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Table of Contents
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 March 31, 2022
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 2100Seattle,WA98101
(Address of Principal Executive Offices)(Zip Code)
(888) 736-4859
(Registrant’s telephone number, including area code)
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 valueRELYThe Nasdaq Global Select Market
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 May 9, 2022, the registrant had 166,254,470 shares of common stock, $0.0001 par value per share, outstanding.


Table of Contents
TABLE OF CONTENTSPage(s)
Part I
Item 1.
Item 2.
Item 3.
Item 4
Part II

Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.


i

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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;
•    our ability to attract and retain qualified employees;
•    the COVID-19 pandemic, and its impact on our employees, customers, strategic partners, vendors, results of operations, liquidity, and financial condition;
•    uncertainties regarding the impact of general economic and market conditions, including as a result of regional and global conflicts or related government sanctions;
•    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. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in “Risk Factors” in this Quarterly Report on Form 10-Q. New risks emerge from time to time. It is not possible for us to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make.
Unless the context otherwise requires, the terms “Remitly Global,” “Remitly,” “the Company,” “we,” “us,” and “our” in this Quarterly Report on Form 10-Q refer to Remitly Global, Inc. and our consolidated subsidiaries, taken as a whole.

ii

Table of Contents
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)
March 31,December 31,
20222021
Assets
Current assets
Cash and cash equivalents$444,605 $403,262 
Disbursement prefunding57,177 119,627 
Customer funds receivable, net81,702 67,215 
Prepaid expenses and other current assets23,413 17,448 
Total current assets606,897 607,552 
Restricted cash51 51 
Property and equipment, net9,671 9,249 
Operating lease right-of-use assets7,272 5,302 
Other non-current assets, net3,645 3,510 
Total assets$627,536 $625,664 
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable$6,048 $1,210 
Customer liabilities80,926 70,483 
Accrued expenses and other current liabilities60,001 66,683 
Operating lease liabilities3,590 3,240 
Total current liabilities150,565 141,616 
Operating lease liabilities, non-current4,362 2,907 
Other non-current liabilities1,106 813 
Total liabilities$156,033 $145,336 
Commitments and Contingencies (Note 14)
Stockholders' equity
Common stock, $0.0001 par value; 725,000,000 shares authorized as of March 31, 2022 and December 31, 2021 both; 166,138,369 and 164,239,555 shares issued and outstanding, as of March 31, 2022 and December 31, 2021, respectively
17 16 
Additional paid-in capital753,983 739,503 
Accumulated other comprehensive income257 253 
Accumulated deficit(282,754)(259,444)
Total stockholders' equity471,503 480,328 
Total liabilities and stockholders' equity$627,536 $625,664 

The accompanying notes are an integral part of these condensed consolidated financial statements.
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REMITLY GLOBAL, INC.
Condensed Consolidated Statements of Operations
(In thousands, except share and per share data)
(unaudited)
Three Months Ended March 31,
20222021
Revenue$136,014 $91,056 
Costs and expenses
Transaction expenses(1)
56,263 41,110 
Customer support and operations(1)
13,870 8,631 
Marketing(1)
40,621 26,116 
Technology and development(1)
23,575 11,644 
General and administrative(1)
23,342 10,882 
Depreciation and amortization1,517 1,245 
Total costs and expenses159,188 99,628 
Loss from operations(23,174)(8,572)
Interest income36 5 
Interest expense(313)(259)
Other income, net669 1,426 
Loss before provision for income taxes(22,782)(7,400)
Provision for income taxes528 370 
Net loss attributable to common stockholders$(23,310)$(7,770)
Net loss per share attributable to common stockholders:
Basic and diluted$(0.14)$(0.34)
Weighted-average shares used in computing net loss per share attributable to common stockholders:
Basic and diluted164,391,753 22,711,379 
__________________
(1) Exclusive of depreciation and amortization, shown separately, above

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


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REMITLY GLOBAL, INC.
Condensed Consolidated Statements of Comprehensive Loss
(In thousands)
(unaudited)
Three Months Ended March 31,
20222021
Net loss$(23,310)$(7,770)
Other comprehensive income (loss):
Foreign currency translation adjustments4 (32)
Comprehensive loss$(23,306)$(7,802)

The accompanying notes are an integral part of these condensed consolidated financial statements.
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REMITLY GLOBAL, INC.
Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)
(In thousands, except share data)
(unaudited)
Three Months Ended March 31, 2022
Redeemable Convertible
Preferred Stock
Common StockAdditional
Paid-in
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Accumulated
Deficit
Total
Stockholders' Equity
SharesAmountSharesAmount
Balances as of January 1, 2022 $ 164,239,555 $16 $739,503 $253 $(259,444)$480,328 
Issuance of common stock upon exercise of stock options, including early exercised options, and vesting of restricted stock units— — 1,696,601 1 2,677 — — 2,678 
Issuance of common stock through Employee Stock Purchase Plan— — 202,213 — 1,882 — — 1,882 
Stock-based compensation expense— — — — 9,921 — — 9,921 
Other comprehensive income— — — — — 4 — 4 
Net loss— — — — — — (23,310)(23,310)
Balance as of March 31, 2022 $ 166,138,369 $17 $753,983 $257 $(282,754)$471,503 
Three Months Ended March 31, 2021
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, 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 3,000 — — — — — — 
Issuance of common stock upon exercise of stock options, including early exercised options, and vesting of restricted stock units— — 706,948 — 1,104 — — 1,104 
Stock-based compensation expense— — — — 1,522 — — 1,522 
Other comprehensive loss— — — — — (32)— (32)
Net loss— — — — — — (7,770)(7,770)
Balance as of March 31, 2021127,410,631 $390,707 24,996,854 $2 $11,392 $559 $(228,458)$(216,505)
The accompanying notes are an integral part of these condensed consolidated financial statements.

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REMITLY GLOBAL, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(unaudited)
Three Months Ended March 31,
20222021
Cash flows from operating activities
Net loss$(23,310)$(7,770)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities
Depreciation and amortization1,517 1,245 
Stock-based compensation expense, net9,594 1,522 
Other83 7 
Changes in operating assets and liabilities:
Disbursement prefunding62,450 34,425 
Customer funds receivable(14,453)(11,298)
Prepaid expenses and other assets(6,221)(5,165)
Operating lease right-of-use assets807 661 
Accounts payable4,857 8,474 
Customer liabilities10,257 48,390 
Accrued expenses and other liabilities(4,362)(6,740)
Operating lease liabilities(969)(835)
Net cash provided by operating activities40,250 62,916 
Cash flows from investing activities
Purchases of property and equipment(872)(265)
Capitalized internal-use software costs(753)(933)
Net cash used in investing activities(1,625)(1,198)
Cash flows from financing activities
Proceeds from issuance of Series F convertible preferred stock, net of issuance costs 3,000 
Proceeds from exercise of stock options2,601 1,126 
Repayments of revolving credit facility borrowings, net (15,000)
Net cash provided by (used in) financing activities2,601 (10,874)
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash117 84 
Net increase in cash, cash equivalents and restricted cash41,343 50,928 
Cash, cash equivalents, and restricted cash at beginning of period403,313 188,075 
Cash, cash equivalents, and restricted cash at end of period$444,656 $239,003 
Supplemental disclosure of cash flow information
Cash paid for interest$227 $192 
Cash paid for income taxes605 46 
Supplemental disclosure of non-cash investing and financing activities
Operating lease right-of-use assets obtained in exchange for operating lease liabilities$2,830 $ 
Vesting of early exercised options205 53 
Non-cash issuance shares through Employee Stock Purchase Plan1,882  
Reconciliation of cash, cash equivalents and restricted cash
Cash and cash equivalents$444,605 $238,502 
Restricted cash51 501 
Total cash, cash equivalents and restricted cash$444,656 $239,003 
The accompanying notes are an integral part of these condensed consolidated financial statements.

5

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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.
Remitly is a leading digital financial services provider for immigrants and their families in over 160 countries, helping customers send money internationally in a quick, reliable, and more cost-effective manner, by leveraging digital channels and supporting 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 Annual Report on Form 10-K, for the year ended December 31, 2021.
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 months ended March 31, 2022 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 condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the condensed 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 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 are typically located in India, Philippines and Mexico. The Company has not experienced any significant losses

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on its deposits of cash and cash equivalents, disbursement prefunding, restricted cash or customer funds receivable in the three months ended March 31, 2022 and 2021.
For the three months ended March 31, 2022 and 2021, no individual customer represented 10% or more of the Company’s total revenue or customer funds receivable.
Advertising
Advertising expenses are charged to operations as incurred and are included as a component of marketing expenses. Advertising expenses also include additional incentive costs that would have caused the customer level revenue to be negative. Advertising expenses totaled $34.5 million and $22.5 million during the three months ended March 31, 2022 and 2021, respectively, and are used primarily to attract new customers.
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 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. There have been no significant changes to these policies during the three months ended March 31, 2022, except as noted below.
Recent Accounting Pronouncements
Recently Adopted Accounting Pronouncements (“ASU”)
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which modifies ASC 740 to simplify the accounting for income taxes. The ASU’s amendments are based on changes that were suggested by stakeholders as part of the FASB’s simplification initiative (i.e., the Board’s effort to reduce the complexity of accounting standards while maintaining or enhancing the helpfulness of information provided to financial statement users). ASU 2019-12 removes certain exceptions related to the approach for intra period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. ASU 2019-12 also amends other aspects of the guidance to help simplify and promote consistent application of GAAP. The new standard is effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022 with early adoption permitted. The Company adopted this ASU on a prospective basis in the first quarter of 2022. The adoption of this ASU did not have a significant impact on the Company’s consolidated financial statements.
In August 2018, the FASB issued ASU No. 2018-15, Intangibles - Goodwill and Other-Internal-Use Software (Subtopic 350-40),Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. Under existing U.S. GAAP, there is diversity in practice in accounting for the costs of implementing cloud computing arrangements (CCA) that are service contracts. The standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The standard also requires the presentation of the amortization of the capitalized implementation costs in the same line item in the consolidated statements of comprehensive loss as the fees associated with the hosting arrangement. The new standard is effective for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021 with early adoption permitted. This ASU was adopted on a prospective basis for the fiscal year ended December 31, 2021. The Company assessed the impact of the guidance to its consolidated financial statements for the three months ended and as of March 31, 2021 and concluded that the standard did not have a material impact on its financial statements. See Note 4. for further disclosure of the ongoing impact of ASU 2018-15 to the Company’s condensed consolidated financial statements.
Accounting Pronouncements Not Yet Adopted
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments- Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU replaces the existing incurred loss impairment methodology that recognizes credit losses when a probable loss has been incurred with new methodology pursuant to which loss estimates are based upon lifetime expected credit losses. The amendments in this ASU require a financial asset that is measured at amortized cost to be presented at the net amount expected to be collected. The consolidated statements of operations would then reflect the measurement of credit losses for newly recognized financial assets as well as changes to the expected credit losses that have taken place during the reporting period. The change in allowance recognized as a result of adoption will occur through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the ASU is adopted. The new standard is effective for fiscal years beginning after December 15, 2022, and interim periods within that fiscal year with early adoption permitted. The Company is currently assessing the impact of the guidance on its consolidated financial statements.
There are 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 consolidated financial statements or disclosures.
3.    Revenue    
The Company’s primary source of revenue is generated from its remittance business. Revenue is earned from transaction fees charged to customers who are sending remittances and the foreign exchange spreads earned 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

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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.
Customers engage the Company to perform one integrated service — collect the customer’s money and deliver funds to the intended recipient in the currency requested. Payment is generally due from the customer upfront upon initiation of a transaction, when the customer simultaneously agrees to the Company’s terms and conditions.
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, at which time a receivable is recorded, along with a corresponding customer liability. None of the Company’s contracts contain a significant financing component.
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 condensed consolidated statements of operations. The Company does not have any capitalized contract acquisition costs.
Deferred Revenue
The deferred revenue balances from contracts with customers were as follows:
Three Months Ended March 31,
(in thousands)20222021
Deferred revenue, beginning of the period$1,212 $1,105 
Deferred revenue, end of the period1,068 1,111 
Change in deferred revenue during the period(144)6 
Revenue recognized during the three month periods ended March 31, 2022 and 2021 from amounts included in deferred revenue at the beginning of the period were $0.5 million and $0.3 million, respectively.
Deferred revenue represents amounts received from customers for which the performance obligations are not yet fulfilled. Deferred revenue is primarily included within accrued expenses and other current liabilities on the condensed consolidated balance sheets as the performance obligations are expected to be fulfilled within the next year.
Sales Incentives
The Company provides sales incentives to customers in a variety of forms, which includes promotions, discounts, and other sales incentives. 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 March 31, 2022 and 2021, payments made to customers resulted in reductions to revenue of $4.9 million and $4.3 million, respectively, and charges to sales and marketing expense of $3.7 million and $2.9 million, respectively.

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4.    Property and Equipment
Property and equipment, net consisted of the following:
March 31,December 31,
(in thousands)20222021
Capitalized internal-use software$10,103 $9,022 
Computer and office equipment5,086 4,700 
Furniture and fixtures1,457 1,445 
Leasehold improvements6,646 6,655 
Projects in Process383 533 
23,675 22,355 
Less: Accumulated depreciation and amortization(14,004)(13,106)
Property and equipment, net$9,671 $9,249 
Depreciation and amortization expense related to property and equipment was $1.5 million and $1.2 million for the three months ended March 31, 2022 and March 31, 2021, respectively.
Capitalized Internal-Use Software Costs
There has been no impairment of previously capitalized costs during the three months ended March 31, 2022 and 2021.
The Company capitalized $1.1 million and $0.9 million for internal-use software costs for three month periods ended March 31, 2022 and 2021, respectively. The Company capitalized $0.3 million and $0.1 million of stock-based compensation costs to internal-use software during the three months ended March 31, 2022 and 2021, respectively. The Company recorded amortization expense of $0.7 million and $0.6 million for the three months ended March 31, 2022 and 2021, respectively.
Capitalized Cloud Computing Arrangements
The Company capitalized $0.4 million related to the implementation of cloud computing arrangements and recorded amortization expense of $0.1 million during the three months ended March 31, 2022. As of March 31, 2022, capitalized costs, net of accumulated amortization, were approximately $1.2 million, of which $0.4 million was recorded within prepaid expenses and other current assets and $0.8 million was recorded within other non-current assets, net in the Company's condensed consolidated balance sheet.
Amortization expense related to cloud computing arrangements for the three months ended March 31, 2022 was as follows:
March 31,
(in thousands)2022
Technology and development$110 
General and administrative9 
Total amortization$119 
The Company assessed the impact of the guidance to its consolidated financial statements for the three months ended and as of March 31, 2021 and concluded that the standard did not have a material impact on its financial statements.
5.    Fair Value Measurements
The following table presents information about the Company’s financial assets and liabilities that are measured at fair value and indicates the fair value hierarchy of the valuation inputs used as of March 31, 2022:
As of March 31, 2022
(in thousands)Level 1Level 2Level 3Total
Assets
Cash and cash equivalents
Term deposits$ $80,029 $ $80,029 
Total assets$ $80,029 $ $80,029 

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Term deposits as of March 31, 2022 were classified as cash equivalents on the Company’s condensed consolidated balance sheet, as such amounts were considered highly liquid and have an original maturity of three months of less at the time of purchase. The carrying value of term deposits approximated their respective fair value due to the short maturity of the amounts. For further information on the Company’s Cash and Cash Equivalents and Fair Value of Financial Instruments policies, see Note 2, “Basis of Presentation and Summary of Significant Accounting Policies”, in the notes to the Company’s consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.
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 March 31, 2022.
There were no financial assets and liabilities that are measured at fair value as of December 31, 2021.
There were no transfers between Level 1 and Level 2 during the three months ended March 31, 2022 and 2021, other than the investment of our cash and cash equivalents into a term deposit in the first quarter of 2022.
6.    Debt
Secured Revolving Credit Facility
New Revolving Credit Facility
On September 13, 2021, Remitly Global, Inc. and Remitly, Inc., a wholly owned subsidiary of Remitly Global, Inc., as co-borrowers, entered into a credit agreement (the “New Revolving Credit Facility”) 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 (including a $60.0 million letter of credit sub-facility) and terminated its then-existing 2020 Credit Agreement (as defined below). 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 during the third quarter of 2021. Such amounts were capitalized and recorded within other non-current assets, net on 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 remaining $0.1 million was expensed as a debt extinguishment cost within interest expense in the condensed consolidated statements of operations during the third quarter of 2021.

The New Revolving Credit Facility was used to refinance its existing 2020 Credit Agreement. The New Revolving Credit Facility has a maturity date of September 13, 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%. Such interest is payable (a) with respect to Alternate Base Rate loans, the last day of each March, June, September and December and (b) with respect to Adjusted LIBO Rate loans, at the end of each applicable interest period, but in no event less frequently than every three months. In addition, an unused commitment fee, which accrues at a rate per annum equal to 0.25% of the unused portion of the revolving commitments, is payable on the last day of each March, June, September and December.

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 March 31, 2022, 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 Company was in compliance with all financial covenants under the New Revolving Credit Facility as of March 31, 2022 and December 31, 2021.

The obligations under the New Revolving Credit Facility are guaranteed by the material domestic subsidiaries of Remitly Global, Inc., 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.

As of March 31, 2022 and December 31, 2021, the Company had no outstanding borrowings under the New Revolving Credit Facility. As of both March 31, 2022 and December 31, 2021, the Company had $18.9 million in issued, but undrawn, standby letters of credit. The Company had unused borrowing capacity of $231.1 million under the New Revolving Credit Facility as of both March 31, 2022 and December 31, 2021.

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2020 Credit Agreement
Since 2013, the Company had access to a variable rate credit facility. In November 2020, Remitly Global, Inc. and Remitly, Inc., a wholly owned subsidiary of Remitly Global, Inc., as borrower, further modified its then-existing credit agreement (the “2020 Credit Agreement”). Following such modification, the 2020 Credit Agreement provided Remitly, Inc. with access up to $150.0 million in revolving credit facility borrowings (including a $30.0 million letter of credit sub-facility) with a maturity date of November 16, 2023. As noted above, in September 2021, the New Revolving Credit Facility was used to refinance the 2020 Credit Agreement. As a result of the refinancing, the 2020 Credit Agreement was terminated and all amounts outstanding, including any accrued interest, were repaid in full.
Borrowings under the 2020 Credit Agreement were 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 2020 Credit Agreement accrued at a floating rate per annum equal to (i) ABR (defined in the 2020 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 accrued at a floating rate per annum equal to 0.40% of the unused portion of the line, payable monthly.

The 2020 Credit Agreement contained 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 included the occurrence of a Material Adverse Effect (as defined in the 2020 Credit Agreement) on the business or financial condition of the Company. Financial covenants included (1) a requirement to maintain a minimum Adjusted Quick Ratio of 1.50:1.00, which was tested monthly and (2) a requirement to maintain minimum trailing twelve month Consolidated Adjusted EBITDA (as defined in the 2020 Credit Agreement), which was tested quarterly.

The obligations under the 2020 Credit Agreement were guaranteed by the material subsidiaries of Remitly Global, Inc., subject to customary exceptions, and were secured by substantially all of the assets of the borrowers and guarantors thereunder, other than intellectual property.

7.    Net Loss Per Common Share
The following table presents the calculation of basic and diluted net loss per share attributable to common stockholders for the periods indicated. 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.
Three Months Ended March 31,
(in thousands, except share and per share amounts)20222021
Numerator:
Net loss attributable to common stockholders$(23,310)$(7,770)
Denominator:
Weighted-average shares used in computing net loss per share attributable to common stockholders:
Basic and diluted164,391,75322,711,379 
Net loss per share attributable to common stockholders:
Basic and diluted$(0.14)$(0.34)
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:
March 31,
20222021
Redeemable convertible preferred stock 127,410,631 
Common stock warrants 256,250 
Stock options outstanding21,596,404 20,692,111
RSUs outstanding(1)
5,476,101 617,696 
ESPP1,379,019 
Shares subject to repurchase363,3841,901,675
Total28,814,908150,878,363
(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.

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8.    Common Stock
As of March 31, 2022, 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 March 31, 2022 and March 31, 2021, no dividends have been declared or paid by the Company.
9.    Redeemable Convertible Preferred Stock
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.
As of December 31, 2021 and March 31, 2022, there were no
shares of redeemable convertible preferred stock issued and outstanding.
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 Remitly Global, Inc. 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 issuance of incentive stock options, nonqualified stock options, restricted common stock, stock appreciation rights, RSUs, 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 grants, including exercise price, number of equity awards granted, and vesting schedule. The 2021 Plan provided for the initial 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 initially reserved for issuance under the 2021 Plan. Beginning in January 2022, the number of shares reserved for issuance under the 2021 Plan will increase automatically on January 1 of each year 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 January 2022, there was an increase in the shares reserved for issuance under the 2021 Plan, in accordance with the automatic increase provision.
In addition, in September 2021, the Company adopted the Remitly Global, Inc. 2021 ESPP to enable eligible employees to purchase shares of common stock with accumulated payroll deductions at a discount. The ESPP provided for the initial issuance of up to 3,500,000 shares of common stock. Beginning in January 2022, the number of shares reserved for issuance and sale under the ESPP will increase automatically on January 1 of each year through 2031 by the number of 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. In January 2022, there was an increase in the shares reserved for issuance under the 2021 ESPP Plan, in accordance with the automatic increase provision.

As of March 31, 2022, 29,925,304 equity incentive awards remain available for issuance under the 2021 Plan and 4,940,182 shares of common stock remain available for issuance under the ESPP.
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, options will generally remain exercisable, to the extent vested, for three months following the termination of service.

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The following is a summary of the Company’s stock option activity during the three months ended March 31, 2022:
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, 2022
23,386,942 $3.70 7.66$395,676 
Granted  
Exercised(1,491,515)1.72 12,606 
Forfeited(299,023)3.97 
Balances as of March 31, 2022
21,596,404 3.84 7.52133,570 
Vested and exercisable as of March 31, 2022
10,179,554 2.02 6.4379,746 
Vested and expected to vest as of March 31, 2022
21,914,788 $3.82 7.52$135,807 
_________________
(1)The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock options and the estimated fair value of the Company’s common stock.
No stock options were granted during the three months ended March 31, 2022.
The fair value of each employee stock option granted during the three months ended March 31, 2021 was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:
Three Months Ended March 31,
2021
Risk-free interest rates
0.32% to 0.82%
Expected term
3.5 to 6.1 years
Volatility
38.0% to 41.4%
Dividend rate%
Fair value of underlying common stock
Prior to the completion of the IPO, the Company’s board of directors considered numerous objective and subjective factors to determine the fair value of the Company’s common stock at each meeting in which awards were approved. The factors considered included, but were not limited to: (i) the results of contemporaneous independent third-party valuations of the Company’s common stock; (ii) the prices, rights, preferences, and privileges of the Company’s redeemable convertible preferred stock relative to those of its common stock; (iii) the lack of marketability of the Company’s common stock; (iv) actual operating and financial results; (v) current business conditions and projections; (vi) the likelihood of achieving a liquidity event, such as an initial public offering or sale of the Company, given prevailing market conditions; and (vii) precedent transactions involving the Company’s shares. After the completion of the IPO, the fair value of the Company’s common stock is determined by the closing price, on the date of grant, of its common stock, which is traded on the NASDAQ.
The weighted-average grant date fair value of options granted during the three months ended March 31, 2021 was $2.69. The aggregate grant-date fair value of options vested for the three months ended March 31, 2022 and 2021 was $2.9 million and $1.4 million, respectively. The intrinsic value of options exercised for the three months ended March 31, 2022 and 2021 was $12.6 million and $2.6 million, respectively.
Restricted Stock Units
Prior to the IPO, the Company granted performance-based RSUs (“PRSUs”) to employees and directors that contained both service-based and performance-based vesting conditions. The service-based vesting condition for these awards is typically satisfied over four years with a cliff vesting period of one year and continued vesting quarterly thereafter. The performance-based vesting condition is satisfied on the earlier of (i) the effective date of a registration statement of the Company filed under the Securities Act for the sale of the Company’s common stock or (ii) immediately prior to the closing of a change in control of the Company. Both events were not deemed probable until consummated, and therefore, stock-based compensation expense related to these PRSUs remained unrecognized prior to the effectiveness of the IPO. Upon the effectiveness of the IPO the performance-based vesting condition was satisfied, and therefore, the Company recognized cumulative stock-based compensation expense of

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$1.1 million, using the accelerated attribution method for the portion of the awards for which the service-based vesting condition has been fully or partially satisfied. The remaining grant-date fair value of these PRSUs will be recognized over the remaining requisite service period.
Beginning in August 2021, the Company began granting RSUs to employees and directors with service-based vesting conditions. The service-based vesting condition for these awards is typically satisfied over four years with a cliff vesting period of one year and continued vesting quarterly thereafter. The grant-date fair value of these RSUs will be recognized over the requisite service period.
Restricted stock unit activity, including PRSUs, during the three months ended March 31, 2022 is as follows:
Number of SharesWeighted-Average Grant-Date Fair Value Per Share
Unvested at January 1, 2022
3,372,585 $24.83 
Granted2,480,410 13.06 
Vested(81,060)6.33 
Cancelled/forfeited(295,834)14.36 
Unvested at March 31, 2022
5,476,101 20.34 
In addition, during the three months ended March 31, 2022, as a result of the expiration of the lock-up agreement related to its IPO, the Company issued 124,026 shares of common stock subject to RSUs that were vested as of December 31, 2021, but not yet settled.
The weighted-average grant date fair value of RSUs, including PRSUs, granted during the three months ended March 31, 2022 and 2021 was $13.06 and $4.95, respectively. The aggregate grant-date fair value of RSUs, including PRSUs, vested for the three months ended March 31, 2022 was $0.5 million. No RSUs or PRSUs vested in the three months ended March 31 2021.
Employee Stock Purchase Plan
The ESPP provides for consecutive offering periods during which eligible employees can participate in the ESPP and be granted the right to purchase shares. Except for the first offering period, which commenced on September 22, 2021, offering periods shall commence on each subsequent March 1 and September 1, with each offering period consisting of four six-month purchase periods, for a total of a 24-month offering period. No offering periods may last longer than 27 months. The offering period that commenced on September 22, 2021, ended on February 28, 2022, due to a decline in the Company’s stock price at the end of the purchase period, triggering a new offering period, as required by the ESPP plan documents. A new 24-month offering period commenced on March 1, 2022. This event is accounted for as a modification under US GAAP, resulting in incremental stock-based compensation expense of $3.6 million, which will be recognized over the requisite service period, which is deemed to be the new offering period.
Eligible employees can contribute up to 15% of their eligible compensation, subject to limitation as provided for in the ESPP, and purchase the common stock at a purchase price per share equal to 85% of the lesser of the fair market value of the common stock on (i) the offering date, which is defined as the first business day of the offering period, or (ii) the purchase date, which is the final business day of the purchase period.
The fair value of ESPP offerings was estimated at the date of each offering using the Black-Scholes option-pricing model with the following assumptions during the quarter ended March 31, 2022:
Three Months Ended March 31,
2022
Risk-free interest rates
0.60% to 1.31%
Expected term
0.5 to 2.0 years
Volatility
61.0% to 73.0%
Dividend rate %

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Stock-Based Compensation Expense
Stock-based compensation expense for stock options, RSUs, PRSUs, and the ESPP, included in the condensed consolidated statements of operations, net of amounts capitalized to internal-use software, as described in Note 4, was as follows:
Three Months Ended March 31,
(in thousands)20222021
Customer support and operations$93 $8 
Marketing1,032 285 
Technology and development4,072 590 
General and administrative4,397 639 
Total$9,594 $1,522 
As of March 31, 2022, the total unamortized compensation cost related to all non-vested equity awards, including options, RSUs, and PRSUs was $141.3 million, which will be amortized over a weighted-average remaining requisite service period of approximately 3.2 years. As of March 31, 2022, the total unrecognized compensation expense related to the ESPP was $6.5 million, which is expected to be amortized over the next 1.9 years.
The Company did not record a material income tax benefit related to stock-based compensation expense and stock option exercises, during the three months ended March 31, 2022 and 2021, since the Company currently maintains a full valuation allowance against its net deferred tax assets in the jurisdictions where material stock-compensation expense charges are incurred, and stock option exercises occurred.
11.    Related Party Arrangements
The Company previously had promissory note agreements with two executive employees in conjunction with their early exercise of stock options to purchase 1,800,000 shares of the Company’s common stock. The principal amount of the notes was $3.1 million, and interest accrued at 2.83% on the outstanding principal amount annually. The notes were secured by the shares that were exercised. Based on the non-recourse nature of these agreements, the agreements were accounted for as grants of options to purchase common stock. The fair value of the stock options, determined using the Black-Scholes option pricing model was being recognized over the requisite service period. The associated shares are legally outstanding and included in shares of common stock outstanding in the condensed consolidated financial statements, but were historically excluded from the Company’s net loss per common share calculations, as these shares of common stock were considered unvested until the underlying promissory notes were repaid.
On August 23, 2021, the promissory notes were paid in full, including all accrued interest. After repayment of the loan, these shares are now considered outstanding for purposes of the Company’s net loss per common share calculations to the extent the shares are vested.
12.    Income Taxes
The Company computes its tax provision for interim periods by applying the estimated annual effective tax rate to year-to-date income from recurring operations and adjusting for discrete items arising in that quarter.
The Company’s effective tax rates on pre-tax income were (2.3)% and (5.0)% for the three months ended March 31, 2022 and 2021, respectively. The difference between the effective tax rate and the U.S. federal statutory rate of 21% in both periods was primarily the result of foreign income taxed at different rates and changes in the U.S. valuation allowance.
The Company maintains a full valuation allowance against the U.S. net deferred tax assets, as it believes that these deferred tax assets do not meet the more likely than not threshold.
The Company files income tax returns in the U.S. federal jurisdiction, various state jurisdictions, and internationally. As of March 31, 2022, tax years 2011 through 2021 remain open for examination by taxing authorities.
The Company has applied ASC 740, Income Taxes, and has determined that it has no uncertain tax positions both during the three months ended March 31, 2022 and 2021. The Company recognizes interest and, if applicable, penalties for any uncertain tax positions. Interest and penalties are recorded as a component of income tax expense.
13.    401(k) Defined Contribution Plan
The Company has a defined contribution savings plan under Section 401(k) of the Internal Revenue Code. This plan covers substantially all domestic employees who meet minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis. The Company makes discretionary matching contributions that are funded in the following year. The Company matches 50% of the first 3% of compensation that a participant contributes to the 401(k) plan, up to a maximum of $1,000 per plan year. The Company contributed $0.3 million and $0.2 million to the 401(k) plan during each of the three months ended March 31, 2022 and 2021, respectively, which represents the current period contribution for the prior plan year. The Company may also make discretionary profit-sharing contributions. No profit-sharing contributions were made during the three months ended March 31, 2022 and 2021.

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14.    Commitments and Contingencies
Guarantees and Indemnification
In the ordinary course of business to facilitate sales of its services, the Company has entered into agreements with, among others, suppliers, and partners that include guarantees or indemnity provisions. The Company also enters into indemnification agreements with its officers and directors, and the Company’s certificate of incorporation and bylaws include similar indemnification obligations to its officers and directors. To date, there have been no claims under any indemnification provisions, therefore no such amounts have been accrued as of March 31, 2022 and December 31, 2021.
Litigation and Loss Contingencies
Litigation
From time to time, the Company may be a party to litigation and subject to claims incident to the ordinary course of business, including intellectual property claims, labor and employment claims, threatened claims, breach of contract claims, and other matters. The Company accrues estimates for resolution of legal and other contingencies when losses are probable and estimable. Although the results of litigation and claims are inherently unpredictable, the Company believes that there was not at least a reasonable possibility that it had incurred a material loss with respect to such loss contingencies, as of March 31, 2022 and December 31, 2021.
Indirect taxes
The Company is subject to indirect taxation in various states and foreign jurisdictions in which it conducts business. The Company continually evaluates those jurisdictions in which indirect tax obligations exist to determine whether a loss is probable, as defined under U.S. GAAP, and the amount can be estimated. Determination of whether a loss is probable, and an estimate can be made, is a complex undertaking and takes into account the judgment of management, third-party research, and the potential outcome of negotiation and interpretations by regulators and courts, among other information. Such assessments include consideration of management’s evaluation of domestic and international tax laws and regulations, external legal advice, and the extent to which they may apply to our business and industry. Our assessment of probability includes consideration of recent inquiries, potential or actual self-disclosure, and applicability of tax rules driven by the growth in our business. As a result of this assessment, management accrued an estimated liability of approximately $3.8 million as of December 31, 2021, reflecting the amount that the Company believes is probable and estimable. There was no change to the estimated liability as of March 31, 2022. The estimated liability is recorded within accrued expenses and other current liabilities on the Company's condensed consolidated balance sheets. Although the Company believes its indirect tax estimates and associated liabilities are reasonable, the final determination of indirect tax audits or settlements could be materially different than the amounts recorded, and such differences could be material.
Reserve for Transaction Losses
The Company is exposed to transaction losses including chargebacks, unauthorized credit card use, fraud associated with customer transactions and other non-fraud related losses. The Company establishes reserves for such losses based on historical trends and any specific risks identified in processing customer transactions. This reserve is included in accrued expenses and other current liabilities on the condensed consolidated balance sheets. The provision for transaction losses is included as a component of transaction expenses on the condensed consolidated statements of operations and comprehensive loss.
The table below summarizes the Company’s reserve for transaction losses for the three months ended March 31, 2022 and 2021:
Three Months Ended March 31,
(in thousands)20222021
Beginning balance$3,134 $3,250 
Provisions for transaction losses10,590 7,576 
Losses incurred, net of recoveries(9,905)(8,047)
Ending balance$3,819 $2,779 

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15.    Accrued Expenses & Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following:
March 31,December 31,
(in thousands)20222021
Trade settlement liability$12,871 $18,924 
ESPP employee contributions389 1,551 
Accrued transaction expense11,602 12,639 
Accrued marketing expense10,743 10,788 
Reserve for transaction losses3,819 3,134 
Accrued salaries and benefits3,270 2,923 
Other accrued expenses17,307 16,724 
Total$60,001 $66,683 
16.    Segment and Geographical Information    
The Company determines operating segments based on how its chief operating decision maker (“CODM”) manages the business, makes operating decisions around the allocation of resources, and evaluates operating performance. The Company’s CODM is its Chief Executive Officer, who reviews the Company’s operating results on a consolidated basis. The Company operates as one segment. Based on the information provided to and reviewed by the Company’s CODM, the Company believes that the nature, amount, timing, and uncertainty of its revenue and how it is affected by economic factors are most appropriately depicted through the Company’s primary geographical locations. Revenues recorded by the Company are substantially all from the Company’s single performance obligation which are earned from similar services for which the nature of associated fees and the related revenue recognition models are substantially the same.
The following table presents the Company’s revenue disaggregated by primary geographical location:
Three Months Ended March 31,
(in thousands)20222021
United States$99,357 $67,619 
Canada17,279 11,081 
Rest of world19,378 12,356 
Total revenue$136,014 $91,056 
Revenue is attributed to the country in which the sending customer is located.
17.    Subsequent Events
On May 4, 2022, the Company amended and renewed the lease for its corporate headquarters in Seattle, Washington. This renewal will commence on January 1, 2023 and expire on June 30, 2025. Total incremental estimated cash payments that will be made over the course of this lease agreement approximate $6 million.


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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and the related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and the related notes and the discussion under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in the Annual Report on Form 10-K for the year ended December 31, 2021. You should read the sections titled “Risk Factors” in this Quarterly Report on Form 10-Q as well as in the Annual Report on Form 10-K and “Special Note Regarding Forward-Looking Statements” for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Overview
Remitly is a leading digital financial services provider for immigrants and their families in over 160 countries around the world.
Our differentiated approach to addressing the complexity of cross-border remittances and financial services is comprised of four core elements:
Providing a simple and reliable way of sending money with our mobile-centric suite of products. Today, over 90% of our customers engage with Remitly on their mobile phones, shifting what traditionally required an in-person interaction, including waiting in line to speak with an agent to the palm of their hands. As of March 31, 2022, our mobile app had a 4.9 iOS App Store rating with more than 685,000 reviewers and a 4.8 Android Google Play rating with more than 360,000 reviewers. We have achieved this level of engagement and these high ratings by designing mobile-centric products that make the customer experience simple and convenient and give our customers complete peace of mind.
Conveniently putting money safely in the hands of our customers’ families, wherever they are, by relying on our global network. As of March 31, 2022, our global network of funding and disbursement partnerships enables us to complete money transfers in over 2,300 corridors without the need to deploy local operations in each country. We are able to do this while complying with global and local licensing and regulatory requirements. A corridor represents the pairing of a send country, from which a customer can send a remittance, with a specific receive country to which such remittance can be sent. We have partner relationships with global banks and leading global payment providers to give our customers an array of payment (or pay-in) options, including with a bank account, card-based payments, and alternative payment methods. Our disbursement network provides our customers with various digital and traditional delivery methods and enables us to send (or payout) funds within minutes to more than 3.7 billion bank accounts, over 690 million mobile wallets, and over 395,000 cash pickup locations. These partner relationships help drive a better customer experience, including faster transfers, higher acceptance rates, and enhanced reliability.
Creating trusted and personalized experiences with our localization expertise at scale. We believe our expertise in localizing our marketing, products, and customer support at scale is a key differentiator and enables us to provide customers with a personalized experience that drives peace of mind. Localization can mean many things. To us, it means speaking with our customers in their preferred language, reaching them through the media channels they frequent, and being culturally relevant through their journey. While our business is global, we recognize the importance of a culturally relevant experience being delivered to our customers and their families in the many countries we serve. We strive to deliver marketing, product, and support experiences that connect with them in meaningful ways. For example, we tailor our customer experience with 14 native languages, and we provide peace of mind with our global customer support team. Additionally, for disbursement of funds, we partner with local brands that are among the most trusted and recognized by our customers and their families.
Using our data-driven approach to better serve our customers and provide more value. We have a data-driven approach to how we grow our business, prioritize our investments, and manage our operations. Because our customers initiate transfers digitally, we capture and leverage a body of transaction-related data that provides insight into customer behavior and customer experience. This data and the analytics we perform inform our marketing investments and product development prioritization. In addition, we leverage our data platform and proprietary models to improve our compliance systems and manage pricing, treasury, fraud risk, and customer support.
The combination of our differentiated approach and our relentless focus on meeting the financial services needs of our immigrant communities has resulted in significant customer growth, high customer engagement, rapid send volume and transaction growth, and attractive customer economics built on top of an expansive global network.
Our Revenue Model
For our remittance business, which represents the vast majority of our revenue today, we generate revenue from transaction fees charged to customers who are sending remittances and foreign exchange spreads applied to the customer’s principal.
Transaction fees vary based on the corridor, the currency in which funds are delivered to the recipient, the funding method a customer chooses (e.g., ACH, credit card, debit card, etc.), and the amount of the customer’s principal.
Foreign exchange spreads represent the difference between the foreign exchange rate offered to customers and the foreign exchange rate on the Company's currency purchases. They are an output of proprietary and dynamic models that are designed to provide fair and competitive rates to our customers, while generating a spread for the Company based on our ability to buy foreign currency at generally advantageous rates.

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Revenue from transaction fees and foreign exchange spreads is reduced by customer promotions. For example, we may, from time to time, waive transaction fees for first-time customers, or provide customers with better foreign exchange rates on their first transaction. These incentives are accounted for as reductions to revenue, up to the point where net historical cumulative revenue, at the customer level, is reduced to zero. We consider these incentives as an investment in our long-term relationship with customers.
Initial Public Offering and Private Placement
In September 2021, the Company completed its 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 our 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.
Key Business Metrics
We regularly review the following key business metrics to evaluate our performance, identify trends affecting our business, prepare financial projections, and make strategic decisions. We believe that these key business metrics provide meaningful supplemental information for management and investors in assessing our historical and future operating performance. The calculation of these key business metrics discussed below may differ from other similarly titled metrics used by other companies, analysts, or investors. The key business metrics that we use to measure the performance of our business are defined as follows:
“Active customers” is defined as the number of distinct customers that have successfully completed at least one remittance transaction using Remitly during a given calendar quarter. We identify customers through unique account numbers.
“Send volume” is defined as the sum of all customer’s principal, measured in U.S. dollars, related to transactions completed during a given period. The customer’s principal is net of cancellations, does not include transaction fees from customers, and does not include any credits, offers, or bonuses applied to the transaction by us.
As active customers are measured on a quarterly basis, the data for the full-year periods for active customers is not meaningful, and therefore both metrics are only presented on a quarterly basis herein.
Active Customers
Three Months Ended March 31,
20222021
(in thousands)
Active customers3,042 2,136 
We believe that the number of our active customers is an important indicator of customer engagement and the overall growth of our business.
Active customers increased to approximately 3.0 million, or 42% growth, for the three months ended March 31, 2022, compared to the three months ended March 31, 2021. This increase was primarily due to an increase in new customers, driven by investments in our mobile platform and marketing spend, our focus on customer experience, and continued expansion of our global disbursement network.
Send Volume
Three Months Ended March 31,
20222021
(in millions)
Send volume$6,094 $4,273 
We measure send volume to assess the scale of remittances sent using our platform. Our customers mostly send from the United States, Canada, United Kingdom, other countries in Europe, and Australia. The recipients are located in over 150 countries across the globe; the largest receive countries include India, Mexico, and the Philippines.
Send volume increased approximately 43% to $6.1 billion for the three months ended March 31, 2022, compared to $4.3 billion for the three months ended March 31, 2021. This increase was primarily due to the growth of active customers, which increased 42% over the same period.

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Key Factors Affecting Our Performance
Ability to Retain Our Customers and Maintain High Customer Engagement
Our send volume is primarily driven by existing customers who regularly use our remittance product to send money home. We believe our mobile-first products and superior customer experience encourage high retention and repeat usage, which are important drivers of our performance.
We measure active customers to monitor the growth and performance of our customer base. The majority of our active customers send money for recurring, non-discretionary needs multiple times per month, providing a reoccurring revenue stream with high visibility and predictability.
Ability to Attract New Customers
Our long-term growth will depend, in part, on our continued ability to attract new customers to our platform. We intend to expand our customer base by launching new send and receive corridors, by continuing to innovate, and by providing the most trusted financial services for immigrants. We plan to continue to acquire new customers through digital marketing channels and word-of-mouth referrals from existing customers. We will also explore new customer acquisition channels. Given the nature of our business, new customer acquisition may negatively impact net loss and Adjusted EBITDA in the initial period, while positively impacting net loss and Adjusted EBITDA in subsequent periods.
Ability to Maintain Efficient Customer Acquisition
Our ability to efficiently acquire customers is critical to our growth and attractive customer economics. Online marketing competition, our ability to effectively target the right demographic, and competitor pricing will impact our customer acquisition strategy.
We have a history of successfully monitoring customer acquisitions costs and will continue to be strategic and disciplined toward customer acquisition. For example, for performance marketing, we set rigorous customer acquisition targets that we continuously monitor to ensure a high return on investment over the long term, and we can increase or decrease this investment as desired. Customer acquisition costs refer to direct marketing expenses deployed to acquire new customers and primarily includes digital advertising costs. Given competition in the digital advertising marketplace, we have observed recent increases in customer acquisition costs. We expect customer acquisition costs to increase in 2022.
Corridor Mix
Our business is global and certain attributes of our business vary by corridor such as send amount, customer funding sources, and transaction frequency. For example, a period of high growth in receive corridors with large average send amounts, such as India, could disproportionately impact send volume while impacting active customers to a lesser extent. While shifts in our corridor mix could impact the trends in our global business, including send volume and customer economics, our strategy is to manage and optimize each of these corridors over the long term based on their specific dynamics.
Seasonality
Our operating results and metrics are subject to seasonality, which may result in fluctuations in our quarterly revenues and operating results. For example, active customers and send volume generally peak as customers send gifts for regional and global holidays including, most notably, in the fourth quarter around the Christmas holiday. This seasonality typically drives higher fourth quarter customer acquisition, which generally results in higher fourth quarter marketing costs and transaction losses. It also results in higher transactions and transaction expenses, along with higher working capital needs. Other periods of seasonality include Ramadan/Eid, Lunar New Year/Tết and Mother's Day, although the impact is generally lower than in the fourth quarter. The number of business days in a quarter and the day of week that the last day of the quarter falls on may also introduce variability in our results, working capital balances, or cash flows.
Ability to Invest in Our Technology Platform
We will continue to invest significant resources in our technology platform. These investments will allow us to introduce new and innovative products, add features to current products, enhance the customer and recipient experience, grow our payment and disbursement network, invest in our risk and security infrastructure, and continue to secure data in accordance with evolving best practices and legal requirements. While we expect our expenses related to technology and development to increase, which may impact short-term profitability, we believe these investments will ultimately contribute to our long term growth.
Ability to Manage Risk and Fraud
We manage fraud (e.g., through identity theft) and other illegitimate activity (e.g., money laundering) by utilizing our proprietary risk models which include machine learning processes, early warning systems, bespoke rules, and manual investigation processes. Our models and processes enable us to identify and address complex and evolving risks in these unwanted activities, while maintaining a differentiated customer experience. In addition, we integrate historical fraud loss data and other transaction data into our risk models which helps us identify emerging patterns and quantify fraud and regulatory and compliance risks across all aspects of our customer interactions. These models and processes allow us to achieve and maintain fraud loss rates within desired guardrails, as well as tailor our risk models to target other illegitimate activity.


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Macroeconomic and Geopolitical Changes
Global macroeconomic and geopolitical factors, including immigration, trade and regulatory policies, the conflict in Ukraine, unemployment, inflation, foreign currency fluctuations, and the rate of digital remittance adoption impact demand for our services and the options that we can offer. These factors evolve over time and periods of significant currency appreciation or depreciation, whether in send or receive currencies, changes to global migration patterns, and changes to digital adoption trends may shift the timing and volume of transactions, or the number of customers using our service.
Impact of the COVID-19 Pandemic
As a result of the COVID-19 pandemic, our business, and the digital financial services industry in general, saw accelerated growth, as digital remittances increasingly became the choice of senders and receivers; however, we also experienced disruptions. In response to the COVID-19 pandemic, government authorities and businesses globally implemented varying levels of travel restrictions, border closures, quarantines, shelter-in-place and lockdown orders, mask and social distancing requirements, and business limitations and shutdowns, which contributed to a variety of changes to consumer behavior as well as to government and business practices. As a result, we observed that consumer behavior evolved rapidly to favor forms of commerce that do not require in-person interactions, with acceleration in the shift to digital and contactless forms of payment. During 2020 and 2021, this led to rapid customer, transaction, and revenue growth for our business. We have experienced a stabilization in growth in 2022, primarily as a result of recent macroeconomic conditions, and specifically considering rising inflation and labor shortages. It remains unclear to what extent these conditions will impact our customers’ behavior in the future.
In some cases, pandemic related measures also negatively impacted Remitly, including disruptions to workforce stability during 2020 and 2021. However, certain operating expenses during those years grew more slowly than usual due to reduced business travel and the virtualization or cancellation of events. These operating expenses will, and have begun to, return to normal growth levels as pandemic restrictions are lifted. We expect that our operating costs will increase during the remainder of 2022 as business travel and other events resume.
The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations, cash flows, and financial condition will depend on future developments that are highly uncertain and cannot be accurately predicted, particularly if new variants of the virus emerge. While we expect the trend towards increased use of digital payments to continue, its velocity may also abate as conditions change. In addition, the impact from new variants and other factors arising from the COVID-19 pandemic could adversely impact the use of our services by our customers, the ability of our employees to perform work, and our business generally, which could have a material adverse impact on our operating and financial results.
We will continue to actively monitor the situation and may take further actions that may alter our business practices as may be required by federal, state, or local authorities or that we determine are in the best interests of our employees, customers, or business partners.
Throughout the COVID-19 pandemic, the Company has remained focused on serving its customers and communities, as well as the well-being of its employees.
Components of Results of Operations
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.
Costs and expenses
Transaction Expenses
Transaction expenses include fees paid to disbursement partners for paying funds to the recipient, provisions for transaction losses, fees paid to payment processors for funding transactions, bad debt expense, chargebacks, fraud prevention, and compliance tools.
Reserve for Transaction Losses
The Company is exposed to transaction losses including chargebacks, unauthorized credit card use, fraud associated with customer transactions and other non-fraud related losses. The Company establishes reserves for such losses based on historical trends and any specific risks identified in processing customer transactions. This reserve is included in accrued expenses and other current liabilities on the condensed consolidated balance sheets. The provision for transaction losses is included as a component of transaction expenses in the condensed consolidated statements of operations.
Customer Support and Operations
Customer support and operations expenses consist primarily of personnel-related expenses associated with the Company’s customer support and operations organization, including salaries, benefits, and stock-based compensation expense, as well as third-party costs for customer support

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services, and travel and related office expenses. This includes our customer service teams which directly support our customers, consisting of online support and call centers, and other costs incurred to support our customers, including related telephony costs to support these teams, customer protection and risk teams, investments in tools to effectively service our customers, and increased customer self-service capabilities. Customer support and operations expenses also include professional services fees.
Marketing
Marketing expenses consist primarily of advertising costs used to attract new customers, including branding-related expenses. Marketing expenses also include personnel-related expenses associated with the Company’s marketing organization staff, including salaries, benefits and stock-based compensation expense, promotions, software subscription services dedicated for use by the Company’s marketing functions, and outside services contracted for marketing purposes.
Technology and Development
Technology and development expenses consist primarily of personnel-related expenses for employees involved in the research, design, development and maintenance of both new and existing products and services, including salaries, benefits and stock-based compensation expense. Technology and development expenses also include professional services fees and costs for software subscription services, predominantly for use by the Company’s technology and development teams. Technology and development expenses also include product and engineering teams used to support the development of both internal infrastructure and internal-use software, to the extent such costs don't qualify for capitalization.
We believe delivering new functionality is critical to attract new customers and expand our relationship with existing customers. We expect to continue to make investments to expand our solutions in order to enhance our customers’ experience and satisfaction, and to attract new customers. We expect our technology and development expenses to increase in absolute dollars, but they may fluctuate as a percentage of total revenue from period to period as we expand our technology and development team to develop new solutions and enhancements to existing solutions. In fiscal year 2022, as we invest in our platform to expand our offerings, improve the user experience, and drive geographic expansion, we expect technology and development expense to increase as a percentage of revenue.
General and Administrative
General and administrative expenses consist primarily of personnel-related expenses for the Company’s finance, legal, human resources, facilities, and administrative personnel, including salaries, benefits and stock-based compensation expense. General and administrative expenses also include professional services fees, software subscriptions, facilities, indirect taxes, and other corporate expenses.
As a result of the closing of our IPO, we have incurred and expect to continue to incur additional expenses as a result of operating as a public company, including costs to comply with the rules and regulations applicable to companies listed on a national securities exchange, costs related to compliance and reporting obligations, and increased expenses for insurance, investor relations, and professional services. We have also invested in additional headcount to support both public company costs and to support our growth initiatives.
Depreciation and Amortization
Depreciation and amortization expense includes depreciation on property and equipment and leasehold improvements, as well as the amortization of internal-use software costs and amortization of intangible assets.
Interest Income
Interest income consists primarily of interest income earned on our cash and cash equivalents.
Interest Expense
Interest expense consists primarily of the interest expense on our borrowings.
Other Income (Expense), net
Other income (expense), net primarily consists of foreign exchange gains and losses.
Provision for Income Taxes
Provision for income taxes consists primarily of income taxes in certain foreign jurisdictions in which we conduct business and state income taxes in the United States. We maintain a full valuation allowance for U.S. deferred tax assets, which includes net operating loss carryforwards. We expect to maintain this full valuation allowance for the foreseeable future as it is more likely than not that the assets will not be realized based on our history of losses.

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Results of Operations
Comparison of the three months ended March 31, 2022 and 2021
Revenue
Three Months Ended March 31,Change
(dollars in thousands)20222021AmountPercent
Revenue $136,014 $91,056 $44,958 49 %
Revenue increased $45.0 million, or 49%, to $136.0 million for the three months ended March 31, 2022. This increase was primarily driven by growth in send volume, which increased $1.8 billion, or 43%, to $6.1 billion for the three months ended March 31, 2022, compared to $4.3 billion for the three months ended March 31, 2021, reflecting an increase in active customers who sent the same average principal compared to the first quarter in 2021.
Transaction Expenses
Three Months Ended March 31,Change
(dollars in thousands)20222021AmountPercent
Transaction expenses$56,263 $41,110 $15,153 37 %
Percentage of total revenue41 %45 %
Transaction expenses increased $15.2 million, or 37%, to $56.3 million for the three months ended March 31, 2022, compared to $41.1 million, for the three months ended March 31, 2021. The increase was primarily due to an $11.2 million increase in direct costs associated with processing a higher volume of our customers’ remittance transactions and the disbursement of our customers’ funds to their recipients, a $3.0 million increase in fraud and other losses largely driven by growth in new customers and send volume, and a $1.0 million increase in other transaction expenses, primarily related to software and tools that support our compliance and risk operations.
As a percentage of revenue, transaction expenses declined to 41% for the three months ended March 31, 2022 as compared to 45% for the three months ended March 31, 2021 primarily due to better economics with partners driven by increasing scale and additional direct partner integrations, which have resulted in lower transaction expenses as a percentage of revenue year over year.
Customer Support and Operations Expenses
Three Months Ended March 31,Change
(dollars in thousands)20222021AmountPercent
Customer support and operations$13,870 $8,631 $5,239 61 %
Percentage of total revenue10 %%
Customer support and operations expenses increased $5.2 million, or 61%, for the three months ended March 31, 2022, compared to the three months ended March 31, 2021. The increase was primarily driven by a $2.3 million increase in third-party customer support costs, a $2.1 million increase in internal personnel costs at our sites in the Philippines, Nicaragua and Ireland that support customer operations, and a $0.8 million increase in software and telephony costs as we supported more active customers.
As a percentage of revenue, customer support and operations expenses increased to 10% for the three months ended March 31, 2022 from 9% for the three months ended March 31, 2021, due to the impact of the COVID-19 pandemic in the prior year, which impacted our staffing levels and created delays in our efforts to expand our customer support teams. We continue to invest in customer support and operations teams to support our customers’ experience.
Marketing Expenses
Three Months Ended March 31,Change
(dollars in thousands)20222021AmountPercent
Marketing$40,621 $26,116 $14,505 56 %
Percentage of total revenue30 %29 %
Marketing expenses increased $14.5 million, or 56%, for the three months ended March 31, 2022, compared to the three months ended March 31, 2021, due primarily to an increase of $11.6 million in direct marketing expense, including online and offline marketing spend and promotion costs to acquire new customers. Personnel-related costs increased by $1.3 million driven by a 38% increase in marketing headcount compared to the same period in 2021, as well as a $0.7 million increase in stock-based compensation expense. The increase in marketing expenses was also driven by a $0.9 million increase in other indirect marketing, professional fees, software, and employee-related costs.

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As a percent of revenue, marketing expenses increased to 30% for the three months ended March 31, 2022, from 29% for the three months ended March 31, 2021, due to growth in new customers, as well as higher customer acquisition costs, as our marketing spend was mostly dedicated to acquiring new customers.
Technology and Development Expenses
Three Months Ended March 31,Change
(dollars in thousands)20222021AmountPercent
Technology and development$23,575 $11,644 $11,931 103 %
Percentage of total revenue17 %13 %
Technology and development expenses increased $11.9 million, or 103% for the three months ended March 31, 2022, compared to the three months ended March 31, 2021. The increase was driven by $6.2 million in personnel-related expenses resulting from a 53% increase in headcount compared to the same period in 2021, as well as a $3.5 million increase in stock-based compensation expense. The increase in technology and development expense was also driven by a $1.4 million increase in software costs for employee tools and cloud services due to growth in headcount and volume of transactions, $0.3 million increase in professional fees, $0.3 million increase in other employee-related expenses and $0.2 million increase in facilities costs.
As a percentage of revenue, technology and development expenses increased to 17% for the three months ended March 31, 2022, from 13% for the three months ended March 31, 2021, primarily driven by an increase in headcount and related stock-based compensation expense, as we continue to invest in enhancements to our platform, expanded offerings, and geographic expansion.
General and Administrative Expenses
Three Months Ended March 31,Change
(dollars in thousands)20222021AmountPercent
General and administrative$23,342 $10,882 $12,460 115 %
Percentage of total revenue17 %12 %
General and administrative expenses increased $12.5 million, or 115%, for the three months ended March 31, 2022, compared to the three months ended March 31, 2021. This increase was primarily driven by a $3.9 million increase in personnel-related costs due to a 71% increase in general and administrative headcount compared to the same period in the prior year, as well as a $3.8 million increase in stock-based compensation expense. The increase in general and administrative expenses was also due to a $2.9 million increase in professional, regulatory, and corporate fees to support our operations as a public company, a $1.4 million increase to other employee-related and facilities costs, and $0.5 million increase to other operating expenses.
As a percent of revenue, general and administrative expenses increased to 17% for the three months ended March 31, 2022, from 12% for the three months ended March 31, 2021, due to an increase in headcount to scale the organization to support our growth initiatives and ongoing public company costs, as well as a related increase in stock-based compensation expense.
Depreciation and Amortization
Three Months Ended March 31,Change
(dollars in thousands)20222021AmountPercent
Depreciation and Amortization$1,517 $1,245 $272 22 %
Percentage of revenue%%
Depreciation and amortization increased $0.3 million, or 22%, for the three months ended March 31, 2022, compared to the three months ended March 31, 2021. This increase is mostly due to an increase in depreciation for internally developed software and computers.
Interest Income
Three Months Ended March 31,Change
(dollars in thousands)20222021AmountPercent
Interest income$36 $$31 nm
nm = not meaningful
Interest income increased by an immaterial amount for the three month period ended March 31, 2022, compared to the three months ended March 31, 2021.

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Interest Expense
Three Months Ended March 31,Change
(dollars in thousands)20222021AmountPercent
Interest expense$(313)$(259)$54 21 %
Interest expense increased by an immaterial amount for the three month period ended March 31, 2022, as compared to the three month period ended March 31, 2021.
Other Income, Net
Three Months Ended March 31,Change
(dollars in thousands)20222021AmountPercent
Other income, net$669 $1,426 $(757)(53)%
Other income, net, decreased $0.8 million for the three month period ended March 31, 2022, as compared to the three month period ended March 31, 2021, primarily due to foreign exchange remeasurements on transactions associated with high-volume balance sheet balances, and reduced variability in the related currencies, as compared to prior year.
Provision for Income Taxes
Three Months Ended March 31,Change
(dollars in thousands)20222021AmountPercent
Provision for income taxes$528 $370 $158 43 %
The provision for income taxes increased by $0.2 million, or 43%, for the three months ended March 31, 2022 compared to the three months ended March 31, 2021, due to an increase in taxable income for our international entities.
Non-GAAP Financial Measures
We regularly review the following non-GAAP measure to evaluate our performance, identify trends affecting our business, prepare financial projections, and make strategic decisions. We believe that this non-GAAP measure provides meaningful supplemental information for management and investors in assessing our historical and future operating performance. The calculation of this non-GAAP measure discussed below may differ from other similarly titled metrics used by other companies, analysts, or investors.
We use Adjusted EBITDA, a non-GAAP financial measure to supplement net loss. Adjusted EBITDA is calculated as net loss adjusted by i) interest expense, net; ii) provision for income taxes; iii) non-cash charge of depreciation and amortization; iv) other expense (income), net, including gains and losses from the remeasurement of foreign currency assets and liabilities into their functional currency and v) non-cash stock-based compensation expense, net, as well as vi) non-cash charges associated with our donation of common stock in connection with our Pledge 1% commitment.
Our goal is not to maximize Adjusted EBITDA in any given quarter, but to drive revenue growth with investments that generate long-term value. Adjusted EBITDA is a key output measure used by our management to evaluate our operating performance, inform future operating plans, and make strategic long term decisions, including those relating to operating expenses and the allocation of internal resources.
Adjusted EBITDA has limitations as a financial measure, should be considered as supplemental in nature, and is not meant as a substitute for the related financial information prepared in accordance with GAAP. These limitations include the following:
although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditures or other capital commitments;
Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
Adjusted EBITDA does not reflect the effect of income taxes that may represent a reduction in cash available to us;
Adjusted EBITDA does not reflect the effect of gains and losses from the remeasurement of foreign currency assets and liabilities into their functional currency;
Adjusted EBITDA excludes non-cash charges associated with the donation of our common stock in connection with our Pledge 1% commitment, which is recorded in general and administrative expense;
Adjusted EBITDA excludes stock-based compensation expense, which has recently been, and will continue to be for the foreseeable future, a significant recurring expense for our business and an important part of our compensation strategy; and
other companies, including companies in our industry, may calculate Adjusted EBITDA differently from how we calculate this measure or not at all, which reduces its usefulness as a comparative measure.

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The following table sets forth a reconciliation of net loss to Adjusted EBITDA, the most directly comparable financial measure prepared in accordance with GAAP, for each of the periods indicated:
Three Months Ended March 31,
(in thousands)20222021
Net loss$(23,310)$(7,770)
Add:
Interest expense, net277 254 
Provision for income taxes528 370 
Depreciation and amortization expenses1,517 1,245 
Foreign exchange (gain) loss(669)