Remitly Global (RELY) 1 Nov 232023 Q3 Earnings call transcript

Good day, and thank you for standing by. Welcome to Remitly's Q3 ‘23 Earnings Conference Call. [Operator Instructions]. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Stephen Shulstein, Vice President of Investor Relations.

you Call. us thank Quarter Remitly's and Earnings XXXX afternoon, for for joining Third Good

on call Hemanth me Executive Financial Joining the Officer and Oppenheimer, Officer. of Chief Co-Founder Remitly; and Munipalli, Chief today our are Matt

website. results be our release in the simultaneously be at webcast and are that note Relations can earnings ir.remitly.com. which on and Please additional slides, this Our commentary found available management presentation call Investor will

in the those Before statements I'd statements be to actual making including, you, laws, remind involve to regarding financial results to, will of materially we and and we meaning here. but cause neither are results vary management's risks guarantees start, like presented promises statements future limited and securities uncertainties federal and expectations may from forward-looking not These nor plans. Remitly that

law. place otherwise, also Remitly You reliance as including statements based for result factors refer are and of Any of our today, as forward-looking update on SEC statements. responses information results. earnings any that regarding Please on filings conference release call, the on risk no this developments them, and affect more obligation should expectations our to contains not to new non-GAAP or may as financial questions, on or by a made presentation current required revise undue your The assumes following whether except measures. forward-looking

GAAP metrics, are section our our IR of reconciliation to available website. the see non-GAAP directly financial please a our the these comparable press to of on For which the release measures earnings presentation, earnings appendix and most

the to turn call Matt will begin. Now to I over

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[Operator Instructions].

Citi. with Our first Andrew from Schmidt question comes

to maintain front. up off And that makes questions economics, on start maybe on want more, and I marketing but of has think sense of you LTV given can that I investing couple things. it a the unit side stepped the attractive

maybe of helpful. that, of confidence talk more about First, then to to about can those as scale you're And initiatives second, in and just could you would things funnel you your and Those be ability performance like in areas efficiency CAC the you over just seeing trends talk time? top shift marketing those marketing.

the an an we're integrated because front, marketing like we brand makes it And be would even continuation roll already proven And that strategically it's of and seeing we've an that example the important in drives long-term campaign expansion a Miami where That's and did And be are with about of a started excited On that our what that efficient. more have to campaigns. to playbook successful. out actually the say we the audiences. marketing it dividends is see marketing from. we integrated awareness efficient area, I'd performance

and into effect expand our making the word and past. that, two to size, delivered mouth measure about into high we have we're ratios, And is we're confidence to good excited so benefit Mainly I geographies. where And rates campaigns then XXXX. LTV-to-CAC in as ability and payback doing, our given results the and other that that gives growth investments confident about delivering we've scale feel ability that go ability already additional in to continues given of some we us deliver And those referrals that feel our to in flywheel head the of about of because continue good it feel to the we period about we QX. as XXXX, it been the

it. Got

question, second far. that. I customers think actually have given visibility bit my dig Maybe XXXX which you is you could You the into I visibility. a more mean, about guys good pretty little preempted high you've bit helpful. thus added be think XXXX. into front Anything about the of talk as a Maybe kind just just about the rates that growth on you of would little variables sustaining

a the financial think of standpoint. into unique with resilience and spend, then our terms is of But talk base little that, thinking business start that in digital XXXX to And in into I of Hemanth a we're it about there's the we're how that to those lot resilience that squares and the vision, because a XXXX, -- the accomplish of serve. in that our as QX Yes. turn business. of a because and there and I'll of and to from investments shift I'll confidence that's head continue our think you more our predictability our us the -- nature spot, mainly that, bit of and a founded to the resilience nondiscretionary we give predictability over the lot audacious kind about of we the customers, we think something right that in tenacity happening the to customer making is I but can confidence, in

of I Andrew, think Matt I a think that covered bunch stuff.

it's into year. that that seeing, When the cohorts, of we execute I continues in this think give deeper think rates in when new from about look what behavior to I overall the for we've of a it would growth behavior, with been confidence at terms so we of something see bit think translate cohorts us in a could pretty existing quarter. dig of and lot there's consistency it to customer and what next the we're I able what terms growth rates in little to whether expect consistent on, or in terms

key I on it. and we that's, have a So lot of think, visibility

seeing will So now we're in of that be cohort pretty terms confident what behavior we're consistent.

QX is add here us invest want why for seasonally in The is to a high of other sense a lot continue to makes marketing. reason another which to I is quarter, it thing that

to benefit within LTV/CAC While XXXX. think we in sense that sure CAC remaining our and makes guardrails our and benefits while our would well make see expand you still can that the from high guardrails it of seasonal that within the quarter

Our Ramsey comes next with from El-Assal Barclays. question

on This is for Ramsey. Allison

of those of segment some could just the is a you And a So level that really of rest dive what you've nice growth the the making curious start seems for you opportunity as It growth, going think into opportunity world are in forward? rest the wondering see some where but really versus of bit promising? helpful like deeper really and you been Canada, call. disclosures if world for on U.S. sustainable

the excited, we're year-on-year we of Yes, mentioned, quarter. for XX% world growth as rest

indicative our it's expansion is just think of very the I corridor globe, large playbook. intentional combined opportunity how across with the

getting returns country launched ago.And markets launched that in ago I some great come, not launched we have of what's also but of great so the that or geographies like we the the to we're the mentioned markets investments we is would from of we start those quarters years newer UAE, years countries quarters and of expect And every really that the couple a terms see to it's to dividends that strong made And we we in in. globe. launched showing just even returns yet and we that haven't like around started years

So U.S., important it why And what our with growing North But mind growth, in of grow the nice big and is X% like that XX% that to rate. lot of the to and to year. Canada, healthy as about are there's world I a I to that continue opportunities approach mentioned, continued to trillion for grow. only every businesses, a there, growth. of growing $X.X very the we're year-on-year call we runway room is given in there's And mentioned America continue it's and at the portfolio rest also keep

Great. And mentioned you UAE.

that forward types of of we out anything possibility is as similar corridor Rewire -- in other into Rewire Just extension? expect acquisitions any there, progress of sort a geographic Remitly? how any going acquisition about just should the integrating of terms

few A parts Yes. to question. your

the products regions going we operating. new internal are been acquired, well both amazing growth think that we and available. that it's the Historically, the we very that as the opportunities expand best help to in with become and team, us all assets builds have currently they found add they continue that I review as On and organic opportunities, continuously as Rewire but complementary to acquisition pleased acquisition,

for that on in front. We disciplined deploying capital and transactions, have we'll a remain M&A high any bar

part works, that of answers as the that have over business starts of excited nature time market, launched. time. the the given So the mentioned, live very the and our large then cohorts business with our that you UAE, build increase repeat customers, And nature of question, a cohorts lastly, to just about we I Allison. over acquire there it's And that product and those how business then a sizable of

corridors, And for in so takes I'd expect that it track to that actually happen few on other in up, as the and that. but for a we're quarters it ramp to happened UAE

with from Napoli Our Blair. Robert William comes next question

the expanding fourth maintaining are you do In you that? your thinking in Hemanth, looking that ROIs? are the How when quarter, you about now, way So to talk CAC how manage you that? about what and do

the LTV think really as we our on we've on have a I So before, of lot we and we in we are at we in pretty last quarter and strong. particular, QX, sequentially would look attractive look CAC and increase. as to CAC said unit as and -- we said focused focus economics expect well that that When ratios the -- and at

Some of our marketing be that it. related going side on performance to to is directly

these investments, that relate bit is we upper to to of investments, funnel which it it, brand brand and which on but our take conviction of a little some high longer-term have And payback going a will promise of the to in drive backing really with our them will to medium and term. continue long marketing deliver up building for us is that we're customers, we the in leverage trust to have help sort

a brand to within upper funnel what still well GAAP be to our we growth marketing, guardrails, expect keep sequentially, as broader going we investments, going up. both a of So would of also lot to sort and of mix want again, it's but be but

that Yes, look over a to there, that to that even with expanded market, thing of you bottom amount have about like at drive they're versus or think to and the are we is we But to we we're share the as the LTV these with general, capital we don't lot you when cost look marketing you control fast. slightly at high, look when if the grow in the add amount a we investments ratio, choose returns and increased NPV. choose CAC, the the that making in I'd IRR I the only metrics think QX at in the Bob, line. And even CAC of payback,

within own what And bring and about because our making beyond. will control so in them XXXX we're excited very intentionally we're that

the that quarter, bring Send two way. your the Mastercard direct you've And a talked And Send, during I relationship in Great. on progress on guess, and follow-up questions partnership on related been with integrations, you has Mastercard a lot is business? separate a announced does to maybe direct integrations just how then effect and what the had about a you? What

Mastercard and enables MasterCard debit us linked to Visa Send the and on partnership, Direct So it funds Visa to send card.

it into bank those cost the gives linked other us and account the some cards. recipient of account to that customer's deposits a those So bank of improvements partnerships. has just both And debit also scale

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the in of overview, about terms the talked And bucket we started to a progress And overall investments just ability from it's in drive into our proud in experience, really frictionless a customers. and the costs third win-win-win our falls of that so remittance that down we're there. we're that to standpoint. of But to getting and for mentioned as reduce friction I continue making

with comes Will question Sachs. next Goldman Our from Nance

in QX. making I comments guess costs. both QX the direct in focused have a up, a stepping confident to things in in the of seen just the $X will looks lot it roughly I quarter. of fourth the roughly a investments assuming in being basis of kind kind that mean like million that's reoccurring wanted as bear you performance-based incrementally quarter, kind all-equals range we marketing think with marketing fruit, successful, like have non-GAAP partial been addition and that you're guys sounds you've of sound that Maybe guys the market investments future?And making, sort I But up these costs that pretty brand right should you marketing investments of is incremental to like the on go-forward normal about on past? maybe little Is the the these also the stepped on are thinking in sequentially. made? a we we line these bit are that be costs It the about higher pile

Yes.

Let to for the Will, you thanks answer, me give question. try an

turn marketing about question and this then In a think rate I Matt terms to of on to give I brand necessarily I broader think rate there. your don't question, it investments is run side. run sort making we're -- about mean, to back of response way the the the off, maybe to first think

the brand off, our marketing and way funnel customer tend a upper base directed lot of the the is to really at we versus First across what which just look investments, new performance they acquisitions, towards. entire spread marketing customer is

active the of the expect and which do well we bigger So it we both get get base customers. of cohorts new bigger existing customers, terms to include includes leverage on customers of our both. as as in as Obviously, customers

out. we terms forward XXXX, But talk we'll more year, how go So beyond.Anything in have be terms CAC deleverage these that we been in conviction to of Matt? maybe add, look guidance investments would next efficiencies deliver of these returns doing over we some several that XXXX share But in in of to pans about the QX. have to we've we last will years able how overall, in terms as that do high and think marketing,

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you run characterize said it rate. as You wouldn't

should we bigger? base the like does kind then? costs of gets top expect these don't come saying time as you mean of over we on So Or we customer to down, incremental that all make are else investments scale these this and equal over costs

Yes.

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with question next comes Our Markgraff Alex from KeyBanc.

to just one of on not it, the overplay and more of just kind things side but Maybe unit the marketing economics. piece of

at what think today those of today maybe end all about as higher You curious, lot of, I'm about and of helpful talked kind far think kind help guardrails, of sort comfortable think of that just versus side context us it's of investments, or sit these to but you guardrails, just sit a guardrail. context. you're the some if with you the I you top where about the -- end any making

to you try give question. Alex. let Maybe context, the me on color Thanks for Yes. some

an we economics. we've we've be last unit of attractive And able quarter -- here ratio When got look is X% sense. horizon I to said we've economics expect talking in. also as the and NPV the well triangulating and looking these as looking on an look and comfortable this of said that LTV/CAC feel investments, this have some we've we multiple that payback make pretty it robust a think generate before investments. of and places perspective a at internally, we about at sort really think this unit pretty of makes at to of we been as including as incremental we're from And further in particularly terms and by marketing at still at the to room returns attractive to from lot place be look in cash we

And we're very EBITDA you the that making guidance think the now. right I raised investments And I would in good much Alex, invest had some not marketing -- in that as the is in we decided adjusted what the on I is on CAC only investments QX, say, we thing to incremental see and average I'd of the about add feel front guide the be, fact marketing and average and are we're we're right because control now. you up of that marginal growth.But the our see we dialing what eventually which payback we we down good how or are to confidence can and able to choose of when see then guidance XXXX down, very raise dial growing in or always dial to guide up much that spending is would both

and to being about And term profitability, from balance get and I And that right -- we're long needle very those intentional next not XXXX about year. levers dialing think down growth that we as to in we're only also in of kind term, up but XXXX. we'll QX return long the the think in mean I in QX. that invest threading amount for by investments those the

great. That's

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the anything the fourth consider expense for transaction Just to on quarter? line curious, Hemanth,

I think with really the related to in we've the of broadly, pay advances fraud economics partners, down and made I we've friction the line, think the payout the think in with our our as driving while of expense we've keeping basically sort reducing pay are both which transaction customers side with and both I in been pleased progress on about side disbursement as well terms management the and in low. costs, talked

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Instructions]. [Operator

with Our next from question Scharf comes JMP Securities. David

of already, in But specifically, lately the plan, four is asked other providers digital have in have coming as if you get on and chance and maintain stepped-up if example, is have new I'm Western where still remitters so not But are competitive visibility profile in that that. questions been have that from jumping apologize already MoneyGram been loyalty. is I'll about you incremental a they there Union, have just three assuming private. the kind Meaning, sense are the not question? we these but referenced a now been changing quarter and about covered in stickiness customers I but the sure into used we commentary digital your are ads have there pass I Matt, of the this of between particular the have investment all? calls. Union or kind been less just first-time marketing Western bouncing on you environment, X different the any there newer folks at from? to And or fourth the Do for am

see Thanks, Great you. to and David. good questions,

I the there been the material landscape changes the in have is quarter. think on that headline no competitive last

word active you our of from new our digital And industry, their And players seeing of others given to who subscale approach, our the acquisition. customers changes customers building in whether well structural are overall are think meaning about growth the like customers, in positioned things recommending uniquely provide you that trusted, that's shift range think say operational our scaled and digital and is new our of whether as I'd player, digital. front. the that subscale that's choosing coming the or we from wide reliable and of and because that to again given legacy able a competitors difficulty service back when as increasingly wide whether that we're a resilience coming we excellence, players to see not and think a that that range I existing that digital-first We're have other out of viable, the quarterly solution a a maybe scale, given shift our us reliable that's and do. service legacy again user customer mouth are

a maybe it. as follow-up. Got just And

average believe or lifetime is -- up On is actually percent seeing is you your bones observation the of meat the make something increasing? LTV? an What in on more the marketing you or LTV that that where upward. provide comment of a is sense ratio cents increasing? innate when the side, number a provide coming takes incremental little to velocity Can per terms principal average Are from? that you you trending value based that around Is it a CAC you year tells in

David. Yes. question, Great

Let for me that try you. answer to

us cumulative just you at from off, we And expect interest given improving profit has of a cohorts. sort our and our LTV. confidence get considering that first think really that reminder, a One components our X intensity. transaction would of it's transaction when I as that, there's customers LTV, our look is are to we

first digital and and seeing we're customer across scale, that our base. transactions transactions increasing, also is digital of being increasing that's the think I those intent active in

has good analytics and LTV on us some increased, that's continued pay conviction high to in margin, coupled a intensity transaction which the previously the for on and of trajectory. we the reasons scale for that around payout have side, described gives just and So with improve a costs work been fraud around done

there. those So the are key components

Tien-Tsin comes question next JPMorgan. from Our with Huang

you've covered actions, know here a I last of in days pricing, if I ask lot XX on mind, the to and political lot already. if is the you world regulation. on just going changed with wanted Matt and it's visibility, competitive don't a

like visibility curious Just feel you if has your mind? in the changed

visibility, And about yes, do kind forward-looking what of you're talking you mean? about when Tien-Tsin, talk you

on of short Yes, consumer run already, just as visibility... behavior check I that I exactly as lot wanted visibility side, outlook changes into the in just surprised well on if the financial covered in to the you? anything the know you've but a

home, business. the of running are you Remitly especially from our sent more the about business and when money remittances and how the natural view a of understand that expenses, nondiscretionary both We've nature emergency a World resilience, medical last manage things We've why business specifically are, that I the There's disasters. a over seen the predictability decade whether of think is funds and that one seen a in at predictability, in resilience. and unique you especially is studies that Bank them who past. bit the look customers cohort sending when the that's and we

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being visibility reasons to of business. one as about about more what's that So the and for to our thinking customers But would the and and them that come. gratitude to we that's back 'XX, predictability our and case I we're about start we come have excited talking

any the now call would over turn for remarks. to back like Oppenheimer Matt closing I to

operator, the questions. Thanks, thanks, and everyone, thoughtful for

love support. one to her Alexis the year us, money joining whose appreciate it others added of Australia loyalty awesome, and increasing about of and customers in this We're is our thank this fast try Alexis her recommendation Thank end many sharing shared the reflects opportunities As And Remitly it, of look and was we new progress I to and in Thanks, We we highlighting call And we to of the we corridor Philippines. by end of is name try like the to our for our service. always the ahead easy. is our her I'd and Alexis do as more family Alexis Remitly, to year amazing excited from your for forward the customers, sends it. diversity one Alexis you. portfolio. for everybody, and appreciate app XXXX. we us at

This for you call. participating. Thank concludes today's conference

disconnect. Goodbye. now may You