Shares of Remitly Global (RELY -0.17%) popped over 20% this week, according to data from S&P Global Market Intelligence. The remittance company that is trying to disrupt legacy players posted strong and accelerating revenue growth in the second quarter, driven by new user sign-ups. Shares are now up 33% in the past month, but still down 60% from its IPO back in 2021.

Here's why Remitly stock was running higher this week.

Accelerating revenue growth

In the third quarter of 2024, Remitly's revenue grew 39% year over year to $336.5 million, an acceleration from 31% growth last quarter. This was driven by a 42% increase in spending volume across the Remitly platform. Remitly earns revenue by taking a cut of every transaction.

The company now has 7.3 million active customers, up from 5.4 million a year ago. Currently, it is spending a lot on product development and marketing in order to get its remittance product highly robust and to make sure as many people hear about it as possible.

This strategy seems to be working, and the company is now generating better profit margins because of it. Operating margin was basically flat last quarter, up from -20% just a few years ago. As the company scales to an even larger size, investors should expect operating margin to finally flip to positive territory.

Big market opportunity ahead

Remitly has grown quickly in the last few years. There is still a long runway of growth ahead. According to management, it has captured just 3% of the growing global remittance market. This gives the company plenty of room to double or even triple its business over the next few years.

In the long term, it is aiming to add new products to its platform such as Remitly Circle, which will help people spend and store money as opposed to just sending it. This opens up a much larger market opportunity for the company.

With a market cap of just $3.5 billion, there is a lot to like about Remitly's prospects over the next decade. Investors may have gone through some pain over the last few years if they bought too high at the IPO. But if you hold on for the long term as this company keeps growing revenue and expanding profit margins, this has all the ingredients for being a multibagger stock investment.