Remitly Global, Inc. is a leading provider of digital financial services that transcend borders. With a global footprint spanning over 170 countries, Remitly's digitally native, cross-border payments platform has revolutionized the way individuals and businesses move money across the world.

Company Background

Founded in 2011, Remitly has steadily carved out a significant presence in the rapidly growing cross-border payments industry. The company was incorporated in the State of Delaware and is headquartered in Seattle, Washington, with various other global office locations. Remitly's founders recognized the need for a trusted and reliable money transfer service that could serve the growing population of immigrants and migrant workers who regularly send money back to their home countries.

In its early years, Remitly focused on building out its digital platform and establishing partnerships with financial institutions and payment providers around the world. The company faced challenges in navigating the complex regulatory landscape of the cross-border payments industry, as well as building trust with customers who were accustomed to traditional, in-person money transfer services. Despite these early challenges, Remitly was able to steadily grow its customer base and expand into new markets.

By 2018, the company had established a global footprint spanning over 170 countries and had processed over $10 billion in cross-border transactions. In 2019, Remitly completed a $135 million Series E funding round, which allowed the company to further invest in its technology and expand its product offerings. In 2021, Remitly took a major step forward by completing its initial public offering on the Nasdaq Global Select Market. The IPO raised over $300 million in proceeds, which the company used to fuel its continued growth and expansion.

Recent Performance

In the most recent quarter (Q3 2024), Remitly reported a 39% year-over-year increase in revenue, reaching $336.5 million. This impressive performance was driven by a 35% surge in active customers, which now total 7.3 million. Furthermore, the company's send volume grew by an impressive 42% to $14.5 billion, highlighting the strong demand for its services.

Strategic Focus

Remitly's strategic focus on expanding its global network of funding and disbursement partnerships has been a key differentiator. The company's ability to complete money transfers efficiently in over 5,100 corridors, while adhering to regulatory requirements, has enabled it to scale rapidly and provide a superior customer experience.

Innovation

The company's commitment to innovation is also a significant part of its success story. Remitly's proprietary technology platform allows it to quickly introduce new features and services, further enhancing its value proposition. This agility, combined with a focus on data-driven decision-making, has enabled the company to optimize its marketing efforts and maintain attractive customer economics.

Financials

Remitly's strong financial performance is evident in its recent quarterly results. For the most recent fiscal year (2023), the company reported revenue of $944.28 million, with a net loss of $117.84 million. Operating cash flow was negative $53.59 million, and free cash flow was negative $62.69 million.

In the most recent quarter (Q3 2024), Remitly reported revenue of $336.53 million, up 39% year-over-year. The company achieved profitability with a net income of $1.92 million. Operating cash flow improved significantly to $146.76 million, and free cash flow reached $152.14 million.

Performance across geographic markets has been strong. Revenue from the United States was $219.07 million, up 36% year-over-year. Canada contributed $36.02 million, growing 22% year-over-year. The rest of the world saw impressive growth of 58% year-over-year, reaching $81.44 million in revenue.

Remitly's main source of revenue is generated from its remittance business, where the company earns transaction fees and foreign exchange spreads. The company's mobile-first approach, global scale, high-quality money movement platform, and attractive unit economics are key competitive advantages that have driven the strong growth in its remittance business.

Liquidity

In terms of profitability, Remitly reported an adjusted EBITDA of $46.7 million in the most recent quarter, representing an impressive 14% margin. This milestone demonstrates the company's ability to leverage its scale and operational efficiencies to drive profitable growth.

The company's financial position remains strong. As of the latest report, Remitly had a debt-to-equity ratio of 0.021, indicating a low level of debt. Cash and cash equivalents stood at $324.43 million, providing a solid liquidity buffer. Additionally, the company has access to $276.30 million under its 2021 Revolving Credit Facility. The current ratio and quick ratio both stand at 2.66, indicating a strong ability to meet short-term obligations.

Guidance and Outlook

Remitly has provided guidance for the upcoming periods. For Q4 2024, the company expects revenue to be between $338 million and $342 million, representing a growth rate of approximately 28% to 29%. For the full year 2024, Remitly has raised its revenue guidance to between $1.25 billion and $1.254 billion.

On the profitability front, Remitly expects Q4 2024 adjusted EBITDA to be between $17 million and $21 million. For the full year 2024, the company has increased its adjusted EBITDA outlook to a range of $108 million to $112 million.

Looking ahead to 2025, Remitly has provided an early view of a low- to mid-20s revenue growth rate, although this is subject to change as the company will provide formal guidance after Q4 2024 results.

Challenges and Outlook

Looking ahead, Remitly remains well-positioned to capitalize on the vast opportunities in the cross-border payments market. The company's early-stage expansion into new geographies and diversification into adjacent financial services offerings provide additional avenues for growth. The consumer cross-border payments market represents a $2 trillion opportunity, and Remitly currently has only approximately 3% market share, indicating significant growth potential.

However, Remitly is not without its challenges. The company operates in a highly competitive and regulated industry, where it faces competition from both traditional players and emerging fintech disruptors. Additionally, macroeconomic factors, such as currency fluctuations and geopolitical tensions, can impact the company's operations and financial performance.

Despite these risks, Remitly's strong track record, innovative approach, and commitment to customer trust have positioned it as a formidable player in the cross-border payments landscape. The company continues to focus on customer retention, new customer acquisition, and expanding its global footprint and product offerings to further drive growth.

In conclusion, Remitly Global (RELY) has demonstrated its ability to navigate the complex cross-border payments industry and deliver consistent growth and profitability. With its innovative technology, global footprint, and focus on customer experience, the company is well-poised to capitalize on the vast opportunities in the rapidly evolving financial services landscape.