Good day, and thank you for standing by. Welcome to the Remitly’s 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. [Operator Instructions] 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 Investor 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 and presentation slides, which can 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 meaning of the federal securities laws, including but not limited to statements regarding Remitly’s future financial results and management’s expectations and plans. These statements are neither promises nor guarantees and involve risks and uncertainties that may cause actual results to vary materially from those presented here. You 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 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, 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 pledged 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 a 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 4. With a 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 5, 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 the customer example. Jigyasa 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…

Thank you, Matt, and good afternoon, everyone. We delivered another strong quarter and full-year with both revenue and adjusted EBITDA ahead of our expectations. Fourth quarter revenue was $351.9 million up 33% year-over-year and adjusted EBITDA was $43.7 million driving over 12% adjusted EBITDA margin. Full-year revenue was $1.26 billion, up 34% and adjusted EBITDA was $135 million delivering nearly 11% adjusted EBITDA margin as you can see on Slide 9. We drove profitable growth with revenue more than 25 million above and adjusted EBITDA more than $50 million above the midpoint of our initial 2024 guidance. I will begin with an overview of our fourth quarter results and then share our outlook for the full-year and first quarter of 2025. In the fourth quarter, active customers increased 32% year-over-year to $7.8 million. Driving the strong quarterly active customer growth was continued retention and once again a record number of new customers acquired in the quarter. Send volume per active customer increased 5.5%, a three-year high and continued the trend we saw in the last quarter. This was driven by a record number of transactions per active customer. Send volume grew 39% to $15.4 billion and again outpaced revenue growth. Gross take rate was 2.28% in-line with our expectations. As Matt highlighted earlier, our business continues to diversify while also delivering strong growth across geographies. During Q4, U.S. revenue grew 33% and rest of the world revenue grew 41% year-over-year. During the full-year 2024, rest of the world contributed nearly 24% of revenue compared to 21% in 2023. On the receive side, we further diversified as more than 60% of new customers acquired in the fourth quarter were sending to countries outside of Mexico, the Philippines and India. Turning to our focus on driving profitable growth on Slide 10, transaction…

Thank you. At this time, we will conduct a question-and-answer session. [Operator Instructions] And, our first question comes from the line of Andrew Schmidt of Citigroup. Your line is now open.

Hey, Matt. Hey, Vikas. Thanks for taking my questions. Congrats on the results and the first full-year of GAAP profitability here. I wanted to ask on marketing spend. So, good leverage in the fourth quarter, obviously comping high-levels in the prior year. But, maybe going back to something you said, you commented that, obviously organic ad should help the profile there. How you’re seeing that in the quarter? Are you seeing a higher level of organic ads versus paid? And then, as we think about ‘25, I caught the comment in terms of the first quarter, marketing spend marketing spend per quarterly active, but how should we expect that to trend for the full-year? Thanks so much.

Thanks, Andrew. First of all, I’d say that we are really pleased with our results and I want to start with a big gratitude to the Remitly team for an outstanding performance. As I think about marketing specifically, I would say that we have received benefits from all the work we have done on product improvements that reduce friction for our customers and drive word of mouth. And, that goes back to the comment on improving the organic results in a way that improves our ROI. And, this was clearly reflected in our results as you saw with Q4 leveraging 440 basis points and the marketing spend per QAU declining 16% and all the while being able to drive record new customer acquisitions. So, overall the marketing ROI has been excellent because of the work on product experience as well as the great work on driving the right campaigns and lending in a way that drives ROI. Matt, anything you would add?

Yes. I’d first just agree with everything you said, Vikas. And Andrew, the only points that I’d add strategically are, one, to your point on organic, I am incredibly excited about, how as a foundation customers love using our product and increasingly including the customer example that I shared today, Jigyasa, they found out about Remitly from someone else who loved and trusted their experience. And if you look at some of the numbers I shared around app per reviews as an example, 3 million iOS reviews, over a million or about a million Google Play reviews, so 4 million total at 4.9 and 4.8 stars respectively. That’s 4 million customers that have proactively given us a review. And, you think about the inorganic of just folks in their communities talking about their great experience that they have with Remitly, that is foundational and that is part of why our flywheel is spinning. And then the second point I’ll make is, we then fuel that with a very sophisticated integrated marketing approach. And, I’d like to give our marketing team and Rina Hahn, our CMO, deep gratitude for marketing campaigns that we executed in Q4. And one example of that is our campaign in the Philippines where we partnered with everything from The Filipino Channel, TFC to do really great creative and really customer-centric marketing combined with middle and lower-funnel, all with the same campaign, all with aligned creative, and that just fuels that flywheel even further. So, excited overall about both the efficiency on growth, both the growth side and the efficiency we’re seeing when it comes to marketing.

And I’ll add with one last point here. Your question around FY ‘25 Q1 as well as full-year, I’d say that given the strength we have seen and the focus on marginal ROI, we would expect the leverage to continue both in Q1 as well as the full-year.

Thank you. One moment for our next question. Our next question comes from the line of Andrew Bauch of Wells Fargo. Your line is now open.

Hey, guys. It’s Griffin on for Andrew. Nice results here and thanks for the question. Looks like volume per customer was much stronger than expected in the quarter. Can you just expand on some of the drivers of that? What’s driving maybe the greater transaction frequency and how we should think about where that can ultimately go from here given the modest increases you expect throughout the year?

Thank you. I’d say that you picked the right metric there. And if you look at our revenue growth for Q4 it grew 33%. If you dissect it further it’s just a function of QAU growth, the send per active growth and the growth take rate. And what we saw in Q4 was that QAU grew 32%, but most importantly as you pointed out we saw send per active growth of 5.5% and this was the highest that we have seen in the last three years continuing a trend that we also saw in Q3. And what is really driving this trend is the quality of engagement that we are able to drive with customers which is increasing the frequency of transactions. For example, in this quarter we had record number of transactions per active customers. So clearly, we feel that the strength of the platform is resonating with our customers and the simplicity, convenience, reliability that we offer is building trust as well as loyalty.

Thank you. One moment for our next question. Our next question comes from the line of Ramsey El-Assal of Barclays. Your line is now open.

Hi. Allison on for Ramsey here. Thanks so much for taking our question tonight. So understood that the guidance for the full year doesn’t include any changes in the macro or any regulatory changes. So just in that context, would you be able to share your most up-to-date view on how you guys are currently viewing the political environment when it comes to immigration specifically?

Yes. Thanks, Allison. Great question. As I zoom out over the last decade plus, our business has been really resilient through various macro, political, regulatory changes. And so that combined with our increasing diversification, our customer profile, additional use cases that I talked about on the call, all provide significant opportunities for growth and give me a lot of confidence. So, happy to unpack any of those areas for you, but we feel good about the visibility of our 2025 revenue, and, you know, monitor it closely, but overall feel really confident about where we’re headed.

And I’d just add to that, what gives us a lot of confidence is that as we have shared before significant majority of FY ‘24 revenue for example was from prior period customers. So, the strength of the cohort gives us confidence on the durability and the strength of our guide. At the same time as you pointed this does not include large changes that could come in regulatory environment, macro or geopolitical.

Thank you. One moment for our next question. Our next question comes from the line of David Scharf of Citizens. Your line is now open.

Hi. This is Zach on for David. Thank you for taking our question. I want to drill down a little bit into the margin piece of the business. So first, I wanted to see if there is a sense of what the ceiling for the margin could be and then also wanted to kind of get a sense of what’s driving the margin guide for ‘25 that’s below 2H ‘24? Thank you.

Yes. Thanks, Zach. First of all, I’d say that really pleased with the strong performance. And most importantly the focus on growth and profitability. As you highlighted, we’ve seen that in spades. And if you think about just Q4, we were able to exceed our revenue guidance by $12 million and our EBITDA guidance by $25 million. So, overall really very happy with the progress that we have seen on the growth plus profitability equation. If you think about FY ‘25, I’ll just call out a few things from an assumption perspective. The first highlight I’d share is that from an RLTE as a percentage of revenue, we believe that we are comping against tough comps especially because we are lapping against big benefits we had from a partnership throughout FY ‘24. So, it would remain in line with the revenue growth RLTE dollars growing in line with revenue growth. Secondly, as I shared earlier, we expect marketing to modestly leverage. Beyond that, we will continue to invest in technology and development as we make long-term product life. CS&O as well as G&A are areas that we have seen a lot of leverage over the past few years and we feel we are up against tough comps there. So overall, we are really excited about the guide of at midpoint $190 million EBITDA which translates to 12% plus margin and that’s a great foundation to start with where we are balancing growth, balancing profitability and investing in the long-term of the business.

Yes, I agree with all of that. And the only strategic point I’ll add is when I look at the overall just margin potential of the business, what excites me is one, how much of it is in our control in terms of how much we’re marketing and focusing on efficiency as well as growth. And when I look at things like our overall OpEx as well as CS, one of the things in Q4 and into this year that I’ve been really excited by is, leveraging AI. And an example of that is when I took a trip to the Philippines and as always do customer calls and do side by side with various agents and seeing how they are leveraging AI very actively to serve customers, more efficiently, more effectively to get the highest and best use of their unique skills and time and to create ultimately a better customer experience, is really exciting. So, I think there’s opportunities across the board there and excited about overall just the potential on the expense side.

Thank you. One moment for our next question. Our next question comes from the line of Rufus Hone of BMO. Your line is now open.

Hey, guys. Thanks for the question. I wanted to come back to the 2025 guidance and curious if FX was a tailwind for you this quarter. I guess, I’m just curious how you’re thinking about FX impacting 2025. And then maybe also asking about the EBITDA margin in a slightly different way. I’m just curious to hear your thoughts on whether this sort of 150 bps of annual expansion, is that a good pace for margin expansion over the medium term? Thanks.

Yes. Rufus, thank you. Great question. As I think about FX, I’ll just start with Q4 first and that will help set the foundation for the 2025 guide. So in Q4, we saw both tailwinds as well as headwinds from FX perspective which were essentially offsetting each other. We saw strength in USD which helped the U.S. corridors. On the other hand, we saw both Canadian dollar as well as the rest of world currencies being weaker which was a headwind. And overall it was offsetting, so really there was no net effect of that. And that again goes back to what Matt shared earlier which is the power of diversification as well as the power of portfolio that we have. So, as we think about FY 2025 guide, from a prudence perspective, we just don’t know which way FX will go and we think it is better for us not to assume FX movement. So, this guide does not include any change in an FX stance and, of course, we’ll keep you updated over the course of the year when we see any material movements that become part of the growth trajectory. And on your second question on the EBITDA margin, I’d say that just going back to Matt’s commentary, as we think about the overall size and shape of the market, we are less than 3% of a $2 trillion market and we see massive opportunities and as Matt said earlier there is no shortage of projects that we can sign up for. So, with that setup we want to make sure that we are investing wisely both in marketing as well as tech and dev to set us up for long-term success.

Thank you. One moment for our next question. Our next question comes from the line of Chris Kennedy of William Blair. Your line is now open.

Good afternoon. Thanks for taking the question and great results. Can you just give a little bit more color on the micro business opportunity? What’s the current landscape today and how do you leverage your platform to capture that opportunity? Thank you.

Yes. Thanks, Chris. It’s always great to hear from you. And I’m glad that you asked about that. I think that the extensibility of the platform that we’ve built really excites me. And I mentioned Seafarer, I mentioned reducing, friction for high dollar centers. And then as you mentioned micro businesses, not small, medium, large businesses that’s a well-served segment. But when you look at our cost to serve micro businesses and the unique platform we built, I think there’s an opportunity there. And there’s one story that I’ll kind of weave in, which is a customer Mary, just to give you a sense of the type of customers that we serve. And Mary is self-employed bookkeeping professional. She was born and raised in the Philippines. She moved to California in 2001. And with a background in accounting and a CPA license, Mary now runs her own bookkeeping company and specializes in helping U.S. based small businesses to manage their record. And so to scale our operations, she built a team of 10 contractors in the Philippines who she trains and pays using Remitly. And she was drawn to Remitly because of the efficiency and effectiveness of our platform. And she shared with us, I built my own team in the Philippines. I went there to train them. They’re extension of my own hands. And she went on to talk about how Remitly has been a great solution for her. And she signed up in 2017, but, we’ve adapted and improved the product to be able to serve customers like Mary more effectively, and I think there’s a lot more customers out there like her. So, it’s one example of how I think there’s a lot of extensibility in our platform with micro businesses and we’re excited about growing that opportunity in ‘25 and beyond.

Thank you. One moment for our next question. Our next question comes from the line of Darrin Peller of Wolfe Research. Your line is now open.

Hey, thanks guys and nice job on the quarter. Can you just give us a quick update on any progress you’re making, around broader financial services, family accounts via Remitly circle, and just where that is? And then I just have a quick financial question follow-up, maybe I’ll ask it right now altogether, which is around gross margins. And I think you mentioned it would from a gross margin leverage standpoint, it would be about similar in ‘25. In other words, it’ll grow in line with revenues, I guess. And so I’m just curious, you know, why we couldn’t see expect to see a little bit more than that just in the context of, better risk management AI. You guys have done a great job on that so forth. So what could drive upside to that?

Thanks, Darrin. Yes, I’ll start with the first question and then I’ll turn it over to Vikas for the second. And I’m glad you asked. I think that I unpacked our vision in my prepared remarks, but it really is around transforming lives with trusted financial services that transcend borders. And it’s that intersection of customers’ needs to live an international life, when it comes to their financial services needs. That’s where I think that we can win and add other features. And I remain optimistic about that. I think that the platform that we’ve built and I credit Ankur Sinha, who is our Chief Product and Technology Officer, who over the last couple of years he and then obviously our engineering team has really worked on platformizing, our platform. And that enables us to roll out innovative new features and address new customers use cases in a much more efficient and effective way. And so we’re going to remain disciplined and thoughtful, but we’re excited about the opportunity to deepen relationships with our existing customer and leverage the platform, whether that is adding additional services to our existing customers and continuing to explore adjacencies all the way from helping them transact to store currencies to creating additional liquidity in a unique way as well as adding new customers types. I mentioned micro businesses, seafarers, and I think all of that’s a reflection of the platform we built and excited about what’s become there.

Yes. And let me follow-up on your second question which was around the RLTE as a percentage of revenue. So, the first thing I’d say is that just from a technical perspective we are lapping against a partnership that we signed in fourth quarter of FY ‘23. So, for most of last year we had the benefit coming through that. So, again that’s already in the base. The second thing I’d say is as we think about just the operational efficiencies of the business, we see some step changes happening over time where if you just go back to FY ‘22, this was 60%. We were 60% RLTE as a percentage of revenue. From there we moved to 65% and then for ‘24 we came in at 66%. So, clearly we have made a lot of progress in terms of driving efficiencies. The last thing I would say here is that we are always very cognizant of how much we want to pass it back to our customers and how much we want to drive to the bottom line. This goes back to creating trust, creating a better pricing model and making sure that we are winning with trust over here.

Thank you. One moment for our next question. Our next question comes from the line of Alex Markgraff of KBCM. Your line is now open.

Hey, thanks for taking my question. Maybe, Vikas, just one on the ‘25 revenue outlook. I think modestly better than what you had guided to on a preliminary basis last call. I think gross adds or net adds or quarterly actives are pretty similar to how you had talked about them for the fourth quarter. So, just maybe get your thoughts on the delta there between the updated ‘25 outlook and what you had shared last call. And if you could just fold some gross add expectations, retention expectations for ‘25 into that, that would be helpful. Thank you.

Thanks, Alex. That’s a great question. Let me unpack that a little bit. So let me just start with the top line. So, from a revenue total perspective as we guided, we are expecting $1.565 billion to $1.580 billion which approximately comes to at midpoint 24.4% growth. A key aspect I want to share is in terms of the shape of the year, we think that the growth will be moderating each quarter sequentially. So, starting our FY ‘21 Q1 guide where we shared at midpoint 28.8% growth with ending the year with around that 24.4% guide. So, that’s one important factor. The second going to the key of your question, again if I unpack the equation growth is QAU times send per quarterly active user times the gross take rate. I’d say that in Q1 and beyond we’ll see similar trends to what we have seen in Q4 and those trends have been first of all, QAU growth in line with revenue growth. Secondly, from a send per QAU perspective which I answered earlier, we remain very optimistic and we feel there will be modest increase there driven by increasing frequency of transactions. And finally from a take rate perspective continued volume growth outpacing revenue growth. So, that trend we feel will endure through the year. The other aspect that’s important which I’m glad you asked because I wanted to help you understand and other analysts appreciate how we think behind the scenes which is with regards to your question on the quarterly active users. One of the aspects is we strongly believe that net adds the way they are calculated is not a good metric, especially on a quarterly basis. And the reason is that there’s a lot of noise due to spending patterns which may not align with how these are measured. So, we definitely focus on QAUs, but looking at net add is I’d say misleading. And that also means that the key not success factor for us remains RLTE dollars where we continue to focus on the expansion and growth of that. So, overall very confident about the setup that we have for FY ‘25. We are off to a good start and as Matt says, we are just getting started. So very excited.

Thank you. This concludes the question-and-answer session. I would now like to turn it to Matt Oppenheimer for closing remarks.

Great. Thanks, operator. And just a few thank you. First, to all of the analysts for your thoughtful questions. We genuinely really appreciate them. All the investors on the line, we appreciate you being on this journey with us. And then I want to thank the Remitly team, thousands of folks around the globe who are working tirelessly to deliver on our vision and to deliver the exceptional results that we had in Q4 as well as starting off 2025 on a really strong start. Heartfelt thank you for me. Lastly, thanks to the cost for the amazing partnership. But most importantly, I want to thank our customers and I’ll thank Jigyasa specifically who said this about her experience with Remitly. She said, I haven’t used anything apart from Remitly. It’s very intuitive no fluff. And so we thank her for her loyalty since 2018 and for trusting Remitly to get money home to her family and friends reliably and seamlessly. We are excited about the opportunities ahead and look forward to sharing our progress as we continue to execute on our vision of transforming lives with trusted financial services that transcend borders.

Thank you for your participation in today’s conference. This does conclude the program. You may now disconnect.