Remitly Global, Inc.

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 remitly assumes 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, payroll taxes related to stock-based compensation, pledge 1% contribution, integration restructuring and other costs, and other income and expense. As previously announced on our last earnings call, beginning in Q1, our non-GAAP financial measures exclude payroll taxes related to stock-based compensation. This update is intended to improve the usefulness of our non-GAAP financial measures in evaluating underlying operating performance by more completely reflecting the extent of stock-based compensation and related impacts. We have updated our historical periods for consistency. For reconciliation of non-GAAP financial measures to the most directly comparable GAAP metrics, please see the earnings press release and the appendix to the earnings presentation, which are available on the IR section of our website. And with that, I will now turn the call over to Matt to begin.

Thank you, Stephan, and thanks, everyone, for joining us for our first quarter earnings call. It's energizing to start 2025 with such strong momentum. Building on the foundation we laid last year, we delivered another quarter that exceeded expectations, with revenue growing 34% and adjusted EBITDA margins surpassing 16%, as you can see on slide four. That means we exceeded the rule of 50, a benchmark that reflects the rare combination of high growth and strong profitability. It's a clear sign of the durability of our business model and the discipline of our execution. In a world that continues to face uncertainty, our customers inspire us. Their resilience, their determination, and their trust in Remitly are what drive our success. Because of their continued commitment, our team's strong execution and the strength of our flywheel, we are raising our full-year outlook for both revenue and adjusted EBITDA. I'm going to focus my remaining remarks today on three topics, as you can see on slide five. First, how we have built a resilient business that has a proven track record of delivering across economic cycles and geopolitical changes. Second, I will discuss how this resilience allows us to continue diversifying our business across many dimensions, allowing us to capture more growth and reduce overall risk. Finally, I will discuss how we deliver trusted experiences that drive customer activity, along with a deep focus on our regulatory and compliance program, which enables this sustainable growth. All of these allow us to accomplish our audacious vision to transform lives with trusted financial services that transcend borders. Turning to the resilience embedded in our business on slide six, I know macroeconomic uncertainty, including the impact of tariffs, is at the top of every investor's mind at this moment. I will say this directly. Our strong balance sheet and global diversification positions us well in this evolving environment. Remittances have consistently demonstrated remarkable resilience across economic cycles, serving as a vital financial lifeline for millions of families around the world. Even in times of global uncertainty, such as economic downturns or geopolitical changes, remittance flows have remained steady or even grown as senders prioritize the needs of their loved ones back home. This unwavering commitment underscores the essential role remittances play in household stability and local economies. At Remitly, we continue to see this resilience reflected in our customers' behavior, reinforcing the critical importance of our mission and the reliability of our business model in both stable and challenging macroeconomic environments. We have also embedded resilience into how we manage foreign exchange, which has become a competitive advantage of ours at scale. At Remitly, we built a treasury function that is not just operationally essential, but increasingly a source of differentiation. What sets Remitly apart is the integration of treasury with our business management and analytics teams as a strategic growth enabler. Over the last 12 months, we managed nearly $60 billion in send volume. This enables us to enter into win-win partnerships, reduce transaction costs, and improve customer pricing, directly supporting our flywheel and long-term profitability. We are building real-time data systems to optimize liquidity, predict customer behavior, and proactively manage FX and counterparty risk. These efforts allow us to decouple funding from FX risk and reduce the need for pre-funding, all while strengthening the reliability and efficiency of our network. These capabilities matter more than ever in today's macro environment where we see foreign exchange volatility. Remitly's ability to source currency at competitive rates and respond quickly to market shifts means we can continue offering reliable affordable pricing to customers while protecting margins. Our strong internal systems, capital strategy, and operational discipline allow us to not just weather FX swings, but turn them into opportunities for sustainable growth. Now, I'd like to turn to the progress we are making in diversifying our business on slide seven. Resilience also enables us to diversify, which is one of the most powerful levers for long-term sustainable growth. By broadening our geographic footprint, expanding our partner network, and introducing new products, we reduce dependency on any one corridor or customer type. That not only mitigates risk, it opens up new avenues of opportunity. Along with rapid geographic expansion, we have increased the pay-in and pay-out options through direct integrations with key local payment partners. In Q1 alone, we launched remittance services to Nigeria, Burkina Faso, and Mali. Customers can now send to widely used mobile wallets like Orange Money. These launches reinforce our long-term belief in the growth potential of Africa and support financial inclusion in regions that need it most. We also expanded disbursement options with integrations like Flynn in Peru, used by millions of people across major banks, and Match in Chile, which serves over 4 million users. We also added Orange Money in Mali and Burkina Faso and Vodafone Cash in Egypt. These additions give customers more choice, greater convenience, and a better experience. The goal is to enable anyone, anywhere to send and receive money as easily as if they were a local. That's why we have completed the rollouts of Interact in Canada, Pay2 in Australia, and pay by bank via Plaid in the United States. These payment methods help reduce costs, improve retention, and increase send volume, aligning perfectly with our growth and unit economic goals. Turning to new customer use cases, we have made strong progress on attracting high amount senders. Over the past four quarters, send volume for transactions of more than $1,000 has outpaced overall send volume growth. Most notably in Q1, send volume related to transactions of more than $1,000 accelerated to more than 45% year-over-year growth, and the mix increased by approximately 200 basis points year-over-year. We also saw the largest transfer in company history in Q1, which was sent from Canada to the United States. This growth was fueled by our ability to make dynamic risk decisions using machine learning models which reduce friction significantly for this customer base by tailoring send limits to customer risk. In the past, we had broad sending limits that were not tailored specifically to the individual customer risk profile, which added friction to customers who were looking to send larger transactions. Our direct integrations have also allowed us to streamline transaction processing and substantially increase sending limits. These advancements have empowered our customers to confidently send larger amounts across borders with fewer errors and lower friction, ultimately delivering a more seamless and reliable experience. Our early traction with micro-business customers further supports increasing send volume per customer, as these customers naturally transact at higher average amounts, reinforcing the positive trajectory in transaction size and overall send volume. In the U.S., business customers have facilitated millions of dollars in transactions, underscoring the demand for our solutions. Our micro business offering has clearly proven its product market fit, as reflected in exceptional early retention and substantial transaction volumes for newly engaged customers. Our deep commitment to meeting customers where they are continues to guide how we reach and engage new users, especially those who have historically relied on traditional cash-based remittance providers. One recent and powerful example is WhatsApp Send, a great demonstration of how we're using technology to make cross-border money movement more intuitive, accessible, and aligned with how our customers live and communicate. By integrating the same award-winning technology conversational AI technology that powers our customer service experience into WhatsApp, we've created a frictionless, intuitive way for customers to send money, check rates, and get support, all from a product they already trust. This opens up powerful new customer acquisition paths, especially for those customers transitioning from offline to online. Finally, We continue to innovate and explore adjacencies to our core offering, from helping customers store funds to accessing faster cross-border payments to creating additional liquidity in unique ways. We've made meaningful progress through our work with Remitly Circle, which continues to be a powerful sandbox for innovation at Remitly. Circle allows us to test new ideas in a low-risk environment with early adopter customers. This approach has enabled us to move quickly and learn deeply before scaling new capabilities across our broader customer base. Many of the insights we've gained, such as how storing funds with even faster disbursements align with real customer needs, are directly informing our innovation as we evolve the core Remitly experience. Now, turning to how building trust across all stakeholders has placed us in a very unique position to continue delivering exceptional experiences for our customers and returns for our shareholders. These results are not only possible by delivering a trusted experience to our more than 8 million quarterly active customers across the entire journey of their cross-border payment. One powerful example is Ajai, a retired doctor and academic who has served communities across India, the UK, the US, and Saudi Arabia. For years, Ajay used his bank in England for international transfers until he noticed high fees on larger transactions. In 2023, he began searching for a better, more trustworthy option, and he found Remitly. Ajay quickly discovered our competitive rates, low fees, and the ease of repeat transfers. When we needed to cancel a transfer, The refund process was seamless and swift, deepening his trust in Remitly even further. Since joining us, Ajay has completed nine transfers totaling over $200,000, primarily investing in India to help provide for his daughter, son, and grandchildren. Stories like Ajay's are a powerful reminder. When we lead with trust, we have the ability to serve a wider variety of use cases for our customers and empower their futures. Trust is at the heart of every decision customers like Ajai make when sending money to loved ones across borders where speed, reliability, and security are non-negotiable. As you can see on slide eight, we continue to make progress on the metrics that matter to customers and build trust. In the first quarter, a record of more than 93% of transactions were dispersed in less than an hour, a record of more than 95% of transactions proceeded without a customer support contact, and our uptime was 99.99%. This all contributed to driving strong retention, incremental customer activity, and word of mouth in attracting new customers. At Remitly, compliance is a key driver of customer and regulator trust, and it's a foundational pillar of our business model. We operate in a complex and regulated industry across over 170 countries, and we have built robust systems, teams, and controls to ensure that we meet or exceed local and global standards. Trust starts and ends with our customers. But the ecosystem in which we operate, including the oversight from our regulators has always been a vital part of our culture and strategy. We've invested in developing a sophisticated system of controls to perform know your customer evaluation, detect fraud and money laundering, and perform sanction screening in a centralized manner. As a digital first company, we leverage advanced technology and data-driven automation to verify customers' identities, ensuring faster, more secure onboarding, while maintaining strong compliance with global regulations. This digital approach not only strengthens security and transparency, but also significantly reduces the operational costs associated with manual, in-person verification. Savings that can be reinvested to improve customer experience and drive growth. As a digital-only player, most of our customers fund their remittance transactions using a card linked to a bank account, which means that they are able to pass bank-level KYC, signaling an established presence in the country. This contrasts with cash-based providers that often depend on labor-intensive decentralized processes that are harder to scale, more expensive to maintain, and more prone to inconsistencies or fraud. These controls are routinely subject to regulatory exam and supervision by US and foreign financial regulators. In addition, we continuously evaluate our system of controls through regular independent testing and make frequent and regular improvements. We take a rigorous approach to partner due diligence to ensure compliance, security, and reliability across our global network. Before onboarding any financial institution or payout partner, We conduct due diligence, including regulatory compliance checks, financial stability assessments, and security evaluations. In this way, our compliance team confirms that partners appropriately adhere to any money laundering and counter-terrorist financing regulations, as well as applicable laws. Remitly also employs a multi-layered approach to fraud prevention. combining advanced machine learning models, real-time transaction monitoring, and next-generation identity verification processes that maintain a strong compliance posture while imposing fewer burdens on customers. Our risk management team continuously analyzes patterns to detect and prevent fraudulent activity while ensuring a seamless experience for legitimate customers. This differentiated approach allows us to continue to manage transaction loss rates while delivering a continuously improving experience with the goal of optimizing customer lifetime value. This improvement was delivered at the same time that our customer support contact rates continue to decline to record lows as we make it easier for legitimate customers to complete their transactions. All of this builds trust for both customers and regulators thereby ensuring our customers' money is delivered safely and reliably and our business can continue to expand. In closing, even amid macroeconomic and geopolitical uncertainty, we remain confident in the resilience of remittances, the strength of our diversified business model, and the trust our customers have placed in us. Trust remains the cornerstone of our vision, to transform lives with trusted financial services that transcend borders, as you can see on slide nine. This is what enables us to drive consistent growth, deepen customer relationships, and expand our global footprint while delivering strong, sustainable profitability. We are proud of what we have accomplished so far, and we are energized by the opportunities in front of us. Thank you to our customers, our team, and our shareholders for your continued support. Now, over to Vikas.

Thank you, Matt, and good afternoon, everyone. We are off to a strong start in 2025. We delivered another strong quarter with both revenue and adjusted EBITDA ahead of our expectations, as you can see on slide 11. First quarter revenue was $361.6 million, up 34% year-over-year. And adjusted EBITDA was $58.4 million, driving 16% adjusted EBITDA margin, resulting in a rule of 50 quarters, as Matt mentioned. We delivered our second quarter of cap profitability. We drove profitable growth with revenue more than $15 million above and adjusted EBITDA more than $20 million above the midpoint of our first quarter guidance. These results reinforce the strength of our business model and the resilience of cross-border payments as a category, even in turbulent economic times. I'll begin with an overview of our first quarter results and then share our outlook for the full year and second quarter of 2025. In the first quarter, revenue was $361.6 million, up 34% year-over-year, or 36% on a constant currency basis. Quarterly active customers increased 29% year-over-year to over 8 million in line with our expectations. Driving this strong quarterly active customer growth was continued retention and strength in new customers acquired in the quarter. Send volume for active customer increased 9% year-over-year, the highest growth rate we have seen since 2021. This was driven by strong growth in transactions per active customer as we take share and increase the attractiveness of our product for high amount senders. As Matt mentioned, we have increased send limits in key corridors, allowing customers to confidently send larger amounts across borders with fewer errors and lower friction while maintaining our strong risk and compliance controls. Send volume grew 41% to $16.2 billion in again outpaced revenue growth. Growth stake rate was 2.24% in line with our expectations. As Matt highlighted earlier, our business continues to diversify while also delivering strong growth across geographies. During Q1, US revenue grew 35%, accelerating from 33% in Q4 driven by continued share gains. The rest of the world grew 41% year-over-year ahead of our overall revenue growth. On the received side, we further diversified as revenue from regions outside of India, the Philippines, and Mexico grew 45% year-over-year. Turning to our focus on driving profitable growth on slide 12, transaction expenses this quarter were $121.4 million and as a percentage of revenue were 33.6%. Excluding provision for transaction losses, other transaction expenses were $103.5 million, improving 60 basis points year over year as a percentage of revenue. We continue to see improvements in our economics with pay-in and disbursement partners relating to increasing volumes. The mix of digital receipt transactions increased year over year by more than 300 basis points, continuing a trend that has been positive for our business and customers. Provision for transaction losses was $17.9 million, and as a percentage of send volume was 11.1 basis points. This was in line with our expectations as we improve machine learning risk models, and at the same time, minimize unnecessary friction for customers. As I've shared in prior quarters, RLTE expansion is an indicator of the long-term business model success. RLTE dollars grew 34% to $240.2 million, reflecting strong, new, and existing customer activity and economies of scale. RLT as a percentage of revenue this quarter was 66.4%, largely in line with the percentages we saw last year. As Matt highlighted, we have seen strong growth of more than 45% in send volume related to transactions of more than $1,000. As you will note, while there is a mixed impact of these large transactions on growth take rates, in the short term, they help us maximize RLT growth over the long term. We are focused on driving long-term RLTE dollars as we continue to attract new customers, innovate with new use cases, and scale. The strengths we have seen here reinforces our flywheel framework that we highlighted last quarter, driving sustainable top-line growth and profitability. With that, let me walk you through the specific non-GAAP expense categories on slide 13. As described on our last earnings call, please note that year-over-year comparisons exclude payroll taxes related to stock-based compensation in both periods. Marketing spend was $68.3 million and decelerated to 7.5% growth year-over-year. As a percentage of revenue, it was 18.9%, improving 473 basis points year-over-year. We continue to strike the right balance between growth and efficiency, especially in a seasonally slower quarter from a demand perspective. We benefited this quarter from efficiencies in digital and brand marketing, along with word of mouth. Marketing spend per quarterly active customer was $8.5 in Q1 and decreased 17% year over year, reflecting our focus on driving returns from marginal marketing investments. We continue to invest behind paid channels using AI tools to drive further testing and efficiency. As Matt highlighted, the trust we have built with customers has enabled us to benefit from word of mouth, which has been a powerful driver of new customer additions while driving efficiency for us. Customer support and operations expense was $22.3 million and as a percentage of revenue of 6.2%, improving 89 basis points year over year, continuing a trend that we have seen over the past couple of years. Our AI-based virtual assistance and product improvements have enabled lower agent contact rates and strong customer satisfaction ratings. Technology and development expense was $50.6 million, and as a percentage of revenue improved by 144 basis points year-over-year. Technology and development expenses grew 22% year-over-year as we become more efficient in managing our spend while delivering product innovation. G&A expense was $40.6 million, and as a percentage of revenue improved 79 basis points year-over-year as we maintained rigorous discipline on hiring and non-headcount spend. We also implemented additional automation and AI tools across functions to help drive even more efficiency. Strong revenue growth combined with efficiency and discipline across all operating expense categories led to adjusted EBITDA of $58.4 million. We delivered our second positive gas net income quarter of $11.4 million of material improvement compared to a $21.1 million net loss in the first quarter of 2024. Stock-based compensation was $35.8 million, and as a percentage of revenue was at 9.9%, approximately 280 basis points lower than the first quarter of 2024. We continue to drive towards a lower burn rate in line with the philosophy I outlined last quarter. Moving to our outlook on slide 14. While the economic and geopolitical environment remains uncertain, we are comforted by the resilience we have seen in our customers. It's important to note that our outlook does not assume any material macroeconomic, geopolitical, or regulatory changes. For the second quarter of 2025, we expect revenue of 383 to $385 million or 25% to 26% growth. We have no shortage of growth opportunities, including taking share in our existing corridors, expanding to new corridors, and continued traction with new use cases like high amount senders and SMB, which will power this growth. If we unpack the revenue growth expectations further, we expect revenue to outgrow quarterly active customers due to continued strength in high amount senders. Growth in send volume per quarterly active customer is expected to increase modestly, driven primarily by higher frequency of transactions and continued strength in higher amount senders. Consistent with recent trends, we also expect send volume growth to outpace revenue growth for both Q2 and FY2025. Higher transaction sizes lead to higher send volume growth, driving RLT dollars even with lower take rates. Given our traction with high amount senders and SMB customers, we believe volume growth is a stronger indicator of our future growth potential in addition to quarterly active customers. For the full year, we expect revenue between $1.574 and $1.587 billion. reflecting a growth rate of 25% to 26%. This outlook reflects our performance in Q1, the confidence we have in durable customer behavior, and strong returns from our marketing investments. Note, we will be lapping tougher comps in the second half of 2025 due to our performance in the back half of 2024. Specifically, we will face toughest revenue comp of the year in Q3. Furthermore, the macro environment remain uncertain. As such, we believe our guidance is prudent given these variables. Shifting to our adjusted EBITDA outlook, we expect Q2 adjusted EBITDA to be between $45 and $47 million, translating to 12% margin. As we shared last quarter in F5 2025, we are lapping the benefits from key payment processing partnerships that we realized in 2024. As a result, we expect Q2 transaction expenses as a percentage of revenue to be in line with the full year 2024. Also note, transaction losses can be volatile from quarter to quarter, and we remain focused on optimizing customer lifetime value. We expect our marketing investments in Q2 will continue to deliver strong ROI. Although we saw strong leverage from our marketing investments in a seasonally less active Q1, we intend to increase our marketing investments to drive growth in Q2 and second half of 2025, given the strong payback period well under 12 months. As a reminder, our marketing investments drive returns for many years beyond our initial investment, given repeat behavior and the resilience of remittance. We plan to continue to balance our investments with efficiency and expect marketing per QAU decline modestly on a year-over-year basis in Q2. Recall, we began delivering meaningful marketing per QAU efficiencies in second half of 2024. So as we lap those improvements in the second half of 2025, we should expect marketing per QAU to be stable year-over-year. For the full year, we expect adjusted EBITDA to be between 195 and $210 million, representing an adjusted EBITDA margin range of 12% to 13%. We expect adjusted EBITDA dollars to ramp sequentially throughout the balance of the year. Although we delivered GAAP profitability in Q1, that was two quarters ahead of our guidance last quarter, we continue to expect to generate positive gap net income in the third quarter of 2025. As we plan to make growth-enhancing investments, improve adjusted EBITDA, as well as manage dilution, net burn rate and stock compensation expense effectively. In the second quarter, we expect stock-based compensation to increase sequentially from Q1, reflecting our annual performance cycle. Overall, we continue to expect to deliver positive gap net income for the full year. This outlook provides us with flexibility to make key growth investments while at the same time delivering efficiencies across our operating expense base. In closing, we are pleased that we delivered both higher than expected revenue and adjusted EBITDA. Despite an uncertain and volatile macroeconomic environment, we have delivered consistent trusted experiences driving increased customer activity. The trust we have built with the customers also allow us to diversify the business across new use cases, new geographies, and new partnerships, allowing us to deliver sustainable long-term results regardless of economic cycles. With that, Matt and I will open up the call for your questions. Operator?