Good day, and thank you for standing by. Welcome to the Remitly Fourth Quarter and Full Year 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, David Beckel, Vice President of Investor Relations. Please go ahead.

Good afternoon, and thank you for joining us for Remitly's Fourth Quarter and Full Year 2025 Earnings Call. Joining me on the call today are Matt Oppenheimer, Co-Founder and Chief Executive Officer of Remitly; Sebastian Gunningham, incoming CEO 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 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, adjusted EBITDA and free cash flow 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. 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, David, and thank you, everyone, for joining us today for our fourth quarter earnings call. Today's call is an important and especially exciting one for me as we announced the appointment of and welcome Sebastian Gunningham as Remitly's new CEO. He could have not timed joining Remitly any better. We ended this strategically important year with incredible results, growing revenue by 29% and reaching adjusted EBITDA of $272 million in 2025, exceeding our guidance for both. This very strong finish to the year and our outlook for next year reflect the strength of our product platform, team and strategy and is the result of 15 years of hard work guided by a simple vision that sending money and receiving money across borders should be reliable, fast and fair. Prior to founding Remitly, I lived and worked on 3 continents and saw how painful and uncertain basic financial flows could be for people who move money across borders. That experience was the seed for our now broader vision, transform lives with trusted financial services that transcend borders. I'm reminded of the importance of that vision every time I connect with customers like Sanjana, a customer since 2019, who joined Remitly through word of mouth during graduate school. She used Remitly initially to support her parents. Since then, she has lived in multiple countries, sending larger and larger amounts over time and recently used Remitly to transfer $60,000 in one transaction to meet tax obligations. She is what we call a high amount sender, a customer category that grew send volumes more than 40% year-over-year in 2025. She says she prefers Remitly relative to banks and other competitors because of our competitive exchange rates and the speed of transfers. That vision, our unrelenting commitment to delivering positive and trusted customer…

Thank you, Matt. First, I want to congratulate Matt and the entire Remitly team on an exceptional 2025. Ending the year with 29% revenue growth and $272 million in adjusted EBITDA is a testament to the strength of the platform we've built over the last 15 years. It's a privilege to join a company executing with such consistency and discipline of results. Second, I've been asked what attracted me to Remitly. The answer is a combination of mission, opportunity and time. Let me start with the mission. Remitly serves a global community that has been historically underserved and overcharged. After getting to know Matt, it became clear that this mission is an authentic reflection of the founder. This makes the work of serving this community meaningful and it makes the impact real. Next, the opportunity. Global remittances is a monster category with room for multiple strong players. Remitly has around 4% of the consumer payments segment alone. There is plenty of space for growth as money movement around the world is only going to get bigger and more important. Then the product. Customers love the Remitly product. High trust and repeat usage prove that Remitly is a product value story. That trust built across more than 5,300 global corridors is a moat that doesn't reset overnight. The unit economics also work as you are seeing in these latest results. This is a business with scale advantages that will continue to accrue into the future. And finally, timing. AI is a big tailwind for this business. For me personally, the timing is very good. I have a data and science background and have been deep in the evolution of AI. I believe AI will be transformative, and I also believe incumbents with established business models and happy customers are going to…

Thank you so much, Sebastian. I am so incredibly excited that you are here. Your focus on building the best product, combined with disciplined execution is going to result in really exciting results for our company and customers. And it reinforces the strategy we laid out at Investor Day and strengthens our confidence in delivering on our ambition of $3 billion in revenue and $600 million in adjusted EBITDA by 2028. With that, I'll now turn the call over to Vikas to walk through our financial and operating highlights from the quarter.

Matt, thank you for your leadership. Sebastian, welcome to Remitly. Good afternoon, everyone. As we shared at Investor Day, we are focused on profitable growth, strong free cash flow and managed dilution to drive long-term shareholder value. Q4 and full year results clearly demonstrated our ability to do that. We delivered a very strong quarter and full year with record revenue and adjusted EBITDA. Fourth quarter was $442 million revenue, up 26% year-over-year. Adjusted EBITDA was $89 million, resulting in an adjusted EBITDA margin of 20%, our highest quarterly adjusted EBITDA margin ever. Our performance this quarter was driven by 3 primary factors: revenue growth, aided by a strong December holiday period with efficiently managed marketing spend, lower-than-expected transaction losses, reflecting the benefits of our new AI-driven fraud detection and prevention model and rigorous management of operating expenses. For the full year, we once again delivered profitable growth. Revenue was $1.635 billion, up 29% and adjusted EBITDA was $272 million, resulting in an adjusted EBITDA margin of nearly 17%, an increase of more than 500 basis points year-over-year, as you can see on Slide 12. Importantly, we delivered our first full year of GAAP profitability with $68 million of net income. We delivered these results by carefully managing both top line and bottom line throughout the year with revenue ending up more than $60 million above and adjusted EBITDA more than $80 million above the midpoint of our initial 2025 guidance. I'll begin with an overview of our fourth quarter results and then share our outlook for the full year and first quarter of 2026. Let me first unpack revenue growth drivers for Q4. Send volume grew 35% to $21 billion, consistent with the prior quarter's pace. Supporting the strong volume growth, send volume per active customer increased to over…

[Operator Instructions] Our first question comes from Tien-Tsin Huang with JPMorgan.

Great. Yes, I just want to add my thanks to Matt as well. I learned a lot from you, Matt, and what you built. So hopefully, we'll be able to stay connected here. My question, maybe just for Sebastian since we have you, and I'm sure we'll learn more and I appreciate your intro and yourself. But just given your background, what's really interesting, I would love to hear a little bit more on how your prior experience prepares or informs your decision to join and lead Remitly given that it is a smaller consumer platform, different than some of the larger enterprise businesses that you led. So just love to hear your thoughts on that.

Thank you for the question. Some of my prior experiences include leading product organizations and engineering organizations in some of the best companies in the world. Some of those were big, some of those were smaller. I've run large complex businesses in many continents. I've been a CEO a number of times. And specific to payments and the Remitly Business, I did run the payments business at Amazon, as I mentioned, both on the consumer side and on the merchant side. Those were not always big, but they did scale. And this included all the money in and the money out channels for the Amazon business. And then finally, over the last few years, I've played both a Board role and a product role at Santander, helping its very successful global digital transformations in its core business and its payments business. So I think the sum of all these experiences positions me well to lead Remitly in this next chapter of scaling.

Great. Yes. And the only thing that I will add, Tien-Tsin, is a huge thank you to you. I've known you for a decade. You're an amazing analyst and appreciate all the thoughtful questions and coverage. I am incredibly excited for Sebastian to be here. And I wish you could see me because I have a huge smile on my face sitting next to him here in Seattle. I lost my voice as you can potentially hear. So I'm speaking a bit more slowly and calmly. But the feeling I have is he's calm, optimism about this change. And you'll hear more from Sebastian and Vikas today, which is great and just super excited about what's to come.

Our next question comes from Ramsey El-Assal with Cantor Fitzgerald.

I'll also add, Matt, it's been terrific interacting with you all these years, and welcome to you, Sebastian. Matt, I'm going to spare your voice and actually ask Vikas a question. What are you seeing out there in terms of kind of macro impacts to the business? I'm thinking things like FX or immigration policy or any other external factors. I guess the more nuanced question is, did you grow through any headwinds? Or are these macro factors that are in the headlines just not impacting your business?

Ramsey, thank you for the question. And I'd start with the fact that we had an exceptional year and a quarter as we ended the year with record revenue, record EBITDA and EBITDA margin. And a lot of that was because of really strong execution, especially the December holiday period, we saw significant outperformance even compared to our internal expectations. And as we noted, it was along with driving marketing efficiencies at the same time. So a lot of it was really strong execution, understanding the customer needs and really having a product and a marketing message that has resonated with our customers. As we look forward, we shared our guide and the drivers of the guide. I'd say, first of all, building on a strong FY '25 gives us a lot of predictability coming into the year. We see that our customer is very resilient even in sort of geopolitical volatile background, which again strengthens our confidence with regards to the guidance. One additional factor, which is a good tailwind, at least in the beginning of the year is the 1% remittance tax that's applicable for cash remittances. So we definitely see a strong start to the year because of that. But overall, the diversification that we have across geographies, customer and new products, the new product momentum we have seen thus far, all of us gives us a great confidence in the guidance we have put forward.

Our next question comes from Aditya Buddhavarapu with Bank of America.

Just wanted to say, Matt, congratulations on the successful run at Remitly; and Sebastian, welcome. I have a couple of questions actually for Vikas as well. When I look at the 2026 guidance, you talked about the 19% to 20% growth on revenues for the full year with Q1 actually being at 21%. So could you just talk a bit more about the cadence of revenues through the year? Is Q1 faster than the full year outlook because of the 1% remittance tax giving some tailwind given you have actually easier comps in H2, should actually there may be some degree of conservatism there given maybe macro uncertainty. So just some color on the quarterly cadence. And then also related to the outlook for '26, when you exited Q4 with 20% adjusted EBITDA margin. For '26, the implied margin is close to about 18%, 19%. So could you just talk about what's driving maybe that sort of margin for the full year being lower than Q4?

Yes. Aditya, first of all, thank you for the question, and thank you for initiating coverage on Remitly. I'll start with your second part of the question, and then I'll go to the first part. So as you noted, we exited 2024 with a very strong Q4 and a record EBITDA margin of 20%. There were a few reasons for that outperformance. And I'd say the 3 key ones being a strong holiday period, along with marketing efficiencies, which pretty much drove 1/3 of that, call it, beat to guidance. The second important factor was a record low transaction loss. It was at 7.3 basis points, which, again, was very, very strong, especially given the new AI model that we have been able to deploy. And the final one was disciplined expense management. So as we look at 2026, we think about, for example, the transaction loss tends to be volatile. And we -- in our guidance and our forecast, we look at the normal range, historical range, which is 9 to 13 bps, and we take that as, call it, the baseline. Outside of that, we really feel that with strong execution, again, we are going to continue to drive margin expansion compared to the full year FY '25. At the same time, we feel the organic opportunity ahead of us is huge. And as we have spoken about it earlier, the new product momentum has been good. So we want to invest behind that trend that we are seeing. So overall, we feel it's a very balanced profitability plus growth equation we are striking here. Shifting to your question on the revenue drivers and the seasonality thereof, the first point I'd make is that H1 versus H2, it's a similar thing that we saw last year, where the growth rates moderate in the second half. It's a little bit of the larger the business gets, it tends to follow that curve. The second thing I would say is, as you noted, Q1, we benefit from the remittance tax, and there's a little bit of a shift in the Ramadan timing also moving a few weeks ahead compared to last year. And both those give us stronger confidence with regards to Q1. So overall, really looking forward to an exciting 2026. And as I said, a strong foundation from 2025 gives us a great momentum going in.

Our next question comes from Will Nance with Goldman Sachs.

Matt, it's been a pleasure working with you. I guess one maybe for Sebastian. I think in the prepared remarks, Matt called out the ability to accelerate product innovation and execution and some operational benefits given your history. When you look at the business kind of exiting the year in the mid-20s on revenue, margins expanding nicely, where do you feel like you can have the most impact in some of those things that Matt mentioned at the top of the script? What do you expect to be your main areas of focus as Matt kind of hands over the reins?

Yes. Thanks for the question. I start as CEO tomorrow, so I don't want to get ahead of myself here. I think I'll make a couple of comments. I think these are very large markets. We are -- we've got a lot of traction in the consumer market. We see, as Vikas and Matt have said, an opportunity in the business market. And even within the business market, there are many, many subsegments. I think product -- having the right product for each of these segments is super important. So I think that overall, any velocity in product development is going to give us all kinds of opportunities in these large markets that we have to address. So a little bit early for me to have a strong opinion, but very excited about what we can do in these markets.

Our next question comes from Cris Kennedy with William Blair.

Congratulations to both Matt and Sebastian. Just a follow-up, Sebastian. You mentioned your history with data science and your enthusiasm around AI. Can you just provide more color as to kind of what the opportunity is at Remitly?

So maybe I'll stay away from -- I'll make just a few general comments. I think there are a number of buckets of AI. There's the customer-facing part of AI. There's the internal efficiencies facing part of AI. There's the software product, the software factory part of AI. So -- and we've all been following this. I think the -- as I said, for an incumbent like Remitly with a very strong business model, the right unit economics and the customer that loves the product, and probably doesn't only apply for Remitly. I think that the right AI adoption just gives us a lot of tailwinds into the next few years. So that would be my general statement. I'm very optimistic with what I've seen so far. I think it's going to be a very strong multiplier for the company over time.

Our next question comes from Alex Markgraff with KBCM.

Matt, Sebastian, congrats to both of you. I guess just -- I don't know if these are for Matt or Vikas, but just a couple of questions on new products. I'd be curious to understand sort of what sort of observable benefits you've seen from Flex and One on wallet share. And then just sort of curious on willingness to pay. Anything you've learned in these early days around willingness to pay for those from customers?

Thanks, Alex. I'll take this one. We have been very impressed with what we have seen thus far from Flex. First of all, it opens up a whole new category with the Send Now, Pay Later. And as we talked at Investor Day, if you look at our customers and segment them or categorize them, you will have the low amount senders, high amount senders, businesses and receivers. And as you look at low amount senders, there's a clear mismatch between the timing of earnings and when they need to make payments. In addition to that, specifically for our customers, sometimes there's also a mismatch between their credit history versus the creditworthiness. And this is where we feel we can fill that gap and void in a meaningful way for the customer, along with driving really positive unit economics and creating shareholder value. And what we have seen thus far is pretty promising, 120,000 users, revenue almost doubling quarter-over-quarter. And along with that, clearly maintaining strong unit economics as well as having provisions very much in line with our expectations. The last point I'll make on that is we've also seen very interesting insight that the Flex users, especially members tend to send more than the non-Flex users/members. And that clearly shows that not only are we creating a new category, we are actually creating a path where higher volumes are sent and we are reducing some of the friction that was existing earlier. So overall, excited about Flex as well as Send Now, Pay Later in general.

And our final question comes from Darrin Peller with Wolfe Research.

Matt and Sebastian, congrats to both of you guys. I just want to touch back a quarter ago. But if you look at, it was obviously a very strong upside surprise. And so when we think about the opportunity you're seeing in terms of the higher spenders and maybe just reminding us what other scenarios, what other results drove -- I love to hear what you're seeing in terms of strategy around higher spenders and what's really driving that and maybe other factors all that you see in the quarter driving the upside.

Thanks, Darrin. Clearly, the trend that we are seeing is that the high amount spenders are spending more and the product improvements that we are doing, raising the send limits, having the right marketing campaigns are resonating as well. And this shows in the numbers. We had in record send per QAU, both from a dollar perspective, about $2,200 as well as growth at 13%. And if you fuel that further, in fact, we provided a slide that breaks out low amount senders, high amount senders, and we added one more tier to call out very high amount senders, which is people who spend or send more than $10,000 per transaction. And we are seeing really high growth rates with north of 40% on the high amount senders and north of 100% send volume growth for the very high amount senders. And again, as we say, we are just getting started there and with more product innovations and a more front-footed marketing campaign in that space, we will continue to drive higher market share gains, and we feel very excited about that in 2026 and beyond.

Great. And I'll just wrap with a couple of thoughts. Our ambitions at Remitly have never been higher. And if you look at our vision of transform lives with trusted financial services that transcends borders, that is our anchor. And as we think about this transition, as we think about Sebastian coming on, as we think about its product-led leadership, operational excellence, that is going to be a huge, huge accelerant to help us accomplish the vision and financials that we laid out at Investor Day. And to wrap, as my last earnings call as CEO, I just want to say an enormous thanks to our investors, to our analysts, to all of our thousands of team members and to our millions of customers around the globe. This business is already making an enormous impact, and it is because of you, and we are very much more than ever just getting started.

Thank you. This concludes the question-and-answer session and today's conference call. Thanks for participating. You may now disconnect.