Good day, and thank you for standing by. Welcome to Remitly's Second Quarter 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Luv Sodha, Investor Relations. Please go ahead.

Thank you. Good afternoon, and thank you for joining us for Remitly's Second Quarter 2025 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 would like to remind you that we will be making forward-looking statements within the meaning of 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, payroll taxes related to stock- based compensation, our pledge 1% contribution, integration, restructuring and other costs and other income and expense. For a reconciliation of non-GAAP financial measures to the most directly comparable GAAP metric, please see the earnings press release and the appendix to the earnings presentation, which are available on the IR section of our website. Now I will turn the call over to Matt to begin.

Thank you, Luv, and thank you to everyone for joining us for our second quarter earnings call. Q2 was a defining quarter for Remitly. Not only did we deliver exceptional financial performance, but we also achieved breakthrough product innovation. Vikas will cover Remitly's exceptional financial performance in detail. So I will use my time today to focus on the new products, services and experiences that we have introduced into the market in the first half of the year. These innovations are changing customers' lives, expanding our TAM and further fortifying our business model, positioning us to shape the future of global financial services. Our vision continues to be clear: to transform lives with trusted financial services that transcend borders. With over 8.5 million customers, we are no longer simply enabling cross-border peer-to-peer payments. We are becoming the modern financial platform for globally connected people and businesses. Today, I am excited to share the momentum behind our product innovation engine and why Q2 represents an inflection point for Remitly across multiple dimensions. I will highlight 4 core focus areas of product innovation in 2025, shown on Slide 5. First, I'll start with our product momentum on Remitly business. Second, I am excited to introduce Remitly One, a first-of-its-kind membership for customers with cross-border needs. Third, I will share our innovative Stablecoin initiatives. And fourth, I'll showcase our approach to Agentic AI to create a more personalized, frictionless experience. In all these areas, we are building on our existing strengths as well as leveraging new technology innovations to further strengthen our lead. Let's dive deeper into each one, starting with Remitly Business. With Remitly Business, we expanded our TAM more than tenfold from approximately $2 trillion to over $22 trillion as we aim to serve the 1.5 billion freelancers and millions of…

Thank you, Matt, and good afternoon, everyone. We delivered another strong quarter of growth, expanded profitability margins while also investing in innovation. As shown on Slide 12, second quarter revenue was $411.9 million, up 34% year-over-year, and adjusted EBITDA was $64 million, representing a 16% margin. Results exceeded expectations with revenue $28 million above and adjusted EBITDA $18 million above the midpoint of our Q2 guidance. We again delivered GAAP profitability, an important milestone that we expect to sustain going forward. Before I dive into our quarterly results and outlook, let me address a macro topic that has been top of mind for investors, remittance tax. The one big beautiful bill, which applies a 1% tax to cash and other physical instruments exams digital cross-border transfers funded via bank accounts, credit and debit cards. All of our transactions are digitally funded and typically passed through both bank KYC standards at the payment instrument level as well as incremental KYC standards on Remitly's platform, which gives us a structural advantage against legacy cash-based providers. We expect this tax to further accelerate the shift from off-line to online, benefiting Remitly when it's implemented on January 1, 2026. In short, this legislation is a tailwind for our business. And as Matt highlighted earlier, our product innovation around Agentic AI will further accelerate the shift from offline to online. Now I will begin with an overview of our second quarter results and then share our outlook for the full year and third quarter 2025. Let me unpack the revenue growth drivers. Send volume grew 40% to $18.5 billion, driving the strong volume growth. Send volume per active customer increased a record 12% year-over-year. This was driven by strong growth, both in transactions per active customer and average transaction size as we continue to win…

[Operator Instructions] And our first question comes from Tien-Tsin Huang of JPMorgan.

Matt, I appreciate your enthusiasm here around all these fun initiatives. I'll ask on that, if you don't mind, just -- anything else you can share on the expected time line and the geographic phasing for the rollout of these products like business and Remitly One, Wallet, of course, the stablecoin remittances. And I'm curious if you can just comment on if you expect these initiatives to be accretive to both revenue and profit because it feels like there's a lot to do here to promote these initiatives properly to your user base. Is that going to alter your profit commitments in any way?

Yes, I'll start, and then I can let Vikas add on some of the latter part of your questions. Yes, Tien-Tsin, I appreciate the question. We are incredibly excited about both expanding to new customer segments like Remitly Business, which we mentioned we launched in Q1, continued to grow really nicely in Q2. And then excited about Remitly One, which is our membership product that includes 2 products that are already live, Remitly Flex, which is our send now, pay later solution and Remitly Wallet, which is the ability to store both fiat and over time, stablecoins as well. So incredibly excited about the foundation that gives us to continue to innovate, serve new customers, serve our existing customers with additional services. And I don't expect it to impact marketing line items, areas like that. I think that we have clear plans to be able to continue to grow those products.

Yes. Let me just add a few quick points. So first of all, we have given a detailed guide for Q3 and the full year. So that covers everything that we have discussed in all the new products. A few double clicks though that may be helpful over here. The first is, as we highlighted, we are seeing strong success -- early success with SMB, where the transaction sizes are larger, the retention profile is better. So clearly, that has its own dynamics with regards to send per QAU as well as take rates. Beyond that, if you look at the P&L line items, thus far, we have not specifically invested in marketing in new areas, but now starting second half, we will be focusing with targeted campaigns on newer areas. So definitely, that's already built into our guide, but just highlighting that, which will, of course, drive additional marketing investments. But again, all within the envelope of what we have shared. In addition to that, tech and dev will also be an important area of investment, especially as we innovate. Overall, as I shared earlier, it's all part and parcel of our guide that we have given. So no specific changes and very excited about the innovation that's coming ahead of us.

And our next question comes from Will Nance of Goldman Sachs.

I would echo Tien-Tsin's comments on the new products. It's great to see some of the momentum and some of the investments that you've been making paying off. I wanted to talk maybe on the -- I'll just kind of pick on Remitly Wallet for a second. Maybe you can talk a little bit in more detail about the customer profile that you'd be going after, how you think about kind of cross-sell to the existing customer base versus maybe unlocking a different type of customer? And just how you think about unit economics in that space and pricing and just how it may alter the complexion of the business as that product sales?

Yes, absolutely. Happy to, Will. And I'm glad you can sense the excitement. It's definitely a defining quarter for Remitly. When it comes to the Wallet, we are excited about giving our customers the ability to store both fiat and stablecoins. And I think in terms of the types of customers that we can serve, I think there's opportunities across the board. I think that starting with our existing customer base, we have 8.5 million quarterly active users that I think have a need to store multicurrencies across the globe. And then over time, I think that oftentimes, a place that we can capture demand is when customers move to a new country. There's a broad financial services set of needs that they have, getting money back to their families is where we focused on historically. And I think also getting that initial bank account set up is an area where there's a pain point. So I think that lots of opportunities there and really excited about what's to come.

And our next question comes from Ramsey El-Assal from Barclays.

Great results tonight. I wanted to ask you guys what you're actually seeing in the marketplace when it comes to stablecoin demand from your customers. There's obviously a kind of emerging market use case already sort of an inflation hedging use case. Are your customers -- are you getting signals that they're looking for you to provide these capabilities? Or is this more sort of like you're laying in these solutions just to be prepared as the market evolves, if that makes sense?

Yes. Yes. Thanks, Ramsey. Whenever I look at new technologies, whether it's AI or stablecoin, I look at what is the problem that can be solved for customers. And I think that the first problem that can be solved is exactly what you said. There is a demand in a lot of countries for customers to hold a less volatile currency. And I think stablecoins are a potential solution for that. The solution that we're offering when it comes to how to leverage stablecoins is, one, the ability to hold stablecoins as part of their Remitly Wallet. And then the second is we are incredibly good at getting funds to customers the way that they want to receive them. And we can do that via 4 billion bank accounts and mobile wallets. We can do that via over 400,000 cash pickup locations. We can even door-to-door delivery in some markets where it's popular in the Dominican Republic. What we're excited about today is announcing that we'll be giving our customers the ability to send money to stablecoin wallets across the globe to give them another option of a way to send money back home to their families, and we'll be doing that in partnership with Bridge, which is obviously a Stripe company. And so I see those 2 solving the first pain point is customers in emerging markets wanting to hold a stable currency. And then the second is we could be the potential customer. And we have already launched within our treasury team the ability to leverage stablecoins to improve our FX, treasury and cash management. Now to your point, Ramsey, that's the future. That's where the world is headed. Modest usage now because sometimes technology takes time to adopt, especially in financial services. But I think we're investing in the future. We're ahead of the curve, and we're excited about what's to come.

And our next question comes from Cris Kennedy of William Blair.

Can you just talk a little bit more about your wallet initiative, kind of how you're thinking that your customers would utilize and spend those balances and kind of talk about the float opportunity for Remitly?

Yes. Yes, absolutely, Cris. And I'll build on a little bit more too of what I answered with Will. So I think that there is, as I mentioned, the desire to hold multicurrencies, whether that's fiat or stablecoins. And the exciting thing is we're putting it in the overall context of a membership solution. And so that's where Remitly One comes into play. Customers will be able to hold balances without a Remitly One membership. But then by becoming a Remitly One member, they'll be able to earn interest like rewards to be able to actually increase those cash balances, and there'll be more seamless integrations with things like being able to send money. So we will talk more about the Wallet, about Flex and about Remitly One, the membership that gives customers additional benefits of those 2 products and others at the product launch event, Remitly Reimagine that I mentioned will be happening in September. So excited to share even more then.

And our next question comes from David Scharf of Citizens Capital Markets.

I wanted to just follow up on the stablecoin discussion. Given that FX markup is a significant component of the fee structure of any send, can you discuss how holding a stablecoin sort of impacts the unit economics? I mean, are we -- should we be thinking about a different revenue model for stablecoin type transactions, either on the send or receive side?

Yes. Thanks, David. I think the quick answer is I expect the revenue model to be similar. I think that what we are fundamentally good at and what will remain is the fact that we are good at getting one currency to another, and that could be fiat, stablecoin, stablecoin, fiat, it could be via cash pickup, it could be via a lot of the options that I mentioned. But doing that requires an enormous amount of infrastructure, an enormous amount of regulatory expertise and an enormous amount of risk systems that do it quickly and also at a low cost. And so I would say that the model will remain similar, and we feel really well positioned in terms of our ability to drive stablecoin adoption given that we have always been and will continue to be in the business of currency conversion, and we're very well positioned to do that with stablecoin as we've been with fiat.

And our next question comes from Alex Markgraff of KBCM.

Matt, could you talk about Remitly business a little bit? I mean from a TAM standpoint, pretty compelling. You shared some unit economics. But maybe just some thoughts on competition and the pricing dynamic in B2B versus P2P remittances. And then just anything you'd flag on sort of first-party versus partnership type opportunities with Remitly Business.

Yes. Thanks, Alex. I would love to talk about Remitly Business. So Remitly Business was born out of the fact that we had a lot of customers coming to our platform, trying to use it. And it was not previously optimized in terms of a streamlined automated KYB meaning know your customer flow and a lot of other features that I mentioned in my opening remarks that small and micro businesses need. So the question is why were customers coming to our platform to use it in the first place despite the fact that there was friction in the early days. And it's because that segment of customers, we're talking about folks who are sending money to freelancers who might be on the lower end of the overall business or SMB segment in terms of average transaction size. That segment, we believe, is not well served. And the reason it ties a bit to your cost point is because they do not need a lot of the additional features, but what they do need is a reliable, fast and affordable product. And what we've done in the consumer space is we have really optimized the unit economics for exactly that and really optimize the experience for exactly that. And so we're really excited now that we've actually optimized our product for small businesses. We believe we can continue to kind of move upmarket over time. I think that we can add the features that initially micro and small businesses require. And then over the medium to long term, I think that we can continue to serve a wide range of businesses because, as I mentioned, it's 10x the overall TAM, increasing our TAM to $22 billion. And we always say we're just getting started. We are very much just getting started with Remitly business.

And our next question comes from Gus Gala of Monness, Crespi, Hardt & Company.

I wanted to ask about the CAC per quarterly active moderation in the back half. Is it kind of -- I mean, you're talking about performance marketing to drive business, but is there under or beyond that maybe for the core business, are we putting in more in top funnel in the back half? Just help us think about that. And one clarification, if I can squeeze it in. The guide, you clearly raised by more than the beat. How much of that -- is any of that coming from new innovations? Clearly, the business part is some of it because it's been in market since Q2, but just help us delineate that.

Thanks, Gus. I'll take this one. Let me answer the second part of your question. If you look at the guide and the beat, I'd say, given that a lot of the new initiatives are early, in addition to that, as Matt clarified, Remitly One launches in September. So clearly early days. So a lot of the upside you are seeing is from the core business. Now moving to your question around marketing. Let me clarify a few things. I think the first is we have seen a very efficient marketing engine with continuous 6x plus CAC to LTV, LTV to CAC as well as payback periods less than 12 months. So that continues to remain a strength for us. As we look at second half of the year, just comps are very, very tough. Last year, in the second half, we had a lot of efficiencies. The marketing per QAU really went up and in terms of just efficiency. And as we comp some of those tough last year numbers, it's just more of law of numbers there. In addition to that, as we innovate and launch new products, we want to have a targeted focus supporting those newer initiatives. So I think a mix of those 2 is what you are seeing here in terms of the outlook of marketing what we have shared. But overall, marketing continues to be a very important lever for us in attracting new customers and building for our future.

And our next question comes from Zachary Gunn of FT Partners.

I also wanted to just follow up on the stablecoin dynamic. So today, if we break down your transaction expenses, pay-in and payout costs are each about 30 basis points of overall volume. So for transactions where customers want to receive cross-border payments in stablecoins, how do those relative economics compare, especially when you might have a party like Bridge involved who would want to share in those economics?

Yes. I think that -- great question. And I think overall, I think that it's comparable when you look at it as a disbursement option effectively. And then I think there's upside for us as we think about the Remitly Wallet product, where we're actually storing stablecoin value, whether that's earning net interest income in areas like that or whether it's earning other benefits, I think that there's lots of opportunity as we think about stablecoin adoption for the economics to work very well for us.

I'm showing no further questions at this time. I'd like to turn it back to Matt Oppenheimer for closing remarks.

Great. Thank you so much, and thank you, everyone, for the incredibly thoughtful questions. As always, I will end with a customer story. This one is from a Remitly Business customer, named Tony. And Tony shared with us the first transaction was flawless, and it was convenient and it was fast. So I have been hooked ever since. We thank Tony for his loyalty and for trusting Remitly to get money to his business reliably and seamlessly. Thank you, everybody, for joining us. We appreciate your support. We are excited about the opportunities ahead, and we look forward to sharing our progress as we continue to execute on our vision of transforming lives with trusted financial services that transcend borders.

This concludes today's conference call. Thank you for participating, and you may now disconnect.