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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
    
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number: 021-344104
Remitly Global, Inc.
(Exact name of registrant as specified in its charter)
Delaware737283-2301143
(State or other jurisdiction of
incorporation or organization)
(Primary Standard Industrial
Classification Code Number)
(I.R.S. Employer
Identification Number)
1111 Third Avenue, Suite 2100 Seattle, WA
98101
(Address of principal executive offices)(Zip Code)
(888) 736-4859
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.0001 par valueRELYNASDAQ
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of November 9, 2021, the registrant had 164,106,480 shares of common stock, $0.0001 par value per share, outstanding.


1
Page(s)
Part I – Financial Information1





SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding future events or our future results of operations, financial condition, business, strategies, financial needs, and the plans and objectives of management, are forward-looking statements. In some cases you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “likely,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” or similar expressions and the negatives of those terms. These forward-looking statements include, but are not limited to, statements concerning the following:
•    our expectations regarding our revenue, expenses, and other operating results;
•    our ability to acquire new customers and successfully retain existing customers;
•    our ability to develop new products and services and bring them to market in a timely manner;
•    our ability to achieve or sustain our profitability;
•    our ability to maintain and expand our strategic relationships with third parties;
•    our business plan and our ability to effectively manage our growth;
•    our market opportunity, including our total addressable market;
•    anticipated trends, growth rates, and challenges in our business and in the markets in which we operate;
•    the COVID-19 pandemic, and its impact on our employees, customers, strategic partners, vendors, results of operations, liquidity, and financial condition;
•    our ability to attract and retain qualified employees;
•     our ability to maintain the security and availability of our solutions;
•    our ability to maintain and expand internationally;
•    our expectations regarding anticipated technology needs and developments and our ability to address those needs and developments with our solutions:
You should not place undue reliance on our forward-looking statements and you should not rely on forward-looking statements as predictions of future events. The results, events, and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements. The forward-looking statements made in this Quarterly Report on Form 10-Q speak only as of the date of this report. We undertake no obligation to update any forward-looking statements made in this report to reflect events or circumstances after the date of this report or to reflect new information or the occurrence of unanticipated events, except as required by law. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.




Part 1. Financial Information
Item 1. Financial Statements (Unaudited)
REMITLY GLOBAL, INC.
Condensed Consolidated Balance Sheets
(In thousands, except share and per share data)
(unaudited)
September 30, 2021December 31, 2020
Assets
Current assets
Cash and cash equivalents$443,313 $186,694 
Disbursement prefunding108,770 101,558 
Customer funds receivable, net79,243 50,729 
Prepaid expenses and other current assets15,992 6,350 
Total current assets647,318 345,331 
Restricted cash302 1,381 
Property and equipment, net9,225 9,675 
Operating lease right-of-use assets6,052 5,605 
Other non-current assets, net1,972 997 
Total assets$664,869 $362,989 
Liabilities, Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit)
Current liabilities
Accounts payable$6,869 $4,256 
Borrowings 80,000 
Customer liabilities104,683 54,819 
Accrued expenses and other current liabilities57,699 39,742 
Operating lease liabilities3,411 2,959 
Total current liabilities172,662 181,776 
Operating lease liabilities, non-current3,623 4,008 
Other non-current liabilities901 827 
Total liabilities$177,186 $186,611 
Commitments and contingencies (Note 14)
Redeemable convertible preferred stock, $0.0001 par value per share; 50,000,000 and 132,674,735 shares authorized as of September 30, 2021 and December 31, 2020; zero and 127,082,605 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively; liquidation preference of zero and $399,815 as of September 30, 2021 and December 31, 2020, respectively
 387,707 
Stockholders' equity (deficit)
Common stock, $0.0001 par value; 725,000,000 and 190,000,000 shares authorized as of September 30, 2021 and December 31, 2020, respectively; 163,765,500 and 24,289,906 shares issued and outstanding, as of September 30, 2021 and December 31, 2020, respectively
16 2 
Additional paid-in capital730,253 8,766 
Accumulated other comprehensive income282 591 
Accumulated deficit(242,868)(220,688)
Total stockholders' equity (deficit)487,683 (211,329)
Total liabilities, redeemable convertible preferred stock, and stockholders' equity (deficit)$664,869 $362,989 
1



REMITLY GLOBAL, INC.
Condensed Consolidated Statements of Operations
(In thousands, except share and per share data)
(unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
Revenue$121,244 $71,790 $323,350 $176,939 
Costs and expenses
Transaction expenses(1)
47,560 28,046 135,175 74,256 
Customer support and operations(1)
12,005 7,632 32,435 17,795 
Marketing(1)
30,365 18,816 82,639 50,923 
Technology and development(1)
18,123 10,380 44,965 29,439 
General and administrative(1)
24,539 7,667 47,429 22,008 
Depreciation and amortization1,319 1,002 3,890 2,859 
Total costs and expenses133,911 73,543 346,533 197,280 
Loss from operations(12,667)(1,753)(23,183)(20,341)
Interest income82 7 92 181 
Interest expense(512)(247)(1,048)(1,027)
Other income (expense), net396 (241)3,044 (1,737)
Loss before provision for income taxes(12,701)(2,234)(21,095)(22,924)
Provision for income taxes261 195 1,085 635 
Net loss$(12,962)$(2,429)$(22,180)$(23,559)
Deemed dividend on redeemable convertible preferred stock    
Net loss attributable to common stockholders$(12,962)$(2,429)$(22,180)$(23,559)
Net loss per share attributable to common stockholders:
Basic and diluted$(0.41)$(0.11)$(0.85)$(1.11)
Weighted-average shares used in computing net loss per share attributable to common stockholders:
Basic and diluted31,641,400 21,868,865 26,055,903 21,186,012 
__________________
(1)  Exclusive of depreciation and amortization, shown separately, above
The accompanying notes are an integral part of these consolidated financial statements.
2





REMITLY GLOBAL, INC.
Condensed Consolidated Statements of Comprehensive Loss
(In thousands)
(unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
Net loss$(12,962)$(2,429)$(22,180)$(23,559)
Other comprehensive income (loss):
Foreign currency translation adjustments(293)219 (309)156 
Comprehensive loss$(13,255)$(2,210)$(22,489)$(23,403)
The accompanying notes are an integral part of these consolidated financial statements.
3

REMITLY GLOBAL, INC.
Condensed Consolidated Statements of Redeemable Converted Preferred Stock and Stockholders’ Equity (Deficit)
For the Three and Nine Months Ended September 30, 2021 and 2020
(In thousands, except share amounts)
(unaudited)

Three Months Ended September 30, 2021
Redeemable Convertible
Preferred Stock
Common StockAdditional
Paid-in
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Accumulated
Deficit
Total
Stockholders'
(Deficit) Equity
SharesAmountSharesAmount
Balances as of July 1, 2021127,410,631 $390,687 26,385,643 $3 $17,193 $575 $(229,906)$(212,135)
Repayment of non-recourse promissory note— — — — 3,060 — — 3,060 
Conversion of redeemable convertible preferred stock to common stock in connection with initial public offering(127,410,631)(390,687)127,410,631 13 390,674 — — 390,687 
Issuance of common stock upon initial public offering and private placements, net of offering costs, underwriting discounts and commissions— — 7,581,395 — 305,191 — — 305,191 
Donation of common stock— — 181,961 — 6,933 — — 6,933 
Issuance of common stock upon exercise of warrants— — 254,014 — — — — — 
Issuance of common stock upon exercise of stock options and vesting of early exercised options, and vesting of restricted stock units— — 1,951,856 — 2,341 — — 2,341 
Stock-based compensation expense— — — — 4,861 — — 4,861 
Other comprehensive income— — — — — (293)— (293)
Net loss— — — — — — (12,962)(12,962)
Balances as of September 30, 2021 $ 163,765,500 $16 $730,253 $282 $(242,868)$487,683 
Three Months Ended September 30, 2020
Redeemable Convertible
Preferred Stock
Common StockAdditional
Paid-in
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Accumulated
Deficit
Total
Stockholders'
Deficit
SharesAmountSharesAmount
Balances as of July 1, 2020117,788,521 $302,873 23,126,915 $2 $4,741 $(29)$(209,254)$(204,540)
Issuance of Series F redeemable convertible preferred stock, net of issuance costs9,294,084 84,834 — — — — — — 
Issuance of common stock upon exercise of stock options and vesting of early exercised options— — 938,220 — 975 — — 975 
Stock-based compensation expense— — — — 1,329 — — 1,329 
Other comprehensive income— — — — — 219 — 219 
Net loss— — — — — — (2,429)(2,429)
Balances as of September 30, 2020127,082,605 $387,707 24,065,135 $2 $7,045 $190 $(211,683)$(204,446)


The accompanying notes are an integral part of these consolidated financial statements.
4

REMITLY GLOBAL, INC.
Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)
For the Three and Nine Months Ended September 30, 2021 and 2020
(In thousands, except share amounts)
(unaudited)




Nine Months Ended September 30, 2021
Redeemable Convertible
Preferred Stock
Common StockAdditional
Paid-in
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Accumulated
Deficit
Total
Stockholders'
(Deficit) Equity
SharesAmountSharesAmount
Balances as of January 1, 2021127,082,605 $387,707 24,289,906 $2 $8,766 $591 $(220,688)$(211,329)
Issuance of Series F redeemable convertible preferred stock, net of issuance costs328,026 2,980 — — — — — — 
Repayment of non-recourse promissory note— — — — 3,060 — — 3,060 
Conversion of redeemable convertible preferred stock to common stock in connection with initial public offering(127,410,631)(390,687)127,410,631 13 390,674 — — 390,687 
Issuance of common stock upon initial public offering and private placements, net of offering costs, underwriting discounts and commissions— — 7,581,395 — 305,191 — — 305,191 
Donation of common stock— — 181,961 — 6,933 — — 6,933 
Issuance of common stock upon exercise of warrants— — 254,014 — — — — — 
Issuance of common stock upon exercise of stock options and vesting of early exercised options, and vesting restricted stock units— — 4,021,834 1 6,374 — — 6,375 
Issuance of common stock in a business combination— — 25,759 — 169 — — 169 
Stock-based compensation expense— — — — 9,086 — — 9,086 
Other comprehensive loss— — — — — (309)— (309)
Net loss— — — — — — (22,180)(22,180)
Balances as of September 30, 2021 $ 163,765,500 $16 $730,253 $282 $(242,868)$487,683 
Nine Months Ended September 30, 2020
Redeemable Convertible
Preferred Stock
Common StockAdditional
Paid-in
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Accumulated
Deficit
Total
Stockholders'
Deficit
SharesAmountSharesAmount
Balances as of January 1, 2020117,788,521 $302,873 22,425,112 $2 $1,292 $34 $(188,124)$(186,796)
Issuance of Series F redeemable convertible preferred stock, net of issuance costs of $167
9,294,084 84,834 — — — — — — 
Issuance of common stock upon exercise of stock options and vesting of early exercised options— — 1,640,023 — 1,901 — — 1,901 
Stock-based compensation expense— — — — 3,852 — — 3,852 
Other comprehensive loss— — — — — 156 — 156 
Net loss— — — — — — (23,559)(23,559)
Balances as of September 30, 2020127,082,605 $387,707 24,065,135 $2 $7,045 $190 $(211,683)$(204,446)
The accompanying notes are an integral part of these consolidated financial statements.
5

REMITLY GLOBAL, INC.
Condensed Consolidated Statements of Cash Flows
Periods Ended September 30, 2021 and 2020
(In thousands)
(unaudited)
Nine Months Ended September 30,
20212020
Cash flows from operating activities
Net loss$(22,180)$(23,559)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities
Depreciation and amortization3,890 2,859 
Stock-based compensation expense, net8,965 3,852 
Donation of common stock6,933  
Other360 27 
Changes in operating assets and liabilities:
Disbursement prefunding(7,212)(30,345)
Customer funds receivable(29,072)(13,465)
Prepaid expenses and other assets(9,491)(4,952)
Operating lease right-of-use assets2,023 1,803 
Accounts payable1,229 1,840 
Customer liabilities50,284 (28,916)
Accrued expenses and other liabilities16,013 21,595 
Operating lease liabilities(2,317)(1,915)
Net cash provided by (used in) operating activities19,425 (71,176)
Cash flows from investing activities
Purchases of property and equipment(1,347)(1,825)
Capitalized internal-use software costs(1,941)(1,591)
Net cash used in investing activities(3,288)(3,416)
Cash flows from financing activities
Proceeds from issuance of common stock upon initial public offering and the private placement, net of underwriting discounts and commissions and other offering costs307,094  
Repayment of non-recourse promissory note3,060  
Proceeds from issuance of Series F convertible preferred stock, net of issuance costs2,980 84,855 
Proceeds from exercise of stock options7,519 1,995 
Payment of debt issuance costs(988) 
Repayments on borrowings, net(80,000)(45,000)
Net cash provided by financing activities239,665 41,850 
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash(262)338 
Net increase (decrease) in cash, cash equivalents and restricted cash255,540 (32,404)
Cash, cash equivalents, and restricted cash at beginning of period188,075 183,520 
Cash, cash equivalents, and restricted cash at end of period$443,615 $151,116 
Supplemental disclosure of cash flow information
Cash paid for interest$936 $998 
Cash paid for income taxes303 334 
Supplemental disclosure of non-cash investing and financing activities
Operating lease right-of-use assets obtained in exchange for operating lease liabilities$2,532 $1,523 
Vesting of early exercised options263 69 
IPO and debt issuance costs incurred but not yet paid2,287  
Conversion of preferred stock to common stock390,687  
Reconciliation of cash, cash equivalents and restricted cash
Cash and cash equivalents$443,313 $149,881 
Restricted cash302 1,235 
Total cash, cash equivalents and restricted cash$443,615 $151,116 
The accompanying notes are an integral part of these consolidated financial statements.
6

REMITLY GLOBAL, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)


1.Organization and Description of Business
Description of Business
Remitly Global, Inc. (the “Company” or “Remitly”) was incorporated in the State of Delaware in October 2018 and is headquartered in Seattle, Washington, with various other global office locations.
The Company provides integrated financial services to immigrants, including helping customers send money internationally in a quick, reliable, and more cost-effective manner by leveraging digital channels. Remitly supports cross-border transmissions across the globe.
Unless otherwise expressly stated or the context otherwise requires, the terms “Remitly” and the “Company” in these notes to the condensed consolidated financial statements refer to Remitly Global, Inc. and its wholly-owned subsidiaries.

Initial Public Offering and Private Placement
In September 2021, the Company completed its initial public offering (the “IPO”), in which the Company issued and sold 7,000,000 shares of its common stock at $43.00 per share. Concurrently, 5,162,777 shares were sold by certain of the Company’s existing stockholders. In addition, the Company issued 581,395 shares of common stock to an existing stockholder in a private placement at the same offering price as the IPO. The Company received net proceeds of $305.2 million for the IPO and private placement, after deducting underwriting discounts and other fees of $20.8 million. In connection with the IPO, 127,410,631 shares of outstanding redeemable convertible preferred stock automatically converted into an equivalent number of shares of common stock on a one-to-one basis.
2.Basis of Presentation and Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP and therefore the information included in this Quarterly Report on Form 10-Q should be read in conjunction with the historical audited annual consolidated financial statements and related notes included in the Company’s final prospectus dated September 22, 2021 and filed with the SEC pursuant to Rule 424(b)(4) (the “Final Prospectus”).
The accompanying unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments of a normal recurring nature considered necessary to state fairly the Company's consolidated financial position, results of operations, comprehensive loss, and cash flows for the interim periods. The interim results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021, or for any other future annual or interim period.
Principles of Consolidation
The condensed consolidated financial statements include the accounts of Remitly Global, Inc. and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.
Use of Estimates
The preparation of the accompanying consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes. These estimates and assumptions include, but are not limited to, revenue recognition including the treatment of sales incentive programs, reserves for transaction losses, stock-based
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compensation expense including the estimated fair value per share of common stock, the carrying value of operating lease right-of-use assets, the recoverability of deferred tax assets, and capitalization of software development costs. The Company bases its estimates on historical experience and on assumptions that management considers reasonable. Actual results could differ from these estimates and assumptions, and these differences could be material to the condensed consolidated financial statements.
Concentration of Credit Risk
Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents, disbursement prefunding, restricted cash, and customer funds receivable. The Company maintains cash and cash equivalents and restricted cash balances that may exceed the insured limits by the Federal Deposit Insurance Corporation. In addition, the Company funds its international operations using accounts with institutions in the major countries where its subsidiaries operate. The Company also prefunds amounts which are held by its disbursement partners, which typically include India, Philippines and Mexico. The Company has not experienced any significant losses on its deposits of cash and cash equivalents, disbursement prefunding, restricted cash or customer funds receivable in the nine months ended September 30, 2021 and 2020.
For the three and nine months ended September 30, 2021 and 2020, no individual customer represented 10% or more of the Company’s total revenues. As of September 30, 2021 and December 31, 2020, no individual customer represented 10% or more of the Company’s customer funds receivable.
Advertising
Advertising expenses are charged to operations as incurred and are included as a component of marketing expenses. Advertising expenses totaled $25.6 million and $15.9 million during the three months ended September 30, 2021 and 2020, respectively, and are used primarily to attract new customers. Advertising expenses totaled $70.1 million and $42.5 million during the nine months ended September 30, 2021 and 2020, respectively.
Summary of Significant Accounting Policies
The Company’s significant accounting policies are discussed in Note 2, “Basis of Presentation and Summary of Significant Accounting Policies” in the Notes to Consolidated Financial Statements as of December 31, 2020 and 2019 and for the years ended December 31, 2020 and 2019 included in the Final Prospectus. There have been no significant changes to these policies during the nine months ended September 30, 2021, except as noted below.
Deferred Offering Costs
Prior to the IPO, deferred offering costs, which consist of direct incremental legal, accounting, and consulting fees relating to the IPO, were capitalized and included in other non-current assets on the condensed consolidated balance sheets. Upon completion of the IPO in September 2021, the Company reclassified $4.3 million of deferred offering costs to additional-paid-in capital offsetting the IPO proceeds. As of September 30, 2021, approximately $1.9 million of IPO costs were unpaid. Such amounts are recorded within accounts payable and accrued expenses and current liabilities in the Company’s condensed consolidated balance sheet. There were no material deferred offering costs recorded as of December 31, 2020.
Recent Accounting Pronouncements
Accounting Pronouncements Not Yet Adopted
In 2021, The Financial Accounting Standards Board (“FASB”) issued ASU 2021-04, Earnings per Share (Topic 260), Debt — Modifications and Extinguishments (Subtopic 470-50), Compensation — Stock Compensation (Topic 718), and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. The FASB is issuing this update to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. The amendments affect entities when a freestanding equity-classified written call option (such as a warrant) is modified or exchanged and remains equity classified after the modification or exchange. In addition, the
8



amendments impact the recognition and measurement of earnings per share for certain modification and exchange transactions. The new standard is effective for the Company for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years, and early adoption is permitted. The Company is currently assessing the impact of the guidance on its consolidated financial statements.
There are other new accounting pronouncements issued by the FASB that we have adopted or will adopt, as applicable. We do not believe any of these accounting pronouncements have had, or will have, a material impact on our condensed consolidated financial statements or disclosures.
3.Revenue    
The Company’s revenue is generated on transaction fees charged to customers and foreign exchange spreads between the foreign exchange rate offered to customers and the foreign exchange rate on the Company's currency purchases. Revenue is recognized when control of these services is transferred to the Company’s customers, which is the time the funds have been delivered to the intended recipient in an amount that reflects the consideration the Company expects to be entitled to in exchange for services provided. The Company accounts for revenue in accordance with Accounting Standards Codification (“ASC”) Revenue from Contracts with Customers (Topic 606), which includes the following steps:
(1)identification of the contract with a customer;
(2)identification of the performance obligations in the contract;
(3)determination of the transaction price;
(4)allocation of the transaction price to the performance obligations in the contract; and
(5)recognition of revenue when, or as, the Company satisfies a performance obligation.
Revenue is derived from each transaction and varies based on the funding method chosen by the customer, the size of the transaction, the currency to be ultimately disbursed, the rate at which the currency was purchased, and the countries to which the funds are transferred. The Company’s contract with customers can be terminated by the customer without a termination penalty up until the time the funds have been delivered to the intended recipient. Therefore, the Company’s contracts are defined at the transaction level and do not extend beyond the service already provided.
The Company’s service comprises a single performance obligation to complete transactions for the Company’s customers. Using compliance and risk assessment tools, the Company performs a transaction risk assessment on individual transactions to determine whether a transaction should be accepted. When the Company accepts a transaction and processes the designated payment method of the customer, the Company becomes obligated to its customer to complete the payment transaction.
The Company recognizes transaction revenue on a gross basis as it is the principal for fulfilling payment transactions. As the principal to the transaction, the Company controls the service of completing payments on its payment platform. The Company bears primary responsibility for the fulfillment of the payment service, is the merchant of record, contracts directly with its customers, controls the product specifications, and defines the value proposition of its services. The Company is also responsible for providing customer support. Further, the Company has full discretion over determining the fee charged to its customers, which is independent of the cost it incurs in instances where it may utilize payment processors or other financial institutions to perform services on its behalf. These fees paid to payment processors and other financial institutions are recognized as transaction expenses in the consolidated statements of operations. The Company does not have any deferred contract acquisition costs.
Deferred Revenue
The deferred revenue balances from contracts with customers were as follows:
9



Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2021202020212020
Deferred revenue, beginning of the period$1,126 $274 $1,105 $137 
Deferred revenue, end of the period1,269 1,010 1,269 1,010 
Change in deferred revenue during the period143 736 164 873 

Revenue recognized during the three month periods ended September 30, 2021 and 2020 from amounts included in deferred revenue at the beginning of the period were $0.3 million and $0.2 million, respectively.
Revenue recognized during the nine month periods ended September 30, 2021 and 2020 from amounts included in deferred revenue at the beginning of the period were $0.3 million and $0.1 million, respectively.
Deferred revenue represents amounts received from customers for which the performance obligations are not yet fulfilled. Deferred revenue is included within accrued expenses and other current liabilities and other non-current liabilities on the consolidated balance sheets.
Sales Incentives
The Company provides sales incentives to customers in a variety of forms. Cash incentives given to customers are accounted for as reductions to revenue, up to the point where net historical cumulative revenue, at the customer level, is reduced to zero. Those additional incentive costs that would have caused the customer level revenue to be negative are classified as advertising expenses and are included as a component of marketing expenses. In addition, referral credits given to a referrer are classified as marketing expenses.
During the three months ended September 30, 2021 and 2020, payments made to customers resulted in reductions to revenue of $4.3 million and $3.7 million, respectively, and charges to sales and marketing expense of $2.6 million and $2.4 million, respectively.
During the nine months ended September 30, 2021 and 2020, payments made to customers resulted in reductions to revenue of $13.4 million and $12.2 million, respectively, and charges to sales and marketing expense of $8.4 million and $7.6 million, respectively.
4.Property and Equipment
Property and equipment, net consisted of the following:
(in thousands)September 30, 2021December 31, 2020
Capitalized internal-use software$8,232 $6,170 
Computer and office equipment4,342 3,422 
Furniture and fixtures1,450 1,390 
Leasehold improvements6,951 6,609 
20,975 17,591 
Less: Accumulated depreciation and amortization(11,750)(7,916)
Property and equipment, net$9,225 $9,675 
Depreciation and amortization expense related to property and equipment was $1.3 million and $3.9 million for the three and nine months ended September 30, 2021, respectively, and $1.0 million and $2.9 million for the three and nine months ended September 30, 2020, respectively.
Capitalized Internal-Use Software Costs
There has been no impairment of previously capitalized costs during the three and nine months ended September 30, 2021 and 2020.
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The Company capitalized $0.5 million and $0.6 million for internal-use software costs for three month periods ended September 30, 2021 and 2020, respectively. The Company capitalized inconsequential amounts of stock-based compensation costs to internal-use software during the three months ended September 30, 2021 and 2020, respectively. The Company recorded amortization expense of $0.6 million and $0.4 million for the three months ended September 30, 2021 and 2020, respectively.
The Company capitalized $2.0 million and $1.6 million for internal-use software costs during the nine months ended September 30, 2021 and 2020, respectively. The Company capitalized $0.1 million of stock-based compensation costs to internal-use software for both the nine month period ended September 30, 2021 and 2020. The Company recorded amortization expense of $1.8 million and $1.1 million for the nine months ended September 30, 2021 and 2020, respectively.
5.Fair Value Measurements
The following table presents information about the Company’s financial assets and liabilities that are measured at fair value and indicates the fair value hierarchy of the valuation inputs used as of December 31, 2020:
As of December 31, 2020
(in thousands)Level 1Level 2Level 3Total
Assets
Restricted cash
Certificates of deposit$ $102 $ $102 
Total assets$ $102 $ $102 

The carrying values of certain financial instruments, including disbursement prefunding, customer funds receivable, accounts payable, accrued expenses and other current liabilities, customer liabilities and borrowings approximate their respective fair values due to their relative short maturities and are excluded from the fair value table above. If these financial instruments were measured at fair value in the financial statements, they would be classified as Level 2. There are no other financial assets and liabilities that are measured at fair value as of September 30, 2021.
There were no transfers between Level 1 and Level 2 during the three and nine months ended September 30, 2021 and 2020.
6.Debt
Secured Revolving Credit Facility
New Revolving Credit Facility
On September 13, 2021, Remitly Global, Inc. and Remitly, Inc. (U.S. subsidiary) entered into a new credit agreement (the “New Revolving Credit Facility”), as co-borrowers, with certain lenders and JPMorgan Chase Bank, N.A. acting as administrative agent and collateral agent, that provides for revolving commitments of $250.0 million and terminated its existing Revolving Credit Facility. Proceeds under the New Revolving Credit Facility are available for working capital and general corporate purposes. As part of the refinancing, the Company performed a debt modification analysis, utilizing the borrowing capacity test within ASC 470-50, Debt — Modification and Extinguishment, on a lender-by-lender basis, resulting in the capitalization of $1.4 million of new debt issuance costs incurred in connection with the New Revolving Credit Facility, of which $0.4 million remained accrued and unpaid as of September 30, 2021. Such amounts were capitalized and recorded within other long-term assets, net in the condensed consolidated balance sheet, and will be amortized to interest expense over the term of the New Revolving Credit Facility. The Company previously had $0.5 million of unamortized debt issuance costs associated with its existing Revolving Credit Facility. As a result of the debt modification analysis, the Company will continue to amortize $0.4 million of unamortized debt issuance costs over the term of the New Revolving Credit Facility. The
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remaining $0.1 million was expensed as a debt extinguishment cost within interest expense in the condensed consolidated statement of operations for the three and nine months ended September 30, 2021.
The New Revolving Credit Facility was used to refinance its existing Credit Agreement. The New Revolving Credit Facility provides for access to $250.0 million in revolving borrowings and has a maturity date of September 2026. Borrowings under the New Revolving Credit Facility accrue interest at a floating rate per annum equal to, at the Company’s option, (1) the Alternate Base Rate (defined in the New Revolving Credit Facility as the rate per annum equal to the highest of (a) the Prime Rate in effect on such day, (b) the NYFRB Rate in effect for such day plus 0.50% and (c) the Adjusted LIBO Rate plus 1.00%, subject to a floor of 1.00% plus 0.50% or (2) the Adjusted LIBO Rate (subject to a floor of 0.00%) plus 1.50%. In addition, there is an unused commitment fee, which accrues at a rate per annum equal to 0.25% of the unused portion of the revolving commitments, and is payable quarterly.
The New Revolving Credit Facility contains customary conditions to borrowing, events of default and covenants, including covenants that restrict the ability to dispose of assets, merge with other entities, incur indebtedness, grant liens, pay dividends or make other distributions to holders of its capital stock, make investments, enter into restrictive agreements or engage in transactions with affiliates. As of September 30, 2021, financial covenants in the New Revolving Credit Facility include (1) a requirement to maintain a minimum Adjusted Quick Ratio of 1.50:1.00, which is tested quarterly and (2) a requirement to maintain a minimum Liquidity of $100.0 million, which is tested quarterly.
The obligations under the New Revolving Credit Facility are guaranteed by the Company’s material domestic subsidiaries, subject to customary exceptions, and are secured by substantially all of the assets of the borrowers and guarantors thereunder, subject to customary exceptions. Amounts of borrowings under the New Revolving Credit Facility may fluctuate depending upon transaction volumes and seasonality. The Company was in compliance with all financial covenants as of September 30, 2021.
The Company had no outstanding borrowings under the New Revolving Credit Facility as of September 30, 2021. The Company had unused borrowing capacity of $250.0 million under the New Revolving Credit Facility as of September 30, 2021. In addition, the New Revolving Credit Facility includes a letter of credit sub-facility. As of September 30, 2021, the Company had $19.2 million in standby letters of credit outstanding.
2020 Credit Agreement
In November 2020, the Company modified its existing credit agreement (the “Credit Agreement”). As a result, the Credit Agreement provided the Company with access up to $150.0 million in revolving credit facility borrowings with the maturity date of November 16, 2023.
Revolving credit facility borrowings are subject to mandatory repayment within 20 business days in an amount necessary to reduce the borrowings, in the aggregate, to an amount less than the Company’s customer funds account maintained with the lender. Interest on borrowings under the revolving credit facility accrues at a floating rate per annum equal to (i) ABR defined in the Credit Agreement as the rate per annum equal to the highest of (a) the Prime Rate in effect on such day, (b) 3.25% and (c) the Federal Funds Effective Rate in effect for such day plus 0.50% plus (ii) 1.0%. In addition, an unused revolving line facility fee accrues at a floating rate equal to 0.40% of the unused portion of the line, payable monthly. As of December 31, 2020, the interest rate of the borrowings under the revolving credit facility was 4.25%.
As of December 31, 2020, the Company had outstanding borrowings under the revolving credit facility of $80.0 million and an unused borrowing capacity of $70.0 million. As of December 31, 2020, the Company had $9.4 million in standby letters of credit outstanding.
The Credit Agreement contains customary conditions to borrowing, events of default and covenants, including covenants that restrict the Company’s ability to dispose of assets, merge with or acquire other entities, incur indebtedness, pay dividends, incur encumbrances, make distributions to holders of its capital stock, make investments or engage in transactions with affiliates. Defined events of default include an acceleration clause in the event of a Material Adverse Effect (as defined in the Credit Agreement) on the business or financial condition of the Company. Financial covenants include adjusted quick ratio requirements that are measured on a monthly basis as
12



well as trailing twelve month Consolidated Adjusted EBITDA (as defined in the Credit Agreement) measured on a quarterly basis.
The Company was in compliance with all financial covenants as of December 31, 2020. The Company’s obligations under the Credit Agreement are secured by substantially all of the assets of the Company other than intellectual property.
7.Net Loss Per Common Share
Basic and diluted net loss per share attributable to common stockholders is computed using the two-class method required for participating securities. Prior to the automatic conversion of all of its redeemable convertible preferred stock outstanding into common stock upon the completion of the IPO, the Company considered all series of the Company’s redeemable convertible preferred stock and early exercised stock options to be participating securities, as the holders of such stock have the right to receive dividends on a pari passu basis in the event that a dividend is declared on the common stock. Upon completion of the IPO, all of the Company’s redeemable convertible preferred stock was converted to common stock. After the IPO, the Company’s early exercised stock options continue to be participating in nature.
Under the two-class method, basic net loss per share is computed by dividing net loss adjusted to include deemed dividends on redeemable convertible preferred stock by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income attributable to common shares by the weighted-average number of common shares determined for the basic earnings per share plus the dilutive effect of stock options, restricted stock units (“RSUs”), common stock warrants and redeemable convertible preferred stock. As the Company reported a net loss, diluted net loss per share was the same as basic net loss per share because the effects of potentially dilutive items were anti-dilutive for all periods presented.
The following table presents the calculation of basic and diluted net loss per share attributable to common stockholders for the periods indicated:
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands, except share and per share amounts)2021202020212020
Numerator:
Net loss$(12,962)$(2,429)$(22,180)$(23,559)
Deemed dividend    
Net loss attributable to common stockholders$(12,962)$(2,429)$(22,180)$(23,559)
Denominator:
Weighted-average shares used in computing net loss per share attributable to common stockholders:
Basic and diluted31,641,40021,868,865 26,055,90321,186,012 
Net loss per share attributable to common stockholders:
Basic and diluted$(0.41)$(0.11)$(0.85)$(1.11)

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The following potentially dilutive securities were excluded from the computation of diluted net loss per share calculations for the periods presented because the impact of including them would have been anti-dilutive:
As of September 30,
20212020
Redeemable convertible preferred stock 127,082,605
Common stock warrants 256,250
Stock options outstanding24,061,073 19,934,198
RSUs outstanding(1)
1,301,084  
Shares subject to repurchase554,973 1,875,822
Total25,917,130149,148,875
(1) A portion of these RSUs were subject to a performance-based vesting condition until September 22, 2021. See Note 10 for details on these awards. Includes 23,235 performance-based RSUs which legally vested but were not yet issued as common stock as of September 30, 2021.
8.Common Stock
As of September 30, 2021, the Company has authorized 725,000,000 shares of common stock with a par value of $0.0001 per share. Each holder of a share of common stock is entitled to one vote for each share held at all meetings of stockholders and is entitled to receive dividends whenever funds are legally available and when declared by the Company’s board of directors. Through September 30, 2021 and December 31, 2020, no dividends have been declared or paid by the Company.
Donation to Remitly Philanthropy Fund
In July 2021, the Company’s board of directors approved the reservation of up to 1,819,609 shares of common stock (which was approximately 1.0% of the fully diluted capitalization as of June 30, 2021) that the Company may issue to or for the benefit of a 501(c)(3) nonprofit foundation or a similar charitable organization pursuant to the Company’s Pledge 1% commitment in equal installments over ten years. On September 10, 2021, the Company executed the stock donation agreement, pursuant to which it would issue the first installment of the Pledge 1% commitment to Remitly Philanthropy Fund, a donor advised fund that will be administered on its behalf by Rockefeller Philanthropy Advisors, Inc., on the day after consummation of the IPO. On September 28, 2021, the Company donated 181,961 shares of its common stock to Remitly Philanthropy Fund, pursuant to the stock donation agreement, and in connection with the Pledge 1% campaign, which publicly acknowledges the Company’s intent to give back and increase social impact, in order to sustainably fund a portion of its corporate social responsibility goals and further its mission to expand financial inclusion for immigrants. The Company recorded a charge of $6.9 million to general and administrative expense based on the closing price of its common stock as reported on the Nasdaq Global Select Market (the “NASDAQ”) on September 28, 2021.
Warrants
In connection with a previous Credit Agreement, the Company issued stock warrants to purchase shares of common stock with terms of 10 years, exercisable at any time, and exercise prices ranging from $0.054 to $0.64 per share, subject to standard anti-dilution adjustments. The warrants were recorded as additional paid-in capital and capitalized as debt issuance costs on the consolidated balance sheets. On September 24, 2021, the holders of these stock warrants provided a notice of exercise and on September 30, 2021, warrants to purchase 256,250 shares of common stock were exercised in a cashless exercise, pursuant to the terms of the original warrant agreement, resulting in the issuance of 254,014 shares. There were no warrants outstanding as of September 30, 2021 and there were 256,250 warrants outstanding as of December 31, 2020.     
9.Redeemable Convertible Preferred Stock
Upon completion of the IPO, all shares of the Company’s redeemable convertible preferred stock outstanding, totaling 127,410,631, were automatically converted into an equivalent number of shares of common stock on a one-
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to-one basis and their carrying value of $390.7 million was reclassified into stockholders’ equity. As of September 30, 2021, there were no shares of redeemable convertible preferred stock issued and outstanding.
In connection with the IPO, the Company’s amended and restated certificate of incorporation became effective, which authorized the issuance of 50,000,000 shares of undesignated preferred stock with a par value of $0.0001 per share with right and preferences, including voting rights, designated from time to time by the Company’s board of directors.
The following table summarizes information regarding each series of redeemable convertible preferred stock outstanding as of December 31, 2020:

As of December 31, 2020
(in thousands, except share and per share amounts)
SeriesShares AuthorizedShares Issued and OutstandingIssuance Price Per ShareCarrying AmountAggregate Liquidation Preference
Series Seed10,199,786 6,446,322 $0.27 $1,595 $1,741 
Series Seed Prime8,780,816 8,643,665 0.30 2,506 2,593 
Series A11,514,347 10,359,546 0.50 5,091 5,180 
Series B14,196,476 14,196,476 0.88 12,374 12,500 
Series C25,146,777 25,146,777 1.70 41,863 42,800 
Series D30,331,802 30,331,802 3.79 109,674 115,000 
Series E22,663,934 22,663,933 5.96 129,770 135,001 
Series F9,840,797 9,294,084 $9.15 84,834 85,000 
Total132,674,735 127,082,605 $387,707 $399,815 

10.Stock-Based Compensation
In 2011, the Company adopted the Equity Incentive Plan (the “2011 Plan”), as amended, which provided for the issuance of up to 43,899,677 incentive stock options, nonqualified stock options, restricted common stock, and RSUs and stock appreciation rights to employees, directors, officers, and consultants of the Company.
In September 2021, the Company adopted the 2021 Equity Incentive Plan (the “2021 Plan”, and together with the 2011 Plan, the “Plan”) as a successor to the 2011 Plan. The 2021 Plan authorizes the award of both incentive stock options, nonqualified stock options, restricted common stock, stock appreciation rights, restricted stock units, and performance and stock bonus awards. Pursuant to the 2021 Plan, incentive stock options may be granted only to Company employees. The Company may grant all other types of awards to its employees, directors, and consultants. The 2021 Plan is administered by the Company’s board of directors, which determines the terms of the options granted, including exercise price, number of options granted, and vesting period of such options. The 2021 Plan provides for the issuance of up to 25,000,000 shares of common stock, plus any reserved shares not issued or subject to outstanding grants under the 2011 Plan, which was 552,736 on the effective date of the 2021 Plan, for a total of 25,552,736 shares reserved for issuance under the 2021 Plan. The number of shares reserved for issuance under the 2021 Plan will increase automatically on January 1 of each of 2022 through 2031 by the number of shares equal to 5% of the aggregate number of outstanding shares of all classes of common stock as of the immediately preceding December 31, or a lesser number as may be determined by the Company’s talent and compensation committee, or by the Company’s board of directors acting in place of the talent and compensation committee.
In addition, in September 2021, the Company adopted the 2021 Employee Stock Purchase Plan (the “ESPP”) to enable eligible employees to purchase shares of common stock with accumulated payroll deductions. The ESPP provides for the issuance of up to 3,500,000 shares of common stock. The number of shares reserved for issuance and sale under the ESPP will increase automatically on January 1 of each of 2022 through 2031 by the number of
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shares equal to 1% of the aggregate number of outstanding shares of all classes of common stock as of the immediately preceding December 31, or a lesser number as may be determined by the Company’s talent and compensation committee, or by the Company’s board of directors acting in place of the talent and compensation committee. Subject to stock splits, recapitalizations, or similar events, no more than 35,000,000 shares of common stock may be issued over the term of the ESPP. The ESPP is intended to qualify under Section 423 of the Code, provided that the administrator may adopt sub-plans under the ESPP designed to be outside of the scope of Section 423 for participants who are non-U.S. residents. As of September 30, 2021, no awards have been granted under the ESPP, as the grant date criteria pursuant to ASC 718, Stock-Based Compensation, has not yet been met. The grant date for awards under the ESPP was met in October 2021, upon mutual agreement of terms and conditions, and the Company expects to recognize compensation expense related to the ESPP beginning with the fourth quarter of 2021.

As of September 30, 2021 and December 31, 2020, 25,594,331 and 206,529 options remain available for issuance under the 2021 Plan and 2011 Plan, respectively. During the period ended September 30, 2021 and December 31, 2020, activity and amounts related to awards to nonemployees under the Plan were not material.
Stock Options
Stock options granted under the Plan generally vest over a period from two years to four years from the vesting commencement date on a monthly basis with or without a one-year cliff or, for non-employees, ratably on a monthly basis over a shorter period, depending upon anticipated duration of services. Other vesting terms are determined by the Company’s board of directors. All options granted under the Plan are exercisable for up to ten years from the grant date, subject to vesting. In the event of termination of service, option will generally remain exercisable, to the extent vested, for three months following the termination of service.
The following is a summary of the Company’s stock option activity during the nine months ended September 30, 2021:
Stock Options
(in thousands, except share and per share amounts)Number of Options OutstandingWeighted-Average Exercise PriceWeighted-Average Remaining Contractual Life (Years)
Aggregate Intrinsic Value (1)
Balances as of January 1, 202121,034,424 $1.88 7.82$64,604 
Granted8,219,753