Executive Summary / Key Takeaways

• Remitly ($RELY) is establishing itself as a scaled digital leader in the resilient cross-border remittance market, leveraging a mobile-first, data-driven platform to disrupt traditional players and capture significant market share.
• Superior technology, including advanced ML/AI for risk management, customer support, and direct payment integrations, provides a tangible competitive moat, driving operational efficiencies and enhancing the customer experience with faster, more reliable transfers.
• Recent financial performance, highlighted by 34% revenue growth and a 16% Adjusted EBITDA margin in Q1 2025, demonstrates accelerating profitable growth and achievement of the "Rule of 50," validating the company's strategy of balancing investment with efficiency.
• Strategic expansion into new corridors and targeted customer segments like high-amount senders and micro businesses, enabled by platform extensibility, offers significant growth vectors beyond core markets and traditional customer profiles.
• Management's raised full-year 2025 guidance, projecting 25-26% revenue growth and 12-13% Adjusted EBITDA margin, signals confidence in durable customer behavior, strong marketing ROI, and the path to full-year GAAP net income profitability despite macroeconomic uncertainties and tougher comps in the second half.

The Digital Lifeline: Remitly's Ascent in Cross-Border Payments

In a world increasingly defined by global mobility, the simple act of sending money home remains a critical financial lifeline for millions. Remitly Global ($RELY) has built its business on transforming this fundamental need, positioning itself as a trusted provider of digital financial services that transcend borders. Founded with a focus on disrupting the often costly and inconvenient traditional remittance industry, Remitly has scaled its digitally native platform to serve a global footprint spanning over 170 countries. Its core promise is to deliver peace of mind through a fast, reliable, and transparent money movement experience, a mission that resonates deeply with its primary customer base of immigrants and expatriates.

Remitly operates within a massive consumer cross-border payments market, estimated to be worth over $2 trillion annually. Despite its significant growth, the company holds a relatively small share, estimated to be less than 3% penetrated, highlighting a vast runway for future expansion. As a scaled digital player with over $1 billion in trailing 12-month revenue and consistently growing at rates exceeding 25%, Remitly is strategically positioned to capture share from both traditional cash-based providers and less specialized digital competitors.

The competitive landscape is fragmented, featuring a mix of legacy players like Western Union (WU), digital-first rivals such as Wise (WISE), WorldRemit (part of Zepz), and TransferGo, alongside indirect competitors like banks and broader fintech platforms. Remitly differentiates itself through a mobile-first approach tailored specifically to the needs of immigrant communities. While competitors like Wise may emphasize lower costs through mid-market exchange rates, Remitly prioritizes ease of use, speed, and reliability, underpinned by a sophisticated technology stack and a high-quality global network. This focus on the end-to-end customer experience, from seamless onboarding to rapid disbursement, is designed to build trust and drive high customer retention and repeat usage, which are foundational to its business model. Unlike cash-based providers whose operations are often labor-intensive and prone to inconsistency, Remitly's digital model allows for greater efficiency and control over the transaction lifecycle.

The Technological Engine: Powering Speed, Trust, and Efficiency

At the heart of Remitly's competitive advantage lies its superior technology platform. This isn't just about having a mobile app; it's about a data-driven infrastructure that optimizes every step of the cross-border payment process. The platform enables rapid iteration and the introduction of new services and features efficiently, with security and reliability as core design principles. In Q1 2025, the platform demonstrated remarkable performance metrics: a record over 93% of transactions were dispersed in less than an hour, and a record over 95% proceeded without requiring a customer support contact. The platform maintained an impressive uptime of 99.99% in the quarter, underscoring its reliability.

Key technological differentiators include:

• Proprietary Risk Models: Leveraging machine learning (ML), early warning systems, and historical data, Remitly's models dynamically assess transaction risk, enabling tailored send limits and reducing friction for legitimate customers, particularly higher-amount senders. This contrasts with more rudimentary, rule-based systems used by some competitors.
• AI-Powered Virtual Assistant: Integrated into customer support, this AI tool can resolve issues significantly faster than human associates (stated as four times faster), improving customer satisfaction and driving down customer support costs. The company is expanding its language coverage (now including Spanish and French) and the range of issues the assistant can handle, aiming for it to manage a majority of chat contacts.
• Direct Integrations: Building a global network of direct integrations with over 5 billion bank accounts and mobile wallets and approximately 460,000 cash pickup locations allows Remitly to control the last mile of the transaction. This increases speed, improves reliability by reducing intermediaries, and lowers costs compared to relying solely on aggregators or less integrated partners. Recent examples include integrations with Plin in Peru, MACH in Chile, Orange Money in Mali and Burkina Faso, and Vodafone Cash in Egypt in Q1 2025.
• Optimized Pay-in Methods: Strategic additions like Interac in Canada, PayTo in Australia, and Pay by Bank via Plaid in the U.S. offer customers faster, more convenient ways to fund transactions, often at a lower cost to Remitly, further enhancing unit economics and driving the flywheel.

The "so what" for investors is clear: this technological foundation is not merely a feature list; it's a quantifiable competitive moat. It enables Remitly to deliver a superior customer experience that fosters loyalty and word-of-mouth referrals, reducing customer acquisition costs relative to growth. It drives operational efficiencies across transaction processing, risk management, and customer support, contributing to margin expansion. Furthermore, the platform's extensibility allows Remitly to pursue new growth vectors, such as tailoring the product for high-amount senders (seeing over 45% YOY volume growth for transactions over $1,000 in Q1 2025) and micro businesses, with minimal incremental investment.

Strategic Execution and Financial Momentum

Remitly's strategy is built on executing across four core pillars: Mobile First, Global Network, Attractive Unit Economics, and Superior Technology. This execution is driving a powerful flywheel effect: delivering a delightful customer experience builds trust, leading to increased customer activity and volume. This scale, in turn, allows Remitly to negotiate better terms with partners and optimize its cost structure. Some of these savings are passed back to customers through competitive pricing, while the rest are reinvested in innovation and further network expansion, reinforcing the positive cycle and driving long-term RLTE (Revenue Less Transaction Expense) dollar growth.

Operational efficiency gains were evident across the board. Customer support and operations expenses decreased to 6% of revenue (from 7%), marketing expenses dropped to 20% (from 25%), technology and development expenses improved to 20% (from 23%), and general and administrative expenses leveraged to 15% (from 16%). These improvements reflect the benefits of scale, automation, and disciplined spending. Transaction expenses increased slightly as a percentage of revenue to 34% (from 33%), primarily due to higher volume and an increase in the provision for transaction losses, though management emphasizes ongoing optimization of transaction costs and fraud management through technology.

For the three months ended March 31, 2025, Remitly reported revenue of $361.6 million, a robust 34% increase compared to the prior year period. This growth was fueled by a 29% increase in active customers, who now number approximately 8.0 million, and a significant 41% surge in send volume to $16.2 billion. Notably, send volume growth outpaced revenue growth, partly driven by the increasing prevalence of higher-amount senders, which, while potentially impacting gross take rate on a per-dollar basis, drives higher RLTE dollars per customer over time.

The culmination of strong top-line growth and operational leverage resulted in significant bottom-line improvement. Remitly achieved GAAP net income of $11.4 million in Q1 2025, a material swing from a $21.1 million net loss in the prior year period and marking its second consecutive quarter of GAAP profitability. Adjusted EBITDA reached $58.4 million, translating to a 16% margin and exceeding the "Rule of 50" benchmark (revenue growth + Adjusted EBITDA margin), a signal of healthy, balanced expansion.

Liquidity remains strong, with $493.9 million in cash and cash equivalents as of March 31, 2025. The company also has access to a $325 million revolving credit facility, with $277.7 million in unused capacity, providing ample flexibility to support working capital needs driven by increasing transaction volumes and strategic investments. Operating cash flow was robust in Q1 2025, providing $132.9 million, influenced by growth-related working capital dynamics.

Outlook and Future Trajectory

Looking ahead, Remitly's management is optimistic and has raised its full-year outlook for 2025, signaling confidence in the durability of customer behavior and the effectiveness of their strategic investments. For the second quarter of 2025, the company expects revenue between $383 million and $385 million, representing 25% to 26% year-over-year growth, with Adjusted EBITDA projected between $45 million and $47 million (12% margin).

The full-year 2025 guidance anticipates revenue between $1.574 billion and $1.587 billion, reflecting a growth rate of 25% to 26%. Adjusted EBITDA for the full year is guided between $195 million and $210 million, translating to a margin range of 12% to 13%. Management expects Adjusted EBITDA dollars to ramp sequentially throughout the year. While acknowledging macroeconomic and geopolitical uncertainties and the impact of lapping tougher comparisons in the second half of 2025 (particularly Q3 revenue), the guidance reflects a prudent view of continued strong execution.

Key assumptions underpinning this outlook include continued growth in active customers and modest increases in send volume per active customer, driven by higher transaction frequency and the increasing contribution from higher-amount senders and micro businesses. Send volume growth is expected to continue outpacing revenue growth. Management plans to increase marketing investments in Q2 and the second half of 2025 to drive growth, confident in the strong ROI and payback periods well under 12 months. They also expect continued investment in technology and development to fuel innovation and efficiency. The company reiterated its expectation to achieve positive GAAP net income starting in Q3 2025 and for the full year 2025, ahead of prior timelines.

Risks and Considerations

While the outlook is positive, investors should be mindful of potential risks. Macroeconomic and geopolitical factors, including currency fluctuations, changes in immigration policy, and global conflicts, could impact remittance volumes and customer behavior. Managing fraud and compliance across over 170 countries remains a complex challenge, requiring continuous investment in technology and controls, and temporary volatility in transaction losses can occur. Competition is intense, with both established players and agile fintechs vying for market share; the potential impact of cryptocurrencies and stablecoins on transaction fees is also a factor to monitor. Furthermore, a short seller report in March 2025 raised various claims, which the company stated it was reviewing; such events can introduce uncertainty and impact investor sentiment.

Remitly is actively addressing these risks through diversification across geographies and customer segments, sophisticated FX management strategies, continuous enhancement of its risk and compliance systems, and leveraging its technological edge to maintain a differentiated product experience. The company's strong balance sheet and available liquidity provide a buffer against potential headwinds.

Conclusion

Remitly has successfully transitioned from a promising startup to a scaled digital disruptor in the global remittance market. By focusing on the distinct needs of immigrant communities and leveraging a sophisticated, data-driven technology platform, the company has built a powerful flywheel that drives both robust customer growth and expanding operational efficiency. The strong financial performance in Q1 2025, marked by accelerating revenue growth, improving margins, and the achievement of GAAP profitability, underscores the effectiveness of its strategy and execution. While navigating a complex and competitive landscape, Remitly's continued investment in technology, network expansion, and targeted customer segments positions it for sustained growth. Management's raised full-year guidance reflects confidence in the business's durable momentum and its clear path towards consistent profitability, making Remitly a compelling case for investors seeking exposure to the digital transformation of cross-border financial services.