UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 3, 2022
(Exact Name of Registrant as Specified in Its Charter)
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(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class: | Trading Symbol(s): | Name of each exchange on which registered: | ||||||||||||
| | ||||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
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. ☐
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Item 2.02 Results of Operations and Financial Condition.
On August 3, 2022, Remitly Global, Inc. (the "Company") issued a press release announcing its financial results for the fiscal quarter ended June 30, 2022. A copy of the press release is furnished as Exhibit 99.1 hereto and is incorporated by reference herein.
Item 7.01 Regulation FD Disclosure.
On August 3, 2022, Remitly Global, Inc. (the "Company") provided an investor presentation that will be made available on the investor relations section of the Company’s website at https://ir.remitly.com/. The investor presentation is furnished as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated by reference herein.
The information in Items 2.02 and 7.01 of this Current Report, including the accompanying Exhibit 99.1 and Exhibit 99.2, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of Section 18. The information in Items 2.02 and 7.01 of this Current Report, including the accompanying Exhibit 99.1 and Exhibit 99.2, shall not be incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language contained in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description | ||||
| 99.1 | |||||
| 99.2 | |||||
| 104 | Cover page interactive data file (embedded with the inline XBRL document) | ||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Remitly Global, Inc. | ||||||||
| Date: August 3, 2022 | By: | /s/ Hemanth Munipalli | ||||||
Hemanth Munipalli | ||||||||
| Chief Financial Officer | ||||||||
| (Principal Financial and Accounting Officer) | ||||||||
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Remitly Reports Second Quarter 2022 Results
Active customers up 43% year over year
Send volume up 40% year over year
Revenue up 42% year over year
Raising 2022 revenue and Adjusted EBITDA outlook
SEATTLE, WA / August 3, 2022 / GlobeNewswire / - Remitly Global, Inc. (NASDAQ: RELY), a leading digital financial services provider for immigrants and their families in over 170 countries around the world, reported results for the second quarter ended June 30, 2022.
“Our track record of delivering for our customers led to strong financial results in the second quarter,” said Matt Oppenheimer, Remitly’s Chief Executive Officer. “We are raising our revenue and Adjusted EBITDA outlook for 2022 as we expect continued progress on our strategic growth initiatives in the back half of 2022. The resilience of our customers in these volatile times is an inspiration and we plan to keep delivering a remittance and broader financial services experience that builds trust and peace of mind for our customers."
Second Quarter 2022 Highlights and Key Operating Data
(All comparisons relative to the second quarter of 2021)
•Active customers increased to 3.4 million, from 2.4 million, up 43%.
•Send volume increased to $7.0 billion, from $5.0 billion, up 40%.
•Revenue totaled $157.3 million, compared to $111.1 million, up 42%.
•Net loss was $38.2 million and Adjusted EBITDA was $(5.3) million.
2022 Financial Outlook
For fiscal year 2022, Remitly currently expects:
•Total revenue in the range of $625 million to $630 million, representing a growth rate of 36% to 37% year over year. This outlook reflects an increase from our prior outlook of $610 million to $620 million.
•Adjusted EBITDA in the range of $(35) million to $(30) million. This outlook reflects an increase at the midpoint from our prior outlook of $(40) million to $(30) million.
Reconciliation of GAAP to Non-GAAP Financial Measures:
A reconciliation of GAAP to non-GAAP financial measures has been provided in the financial statement tables included in this earnings release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.” We have not provided a quantitative reconciliation of forecasted Adjusted EBITDA to forecasted GAAP net income (loss) or to forecasted GAAP income (loss) before income taxes within this earnings release because we cannot, without unreasonable effort, calculate certain reconciling items with confidence due to the variability, complexity and limited visibility of the adjusting items that would be excluded from forecasted Adjusted EBITDA. These items include but are not limited to income taxes and stock-based compensation expense which are directly impacted by unpredictable fluctuations in the market price of our common stock.
Note: All percentage changes described within this press release are calculated using amounts in the Company's Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission (the "SEC"), for which revenue and active customers are presented in thousands and send volume is presented in millions. Rounding differences may occur when individually calculating percentages or totals from rounded amounts included within the press release body as compared to the amounts included with the Company's SEC filings.
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Webcast Information
Remitly will host a webcast at 5:00 PM Eastern Time on Wednesday, August 3, 2022 to discuss its second quarter 2022 financial results. The live webcast and investor presentation will be accessible on Remitly’s website at https://ir.remitly.com/. A webcast replay will be available on our website at https://ir.remitly.com/ following the live event.
We have used, and intend to continue to use, the Investor Relations section of our website at https://ir.remitly.com as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD.
Non-GAAP Financial Measures
Some of the financial information and data contained in this presentation, such as Adjusted EBITDA and non-GAAP operating expenses, have not been prepared in accordance with United States generally accepted accounting principles ("GAAP").
We regularly review our key business metrics and non-GAAP financial measures to evaluate our performance, identify trends affecting our business, prepare financial projections, and make strategic decisions. We believe that these key business metrics and non-GAAP financial measures provide meaningful supplemental information for management and investors in assessing our historical and future operating performance. Adjusted EBITDA and non-GAAP operating expenses are key output measures 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. Remitly believes that the use of Adjusted EBITDA and non-GAAP operating expenses provides additional tools to assess operational performance and trends in, and in comparing Remitly’s financial measures with, other similar companies, many of which present similar non-GAAP financial measures to investors. Remitly’s non-GAAP financial measures may be different from non-GAAP financial measures used by other companies. The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial measures determined in accordance with GAAP. Because of the limitations of non-GAAP financial measures, you should consider the non-GAAP financial measures presented herein in conjunction with Remitly’s financial statements and the related notes thereto. Please refer to the non-GAAP reconciliations in this press release for a reconciliation of these non-GAAP financial measures to the most comparable financial measure prepared in accordance with GAAP.
We calculate Adjusted EBITDA as net loss adjusted by (i) interest expense, net; (ii) provision for income taxes; (iii) noncash 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) noncash stock-based compensation expense, net, as well as noncash charges associated with our donation of common stock in connection with our Pledge 1% commitment. We calculate non-GAAP operating expenses as our GAAP operating expenses adjusted by (i) noncash stock-based compensation expense, as well as (ii) noncash charges associated with our donation of common stock in connection with our Pledge 1% commitment.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements. These statements include, but are not limited to, statements regarding our future operating results and financial position, including our fiscal year 2022 financial outlook, including forecasted fiscal year 2022 revenue and Adjusted EBITDA, anticipated future expenses and investments, expectations relating to certain of our key financial and operating metrics, our business strategy and plans, market growth, our market position and potential market opportunities, and our objectives for future operations. The words “believe,” “may,” “will,” “estimate,” “potential,” “continue,” “anticipate,” “intend,” “expect,” “could,” “would,” “project,” “plan,” “target,” and similar expressions are intended to identify forward-looking statements. Forward-looking statements are based on management’s expectations, assumptions, and projections based on information available at the time the statements were made. These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including risks and uncertainties related to: our ability to successfully execute our business and growth strategy, our ability to achieve and maintain future profitability, our ability to further penetrate our existing customer base and expand our customer base in existing and new corridors, our ability to expand into broader financial services, our ability to expand internationally, the effects of seasonal trends on our results of operations, our expectations concerning relationships with third parties, including strategic, banking and disbursement partners, our ability to obtain, maintain, protect, and enhance our intellectual property and other proprietary rights, our ability to keep data and our technology platform secure, the success of any acquisitions or investments that we make, our ability to compete effectively, and our ability to stay in compliance applicable laws and regulations, our ability to buy foreign currency at generally advantageous rates, and the effects of changes to immigration laws,
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macroeconomic conditions and geopolitical forces on our customers and business operations. It is not possible for our management 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. In light of these risks, uncertainties, and assumptions, our actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Further information on risks that could cause actual results to differ materially from forecasted results are included in our quarterly report on Form 10-Q for the quarter ended June 30, 2022 to be filed with the SEC, and within our annual report on Form 10-K for the year ended December 31, 2021 filed with the SEC, which are or will be available on our website at https://ir.remitly.com and on the SEC’s website at www.sec.gov. Except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons if actual results differ materially from those anticipated in the forward-looking statements.
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About Remitly
Remitly is a leading digital financial services provider for immigrants and their families in over 170 countries around the world. Remitly helps immigrants send money home in a safe, reliable and transparent manner. Its digitally native, cross-border remittance app eliminates the long wait times, complexities and fees typical of traditional remittance processes. Building on its strong foundation, Remitly is expanding its suite of products to further its mission and transform financial services for immigrants all around the world. Founded in 2011, Remitly is headquartered in Seattle and has several global offices, including London, Cork, Krakow, Singapore, Manila and Managua.
Contacts
Media:
Adam Cormier
adamc@remitly.com
Investor Relations:
Stephen Shulstein
stephens@remitly.com
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REMITLY GLOBAL, INC.
Condensed Consolidated Statements of Operations
(unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (in thousands, except share and per share data) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
| Revenue | $ | 157,255 | $ | 111,050 | $ | 293,269 | $ | 202,106 | |||||||||||||||
| Costs and expenses | |||||||||||||||||||||||
Transaction expenses(1) | 60,826 | 46,505 | 117,089 | 87,615 | |||||||||||||||||||
Customer support and operations(1) (2) | 16,855 | 11,799 | 30,725 | 20,430 | |||||||||||||||||||
Marketing(1) (2) | 43,849 | 26,158 | 84,470 | 52,274 | |||||||||||||||||||
Technology and development(1) (2) | 36,083 | 15,198 | 59,658 | 26,842 | |||||||||||||||||||
General and administrative(1) (2) | 37,509 | 12,008 | 60,851 | 22,890 | |||||||||||||||||||
| Depreciation and amortization | 1,510 | 1,326 | 3,027 | 2,571 | |||||||||||||||||||
| Total costs and expenses | 196,632 | 112,994 | 355,820 | 212,622 | |||||||||||||||||||
| Loss from operations | (39,377) | (1,944) | (62,551) | (10,516) | |||||||||||||||||||
| Interest income | 439 | 5 | 475 | 10 | |||||||||||||||||||
| Interest expense | (332) | (277) | (645) | (536) | |||||||||||||||||||
| Other income, net | 1,687 | 1,222 | 2,356 | 2,648 | |||||||||||||||||||
| Loss before provision for income taxes | (37,583) | (994) | (60,365) | (8,394) | |||||||||||||||||||
| Provision for income taxes | 662 | 454 | 1,190 | 824 | |||||||||||||||||||
| Net loss attributable to common stockholders | $ | (38,245) | $ | (1,448) | $ | (61,555) | $ | (9,218) | |||||||||||||||
| Net loss per share attributable to common stockholders: | |||||||||||||||||||||||
| Basic and diluted | $ | (0.23) | $ | (0.06) | $ | (0.37) | $ | (0.40) | |||||||||||||||
| Weighted-average shares used in computing net loss per share attributable to common stockholders: | |||||||||||||||||||||||
| Basic and diluted | 166,498,333 | 23,717,827 | 165,450,862 | 23,216,865 | |||||||||||||||||||
(1) Exclusive of depreciation and amortization, shown separately, above.
(2) Includes stock-based compensation expense, net. The condensed consolidated financial statements for the three and six months ended June 30, 2022 include an adjustment of $6.3 million to stock-based compensation expense and additional paid-in capital, to correct for an error identified by management during the preparation of the financial statements for the three and six months ended June 30, 2022. This adjustment relates to the understatement of stock-based compensation expense during prior periods, of which $1.9 million relates to the three months ended March 31, 2022, and the remaining $4.4 million amount relates to prior annual fiscal periods. Management has determined that this error was not material to the historical financial statements in any individual period or in the aggregate and did not result in the previously issued financial statements being materially misstated. Substantially all of the cumulative adjustment was related to share-based compensation for personnel who support our general and administrative functions and was recorded to General and administrative expenses in the three months ended June 30, 2022. The Company is also evaluating the implications to its internal controls over financial reporting arising from this error. Additional information will be included in the Company’s future filing of its 10-Q.
Stock-based Compensation Expense, net:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (in thousands) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
| Customer support and operations | $ | 277 | $ | 29 | $ | 370 | $ | 37 | |||||||||||||||
| Marketing | 2,765 | 436 | 3,797 | 721 | |||||||||||||||||||
| Technology and development | 13,649 | 1,234 | 17,721 | 1,824 | |||||||||||||||||||
| General and administrative | 15,850 | 1,004 | 20,247 | 1,643 | |||||||||||||||||||
| Total | $ | 32,541 | $ | 2,703 | $ | 42,135 | $ | 4,225 | |||||||||||||||
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REMITLY GLOBAL, INC.
Condensed Consolidated Balance Sheets
(unaudited)
| June 30, | December 31, | ||||||||||
| (in thousands) | 2022 | 2021 | |||||||||
| Assets | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | 429,709 | $ | 403,262 | |||||||
| Disbursement prefunding | 159,500 | 119,627 | |||||||||
| Customer funds receivable, net | 95,209 | 67,215 | |||||||||
| Prepaid expenses and other current assets | 19,680 | 17,448 | |||||||||
| Total current assets | 704,098 | 607,552 | |||||||||
| Restricted cash | 51 | 51 | |||||||||
| Property and equipment, net | 10,237 | 9,249 | |||||||||
| Operating lease right-of-use assets | 10,146 | 5,302 | |||||||||
| Other noncurrent assets, net | 3,578 | 3,510 | |||||||||
| Total assets | $ | 728,110 | $ | 625,664 | |||||||
| Liabilities and Stockholders' Equity | |||||||||||
| Current liabilities | |||||||||||
| Accounts payable | $ | 5,459 | $ | 1,210 | |||||||
| Customer liabilities | 129,694 | 70,483 | |||||||||
| Accrued expenses and other current liabilities | 113,998 | 66,683 | |||||||||
| Operating lease liabilities | 2,726 | 3,240 | |||||||||
| Total current liabilities | 251,877 | 141,616 | |||||||||
| Operating lease liabilities, noncurrent | 7,933 | 2,907 | |||||||||
| Other noncurrent liabilities | 1,075 | 813 | |||||||||
| Total liabilities | $ | 260,885 | $ | 145,336 | |||||||
| Commitments and contingencies | |||||||||||
| Stockholders' equity | |||||||||||
| Common stock | $ | 17 | $ | 16 | |||||||
| Additional paid-in capital | 789,221 | 739,503 | |||||||||
| Accumulated other comprehensive (loss) income | (1,014) | 253 | |||||||||
| Accumulated deficit | (320,999) | (259,444) | |||||||||
| Total stockholders' equity | 467,225 | 480,328 | |||||||||
| Total liabilities and stockholders' equity | $ | 728,110 | $ | 625,664 | |||||||
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REMITLY GLOBAL, INC.
Condensed Consolidated Statements of Cash Flows
(unaudited)
| Six Months Ended June 30, | ||||||||||||||
| (in thousands) | 2022 | 2021 | ||||||||||||
| Cash flows from operating activities | ||||||||||||||
| Net loss | $ | (61,555) | $ | (9,218) | ||||||||||
| Adjustments to reconcile net loss to net cash used in operating activities | ||||||||||||||
| Depreciation and amortization | 3,027 | 2,571 | ||||||||||||
| Stock-based compensation expense, net | 42,135 | 4,225 | ||||||||||||
| Other | 179 | (38) | ||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||
| Disbursement prefunding | (39,873) | 50,310 | ||||||||||||
| Customer funds receivable | (29,868) | (8,863) | ||||||||||||
| Prepaid expenses and other assets | (2,687) | (5,527) | ||||||||||||
| Operating lease right-of-use assets | 1,743 | 1,336 | ||||||||||||
| Accounts payable | 4,317 | 1,845 | ||||||||||||
| Customer liabilities | 60,279 | 17,376 | ||||||||||||
| Accrued expenses and other liabilities | 50,395 | 7,937 | ||||||||||||
| Operating lease liabilities | (2,062) | (1,678) | ||||||||||||
| Net cash provided by operating activities | 26,030 | 60,276 | ||||||||||||
| Cash flows from investing activities | ||||||||||||||
| Purchases of property and equipment | (1,492) | (671) | ||||||||||||
| Capitalized internal-use software costs | (1,688) | (1,581) | ||||||||||||
| Net cash used in investing activities | (3,180) | (2,252) | ||||||||||||
| Cash flows from financing activities | ||||||||||||||
| Proceeds from issuance of Series F convertible preferred stock, net of issuance costs | — | 2,980 | ||||||||||||
| Proceeds from exercise of stock options | 4,467 | 4,374 | ||||||||||||
| Taxes paid related to net share settlement of equity awards | (30) | — | ||||||||||||
| Repayments of revolving credit facility borrowings, net | — | (80,000) | ||||||||||||
| Net cash provided by (used in) financing activities | 4,437 | (72,646) | ||||||||||||
| Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash | (840) | 181 | ||||||||||||
| Net increase in cash, cash equivalents and restricted cash | 26,447 | (14,441) | ||||||||||||
| Cash, cash equivalents, and restricted cash at beginning of period | 403,313 | 188,075 | ||||||||||||
| Cash, cash equivalents, and restricted cash at end of period | $ | 429,760 | $ | 173,634 | ||||||||||
| Supplemental disclosure of cash flow information | ||||||||||||||
| Cash paid for interest | $ | 465 | $ | 497 | ||||||||||
| Cash paid for income taxes | 829 | 93 | ||||||||||||
| Supplemental disclosure of non-cash investing and financing activities | ||||||||||||||
| Operating lease right-of-use assets obtained in exchange for operating lease liabilities | $ | 6,932 | $ | 251 | ||||||||||
| Vesting of early exercised options | 393 | 101 | ||||||||||||
| Non-cash issuance shares through Employee Stock Purchase Plan | 1,882 | — | ||||||||||||
| IPO costs incurred but not yet paid | — | 1,231 | ||||||||||||
| Stock compensation capitalized to internal-use software | 900 | — | ||||||||||||
| Reconciliation of cash, cash equivalents and restricted cash | ||||||||||||||
| Cash and cash equivalents | $ | 429,709 | $ | 173,363 | ||||||||||
| Restricted cash | 51 | 271 | ||||||||||||
| Total cash, cash equivalents and restricted cash | $ | 429,760 | $ | 173,634 | ||||||||||
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REMITLY GLOBAL, INC.
Reconciliation of GAAP to Non-GAAP Financial Measures
(unaudited)
| Reconciliation of net loss to Adjusted EBITDA: | ||||||||||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| (in thousands) | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||
| Net loss | $ | (38,245) | $ | (1,448) | $ | (61,555) | $ | (9,218) | ||||||||||||||||||
| Add: | ||||||||||||||||||||||||||
| Interest expense, net | (107) | 272 | 170 | 526 | ||||||||||||||||||||||
| Provision for income taxes | 662 | 454 | 1,190 | 824 | ||||||||||||||||||||||
| Depreciation and amortization | 1,510 | 1,326 | 3,027 | 2,571 | ||||||||||||||||||||||
| Foreign exchange (gain) loss | (1,687) | (1,222) | (2,356) | (2,648) | ||||||||||||||||||||||
| Stock-based compensation expense, net | 32,541 | 2,703 | 42,135 | 4,225 | ||||||||||||||||||||||
| Adjusted EBITDA | $ | (5,326) | $ | 2,085 | $ | (17,389) | $ | (3,720) | ||||||||||||||||||
| Reconciliation of operating expenses to non-GAAP operating expenses: | ||||||||||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| (in thousands) | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||
| Customer support and operations | $ | 16,855 | $ | 11,799 | $ | 30,725 | $ | 20,430 | ||||||||||||||||||
| Excluding: Stock-based compensation expense, net | 277 | 29 | 370 | 37 | ||||||||||||||||||||||
| Non-GAAP customer support and operations | $ | 16,578 | $ | 11,770 | $ | 30,355 | $ | 20,393 | ||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
| Marketing | $ | 43,849 | $ | 26,158 | $ | 84,470 | $ | 52,274 | ||||||||||||||||||
| Excluding: Stock-based compensation expense, net | 2,765 | 436 | 3,797 | 721 | ||||||||||||||||||||||
| Non-GAAP marketing | $ | 41,084 | $ | 25,722 | $ | 80,673 | $ | 51,553 | ||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
| Technology and development | $ | 36,083 | $ | 15,198 | $ | 59,658 | $ | 26,842 | ||||||||||||||||||
| Excluding: Stock-based compensation expense, net | 13,649 | 1,234 | 17,721 | 1,824 | ||||||||||||||||||||||
| Non-GAAP technology and development | $ | 22,434 | $ | 13,964 | $ | 41,937 | $ | 25,018 | ||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
| General and administrative | $ | 37,509 | $ | 12,008 | $ | 60,851 | $ | 22,890 | ||||||||||||||||||
| Excluding: Stock-based compensation expense, net | 15,850 | 1,004 | 20,247 | 1,643 | ||||||||||||||||||||||
| Non-GAAP general and administrative | $ | 21,659 | $ | 11,004 | $ | 40,604 | $ | 21,247 | ||||||||||||||||||
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August 2022 / © 2022 Remitly Inc. 1 Investor Presentation Second Quarter 2022 Earnings August 3, 2022
August 2022 / © 2022 Remitly Inc. 2 Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements. These statements include, but are not limited to, statements regarding our future operating results and financial position, including our fiscal year 2022 financial outlook, including forecasted fiscal year 2022 revenue and Adjusted EBITDA, anticipated future expenses and investments, expectations relating to certain of our key financial and operating metrics, our business strategy and plans, market growth, our market position and potential market opportunities, and our objectives for future operations. The words “believe,” “may,” “will,” “estimate,” “potential,” “continue,” “anticipate,” “intend,” “expect,” “could,” “would,” “project,” “plan,” “target,” and similar expressions are intended to identify forward-looking statements. Forward-looking statements are based on management’s expectations, assumptions, and projections based on information available at the time the statements were made. These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including, without limitation, risks and uncertainties related to: our ability to successfully execute our business and growth strategy, our ability to achieve and maintain future profitability, our ability to further penetrate our existing customer base and expand our customer base in existing and new corridors, our ability to expand into broader financial services, our ability to expand internationally, the effects of seasonal trends on our results of operations, the effects of the COVID-19 pandemic, the current inflationary environment, our expectations concerning relationships with third parties, including strategic, banking and disbursement partners, our ability to obtain, maintain, protect, and enhance our intellectual property and other proprietary rights, our ability to keep data and our technology platform secure, the success of any acquisitions or investments that we make, our ability to compete effectively, and our ability to stay in compliance with applicable laws and regulations, our ability to buy foreign currency at generally advantageous rates, and the effects of changes to immigration laws, macroeconomic conditions and geopolitical forces on our customers and business operations. It is not possible for our management 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. In light of these risks, uncertainties, and assumptions, our actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Further information on risks that could cause actual results to differ materially from forecasted results are included in our quarterly report on Form 10-Q for the quarter ended June 30, 2022 to be filed with the SEC, and within our annual report on Form 10-K for the year ended December 31, 2021 filed with the SEC, which are or will be available on our website at https://ir.remitly.com and on the SEC’s website at www.sec.gov. In addition, the COVID-19 pandemic and the global economic climate may amplify many of the risks described above and in our filings. The forward-looking statements in this presentation speak only as of the date of this presentation and except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons if actual results differ materially from those anticipated in the forward-looking statements. A reconciliation of GAAP to non-GAAP financial measures has been provided in the Appendix included in this presentation. An explanation of these measures is also included in the Appendix within this presentation under the heading “Non-GAAP Financial Measures.” We have not provided a quantitative reconciliation of forecasted Adjusted EBITDA to forecasted GAAP net income (loss) or to forecasted GAAP income (loss) before income taxes within this presentation because we cannot, without unreasonable effort, calculate certain reconciling items with confidence due to the variability, complexity and limited visibility of the adjusting items that would be excluded from forecasted Adjusted EBITDA. These items include but are not limited to income taxes and stock-based compensation expense which are directly impacted by unpredictable fluctuations in the market price of our common stock.
August 2022 / © 2022 Remitly Inc. 2Q Strategic Overview 3 Matt Oppenheimer Co-Founder & CEO
August 2022 / © 2022 Remitly Inc. Vision To transform the lives of immigrants and their families by providing the most trusted financial services on the planet. 4
August 2022 / © 2022 Remitly Inc. Track record of strong results continued in 2Q 2022 SCALE $157m 42% YoY REVENUE 3.4m active customers 43% YoY 5
August 2022 / © 2022 Remitly Inc. 6 Convenient +3.9B bank accounts +705M mobile wallets +410k cash pickup Locations Home delivery Fast Majority of transactions disbursed in minutes1 Offer flexibility for customers who desire quick delivery of funds Friendly Intuitive sign on and KYC 3 taps to send a repeat transaction Customer support – human in 15 languages Fair Fair pricing delivers value to customers Upfront FX rate quotes Remitly is creating an enduring customer preference by providing trusted service 1 Represents Remitly internal disbursement data for 2Q 2022
August 2022 / © 2022 Remitly Inc. Our customers are resilient across volatile economic conditions Remittances are not discretionary—they are a priority for our customers Have not noticed changes in customer behavior as a result of inflation or recession fears Recent Remitly customer surveys indicate most senders expect to send the same amount or more in 2022 vs. 2021 Source: World Bank, May 2022 Remittance Flows to Low and Middle Income Countries ($ in billions) 7 Shift to digital remains a tailwind for Remitly regardless of macro conditions
August 2022 / © 2022 Remitly Inc. Portfolio of high ROI investments has driven strong long term growth Revenue ($ in millions) $627.5 $458.6 $257.0 $126.6 Note: 2022E revenue reflects midpoint of current 2022 outlook. 8 71% CAGR New customer acquisition Geographic expansion Remittance product enhancements Complementary new products
August 2022 / © 2022 Remitly Inc. Marketing investments generate strong returns 9 Cumulative Return on Initial Direct Marketing Investment by Cohort Relative Cohort Year Re tu rn o n D ire ct M ar ke tin g In ve st m en t 1 1 Return on marketing investment is the ratio of revenue, net of transaction expenses to “Customer Acquisition Cost” or “CAC.” “CAC” refers to direct marketing expenses deployed to acquire new customers. Direct marketing expenses exclude experimental spend used to test new marketing channels, creative production expenses, endorser costs, customer research expenses, agency fees, personnel costs, or other fixed operating expenses that support the marketing team. The calculation of this metric may differ from other similarly titled metrics used by other companies, analysts, or investors. 2 Year 0 represents the year of acquisition for each cohort shown. As new customers are acquired throughout Year 0, their average tenure exiting this period is typically less than six months (more customers are added in the back half of the year due to continued growth and seasonality). Years 1-5 represent the full annual period for each cohort. For example, Year 1 for the 2020 cohort includes all of 2021. 2 Recent cohorts have improving returns
August 2022 / © 2022 Remitly Inc. ● Disciplined focus on payback ● Elasticity testing ● Improved brand awareness ● Improved referral experience Note: “Customer Acquisition Cost” or “CAC” refers to direct marketing expenses deployed to acquire new customers. Direct marketing expenses exclude experimental spend used to test new marketing channels, creative production expenses, endorser costs, customer research expenses, agency fees, personnel costs, or other fixed operating expenses that support the marketing team. The calculation of this metric may differ from other similarly titled metrics used by other companies, analysts, or investors. Customer Acquisition Cost (CAC) 10 Key Drivers Driving efficiencies in customer acquisition 1Q22 2Q22 11% 18% QoQ
August 2022 / © 2022 Remitly Inc. Geographic expansion is driving customer growth and loyalty 11 +3,200 corridors +3.9b bank accounts +410k cash pickup locations +705m mobile wallets +170 Countries & Territories https://mapchart.net/world.html 2Q22: {"groups":{"#6fa0af":{"label":"Send Countries = 17","paths":["Canada","United_States","Belgium","Sweden","Norway","F inland","United_Kingdom","Ireland","Spain","Netherlands","Germany","It aly","Australia","Singapore","Denmark","Greenland","Austria","French_ Guiana","Guadeloupe","Martinique","France"]},"#b3c066":{"label":"Recei ve Countries & Territories = +150","paths":["Mexico","Guatemala","Honduras","El_Salvador","Nicara gua","Costa_Rica",”Portugal”,”Cayman Islands”,”Gibraltar”,”Puerto Rico”,”Somalia”,”Vanuatu”,"Panama","Colombia","Ecuador","Peru","Boli via","Chile","Argentina","Paraguay","Uruguay","Brazil","Dominican_Rep ublic","Morocco","Ethiopia","Kenya","Rwanda","South_Africa","Poland"," Romania","Czechia","Hungary","Bulgaria","Croatia","India","Nepal","Tha iland","Indonesia","Malaysia","Philippines","Vietnam","Bangladesh","Nig eria","Tunisia","Pakistan","Senegal","Sri_Lanka","Haiti","Ghana","Turke y","Jamaica","South_Korea","Ukraine","Moldova","Egypt","Uganda","Chi na","Guyana","Suriname","Greece","North_Macedonia","Laos","Cambo dia","Cyprus","Cote_d_Ivoire","Tanzania","Cameroon","Israel","Albania" ,"Georgia","Armenia","Lithuania","Montenegro","Kosovo","Benin","Togo" ,"Gabon","Serbia","Uzbekistan","Kyrgyzstan","Gambia","Fiji","Guinea"," Comoros","Madagascar","Malawi","Sierra_Leone","Bahamas","Burundi" ,"Jordan","Zambia","Japan","Estonia","Slovenia","Bhutan","Kazakhstan" ,"Slovakia","Latvia","Malta","Equatorial_Guinea","Iceland","Guinea_Biss au","Andorra","Monaco","Zimbabwe","Congo","Mongolia","Samoa","Djib outi","Botswana","Mauritius","Mozambique","Azerbaijan","Barbados","B osnia_and_Herzegovina","Namibia","Turkmenistan","Liberia","DR_Con go","Eritrea","Mauritania","Tajikistan","Lebanon","Myanmar","Dominica", "Saint_Lucia","Antigua_and_Barbuda","Trinidad_and_Tobago","Timor_ Leste","Luxembourg","Hong_Kong","Lesotho","Liechtenstein","Switzerla nd","Qatar","Oman","Bahrain","Saudi_Arabia","Solomon_Islands","Papu a_New_Guinea","Algeria","Kuwait","Belize"]}},"title":"","hidden":["USA_ Wisconsin","USA_Montana","USA_Minnesota","USA_Washington","US A_Idaho","USA_North_Dakota","USA_Michigan","USA_Maine","USA_O hio","USA_New_Hampshire","USA_New_York","USA_Vermont","USA_ Pennsylvania","USA_Arizona","USA_California","USA_New_Mexico","U SA_Texas","USA_Alaska","USA_Louisiana","USA_Mississippi","USA_A labama","USA_Florida","USA_Georgia","USA_South_Carolina","USA_ North_Carolina","USA_Virginia","USA_Washington_DC","USA_Marylan d","USA_Delaware","USA_New_Jersey","USA_Connecticut","USA_Rho de_Island","USA_Massachusetts","USA_Oregon","USA_Hawaii","USA_ Utah","USA_Wyoming","USA_Nevada","USA_Colorado","USA_South_ Dakota","USA_Nebraska","USA_Kansas","USA_Oklahoma","USA_Iow a","USA_Missouri","USA_Illinois","USA_Kentucky","USA_Arkansas","U SA_Tennessee","USA_West_Virginia","USA_Indiana","Prince_Edward_ Island_CA","New_Brunswick_CA","Ontario_CA","British_Columbia_CA" ,"Alberta_CA","Saskatchewan_CA","Manitoba_CA","Quebec_CA","Yuk on_CA","Nunavut_CA","Newfoundland_and_Labrador_CA","Northwest _Territories_CA","Nova_Scotia_CA","Scotland","Wales","England","Nort hern_Ireland"],"background":"#fbf8f2","borders":"#000000","legendFont" :"Century Gothic","legendFontColor":"#000000","legendBgColor":"#00000000","ar eBordersShown":false,"defaultColor":"#d1dbdd","labelsColor":"#6a0707 ","strokeWidth":"medium","areLabelsShown":false,"usaStatesShown":fal se,"canadaStatesShown":false,"splitUK":false,"legendPosition":"bottom _left","legendSize":"medium","legendStatus":"show","scalingPatterns":tr ue,"legendRowsSameColor":true} 900 from 1Q➜ 200m from 1Q➜ 15k from 1Q➜ 15m from 1Q➜ Data as of 2Q 2022
August 2022 / © 2022 Remitly Inc. Remittance investments drive customer growth and loyalty 12 App UX ● App offered in 15 languages and adding more ● 3 taps to send for repeat customers ● Easy in-app access to help center Risk & Fraud Management ● Differentiated customer experience ● Improved fraud loss rates ● Machine learning algorithm Infrastructure & Security ● High 24/7/365 platform availability ● Lower security threats ● Plug-n-play corridor launches Customer Support ● Lower KYC time and touches per review ● High repeat transaction post review ● Lower cancellation rates +90% of customers engage with Remitly on their phones 4.9X iOS App Store rating1 (+780k reviewers) 4.8X Android Google Play rating2 (+420k reviewers) +99.94% Platform availability3 15 languages customers can access for live support 24/7/365 1, 2 App Store and Google Play rating as of June 2022 3 Remitly internal data for 2Q 2022
August 2022 / © 2022 Remitly Inc. Long-term vision of complementary new products 13 Complementary new products will… … drive value for remittance customers and grow our remittance platform … deepen relationships with our customers … enhance value of the Remitly ecosystem … drive more efficient customer acquisition … become a platform for offering additional products Why We Win 1. Trusted brand focused on immigrants and their families 2. Highly targeted and effective marketing approaches 3. More than 3.4M active customers 4. Mobile centric platform 5. High quality global network 6. Deep customer insights 7. Strong compliance/fraud infrastructure
August 2022 / © 2022 Remitly Inc. New customer acquisition Geographic expansion Remittance product enhancements Complementary new products Portfolio of high ROI investments provides multiple opportunities to drive double digit growth well into the future 2022 & beyond 2023 & beyond 2023 & beyond 2024 & beyond 14
August 2022 / © 2022 Remitly Inc. 15 2Q Financial Results Hemanth Munipalli CFO
August 2022 / © 2022 Remitly Inc. Track record of strong growth continued in 2Q 2022 SCALE 3.4m 43% growth in active customers over 2Q 2021 $7.0b 40% growth in send volume over 2Q 2021 REVENUE $157m 42% growth in revenue over 2Q 2021 90%+ Revenue retention across all cohorts since 2015 16
August 2022 / © 2022 Remitly Inc. Strong continued growth in active customers 1,525 1,692 1,891 2,136 Primarily driven by 2,397 2,561 2,836 3,042 ● Strong new customer acquisition at compelling unit economics ● High retention and customer loyalty ● Convenient, fast, friendly and fair customer experience ● Expansion of our global disbursement network 3,419 17 +43% YoY Active Customers (thousands)
August 2022 / © 2022 Remitly Inc. High double digit revenue growth at scale Revenue ($ in millions) $59.4 $71.8 $80.0 $111.1 $121.2 $135.3 $157.3 $91.1 $136.0 18 +42% YoY
August 2022 / © 2022 Remitly Inc. Delivering leverage on unit costs Direct integrations reduce transaction errors and lower processing costs Advanced risk and fraud management systems drive down transaction loss rates and improve the customer experience Scale drives better terms with payment processing and disbursement partners 2Q21 2Q22 Transaction expenses as percentage of revenue 41.9% 38.7% 320 bps 19
August 2022 / © 2022 Remitly Inc. Disciplined investments will drive long-term growth New customer acquisition marketing Geographic expansion Remittance product enhancements Complementary new products Marketing 2Q 2022 Operating Expense Mix (Non-GAAP) KEY INVESTMENTS $41.1m 40% Technology & Development $22.4m / 22% Customer Support & Operations $16.6m / 16% G&A $21.7m / 22% 20 Excludes stock-based compensation expense. Please see reconciliation of Non-GAAP measures in the appendix
August 2022 / © 2022 Remitly Inc. Strong balance sheet to execute on growth priorities $452m Working Capital as of 6/30/22 ($38.2)m 2Q22 GAAP Net Loss ($5.3)m 2Q22 Adjusted EBITDA 21 Please see reconciliation of Non-GAAP measures in the appendix (2.9)% 2Q22 Adjusted EBITDA Margin
August 2022 / © 2022 Remitly Inc. Raising 2022 Outlook Reflects strong growth and key investments to unlock our vision ● Raising 2022 revenue outlook by $12.5M at the midpoint (1) ● Raising 2022 Adjusted EBITDA outlook by $2.5M at the midpoint (1) ● High growth at scale ● Upfront investments drive future growth and high customer lifetime value ● Investing efficiently to deliver long-term shareholder value $625m-$630m 2022E Revenue 36% to 37% growth — ($35)m-($30)m 2022E Adjusted EBITDA 22 1 Compared with 2022 outlook provided on May 5, 2022
August 2022 / © 2022 Remitly Inc. Q & A 23
August 2022 / © 2022 Remitly Inc. “ Bibi Remitly user since 2022 Sends money from UK to Pakistan 24 A family member recommended Remitly to me. They shared that it was a reliable way to send money back home from the comfort of your home. I liked many things about my experience using Remitly. The charges were clear to understand, I received updates every step of the way, and I really appreciated the message directly to me when the money was collected by the recipients. I recommend Remitly to all of my friends and family.
August 2022 / © 2022 Remitly Inc. Appendix 25
August 2022 / © 2022 Remitly Inc. Non-GAAP Measures Some of the financial information and data contained in this presentation, such as Adjusted EBITDA and non-GAAP operating expenses, have not been prepared in accordance with United States generally accepted accounting principles ("GAAP"). We regularly review our key business metrics and non-GAAP financial measures to evaluate our performance, identify trends affecting our business, prepare financial projections, and make strategic decisions. We believe that these key business metrics and non-GAAP financial measures provide meaningful supplemental information for management and investors in assessing our historical and future operating performance. Adjusted EBITDA and non-GAAP operating expenses are key output measures 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. Remitly believes that the use of Adjusted EBITDA and non-GAAP operating expenses provide additional tools to assess operational performance and trends in, and in comparing Remitly’s financial measures with, other similar companies, many of which present similar non-GAAP financial measures to investors. Remitly’s non-GAAP financial measures may be different from non-GAAP financial measures used by other companies. The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial measures determined in accordance with GAAP. Because of the limitations of non-GAAP financial measures, you should consider the non-GAAP financial measures presented herein in conjunction with Remitly’s financial statements and the related notes thereto. Please refer to the non-GAAP reconciliations in this presentation for a reconciliation of these non-GAAP financial measures to the most comparable financial measure prepared in accordance with GAAP. We calculate Adjusted EBITDA as net loss adjusted by (i) interest expense, net; (ii) provision for income taxes; (iii) noncash 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 non-cash charges associated with our donation of common stock in connection with our Pledge 1% commitment. We calculate non-GAAP operating expenses as our GAAP operating expenses adjusted by (i) non-cash stock-based compensation expense, as well as (ii) non-cash charges associated with our donation of common stock in connection with our Pledge 1% commitment. 26
August 2022 / © 2022 Remitly Inc. Non-GAAP Reconciliation Reconciliation of operating expenses to non-GAAP operating expenses (in thousands) 2Q 2022 Customer support and operations $16,855 Excluding: Stock-based compensation expense, net 277 Non-GAAP customer support and operations $16,578 Marketing $43,849 Excluding: Stock-based compensation expense, net 2,765 Non-GAAP marketing $41,084 Technology & development $36,083 Excluding: Stock-based compensation expense, net 13,649 Non-GAAP technology and development $22,434 General and administrative $37,509 Excluding: Stock-based compensation expense, net 15,850 Non-GAAP General and administrative $21,659 27
August 2022 / © 2022 Remitly Inc. Non-GAAP Reconciliation Reconciliation of net loss to Adjusted EBITDA (in thousands) 2Q 2022 Net loss ($38,245) Add: Interest expense, net (107) Provision for income taxes 662 Depreciation and amortization 1,510 Foreign exchange (gain) loss (1,687) Stock-based compensation expense, net 32,541 Adjusted EBITDA ($5,326) Revenue $157,255 Adjusted EBITDA margin (3.4%) 28
August 2022 / © 2022 Remitly Inc. Thank you.