 12 months. This was also evident in the fourth quarter where marketing expense per quarterly asset customer decreased nearly 16% year over year. And at the same time, we added a record number of new customers. A significant majority of 2024 revenue and revenue less transaction expense or RLTE was from customers who have completed their first transaction in prior years. As transaction volumes grow, economies of scale and network effects strengthen. Scale benefits every aspect from our business. We were able to secure better terms with both pay-in and pay-out partners and source foreign exchange with more advantageous terms as we drive more volume through our network. This allows us to consistently offer better prices and a great experience. Similarly, our investments in our product improvements and AI virtual assistant have helped reduce customer support and operations costs as a percentage of revenue from over 10% in 2022 to 6.5% in 2024. AI and machine learning models have enabled us to reduce transaction losses in the fourth quarter to the lowest transaction loss as a percentage of 10 volume in all of 2024, while also improving our customer experience. This operational excellence allows us to reinvest aggressively in growth while continuing to expand our profitability. Let me talk about the third building block of our vision, how we transcend borders with our world-class service and network. As a digital-first company, we generate valuable data and insights which allow us to expand geographically, innovate, and invest into new offerings. We apply the same customer-centric approach to these offerings as we did with our first corridor. Our corridor expansion playbook, which allows us to enter new regions more efficiently as we grow, has enabled us to deliver an 80% revenue taker since 2020 in the rest of the world outside of U.S. and Canada. As you can see on slide seven, along with rapid geographic expansion, we have increased the pay-in and pay-out options with direct integrations with key local payment partners. We now have more than 5,100 corridors enabling us to send funds to 5 billion mobile wallets and bank accounts and approximately 470,000 cash pickup options. Direct integrations with partners have allowed us to provide high availability, low exception rates, fast delivery, and full control of the experience. This is critically important to our customers who are often sending money for immediate needs. As an example, deeper partnerships and integrations with local payout partners, especially with mobile wallets, has enabled our strong growth in Africa-received countries. In Q4 specifically, we expanded our reach by enabling access to mobile wallets like Wave in Senegal and T-Money in Togo. Additionally, we strengthened direct partnerships with key players such as Wafaa Cash and Cash Plus in Morocco and Tego Pesa in Tanzania. allowing us to move more volume efficiently while enhancing speed and reliability. Expanding the number and quality of pay in options is a key part of making our product more attractive, versatile, and cost efficient for our customers. For example, in Australia, we launched Pay2, which provides an instant alternative to the existing bank account funding method that currently takes three days to process. We also launched Klarna in Germany, providing another convenient pay-in option. We continue to make progress on faster bank-linked payments in the US. This provides more convenience at a lower cost, especially for customers looking to send large transactions. These direct integrations with pay-in and payout partners allow for faster speeds and more visibility in customer funds' journey, allowing for a much more seamless customer experience and broader service selection for our customers. The ability to create seamless pay in and pay out experiences at scale is an enduring competitive advantage that differentiates us from other players in the space. As we look ahead to 2025, we remain steadfast in executing on our vision. We are a growth company with no shortage of growth opportunities. We will unlock value for new customer use cases, including seafarers, micro businesses, and high amount senders, all of whom have distinct needs that we are uniquely positioned to serve. We can serve additional use cases with minimal incremental investment given the strength of our platform. The response thus far has been tremendous. More and more seafarers can securely send money home from the ship, Business owners can go global and have a fast and reliable option to transfer money abroad. High amount senders can transact seamlessly, enabled by personalized risk assessments. Based on our ever-improving risk management system, we are able to raise send limits, further reducing customer friction. Each new corridor, use case, and service increases our TAN, differentiates us from the competition, and creates new revenue streams driving even more growth. 2025 is going to be a big year. We are looking forward to our first $1 billion RLTE year, our first full year of GAAP net income profitability, and we will not be looking back. We have a really exciting roadmap for this year. We are making several product bets that are focused on setting us up for longer-term success. As we often say here, we are just getting started, and I could not be more optimistic about the opportunities in 2025 and beyond. I am grateful to everyone who is on this journey with us. Now, over to Vikas.