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): November 2, 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 November 2, 2022, Remitly Global, Inc. (the “Company”) issued a press release announcing its financial results for the fiscal quarter ended September 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 November 2, 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: November 2, 2022 | By: | /s/ Hemanth Munipalli | ||||||
Hemanth Munipalli | ||||||||
| Chief Financial Officer | ||||||||
| (Principal Financial and Accounting Officer) | ||||||||
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Remitly Reports Third Quarter 2022 Results
Active customers up 49% year over year
Send volume up 44% year over year
Revenue up 40% year over year
Raising 2022 revenue outlook
SEATTLE, WA / November 2, 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 third quarter ended September 30, 2022.
“Remitly’s approach over the last decade has been to deliver consistent, predictable, and strong results, which we did again in the third quarter,” said Matt Oppenheimer, co-founder and Chief Executive Officer, Remitly. “The foundation of this financial performance is the resilience of our global customers and our teams dedicated to serving them. The combination of repeat customers continuing to send regularly as well as efficiently adding a record number of new customers in the third quarter positions us well for long term growth and value creation, which is why we’re raising our 2022 revenue outlook.”
Third Quarter 2022 Highlights and Key Operating Data
(All comparisons relative to the third quarter of 2021)
•Active customers increased to 3.8 million, from 2.6 million, up 49%.
•Send volume increased to $7.5 billion, from $5.2 billion, up 44%.
•Revenue totaled $169.3 million, compared to $121.2 million, up 40%.
•Net loss was $33.1 million and Adjusted EBITDA was $(3.7) million.
2022 Financial Outlook
For fiscal year 2022, Remitly currently expects:
•Total revenue in the range of $635 million to $640 million, representing a growth rate of 38% to 40% year over year. This outlook reflects an increase from our prior outlook of $625 million to $630 million.
•Adjusted EBITDA in the range of $(35) 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 p.m. Eastern Time on Wednesday, November 2, 2022 to discuss its third 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 earnings release, 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) gains and losses from the remeasurement of foreign currency assets and liabilities into their functional currency, (v) noncash charges associated with our donation of common stock in connection with our Pledge 1% commitment, (vi) noncash stock-based compensation expense, net, and (vii) certain transaction and integration costs associated with acquisitions. We calculate non-GAAP operating expenses as our GAAP operating expenses adjusted by (i) noncash stock-based compensation expense, net, (ii) noncash charges associated with our donation of common stock in connection with our Pledge 1% commitment, as well as (iii) certain transaction and integration costs associated with acquisitions.
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, 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
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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 September 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 seven 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 September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (in thousands, except share and per share data) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
| Revenue | $ | 169,259 | $ | 121,244 | $ | 462,528 | $ | 323,350 | |||||||||||||||
| Costs and expenses | |||||||||||||||||||||||
Transaction expenses(1) | 69,872 | 47,560 | 186,961 | 135,175 | |||||||||||||||||||
Customer support and operations(1) | 18,142 | 12,005 | 48,867 | 32,435 | |||||||||||||||||||
Marketing(1) | 43,337 | 30,365 | 127,807 | 82,639 | |||||||||||||||||||
Technology and development(1) | 36,178 | 18,123 | 95,836 | 44,965 | |||||||||||||||||||
General and administrative(1) | 35,504 | 24,539 | 96,355 | 47,429 | |||||||||||||||||||
| Depreciation and amortization | 1,843 | 1,319 | 4,870 | 3,890 | |||||||||||||||||||
| Total costs and expenses | 204,876 | 133,911 | 560,696 | 346,533 | |||||||||||||||||||
| Loss from operations | (35,617) | (12,667) | (98,168) | (23,183) | |||||||||||||||||||
| Interest income | 1,400 | 82 | 1,875 | 92 | |||||||||||||||||||
| Interest expense | (330) | (512) | (975) | (1,048) | |||||||||||||||||||
| Other income, net | 1,765 | 396 | 4,121 | 3,044 | |||||||||||||||||||
| Loss before provision for income taxes | (32,782) | (12,701) | (93,147) | (21,095) | |||||||||||||||||||
| Provision for income taxes | 287 | 261 | 1,477 | 1,085 | |||||||||||||||||||
| Net loss attributable to common stockholders | $ | (33,069) | $ | (12,962) | $ | (94,624) | $ | (22,180) | |||||||||||||||
| Net loss per share attributable to common stockholders: | |||||||||||||||||||||||
| Basic and diluted | $ | (0.20) | $ | (0.41) | $ | (0.57) | $ | (0.85) | |||||||||||||||
| Weighted-average shares used in computing net loss per share attributable to common stockholders: | |||||||||||||||||||||||
| Basic and diluted | 168,604,378 | 31,641,400 | 166,517,398 | 26,055,903 | |||||||||||||||||||
(1) Exclusive of depreciation and amortization, shown separately, above.
Stock-Based Compensation Expense, net:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (in thousands) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
| Customer support and operations | $ | 226 | $ | 40 | $ | 596 | $ | 77 | |||||||||||||||
| Marketing | 3,352 | 486 | 7,149 | 1,207 | |||||||||||||||||||
| Technology and development | 13,238 | 1,698 | 30,959 | 3,522 | |||||||||||||||||||
| General and administrative | 8,929 | 2,516 | 29,176 | 4,159 | |||||||||||||||||||
| Total | $ | 25,745 | $ | 4,740 | $ | 67,880 | $ | 8,965 | |||||||||||||||
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REMITLY GLOBAL, INC.
Condensed Consolidated Balance Sheets
(unaudited)
| September 30, | December 31, | ||||||||||
| (in thousands) | 2022 | 2021 | |||||||||
| Assets | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | 376,451 | $ | 403,262 | |||||||
| Disbursement prefunding | 155,536 | 119,627 | |||||||||
| Customer funds receivable, net | 114,029 | 67,215 | |||||||||
| Prepaid expenses and other current assets | 20,119 | 17,448 | |||||||||
| Total current assets | 666,135 | 607,552 | |||||||||
| Restricted cash | 81 | 51 | |||||||||
| Property and equipment, net | 10,270 | 9,249 | |||||||||
| Operating lease right-of-use assets | 9,420 | 5,302 | |||||||||
| Other noncurrent assets, net | 4,431 | 3,510 | |||||||||
| Total assets | $ | 690,337 | $ | 625,664 | |||||||
Liabilities and Stockholders’ Equity | |||||||||||
| Current liabilities | |||||||||||
| Accounts payable | $ | 8,180 | $ | 1,210 | |||||||
| Customer liabilities | 104,861 | 70,483 | |||||||||
| Accrued expenses and other current liabilities | 99,573 | 66,683 | |||||||||
| Operating lease liabilities | 3,168 | 3,240 | |||||||||
| Total current liabilities | 215,782 | 141,616 | |||||||||
| Operating lease liabilities, noncurrent | 6,667 | 2,907 | |||||||||
| Other noncurrent liabilities | 1,399 | 813 | |||||||||
| Total liabilities | $ | 223,848 | $ | 145,336 | |||||||
| Commitments and contingencies | |||||||||||
Stockholders’ equity | |||||||||||
| Common stock | $ | 17 | $ | 16 | |||||||
| Additional paid-in capital | 822,929 | 739,503 | |||||||||
| Accumulated other comprehensive (loss) income | (2,389) | 253 | |||||||||
| Accumulated deficit | (354,068) | (259,444) | |||||||||
| Total stockholders’ equity | 466,489 | 480,328 | |||||||||
| Total liabilities and stockholders’ equity | $ | 690,337 | $ | 625,664 | |||||||
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REMITLY GLOBAL, INC.
Condensed Consolidated Statements of Cash Flows
(unaudited)
| Nine Months Ended September 30, | ||||||||||||||
| (in thousands) | 2022 | 2021 | ||||||||||||
| Cash flows from operating activities | ||||||||||||||
| Net loss | $ | (94,624) | $ | (22,180) | ||||||||||
| Adjustments to reconcile net loss to net cash used in operating activities | ||||||||||||||
| Depreciation and amortization | 4,870 | 3,890 | ||||||||||||
| Stock-based compensation expense, net | 67,880 | 8,965 | ||||||||||||
| Donation of common stock | 1,972 | 6,933 | ||||||||||||
| Other | 268 | 360 | ||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||
| Disbursement prefunding | (35,909) | (7,212) | ||||||||||||
| Customer funds receivable | (52,547) | (29,072) | ||||||||||||
| Prepaid expenses and other assets | (3,355) | (9,491) | ||||||||||||
| Operating lease right-of-use assets | 2,743 | 2,023 | ||||||||||||
| Accounts payable | 6,863 | 1,229 | ||||||||||||
| Customer liabilities | 36,803 | 50,284 | ||||||||||||
| Accrued expenses and other liabilities | 40,399 | 16,013 | ||||||||||||
| Operating lease liabilities | (3,152) | (2,317) | ||||||||||||
| Net cash (used in) provided by operating activities | (27,789) | 19,425 | ||||||||||||
| Cash flows from investing activities | ||||||||||||||
| Purchases of property and equipment | (2,197) | (1,347) | ||||||||||||
| Capitalized internal-use software costs | (2,444) | (1,941) | ||||||||||||
| Cash paid for acquisitions, net of cash and cash equivalents acquired | (375) | — | ||||||||||||
| Net cash used in investing activities | (5,016) | (3,288) | ||||||||||||
| Cash flows from financing activities | ||||||||||||||
| Proceeds from issuance of common stock upon initial public offering and private placements, net of underwriting discounts and commissions and other offering costs | — | 307,094 | ||||||||||||
| Repayment of non-recourse promissory note | — | 3,060 | ||||||||||||
| Proceeds from issuance of Series F convertible preferred stock, net of issuance costs | — | 2,980 | ||||||||||||
| Proceeds from exercise of stock options | 8,245 | 7,519 | ||||||||||||
| Payment of debt issuance costs | — | (988) | ||||||||||||
| Repayments of revolving credit facility borrowings, net | — | (80,000) | ||||||||||||
| Taxes paid related to net share settlement of equity awards | (55) | — | ||||||||||||
| Net cash provided by financing activities | 8,190 | 239,665 | ||||||||||||
| Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash | (2,166) | (262) | ||||||||||||
| Net (decrease) increase in cash, cash equivalents and restricted cash | (26,781) | 255,540 | ||||||||||||
| Cash, cash equivalents, and restricted cash at beginning of period | 403,313 | 188,075 | ||||||||||||
| Cash, cash equivalents, and restricted cash at end of period | $ | 376,532 | $ | 443,615 | ||||||||||
| Supplemental disclosure of cash flow information | ||||||||||||||
| Cash paid for interest | $ | 690 | $ | 936 | ||||||||||
| Cash paid for income taxes | 1,397 | 303 | ||||||||||||
| Supplemental disclosure of noncash investing and financing activities | ||||||||||||||
| Operating lease right-of-use assets obtained in exchange for operating lease liabilities | $ | 7,441 | $ | 2,532 | ||||||||||
| Vesting of early exercised options | 554 | 263 | ||||||||||||
| Noncash issuance of common stock in connection with Employee Stock Purchase Plan | 3,516 | — | ||||||||||||
| Stock-based compensation expense capitalized to internal-use software | 1,368 | — | ||||||||||||
| Initial public offering and debt issuance costs incurred but not yet paid | — | 2,287 | ||||||||||||
| Conversion of redeemable convertible preferred stock to common stock in connection with initial public offering | — | 390,687 | ||||||||||||
| Reconciliation of cash, cash equivalents, and restricted cash | ||||||||||||||
| Cash and cash equivalents | $ | 376,451 | $ | 443,313 | ||||||||||
| Restricted cash | 81 | 302 | ||||||||||||
| Total cash, cash equivalents, and restricted cash | $ | 376,532 | $ | 443,615 | ||||||||||
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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 September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| (in thousands) | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||
| Net loss | $ | (33,069) | $ | (12,962) | $ | (94,624) | $ | (22,180) | ||||||||||||||||||
| Add: | ||||||||||||||||||||||||||
| Interest expense, net | (1,070) | 430 | (900) | 956 | ||||||||||||||||||||||
| Provision for income taxes | 287 | 261 | 1,477 | 1,085 | ||||||||||||||||||||||
| Depreciation and amortization | 1,843 | 1,319 | 4,870 | 3,890 | ||||||||||||||||||||||
| Foreign exchange gain | (1,815) | (396) | (4,171) | (3,044) | ||||||||||||||||||||||
| Donation of common stock | 1,972 | 6,933 | 1,972 | 6,933 | ||||||||||||||||||||||
| Stock-based compensation expense, net | 25,745 | 4,740 | 67,880 | 8,965 | ||||||||||||||||||||||
Transaction costs(1) | 2,385 | — | 2,385 | — | ||||||||||||||||||||||
| Adjusted EBITDA | $ | (3,722) | $ | 325 | $ | (21,111) | $ | (3,395) | ||||||||||||||||||
(1) Included in transaction costs above are approximately $0.5 million of expenses incurred in connection with the pending acquisition of Rewire (O.S.G) Research and Development Ltd. that were incurred in the three months ended June 30, 2022. We have determined it is not material to retrospectively reflect this amount in Adjusted EBITDA for prior periods; therefore we have included the full amount in the three months ended September 30, 2022, in order for year to date Adjusted EBITDA to appropriately reflect the full year impact of transaction costs in accordance with our non-GAAP policy, effective as of the third quarter of 2022.
| Reconciliation of operating expenses to non-GAAP operating expenses: | ||||||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| (in thousands) | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||
| Customer support and operations | $ | 18,142 | $ | 12,005 | $ | 48,867 | $ | 32,435 | ||||||||||||||||||
| Excluding: Stock-based compensation expense, net | 226 | 40 | 596 | 77 | ||||||||||||||||||||||
| Non-GAAP customer support and operations | $ | 17,916 | $ | 11,965 | $ | 48,271 | $ | 32,358 | ||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
| Marketing | $ | 43,337 | $ | 30,365 | $ | 127,807 | $ | 82,639 | ||||||||||||||||||
| Excluding: Stock-based compensation expense, net | 3,352 | 486 | 7,149 | 1,207 | ||||||||||||||||||||||
| Non-GAAP marketing | $ | 39,985 | $ | 29,879 | $ | 120,658 | $ | 81,432 | ||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
| Technology and development | $ | 36,178 | $ | 18,123 | $ | 95,836 | $ | 44,965 | ||||||||||||||||||
| Excluding: Stock-based compensation expense, net | 13,238 | 1,698 | 30,959 | 3,522 | ||||||||||||||||||||||
| Non-GAAP technology and development | $ | 22,940 | $ | 16,425 | $ | 64,877 | $ | 41,443 | ||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
| General and administrative | $ | 35,504 | $ | 24,539 | $ | 96,355 | $ | 47,429 | ||||||||||||||||||
| Excluding: Stock-based compensation expense, net | 8,929 | 2,516 | 29,176 | 4,159 | ||||||||||||||||||||||
| Excluding: Donation of common stock | 1,972 | 6,933 | 1,972 | 6,933 | ||||||||||||||||||||||
| Excluding: Transaction costs | 2,385 | — | 2,385 | — | ||||||||||||||||||||||
| Non-GAAP general and administrative | $ | 22,218 | $ | 15,090 | $ | 62,822 | $ | 36,337 | ||||||||||||||||||
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November 2022 / © 2022 Remitly Inc. 1 Investor Presentation Third Quarter 2022 Earnings November 2, 2022
November 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, 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 September 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.
November 2022 / © 2022 Remitly Inc. 3Q Strategic Overview 3 Matt Oppenheimer Co-Founder & CEO
November 2022 / © 2022 Remitly Inc. Significant progress since IPO 4 Note: Data reflects comparisons to 3Q 2021 IPO TODAY Quarterly Active Customers 2.6m 3.8m Countries Served +135 +170 Corridors ~1,800 ~4,200 Annualized 3Q Run Rate Send Volume $21b $30b Consistent track record of beating expectations/ execution Invested in our culture with an authentic emphasis on ESG
November 2022 / © 2022 Remitly Inc. Strong execution continued in 3Q 2022 SCALE $169m 40% YoY REVENUE 3.8m active customers 49% YoY 5
November 2022 / © 2022 Remitly Inc. Macro conditions remain volatile but our customers remain resilient Customer behavior metrics indicate continued resilience Remitly customer survey in October 2022 shows 9 out of 10 customers expect to send the same amount or more in 2023 versus 2022 Strong US dollar and weaker emerging market currencies are a tailwind for customer activity and new customer acquisition in certain markets Remittance Flows to Low and Middle Income Countries ($ in billions) 6 Shift to digital remains a tailwind for Remitly regardless of macro conditions Key Receive Market Trends in 3Q ● Vast majority of customers sending money to family for basic household needs ● Total industry remittances to Mexico showed strong growth and reached a record amount in July Mexico ● Continued shift to mobile wallets as a disbursement preference ● Our digital first approach is resonating with customers Philippines ● More affluent senders and high transaction sizes ● Depreciation in INR vs USD and other currencies led to increased send volume and strong customer acquisition India
November 2022 / © 2022 Remitly Inc. Progress across investment portfolio will drive strong long-term growth $257.0 7 New customer acquisition Geographical expansion Remittance product enhancements Complementary new products Record new customers in 3Q along with CAC efficiency Record number of new corridors added in 3Q Peace of mind enhancements and platform reliability Long-term driver of deeper customer relationships
November 2022 / © 2022 Remitly Inc. ● Disciplined focus on payback ● Elasticity testing ● Less competitive advertising market ● 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) 8 Key Drivers Customer acquisition efficiencies continued in 3Q 2Q22 3Q22 18% QoQ 3Q21 3Q22 19% YoY
November 2022 / © 2022 Remitly Inc. Geographic expansion is accelerating 9 ~4,200 corridors +3.9b bank accounts +420k cash pickup locations +875m 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} Data as of 3Q 2022
November 2022 / © 2022 Remitly Inc. Remittance investments drive customer growth, loyalty and product differentiation 10 Peace of Mind Enhancements ● Expanding rapid refunds to Visa and Mastercard in the US ● Ability for global customers to import recipient contacts ● Ability to scan payment card and add to profile 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 ● Optimizing fraud loss rates over time ● Machine learning algorithm Infrastructure & Security ● High 24/7/365 platform availability ● Lower security threats ● Plug-n-play corridor launches +90% of customers engage with Remitly on their phones 4.9X iOS App Store rating1 (+860k reviewers) 4.8X Android Google Play rating2 (+490k reviewers) +99.96% Platform availability3 15 languages customers can access for live support 24/7/365 1, 2 App Store and Google Play rating as of 9/30/22 3 Remitly internal data for 3Q 2022
November 2022 / © 2022 Remitly Inc. Long-term vision of complementary new products 11 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 3.8M active customers 4. Mobile-centric platform 5. High-quality global network 6. Deep customer insights 7. Strong compliance/fraud infrastructure
November 2022 / © 2022 Remitly Inc. New customer acquisition Geographic expansion Remittance product enhancements Complementary new products Our portfolio of investments are expected to drive outsized growth and returns well into the future 2022 & beyond 2023 & beyond 2023 & beyond 2024 & beyond 12
November 2022 / © 2022 Remitly Inc. Vision To transform the lives of immigrants and their families by providing the most trusted financial services on the planet. 13
November 2022 / © 2022 Remitly Inc. 14 3Q Financial Results Hemanth Munipalli CFO
November 2022 / © 2022 Remitly Inc. Track record of strong growth continued in 3Q 2022 SCALE 3.8m 49% growth in active customers over 3Q 2021 $7.5b 44% growth in send volume over 3Q 2021 REVENUE $169m 40% growth in revenue over 3Q 2021 90%+ Average annual revenue retention across all cohorts since 2015 15
November 2022 / © 2022 Remitly Inc. Strong continued growth in active customers 1,692 1,891 2,136 2,397 Primarily driven by 2,561 2,836 3,042 3,419 ● Exceptionally strong new customer acquisition at compelling unit economics ● High retention ● Peace of mind improvements to the customer experience ● Expansion of our global disbursement network 3,818 16 +49% YoY Active Customers (thousands)
November 2022 / © 2022 Remitly Inc. High double-digit revenue growth at scale Revenue ($ in millions) $71.8 $80.0 $91.1 $121.2 $135.3 $136.0 $169.3 $111.1 $157.3 17 +40% YoY
November 2022 / © 2022 Remitly Inc. Unit costs impacted by higher new customer mix and scale Direct integrations reduce transaction errors and lower processing costs Advanced risk and fraud management systems improve the customer experience & optimize transaction loss rates over time Scale drives better terms with payment processing and disbursement partners 3Q21 3Q22 39.2% 41.3% 18 Transaction expenses as percentage of revenue 2021 2022 40.4% YTD 41.8%
November 2022 / © 2022 Remitly Inc. Disciplined investments set us up to deliver on strategic priorities New customer acquisition Geographic expansion Remittance product enhancements Complementary new products Marketing 3Q 2022 Operating Expense Mix (Non-GAAP) KEY INVESTMENTS $40.0m 39% Technology & Development $22.9m / 22% Customer Support & Operations $17.9m / 17% G&A $22.2m / 22% 19 Excludes stock-based compensation expense, donation of common stock and transaction costs. Please see reconciliation of Non-GAAP measures in the Appendix
November 2022 / © 2022 Remitly Inc. Strong balance sheet to execute efficiently on growth priorities $450m Working Capital as of 9/30/22 ($33.1)m 3Q22 GAAP Net Loss ($3.7)m 3Q22 Adjusted EBITDA 20 Please see reconciliation of Non-GAAP measures in the Appendix (2.9)% 2Q22 Adjusted EBITDA Margin
November 2022 / © 2022 Remitly Inc. Raising 2022 revenue outlook Reflects strong growth and key investments to unlock our vision ● Raising 2022 revenue outlook by $10m at the midpoint(1) ● Maintaining 2022 Adjusted EBITDA outlook ● High growth at scale ● Upfront investments drive future growth and high customer lifetime value ● Investing efficiently to deliver long-term shareholder value $635m-$640m 2022E Revenue 38% to 40% growth — ($35)m-($30)m 2022E Adjusted EBITDA 21 1 Compared with 2022 outlook provided on August 3, 2022 Note: This guidance is only effective as of the date given, November 2, 2022, and will not be updated or affirmed unless and until we publicly announce updated or affirmed guidance. Distribution or reference of this deck following November 2, 2022 does not constitute re-affirming guidance.
November 2022 / © 2022 Remitly Inc. Q & A 22
November 2022 / © 2022 Remitly Inc. “ April Remitly user since 2022 Sends money from USA to KenyaI would highly recommend Remitly for sending money. It's fast and reliable. I send money to Kenya once or twice a month and my people have received it safely.
November 2022 / © 2022 Remitly Inc. Appendix 24
November 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 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 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) gains and losses from the remeasurement of foreign currency assets and liabilities into their functional currency, (v) noncash charges associated with our donation of common stock in connection with our Pledge 1% commitment, (vi) noncash stock-based compensation expense, net, and (vii) certain transaction and integration costs associated with acquisitions. We calculate non-GAAP operating expenses as our GAAP operating expenses adjusted by (i) noncash stock-based compensation expense, net, (ii) noncash charges associated with our donation of common stock in connection with our Pledge 1% commitment, as well as (iii) certain transaction and integration costs associated with acquisitions. 25
November 2022 / © 2022 Remitly Inc. Non-GAAP Reconciliation Reconciliation of operating expenses to non-GAAP operating expenses (in thousands) 3Q 2022 Customer support and operations $18,142 Excluding: Stock-based compensation expense, net 226 Non-GAAP customer support and operations $17,916 Marketing $43,337 Excluding: Stock-based compensation expense, net 3,352 Non-GAAP marketing $39,985 Technology and development $36,178 Excluding: Stock-based compensation expense, net 13,238 Non-GAAP technology and development $22,940 General and administrative $35,504 Excluding: Stock-based compensation expense, net 8,929 Excluding: Donation of common stock 1,972 Excluding: Transaction costs 2,385 Non-GAAP General and administrative $22,218 26
November 2022 / © 2022 Remitly Inc. Non-GAAP Reconciliation 27 Reconciliation of net loss to Adjusted EBITDA (in thousands) 3Q 2022 Net loss ($33,069) Add: Interest expense, net (1,070) Provision for income taxes 287 Depreciation and amortization 1,843 Foreign exchange gain (1,815) Donation of common stock 1,972 Stock-based compensation expense, net 25,745 Transaction costs 2,385 Adjusted EBITDA ($3,722) Revenue $169,259 Adjusted EBITDA margin (2.2%)
November 2022 / © 2022 Remitly Inc. Thank you.