Release Date: February 19, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Remitly Global Inc (NASDAQ:RELY) reported record revenue and adjusted EBITDA exceeding $40 million for the second consecutive quarter.
• The company serves almost 8 million quarterly active customers in over 170 countries, with customers sending more than $50 billion in 2024.
• Customer loyalty and retention are strong, with a 4.9-star rating on the iOS App Store and a 4.8-star rating on Google Play Store.
• Marketing expenses per quarterly active customer decreased by nearly 16% year over year, while adding a record number of new customers.
• The company is on track for its first $1 billion RLTE year and its first full year of GAAP net income profitability in 2025.

Negative Points

• The company faces tough comparisons in 2025 due to the benefits from key payment processing partnerships realized in 2024.
• Transaction expenses as a percentage of revenue are expected to remain in line with the full year 2024, indicating limited margin expansion.
• The guidance for 2025 does not assume any large macroeconomic, geopolitical, or regulatory changes, which could impact results.
• Stock-based compensation remains a significant expense, though it has decreased as a percentage of revenue.
• The company is lapping a leap year in the first quarter of 2025, which impacts year-over-year and sequential comparisons.

Q & A Highlights

• Warning! GuruFocus has detected 4 Warning Sign with RELY.

Q: Can you elaborate on the marketing spend trends and expectations for 2025? A: (CFO) We are pleased with our marketing ROI, which has improved due to product enhancements that reduce customer friction and drive word of mouth. This was evident in Q4, where marketing spend per quarterly active customer declined by 16%. We expect this leverage to continue into 2025, both in Q1 and throughout the year.

Q: What drove the stronger-than-expected volume per customer in the quarter? A: (CFO) The increase in transaction frequency is due to enhanced customer engagement and trust in our platform. In Q4, we saw a record number of transactions per active customer, indicating that our platform's simplicity and reliability are resonating well with users.

Q: How are you viewing the political environment regarding immigration, and how does it affect your business? A: (CEO) Our business has shown resilience through various macro, political, and regulatory changes over the past decade. Our diversification and additional use cases provide significant growth opportunities, giving us confidence in our 2025 revenue visibility.

Q: Can you discuss the margin outlook for 2025 and what factors might influence it? A: (CFO) We are pleased with our growth and profitability focus. For 2025, we expect RLTE as a percentage of revenue to remain in line with revenue growth. We will continue to invest in technology and development, and we anticipate modest marketing leverage. Our guidance reflects a balanced approach to growth and profitability.

Q: How do you plan to capture the microbusiness opportunity, and what is the current landscape? A: (CEO) The platform we've built is well-suited for microbusinesses, which are not as well-served as larger businesses. We have customers like Mary, a bookkeeping professional who uses Remitly to pay her team in the Philippines. We see significant potential in serving similar microbusinesses and are excited about this opportunity in 2025 and beyond.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.