Release Date: October 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Remitly Global Inc (RELY, Financial) achieved a record number of new customer acquisitions, with a 39% year-over-year revenue growth.
- The company reported a record adjusted EBITDA of $46.7 million, with an adjusted EBITDA margin expanding to nearly 14%.
- Remitly Global Inc (RELY) continues to gain market share, with send volume growing over 40% in the third quarter, significantly outpacing the market growth rate.
- The company has a large addressable market opportunity in consumer cross-border payments, estimated at nearly $2 trillion, with only 3% market penetration.
- Remitly Global Inc (RELY) benefits from structural advantages as a digital business, including data-driven insights and a robust technology platform that enhances customer experience and operational efficiency.
Negative Points
- The company faces challenges in strategically prioritizing investments across near, medium, and long-term growth opportunities.
- There is a potential risk of FX tailwinds not continuing into the fourth quarter, which could impact revenue growth.
- Remitly Global Inc (RELY) anticipates a sequential decline in gross take rate due to mix changes.
- The company acknowledges the complexity of cross-border payments, which involves regulatory compliance and risk management challenges.
- Marketing expenses are expected to increase in the fourth quarter due to seasonal customer acquisition efforts, which could impact profitability.
Q & A Highlights
Q: Could you discuss any factors other than currency that influenced the strong third-quarter performance and your outlook for the fourth quarter?
A: Vikas Mehta, CFO, noted that the third quarter saw record new customers and a 42% increase in volume, the highest in eight quarters. While FX tailwinds were a factor, they are not included in the Q4 outlook. The focus is on finishing the year strong to set up for 2025. CEO Matthew Oppenheimer added that the product's strength and word-of-mouth marketing are key drivers of growth.
Q: Can you provide more details on the assumptions behind the 2025 guidance of low to mid-20s revenue growth?
A: Vikas Mehta explained that the guidance is based on retaining a majority of revenue from customer cohorts and not assuming continued FX tailwinds. The expectation is for continued growth in quarterly active customers and volume growth outpacing revenue, similar to 2024 trends.
Q: What marketing efficiencies are you seeing, and do you expect these trends to continue?
A: CEO Matthew Oppenheimer highlighted that the product's quality drives word-of-mouth marketing, reducing the need for high marketing spend. Vikas Mehta added that product improvements have reduced friction and driven organic growth, particularly in new customer segments like seafarers.
Q: Are you seeing any macro impacts, such as FX tailwinds, subsiding in the US-Mexico corridor?
A: Matthew Oppenheimer stated that they continue to take market share and see strong customer behavior metrics in Q4, with performance in line with expectations despite some competitors noting macro impacts.
Q: How do you allocate capital between established markets, emerging markets, and new geographies?
A: Matthew Oppenheimer explained that near-term growth focuses on existing markets, but they plan to continue adding new markets. They are also exploring opportunities in new segments like micro-businesses, with recent growth seen in regions like sub-Saharan Africa.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
